Travelers Ins. Co. v. Sierra Pacific Airlines

• Decision Date: 20 December 1983
• Citation: 197 Cal.Rptr. 416,149 Cal.App.3d 1144
• Court: California Court of Appeals Court of Appeals
• Parties: The TRAVELERS INSURANCE COMPANY, a corporation, Plaintiff and Respondent, v. SIERRA PACIFIC AIRLINES, a corporation, et al., Defendants and Appellants. Civ. 67169.

Page 416

197 Cal.Rptr. 416

149 Cal.App.3d 1144

The TRAVELERS INSURANCE COMPANY, a corporation, Plaintiff and Respondent, v. SIERRA PACIFIC AIRLINES, a corporation, et al., Defendants and Appellants.

Civ. 67169.

Court of Appeal, Second District, Division 5, California.

Dec. 20, 1983.

Kern & Wooley and Ralph S. LaMontagne, Jr., Los Angeles, for defendants and appellants.

Parker & Dally and Joan E. Partritz, Pomona, for plaintiff and respondent.

STEPHENS, Associate Justice.

This action arises out of the crash of a Sierra Pacific Airlines (hereinafter SPA or appellant) aircraft which occurred in March of 1974. Thirty-six passengers were killed, including one Irene Bunde. At the time of the accident, Ms. Bunde was working in the course and scope of her employment with Wolper Organization, Inc.

Prior to the crash, plaintiff/respondent Travelers issued a policy of workers' compensation insurance to the Wolper Organization. ¹ In the instant case, decedent Irene Bunde had no "dependents" at the time of her death. Since Ms. Bunde left no dependents, Travelers was required, pursuant to Labor Code section 4706.5, subdivision (a), ², ³ to pay to the Department of Industrial Relations of the State of California a sum equal to the total dependency death benefit that would have been payable to the decedent's surviving dependent, had such a dependent existed.

Regarding Ms. Bunde's estate, Travelers paid the sum of $37,763.67 to the Department of Industrial Relations. ⁴

A complaint for damages was thereafter filed by Travelers on March 6, 1975, seeking recovery of the monies paid out. Based upon stipulated facts and the conceded negligence on the part of SPA, the trial court entered judgment in favor of Travelers. The court concluded that the money paid to the Department of Industrial Relations constituted compensation. SPA thereafter initiated this appeal.

Among the multiple issues presented are (1) whether application of section 3852, as amended in 1970, is to be limited to factual situations involving rights of subrogation; (2) whether payments made to the Department of Industrial Relations, pursuant to section 4706.5, subdivision (a), constitute "compensation" within the meaning of section 3852, as amended in 1970, or in the alternative, does the payment constitute satisfaction of a tax obligation; (3) whether it is necessary for a workers' compensation carrier to make payments to "dependents" of a deceased employee in order to be entitled to reimbursement for such payments from a third party tortfeasor pursuant to section 3852, as amended in 1970; (4) whether section 3852, as amended in 1970, imposes double liability on a third party tortfeasor; and (5) whether section 4706.5 violates Equal Protection.

We find appellant's arguments unpersuasive and thus affirm the court's judgment.

I

We begin our discussion by addressing the foundational question of whether section 3852, as amended in 1981, thereby incorporating section 4706.5 (payments made to the Department of Industrial Relations), should apply to this appeal. ⁵

During the pendency of this appeal, the Legislature amended section 3852 to read as follows:

"The claim of an employee, for compensation does not affect his claim or right of action for all damages proximately resulting from such injury or death against any person other than the employer. Any employer who pays, or becomes obligated to pay compensation, or who pays or becomes obligated to pay salary in lieu of compensation or who pays or becomes obligated to pay an amount to the Department of Industrial Relations pursuant to Section 4706.5, may likewise make a claim or bring an action against such third person. In the latter event the employer may recover in the same suit, in addition to the total amount of compensation, damages for which he was liable including all salary, wage, pension, or other emolument paid to the employee or to his dependents." (Emphasis added.)

By this amendment, the Legislature clearly sought to insure that an employer or insurer (see § 3850) could maintain a claim or right of action against a third party tortfeasor for those payments made pursuant to section 4706.5.

Although the amendment became effective during the pendency of this appeal, Travelers contends that the amendment should be applied retroactively as a result of the following legislative statement of intent:

"The Legislature finds and declares that the provisions of law set forth in Sections 8, 9 and 10 of this act, which respectively amend Sections 3352 and 3852 of the Labor Code and add Section 3706.5 to the Labor Code, do not constitute a change in, but are declaratory of, the existing law. These provisions shall apply to all claims filed for injuries occurring prior to the effective date of this act."

SPA maintains that the declaration of the Legislature cannot change the plain meaning of section 3852 as it read in its 1970 version; that section 3852 as it stands amended or in its former version in fact "bolsters their position"; and that any retrospective application of amended section 3852 would be unconstitutional.

SPA premises these arguments on three theories: (1) that section 3852 does not merely represent a clarification of the former law, but rather represents a clear change in the law making it non-retroactive in its application; (2) that retroactive application would in any event be unconstitutional; and (3) that the section itself, as recently amended or in its former state, is unconstitutional.

We are not persuaded by these arguments and find that section 3852, as amended in 1981, is applicable to the instant case.

In construing the applicability of section 3852, it is fundamental that we ascertain the intent of the Legislature in order to effectuate the purpose of the law. (Sinnamon v. McKay (1983) 142 Cal.App.3d 847, 850, 191 Cal.Rptr. 295; see also California Teachers Assn. v. San Diego Community College Dist. (1981) 28 Cal.3d 692, 698, 170 Cal.Rptr. 817, 621 P.2d 856.) Accordingly, we are bound to give that effect to the statute according to the usual, ordinary import of the language employed in framing them looking first to the words of the statute to determine the intent of the Legislature. " 'If the words ... are clear, the court should not add to or alter them to accomplish a purpose that does not appear on the face of the statute or from its legislative history. [Citations omitted.]' " (Id., 142 Cal.App.3d at p. 851, 191 Cal.Rptr. 295, quoting from California Teachers Assn. v. San Diego Community College Dist., supra, 28 Cal.3d at p. 698, 170 Cal.Rptr. 817, 621 P.2d 856.)

The legislative intent of section 3852, as amended in 1981, is clear. "These provisions shall apply to all claims filed for injuries occurring prior to the effective date of this act." (Assembly Bill No. 44 (1981) Reg.Sess. § 12.) The Legislature intended the amended section 3852 to apply "retroactively" as said amendment "[does] not constitute a change in, but [is] declaratory of, the existing law." (Ibid.; see also Legislative History, West's Ann.Ed.Code (1983 Supp.) foll. § 3352, p. 26.)

SPA suggests that we not "blindly bow to the legislature's stated interpretation" since former section 3852 (as amended in 1976) is unambiguous. The 1981 amendment, it argues, is not declaratory of existing law. SPA cites to the Legislative Counsel's Digest of Assembly Bill No. 44, supra, section 4, which states as follows:

"Existing law permits any employer who pays or becomes obligated to pay workers' compensation or salary in lieu of compensation, to make a claim or bring an action against a third person for the injury or death to the employee.

"This bill would, in addition, permit an employer who pays or becomes obligated to pay an amount to the Department of Industrial Relations when an employee entitled to workers' compensation dies without survivors, to make such claim or bring such action against a third person." (Emphasis added.)

Those statements located in the Legislative Counsel's Digest are noteworthy, yet less than persuasive when considered in light of the Legislature's own patent action and stated intent. These statements merely represent the Legislature's in-house counsel's impressions of the import of that legislation.

Secondly, the additional language in fact alters nothing. Payments made to the Department of Industrial Relations pursuant to section 4706.5 were already implicitly recoverable under the section as previously written. (Associated Indemnity Corp. v. Pacific Southwest Airlines (1982) 128 Cal.App.3d 898, 908, 180 Cal.Rptr. 685.) The "addition" merely clarifies what actions were possible under that statute to avoid any ambiguity. (See ibid; cf. Assembly Bill No. 44, supra, § 13.)

As a result, not only is section 3852, as it stands amended, presently applicable in the instant matter, its application in the instant case is not unconstitutional. The Legislature in its attempt to prevent confusion, stated that the amended statute would apply to injuries occurring prior to the effective date of the act. Though couched in terms of "retroactivity," the statute is in effect administered as if never amended since there has been no "change" in the statute itself.

Finding, as we have, that section 3852, as amended in 1981, is applicable to the instant case, we now address appellant's contention that Travelers has no right to recover under the terms of that section. SPA insists that section 3852 is simply a recognition of the doctrine of equitable subrogation and is not an indemnity statute. The argument continues that this conclusion follows, since section 3852 deals with the doctrine of equitable subrogation, ⁶ and Travelers cannot stand in the shoes of a subrogee because its payments were not made to an "injured person," but rather were made to the Department of Industrial Relations.

As noted earlier, section 3852 entitles an employer or insurance carrier who pays or becomes obligated...