State Compensation Ins. Fund v. Industrial Acc. Commission

• Decision Date: 22 January 1963
• Citation: 59 Cal.2d 45,27 Cal.Rptr. 702,377 P.2d 902
• Court: California Supreme Court
• Parties: , 377 P.2d 902 STATE COMPENSATION INSURANCE FUND, Petitioner, v. INDUSTRIAL ACCIDENT COMMISSION and Harold S. Hutchinson, Respondents. S. F. 21156.

Page 702

27 Cal.Rptr. 702

59 Cal.2d 45, 377 P.2d 902

STATE COMPENSATION INSURANCE FUND, Petitioner, v. INDUSTRIAL ACCIDENT COMMISSION and Harold S. Hutchinson, Respondents.

S. F. 21156.

Supreme Court of California, In Bank.

Jan. 22, 1963.

T. Groezinger, Loton Wells and Henry F. C'Connell, San Francisco, for petitioner.

Everett A. Corten, Rupert A. Pedrin, San Francisco, and Joseph E. Smith, Oakland, for respondents.

PETERS, Justice.

By this petition, the State Compensation Insurance Fund seeks the annulment or modification of a workmen's compensation award made to Harold Hutchinson by the Industrial Accident Commission. In our opinion the award was excessive.

On July 7, 1958, Hutchinson injured his neck when he fell while working within the course and scope of his employment. Based upon a finding of 'Constant minimal pain in the back of neck extending out over left shoulder, at times extending to the right shoulder, at times extending to the fingertips of both hands; at times pain becomes slight, particularly in performing overhead work, climbing ladders, and scaffolds, becoming moderate on lifting over 35 lbs.,' the commission rated his resulting partial permanent disability at 26 per cent, and made an award accordingly. The correctness of this award is conceded. On November 17, 1958, Hutchinson again was injured in the course and scope of his employment. While lifting a heavy steel beam he suffered a sharp burning sensation in his lower back. On application to the commission a second award based upon a rating of 26 per cent partial permanent disability was made. The factors of disability upon which this second award was made were 'Minimal low back pain increased to slight on heavy work. He wears a corset-type brace which reasonably controls the low back pain.' Thus, the first and second disabilities are not identical, but they overlap.

On cross-examination, the rating expert testified that both 26 per cent disability ratings were nonscheduled or judgment ratings, and that if the factors upon which both awards were based were combined then Hutchinson's present combined disability would not be 52 per cent but something more than 26 per cent. In other words, the factors of disability attributable to the prior injury alone, or to the second injury alone, assuming no prior disability, warrant a rating of 26 per cent; but the present combined disability attribuable to the results of both injuries when taken together warrants a rating of something more than 26 per cent but less than 52 per cent. ¹ It is undisputed that there has been no improvement in Hutchinson's disability due to the first injury.

The fund, compensation insurer of Hutchinson's employer at the time of the second injury, contends that the rating expert's testimony demonstrates that the second award amounts to an unwarranted pyramiding of compensation. On this ground, it petitioned the commission for reconsideration of the second award. The commission, in denying this petition, stated the applicable rule to be that if separate parts of the body are injured in separate accidents, each injury must be rated separately and the combined disability is immaterial. Based on this theory, it denied the petition for reconsideration, and upheld the award of 26 per cent permanent disability attributable to the second injury. The fund seeks annulment or modification of the award on the ground that this rule as here applied is not sanctioned by Labor Code section 4750, the provision applicable to this problem.

Labor Code section 4750 provides, that, 'An employee who is suffering from a previous permanent disability or physical impairment and sustains permanent injury thereafter shall not receive from the employer compensation for the later injury in excess of the compensation allowed for such injury when considered by itself and not in conjunction with or in relation to the previous disability or impairment. The employer shall not be liable for compensation to such an employee for the combined disability, but only for that portion due to the later injury as though no prior disability or impairment had existed.' This section has been interpreted to mean that, 'An employer (or his insurer) of a workman who has a permanent physical impairment and who thereafter sustains a compensable injury resulting in permanent disability, is not liable for compensation for the ensuing combined disabilities, but only for that portion of permanent disability which is caused by the last injury.' (Smith v. Industrial Accident Comm., 44 Cal.2d 364, 365, 282 P.2d 64, 65. See also Edson v. Industrial Accident Comm., 206 Cal. 134, 138-139, 273 P. 572.) The purpose of this statutory provision is to encourage the employment of physically disabled persons by assuring an employer that he will not be liable for the total combined disability present after an industrial injury, but only for that portion which is attributable to the subsequent industrial injury. (See 2 Larson, Workmen's Compensation Law (1961) pp. 54-61; Comment (1956) 44 Cal.L.Rev. 548.) The classic application of this rule of apportionment is the case in which an employee with only one eye loses the other in an industrial accident. While the loss of but one eye warrants a partial permanent disability rating of about 30 per cent (2 Hanna, Employee Injuries and Workmen's Compensation (1954) p. 265), the disability of a totally blind person is conclusively presumed to be 100 per cent. (Lab.Code, § 4662.) If the employer is held liable for the combined disability when a one-eyed employee loses his second eye he is likely to adopt a policy of not hiring one-eyed persons, or persons otherwise partially disabled. (See 2 Larson, Workmen's Compensation Law (1961) § 59.31, p. 59.)

The parties in the instant case do not dispute the above rule or the reasons underlying it. They differ, however, on the method of computing the percentage of disability attributable to the subsequent industrial injury in this case. The conflict arises because often, as in the instant case, the sum of the disabilities due to separate injuries does not equal the combined disability. For example, the sum of the disability ratings caused by the loss of two eyes in separate accidents is about 60 per cent, while the combined disability is 100 per cent. Conversely, in the instant case, where the two disabilities overlap, the combined disability rating is less than the sum of the disability ratings due to both injuries when taken separately.

The fund's position is that since Hutchinson was 26 per cent disabled prior to the second injury and was only somewhat more than 26 per cent disabled after the second injury, it is illogical to attribute a full 26 per cent disability to the second injury. Gardner v. Industrial Accident Comm., 28 Cal.App.2d 682, 83 P.2d 295, is cited as authority for the fund's contention that the prior percentage disability should be subtracted from the combined disability after the second injury to determine the disability caused by the second injury. In that case an employee's left leg was amputated after an industrial injury. The loss of a leg was found to warrant a permanent disability rating of 58 3/4 per cent. However, the employee had previously suffered a disabling injury to his left ankle for which an award based upon a 12 per cent permanent disability had been granted. It was held that under section 4750 the prior 12 per cent disability must be subtracted from the 58 3/4 per cent when making an award for the disability caused by the leg amputation. This was so even though the second injury considered alone would have itself caused a 58 3/4 per cent permanent disability. The case is one in which the combined disability equaled the disability due to the second injury and was less than the sum of the disabilities due to the two injuries. Nevertheless, it was held that the correct award could not be made without taking into consideration the condition of the employee at the time of the second injury.

Hutchinson and the commission, on the other hand, contend that the Gardner case is applicable only when the successive injuries occur to the same anatomical part of the body. It is argued that in the instant case the neck and lower back are different parts of the body and, therefore, the case of Pacific Gas & Electric Co. v. Industrial Accident Comm., 126 Cal.App.2d 554, 272 P.2d 818, controls. That case, it is contended, states the rule that where the second injury is not to the same part of the body, neither the prior condition of the comployee nor the combined disability after the second injury are material; that only the second injury may be considered and that if that injury itself would have caused a 26 per cent disability even though it does not add substantially to a pre-existing disability, then a full 26 per cent award should be made. In that case a prior injury to the left leg resulted in a compensation award based upon a 25 1/2 per cent permanent disability rating. In the second accident the employee fractured his pelvis and injured his back, chest, and head. This second injury caused a 77 per cent permanent disability. The contention was made that if an award were made for 77 per cent, then the employee would have recovered for a permanent disability in excess of 100 per cent; that the combined disability should have been rated and from that the 25 1/2 per cent subtracted to obtain the disability properly attributable to the second injury. In rejecting this contention, the court upheld the award based upon the 77 per cent rating. It was reasoned that, where the two injuries are completely independent, the terms of section 4750 clearly require consideration of the effect of the subsequent injury by itself without regard to the prior injury and that it was immaterial that the sum of disabilities would exceed 100 per cent although a combined disability rating could not exceed that figure. ²

The Gardner c...