Sumner v. Workers' Comp. Appeals Bd.

• Decision Date: 02 June 1983
• Citation: 33 Cal.3d 965,663 P.2d 534,191 Cal.Rptr. 811
• Court: California Supreme Court
• Parties: , 663 P.2d 534 Bonnie L. SUMNER, Petitioner, v. WORKERS' COMPENSATION APPEALS BOARD, Pfizer, Inc., et al., Respondents. L.A. 31667.

Page 811

191 Cal.Rptr. 811

33 Cal.3d 965, 663 P.2d 534

Bonnie L. SUMNER, Petitioner, v. WORKERS' COMPENSATION APPEALS BOARD, Pfizer, Inc., et al., Respondents.

L.A. 31667.

Supreme Court of California,

In Bank.

June 2, 1983.

John B. Mestad, Los Angeles, for petitioner.

Richard W. Younkin, William B. Donohoe, Alvin R. Barrett, San Francisco, Mark & Bolson and Hogen J. Kallemeyn, San Bernardino, for respondents.

GRODIN, Justice.

In Johnson v. Workmen's Comp. App. Bd. (1970), 2 Cal.3d 964, 88 Cal.Rptr. 202, 471 P.2d 1002, we reviewed an order of the then Workmen's Compensation Appeals Board (WCAB) dismissing a widow's application for death benefits on the ground that her husband entered into a compromise and release of all claims, including those of his dependents. In an opinion by Justice Tobriner we held, contrary to the widow's contentions, that Labor Code section 5000, subdivision (b), authorizes an employee to release claims of his dependents; that the statute as so construed did not deprive the widow of due process of law or the equal protection of the laws; and that the widow was not entitled to a hearing to determine whether her husband, in executing the release, intended to release claims of his dependents. We stated, however, "We think the board can, and should, devise a form for compromise and release of disability claims which (1) notifies the applicant of the consequences of the release in clear and non-technical language, and (2) does not compel the release of death benefits when the parties and the referee lack sufficient information to weigh the desirability of releasing these benefits and the adequacy of the compensatory consideration." (2 Cal.3d at p. 974, 88 Cal.Rptr. 202, 471 P.2d 1002.)

In the 13 years since Johnson was decided, the WCAB has failed to comply with our directive. Instead, it continues to use basically the same compromise and release form (form 15) which we criticized in that case. Such a form was used in the instant case, and was held by the WCAB to bar entitlement to death benefits by the petitioner here. We issued a writ of review to consider the legal effect of form 15 in light of the WCAB's absence of alacrity in responding to our mandate.

Facts

Petitioner and applicant Bonnie L. Sumner (hereinafter applicant) is the widow of Charles G. Sumner (employee) who died of a respiratory disease on March 23, 1980, at the age of 64. Employee alleged that he had contracted this disease, which was diagnosed as pulmonary emphysema, during his employment as a packer and loader for employer Pfizer, Inc. (employer), which exposed him to high dust levels. A medical report prepared for employer's insurer attributed half of employee's problems to his longstanding cigarette smoking and half to his working environment. ¹

Employee dated the onset of lung problems to early 1978. He began noticing a soreness around his upper chest and back which was aggravated with physical exertion, and a cough. In late 1978, he began noticing an increasing cough and some shortness of breath but was able to continue working. Employer advised him to have a physical examination. This was done and his family doctor advised him to stop working because of a chronic lung condition. He did stop working on January 2, 1979, never to return.

At some point in 1979 employee and applicant began discussing a settlement of his then-pending workers' compensation claim with employer. There were two meetings; at neither did employee or applicant have counsel. At the first meeting, employer offered to settle for $15,000. Employee and applicant took that offer to a superintendent at employer's Victor Valley plant, who advised them that the offer was too low and they should reject it. The Sumners went on a vacation to Texas and when they returned there was a letter waiting for them. Pursuant to the letter they went to employer's Lucerne office. There a representative of the employer had some papers and told the Sumners these papers raised the settlement offer to $25,000. The representative said he didn't think employer would offer any more and advised the Sumners to accept the offer. They did, and employee signed the papers on December 4, 1979.

There was no mention at either of the meetings that the execution of the compromise and release agreement would bar applicant's claim for death benefits if her husband died, applicant said. The only discussion, she said, was over employee's injury.

An order approving the compromise and release, as required by WCAB rules (Cal.Admin.Code, tit. 8, §§ 10870, 10882), was made on December 12, 1979. The award provided for payment of $25,000 plus further lifetime medical care, less a credit to employer and its insurer for advances against permanent disability in the sum of $2,030.

Paragraph 11 of WCAB form 15--which must be used in a compromise and release agreement (Cal.Admin.Code, tit. 8, § 10874)--provides, as it did when Johnson was decided: "Upon approval of this Compromise Agreement by the Workers' Compensation Appeals Board or a Referee, and payment in accordance with the provisions hereof, said employee releases and forever discharges said employer and insurance carrier from all claims and causes of action, whether now known or ascertained, or which may hereafter arise or develop as a result of said injury, including any and all liability of said employer and said insurance carrier and each of them to the dependents, heirs, executors, representatives, administrators or assigns of said employee." (Emphasis added.)

Following employee's death, applicant filed a claim for death benefits. Employer asserted the compromise and release as a bar to her recovery of any death benefits. The workers' compensation judge, while expressing reservations about the continued use of form 15 in light of our decision in Johnson, denied applicant's claim. He opined: "The criticism of the Supreme Court [in Johnson ] seems well founded and Paragraph 11, read by a layman (or even many attorneys) fails to give sufficient language and warning that execution of the document releases the applicant's dependents from any claim for death benefits." Nevertheless, since it could not be said as a matter of law that the settlement was based upon inadequate consideration or induced by fraud or mutual mistake, he refused to set the agreement aside.

In his report and recommendation on applicant's petition for reconsideration, the judge repeated his misgivings about the form. "[W]hile this Workers' Compensation Judge feels that the language should have been changed (and still should be changed) it is not felt that the defect, if any, is so flagrant as to in and of itself provide a prima facie [sic] ground for setting aside a Compromise & Release agreement as to its effect upon the claims of a dependent. To make such a finding would open a floodgate of hundreds and perhaps thousands of claims and such action does not seem appropriate to be made by a Workers' Compensation Judge." He added, "If the Workers' Compensation Appeals Board or an Appellate Court finds that the language of the Compromise & Release agreement is sufficiently defective to support a decision that such agreement is not a bar to actions by dependents, such a finding must be made by them."

The WCAB unanimously adopted the judge's recommendation that the petition for reconsideration be denied. Applicant then filed the instant petition for writ of review, which we granted.

I. Constitutional Attack

We first confront applicant's argument that barring death benefits pursuant to a compromise and release under Labor Code section 5000, subdivision (b) ² deprives dependents of an independent and severable constitutional right before it arises.

This argument need not detain us long, for we confronted it squarely in Johnson v. Workmen's Comp. App. Bd., supra, 2 Cal.3d 964, 88 Cal.Rptr. 202, 471 P.2d 1002. We concluded in Johnson that we could not exalt the right to death benefits granted in sections 4701 and 4702 "as to render unconstitutional the concurrent limitation on those rights placed by the Legislature in section 5000." (Id., at p. 971, 88 Cal.Rptr. 202, 471 P.2d 1002.) "Since the contingent rights to such benefits derive exclusively from statute [citations], we cannot ignore the statutory condition attached to their accrual." (Ibid.) We considered cases from other states holding that releases by the decedent cannot bar dependents' death benefit claims (ibid., fn. 4), but found them unpersuasive in the context of a "clear and specific" statute. (Ibid.) ³

We see no reason to depart from the sound holding in Johnson, and applicant has furnished none. Applicant argues that section 5000 is "ambiguous" because it says nothing shall confer upon dependents "any interest" which the employee cannot compromise, and does not refer to death benefits. We found the statute anything but ambiguous in Johnson, however, referring to it as "clear and specific." (Ibid.) Indeed, the statute leads to the clear conclusion that death benefits may be compromised. Johnson so held and nothing has occurred to alter that conclusion. ⁴

II. Validity of Compromise Form

Applicant's next argument, and the most serious claim before us, is that form 15 of the WCAB, which is used for compromises and releases, is a contract of adhesion which must be interpreted as not covering death benefits. ⁵

We rejected this contention in large part in Johnson. There, as here, the applicant contended that her husband, in executing the compromise and release, did not know he was releasing his wife's claim to death benefits and did not intend that result. (2 Cal.3d at p. 972, 88 Cal.Rptr. 202, 471 P.2d 1002.) We distinguished, however, between releases of tort liability and a release of workers' compensation liability. A tort release is effective upon execution, but a workers' compensation release is invalid until approved by the workers' compensation judge. (2 Cal.3d at p. 973, 88...