Williams v. Workers' Comp. Appeals Bd.

• Decision Date: 18 August 1999
• Docket Number: No. G024467,G024467
• Citation: 74 Cal.App.4th 1260,88 Cal.Rptr.2d 798
• Court: California Court of Appeals Court of Appeals
• Parties: , 99 Cal. Daily Op. Serv. 7800, 1999 Daily Journal D.A.R. 9847 Melissa WILLIAMS, Petitioner, v. WORKERS' COMPENSATION APPEALS BOARD, City of Pismo Beach et al., Respondents.

Page 798

88 Cal.Rptr.2d 798

74 Cal.App.4th 1260, 99 Cal. Daily Op. Serv. 7800,

1999 Daily Journal D.A.R. 9847

Melissa WILLIAMS, Petitioner, v. WORKERS' COMPENSATION APPEALS BOARD, City of Pismo Beach et al., Respondents.

No. G024467.

Court of Appeal, Fourth District, Division 3, California.

Aug. 18, 1999.

Goldschmid, Silver & Spindel, Los Angeles, and Lawrence Silver, Costa Mesa, for Petitioner.

California Applicants' Attorneys Association, William A. Herreras, Grover Beach, and Merle Rabine as Amicus Curiae on behalf of Petitioner.

G. Bruce Sutherland, Arroyo Grande, for Respondents.

O P I N I O N

BEDSWORTH, J.

In this appeal we interpret section 5402 of the Labor Code, which provides in pertinent part: "If liability is not rejected within 90 days after the date the claim form is filed under Section 5401, the injury shall be presumed compensable under this division. The presumption is rebuttable only by evidence discovered subsequent to the 90-day period." ¹ We are concerned here with the effect of this statute on an employer who accepts an employee's claim and provides benefits within the initial 90-day period but later, after almost two years of providing benefits, denies liability. The workers' compensation judge (WCJ) applied the section 5402 presumption of compensability to respondent and excluded the testimony of its defense witnesses. The workers' compensation appeals board (WCAB) found that the presumption of a compensable injury did not apply because respondent initially accepted the claim and furnished benefits in "good faith." In our view the WCAB misinterpreted section 5402; we therefore annul the judgment.

I

Melissa Williams began her law enforcement career with the City of Long Beach in 1978. After ten years on the force, she relocated to the Central Coast of California and secured employment with the City of Pismo Beach (City). During her first year she was promoted to sergeant and experienced no work-related problems.

In January of 1990, Brook McMahon was hired as the new chief of police. From the beginning of his tenure as chief, his attitude toward Williams was antagonistic, and Williams began to experience stress. She was appointed as his aide and delegated a heavy workload. He demanded excessive overtime, publicly ridiculed her and was verbally abusive. Her precarious emotional stability affected her marriage, and her husband complained of the unpaid overtime she put into her job. Both she and her husband had extramarital affairs. Ultimately, their marriage failed.

In March of 1992, Williams sought medical care from a general practitioner who placed her on a leave of absence. She never returned to work with the City. On March 6 she filed an employee's claim for workers' compensation benefits complaining of "depression and anxiety due to work conditions [and] treatment." At the City's request she was examined by Robert T. Grattan, M.D., who concluded she was "temporarily and totally disabled from her usual occupation by her depression." Grattan surmised her disability was at least ten percent related to events arising from her employment with the City, and felt her psychiatric disability began on March 4, 1992. He opined that the conflicts between Williams and McMahon would have to be resolved in order for them to establish a suitable working relationship.

Grattan's psychiatric report was provided to the City on April 28, 1992, 53 days after Williams filed her claim for benefits. The City then provided Williams with full-salary benefits for about a year, after which the rate was reduced to a temporary total disability rate. After providing benefits for almost two years, the City rejected her claim because of "information which was discovered subsequent to the ninety day deadline and which will be presented at trial." In the interim the City filed an application for adjudication with the WCAB.

The litigants selected Thomas Preston, M.D. to conduct a psychiatric examination of Williams. In August of 1995 Preston evaluated her as "tearful and fearful" and suffering from "repetitive obsessional symptoms ... including symptoms of getting into a car crash, shaving her legs to peel the skin off, etc. Although not suicidal, she fights such ideas." He described her judgment as "impaired by her ruminative thinking, depression and loss of self-confidence."

Preston interpreted the results of psychological tests he administered to Williams and assessed her as depressed and resentful, noting "life has probably become a great strain" for Williams. He described her as "functioning at a marginal level ever since discontinuing her employment" and found her to be "significantly symptomatic." Preston concluded Williams was "temporarily totally disabled from March 5, 1992, until she returned to wallpapering on a part-time basis at which point her condition was one of temporary partial psychiatric disability." He doubted whether she would ever be able to return to work as a police officer, because she lacked self-confidence and suffered from depression, anxiety, and fear.

Preston concluded Williams would not have become disabled "absent the interactions with Chief McMahon and the significant work overload. I believe it would be speculative to state she would have developed disability absent the stressful interactions and conflicts with her chief and the significant work overload which occurred." In his opinion, "work situations" were the predominant cause of her depression, but he may not have been presented with evidence of Williams' extramarital affair.

Williams relocated to Southern California and the case went to trial in Santa Monica over a two-year period during which various City employees testified, including police chief McMahon. At the conclusion of trial the WCJ issued her Findings and Award, and Opinion on Decision. The WCJ found the City's "rejection more than 90 days after the date of injury and filing of the claim form did not negate the [Labor Code Section] 5402[p]resumption."

The WCJ explained: "... since the Applicant's claim was accepted after obtaining the opinion of a psychiatrist without doing any further investigation, the subsequent investigation and denial were not performed with due diligence.... All of the witnesses were available for interview within the 90 days, their names were known and they were employed by defendant." The WCJ found that Williams was temporarily disabled from March 5, 1992 onward and issued an award for temporary disability in Williams' favor.

The City filed a petition for reconsideration, which was granted by the WCAB. The WCAB described this as a case "where the defendant timely and in good faith conducted an initial investigation, accepted the applicant's claim of psychiatric injury, and paid benefits in good faith." The WCAB concluded that section 5402 does not apply to cases where the employer has timely furnished benefits but later discovers that liability is in question. The WCAB noted that even in the "pre-reform" era, initial acceptance of a claim did not equate with an admission of liability. The WCAB rescinded the WCJ's findings and award, found that section 5402 did not apply and the City's evidence was not excluded, and returned the matter for the litigants and the WCJ to determine whether there was an industrial injury in the absence of the presumption of compensability under section 5402. Williams then petitioned this court for review of the sole issue of the applicability of section 5402.

II

Our review is governed by section 5952. "This court must determine whether the evidence, when viewed in light of the entire record, supports the award of the WCAB. This court may not reweigh the evidence or decide disputed questions of fact. [Citations.] However, this court is not bound to accept the WCAB's factual findings if determined to be unreasonable, illogical, improbable or inequitable when viewed in light of the overall statutory scheme. [Citation.] Questions of statutory interpretation...