Opinion
For Opinion on Hearing, see 216 Cal. Rptr. 115, 702 P.2d 197.
Opinions on pages 912-931 omitted.
[202 Cal.Rptr. 521]Barry M. Wally, Burlingame, for petitioner Kaiser Foundation hospitals.
David V. Costa, Mullen & Filippi, San Francisco, for respondent City of Daly City.
Richard W. Younkin, William B. Donohoe, Alvin R. Barrett, Workers' Compensation Appeals Bd., San Francisco, for respondent Workers' Compensation Appeals Bd.
KLINE, Presiding Justice.
This workers compensation case requires us to address a conflict that has arisen in the case law between legal and equitable considerations pertinent to the time within which claims must be filed.
The facts are simple. Marvin Martin, an employee of respondent Daly City, was injured at work on February 25, 1981, and was disabled until he returned to work in May, 1981. Kaiser Foundation Hospitals/Permanente Medical Group (Kaiser) furnished medical treatment during the period of disability under a health plan paid for by Daly City. On July 2, 1981, the city sent Martin a letter, with a copy to Kaiser, stating that it believed his injury was not job related and denying his claim for benefits. In March 1982, counsel for Kaiser wrote to an attorney representing Martin inquiring whether the employee intended to file a formal application for benefits with the Workers' Compensation Appeals Board (board). The attorney replied in the negative, and, on April 15, 1982, Kaiser filed the application on behalf of Martin as lien claimant. (Labor Code, § 5501; Independence Indem. Co. v. Indus. Acc. Comm. (1935) 2 Cal.2d 397, 41 P.2d 320.) Based upon stipulated facts, a workers' compensation judge determined that the application was barred by the statute of limitations. Thereafter the board denied Kaiser's petition for reconsideration.
The record is unclear whether Martin actually made a claim, or Kaiser made one on his behalf, or the document sent on July 2 was merely a form letter sent to all employees injured at work whose injuries the city concludes are not industrial.
I.
Labor Code section 5405, as here pertinent, provides that the period within which proceedings for the collection of workers' compensation benefits must be commenced is one year from the date of injury. So applied, the statute would bar the instant application, which was filed more than one year after the injury on February 25, 1981. However, the case law establishes that the one-year period does not commence to run until the employer complies with administrative rules (Cal.Admin.Code, tit. 8, §§ 9812, 9880), prescribed by statute (Lab.Code, § 138.4; see also §§ 138.3 and 5402), requiring that the employee be notified in writing that the employer rejects liability for the payment of benefits and providing related information. (Kaiser Foundation Hospitals v. W.C.A.B. (Webb) (1977) 19 Cal.3d 329, 334-336, 137 Cal.Rptr. 878, 562 [202 Cal.Rptr. 522] P.2d 1037; Reynolds v. W.C.A.B. (1974) 12 Cal.3d 726, 729-730, 117 Cal.Rptr. 79, 527 P.2d 631; Buena Ventura Gardens v. W.C.A.B. (1975) 49 Cal.App.3d 410, 413-417, 122 Cal.Rptr. 714.)
Section 5405 also provides, in the alternative, that the period within which such proceeding may be commenced is "one year from: .... (b) the expiration of any period covered by [disability] payment ...; or (c) The date of last furnishing of [medical] benefits ...." In Mihesuah v. W.C.A.B. (1972) 29 Cal.App.3d 337, 105 Cal.Rptr. 561, it was held that an employer's continued payments to a medical insurance plan covering its employees constitute the "furnishing of [medical] benefits" within the meaning of subdivision (c) of section 5405, and that, accordingly, the statute is tolled while such benefits are being provided, regardless of the date of injury.
In Reynolds, supra, which contains the first and still the principal statement by our Supreme Court on this issue, the employee suffered a heart attack at work in February, 1968, and filed the application in January, 1971. The employer made neither disability nor medical payments (see § 5405, subds. (b), (c)) during those three years. However, it also failed to notify the employee of its refusal to consider the injury industrial or the possibility that the employee could file a workers' compensation claim. "As a result," the court held, "the statute of limitations had not commenced to run at the time petitioner filed his claim." (12 Cal.3d at p. 728, 117 Cal.Rptr. 79, 527 P.2d 631, italics added.)
Such notice was at that time required under former sections 9816, 9817 and 9859 of title 8 of the California Administrative Code.
Some months later, in Buena Ventura Gardens v. W.C.A.B., supra, 49 Cal.App.3d 410, 122 Cal.Rptr. 714, a court of appeal applied Reynolds to very similar facts. In its concluding statement of the rule the court said, "After [the employer gives] notice of potential benefits the statute of limitations commences as to the timely filing of the claim." (Id., at p. 417, 122 Cal.Rptr. 714, italics added.)
In Kaiser Foundation Hospitals v. W.C.A.B. (Webb), supra, 19 Cal.3d 329, 137 Cal.Rptr. 878, 562 P.2d 1037, the court held that once the employer gives notice of its rejection of liability or denial of the claim, the statute of limitations runs even if the employer continues to furnish medical benefits in a technical sense by continuing to contribute to the employee medical plan. In passing, the court characterized the Reynolds rule as one of "estoppel" (19 Cal.3d at p. 335, 137 Cal.Rptr. 878, 562 P.2d 1037); but as it had done in Reynolds it repeatedly stated the holding in terms of tolling. "[T]he one year period commences to run when the potential claimant is notified that the employer ... reject[s] liability ...." (Id., at pp. 331-332, 137 Cal.Rptr. 878, 562 P.2d 1037, italics added.) "[T]he statute of limitations begins to run ... no later than the date on which such notice is given." (Id., at p. 335, 137 Cal.Rptr. 878, 562 P.2d 1037, italics added.) "[W]e hold that the statute of limitations ... begins to run ... no later than the date on which the claimant is notified of a disclaimer by the employer ...." (Id., at p. 336, 137 Cal.Rptr. 878, 562 P.2d 1037, italics added.)
If the principle articulated in Reynolds and reiterated in Buena Ventura and Webb were all that we need concern ourselves with, resolution of the instant case would be quite simple. Since Kaiser's application was filed less than one year after the employer's notification of the denial of benefits, when the statute of limitations commenced to run, it would not be barred. However, for reasons that emerge from the decision in Hurwitz v. W.C.A.B. (1979) 97 Cal.App.3d 854, 158 Cal.Rptr. 914, the matter cannot so easily be laid to rest.
In Hurwitz a legal secretary was injured in May, 1975, when she fell on stairs in the building in which she was employed. Fully aware of her workers' compensation rights, she initially chose instead to exclusively pursue her rights in tort against the owner of the building, who was not her employer. Nearly two years later, after a change of mind, she filed an application for workers' compensation benefits. At that time, which was in April, 1977, the employer had sent none of the prescribed notices; but the court held nonetheless that the application was barred by the statute of limitations.
After reviewing the opinions in Reynolds, Buena Ventura and Webb, the court in Hurwitz stated that "[n]otwithstanding the language used [in those three cases], we are unable to accept that the courts literally meant that the statute of limitations does not commence to run until the notice prescribed by the administrative director has been given." (Hurwitz, supra, [202 Cal.Rptr. 523] 97 Cal.App.3d at p. 872, 158 Cal.Rptr. 914.) The "true basis" of those decisions, the Hurwitz court concluded, was "equitable estoppel." (Id., at p. 873, 158 Cal.Rptr. 914.) As stated by the court, "[t]he rule they establish is that when an employer has the requisite notice or knowledge of an employee's injury as to which there is a reasonable possibility the employee may be entitled to workers' compensation benefits, the employer has a duty to notify the employee of the potential right to benefits, and if the employer fails to do so, and if as a consequence the employee fails to file an application for worker's compensation benefits until after the applicable period of limitations has expired, the employer is estopped to assert the statute of limitations for a period of time equal to the delay resulting from the failure to give the required notice." (Id.) The Hurwitz court also justified its conclusion that the Reynolds and Buena Ventura decisions are founded on the doctrine of equitable estoppel on the ground that "[t]he precedential import of a case cannot be accurately determined without reference to its facts" and that the critical fact relied upon by the courts in those cases was that "the employees were ignorant of their potential rights under the workers' compensation law." (Id.)
II.
The requirement that in order to be relieved of the time limitations set forth in section 5405 the employee must show that his delay in applying for benefits was "a consequence" of the employer's failure to notify him of his right to benefits and that he was otherwise ignorant of that right does not appear in Reynolds, which simply requires the employee to show only that the employer did not provide the required notification more than one year prior to the date of the application for benefits.
The discrepancy between Reynolds and Hurwitz results from the primarily legal manner in which the former case addresses the underlying issue and the essentially equitable approach utilized in the latter. Notwithstanding abolition of the formal distinction between actions at law and proceedings in equity, the conceptual distinction has not lost all utility. (See 2 Witkin, Cal. Procedure (2d ed 1970) Actions §§ 64-84, pp. 939-956.) Law and equity may still be said to describe the body and the soul of our jurisprudence.
Our analysis of Reynolds and Hurwitz is assisted by the Aristotelian differentiation of law and equity, which has proved remarkably durable and still influences contemporary judicial thinking. (See, e.g. Usatorre v. The Victoria (2d Cir.1949) 172 F.2d 434, 439-443, fns. 12-16; Guiseppi v. Walling (2d Cir.1944) 144 F.2d 608, 615-616; Int'l. Union of Elec., Radio and Machine Workers v. NLRB (D.C.Cir.1970) 426 F.2d 1243, 1250.) Legal justice, Aristotle explained, rests on a concept of "arithmetical" equality that can be universally applied. "It makes no difference whether a decent man has defrauded a bad man or vice versa .... The only difference the law considers is that brought about by the damage: it treats the parties as equals and asks only whether one has done and the other has suffered wrong." (Aristotle, Nichomachean Ethics, Book V, ch. 4, pp. 120-121 (Ostwald transl., Bobbs Merrill 1962).) The weakness of justice in the legal sense is that "there are some things about which it is not possible to speak correctly in universal terms .... [I]n situations where it is necessary to speak in universal terms but impossible to do so correctly, the law takes the majority of cases, fully realizing in what respect it misses the mark. The law itself is none the less correct. For the mistake lies neither in the law nor in the lawgiver, but in the nature of the case." (Id., ch. 10, at p. 141.) The superiority of equitable to legal justice lies in the fact that, by considering particular circumstances that the law ignores, equity provides "a rectification of law where law falls short by reason of its universality." (Id., at p. 142.)
Blackstone also defined equity as "the correction of that wherein the law (by reason of its universality) is deficient." (1 Blackstone's Commentaries (Jones Ed.1915) p. 103.) For an illustration of the practical application of this Aristotelian concept, see Beley v. Naphtaly (1898) 169 U.S. 353, 360, 18 S.Ct. 354, 356, 42 L.Ed. 775, discussed, infra, at pp. 19-20.
[202 Cal.Rptr. 524]With respect to the issue here presented, the limitation of actions, the statute of limitations expresses the applicable legal rule. The equitable analog is not estoppel but laches. (See 2 Pomeroy's Equity Jurisprudence (5th ed. 1941) § 419a, p. 172.) Like laches, however, "[t]he doctrine of equitable estoppel is pre-eminently the creature of equity." (Id., § 802, p. 181.) Strictly speaking, the rights and corresponding duties created by true estoppels are primary rights of property or contract. (3 Pomeroy's Equity Jurisprudence, supra, § 801, pp. 176-179.) Extension of the doctrine of estoppel by way of analogy beyond these primary rights, to rights of remedy, actually produces a quasi estoppel. (Id., § 817, pp. 245-246.) Where it does apply by analogy to the right of remedy, and in this manner may affect the right to assert the bar of a statute of limitations, estoppel works to the benefit of a party injuriously misled to believe that the silence or inaction of the adverse party represented acquiescence in wrongful conduct or the deprivation of a right.
What will amount to sufficient acquiescence to support an equitable estoppel largely depends upon the special circumstances of the particular case. (Chamberlain v. Chamberlain (1908) 7 Cal.App. 634, 641, 95 P. 659.) It is clear, however, that the essential circumstances relate both to the party to be estopped and the party claiming the estoppel. Broadly speaking, the essential elements related to the party to be estopped are: (1) conduct, including silence or inaction, which amounts to a false representation or concealment of material facts, or at least is calculated to convey the impression that the facts are otherwise than, and inconsistent with, those which the party subsequently attempts to assert; (2) the intention, or at least the expectation, that such conduct shall be acted upon by, or influence, the other party or other persons; and (3) actual or constructive knowledge of the real facts. As to the party claiming the estoppel, and again speaking broadly, the essential elements are (1) lack of knowledge and of the means of knowledge of the truth of the facts in issue; (2) good faith reliance on the statements or conduct, including silence or inaction, of the party to be estopped; and (3) action or inaction based on such reliance that is of such character as to change the position of such party to his injury or detriment. (See 28 Am.Jur.2d Estoppel & Waiver, § 35, pp. 640-641; see also §§ 76-80, pp. 710-723.)
It is often said that there can be no equitable estoppel if any of the elements just briefly described are lacking, and that such elements must be specifically pled and proved "in every particular, with nothing left to mere intendment or inference." (Id., § 148, p. 827; see also 3 Witkin, Cal. Procedure (2d ed. 1971) Pleading, § 783, and cases there cited, particularly Bowman v. McPheeters (1947) 77 Cal.App.2d 795, 799, 176 P.2d 745.)
The opinion in Reynolds explores none of these essential elements. Without any other significant analysis of the factual circumstances, the court limits its inquiry to a single dispositive fact: that the employer "was obligated to give the notices prescribed by the administrative rules and failed to do so." (Reynolds, supra, 12 Cal.3d at p. 730, 117 Cal.Rptr. 79, 527 P.2d 631.) Contrary to the representation in Hurwitz, the Reynolds court did not find that the employee in that case was ignorant of his rights, nor that the employee's delay was a consequence of the employer's failure to notify. The court merely noted that the board's express finding that the employee knew or should have known that his disability was industrial and that he had rights under the compensation laws reversed a contrary finding by the referee. [202 Cal.Rptr. 525] This observation was gratuitous, since, as provided in Labor Code section 5953, the findings and conclusions of the board on questions of fact normally "are conclusive and final and are not subject to review." Although such findings may be annulled under the substantial evidence test (Lab.Code, § 5952, subd. (d)), this requires a far greater judicial exercise than is represented by the casual observation in Reynolds to which Hurwitz attaches such extraordinary significance. (See Braewood Conv. Hosp. v. W.C.A.B. (1983) 34 Cal.3d 159, 164, 193 Cal.Rptr. 157, 666 P.2d 14; LeVesque v. W.C.A.B. (1970) 1 Cal.3d 627; 637-639, 83 Cal.Rptr. 208, 463 P.2d 432.)
As stated in Reynolds: "Although ... the board concluded that petitioner either knew or should have known of the relationship of his heart attack to his employment, the referee had found that petitioner did not realize the relationship until some time in December 1970 and that his failure to realize the relationship was due to a lack of sophistication." (12 Cal.3d at p. 729, 117 Cal.Rptr. 79, 527 P.2d 631.)
The reason, it seems clear to us, that the Reynolds court did not inquire into the circumstances of the employer's failure to notify, or whether the employee was truly ignorant, or any of the other elements essential to produce estoppel, and the reason the court did not even employ the word estoppel--let alone "equitable estoppel" or "estoppel in pais"--is that this equitable doctrine was not the gravamen of the decision. (Compare Benner v. Indus. Acc. Comm. (1945) 26 Cal.2d 346, 159 P.2d 24, a case decided prior to development of the Reynolds rule, in which, after detailed analysis of the factual circumstances and finding of the essential elements, the Supreme Court did hold that an employer was equitably estopped to rely on the statute of limitations.)
The Reynolds decision was simply the result of the familiar principle that the Workers' Compensation Act, which embodies a complete and exclusive code of laws on the subject, "is to be liberally construed with the purpose of extending its benefits for the protection of persons injured in the course of their employment. The act must be taken as a whole, and scrutiny is not confined to the particular section under review. All are parts of a connected whole and the several sections are to be read in connection with every other section." (Hawthorn v. City of Beverly Hills (1952) 111 Cal.App.2d 723, 727, 245 P.2d 352, fns. omitted, italics added.) This principle, which is codified in this state (Lab.Code, § 3202) , is followed in most others (see 2A Sutherland Statutory Construction (4th ed. 1973) § 54.05, p. 362 and cases there cited) and by the federal courts (see, e.g., International Stevedoring Co. v. Haverty (1926) 272 U.S. 50, 47 S.Ct. 19, 71 L.Ed. 157). The court in Reynolds was neither the first nor in this state is it the only court to have used this rule of construction, explicitly or implicitly, as the basis for an expansive interpretation of a provision of a workers' compensation act limiting the period within which claims must be filed so that it operates in pari materia with another provision of the same act. (See, e.g., Burke v. Industrial Comm'n. (1938) 368 Ill. 554, 15 N.E.2d 305 and Roblyer v. W.C.A.B. (1976) 62 Cal.App.3d 574, 133 Cal.Rptr. 246.) Applying this rule, the Reynolds court sensibly concluded that unless commencement of the statute of limitations set forth in section 5405 is deferred until the employer provides the notification required by section 138.4, and the administrative rules promulgated pursuant thereto, the important purpose of the latter statute would be undermined. Thus the statute of limitations was interpreted so that it did not conflict with but instead complemented section 138.4.
Labor Code section 3202 provides that "The provisions of [the Workers' Compensation Act] shall be liberally construed by the courts with the purpose of extending their benefits for the protection of persons injured in the course of their employment."
There is, of course, an element of due process in this conclusion. As stated in Lambert v. California (1957) 355 U.S. 225, 78 S.Ct. 240, 2 L.Ed.2d 228, "[e]ngrained in our concept of due process is the requirement of notice .... Notice is required before property interests are disturbed, before assessments are made, before penalties are assessed. Notice is required in a myriad of situations where a penalty or forfeiture might be suffered for mere failure to act." (Id., at p. 228, 78 S.Ct., at p. 243.)
[202 Cal.Rptr. 526]Although it may very loosely be said, as it was in Webb, that as a result of the statutory construction undertaken in Reynolds "the employer was estopped from asserting the statute of limitations, " (19 Cal.3d at p. 335, 117 Cal.Rptr. 79, 527 P.2d 631, italics in original) this incidental characterization does not fit the Reynolds rule within any authentic definition of the doctrine of equitable estoppel or estoppel in pais; and were this not so the strenuous procrustean effort undertaken in Hurwitz would have been unnecessary.
As has been noted, "[p]erhaps no other technical legal term is more loosely used than the term 'estoppel'." (28 Am.Jur.2d, Estoppel & Waiver, § 1, p. 599.)
We also think it appropriate to point out that even if, purely for the sake of argument, the Reynolds rule was based on equitable estoppel, that doctrine was not correctly or fairly applied in Hurwitz. The only elements essential to equitable estoppel that were explored in Hurwitz were those that relate to the employee, the party presumed to be claiming the estoppel; namely, the facts that the employee was not ignorant of her rights and that her delay in applying for benefits was not a consequence of the employer's failure to notify. But the court made no inquiry at all into the essential elements relating to the employer, the party against whom the estoppel was ostensibly sought. Thus, for example, it was assumed, without any discussion, that the employer's failure to notify was not a deliberate concealment, or at least calculated to convey a belief different than that upon which the employee acted; that the employer did not intend or at least expect that his failure to notify would be relied upon by the employee to her detriment; and that the employer did not know or should not have been expected to know that he was required to notify the employee. Reliance upon the unexamined assumption that the employer's conduct was in all essential respects above reproach--which necessarily implies that the cleanliness of the employer's hands was unaffected by his violation of the duty to notify--represents an inequitable application of the equitable doctrine. In this respect Hurwitz conflicts not only with Reynolds, but with virtually all workers' compensation cases in which, unlike Reynolds, an estoppel theory was utilized or even considered--for those cases emphasize the knowledge and conduct of the employer far more than that of the employee. (See, e.g., Benner v. Indus. Acc. Comm., supra, 26 Cal.2d 346, 159 P.2d 24; Maples v. W.C.A.B. (1980) 111 Cal.App.3d 827, 168 Cal.Rptr. 884; Nolan v. W.C.A.B. (1977) 70 Cal.App.3d 122, 138 Cal.Rptr. 561; Mihesuah v. W.C.A.B. (1972) 29 Cal.App.3d 337, 105 Cal.Rptr. 561; American Can Co. v. Indus. Acc. Comm'n. (1962) 204 Cal.App.2d 276, 22 Cal.Rptr. 164; Industrial Indem. Co. v. Indus. Acc. Comm'n. (1953) 115 Cal.App.2d 684, 252 P.2d 649; and Pacific Emp. Ins. Co. v. Indus. Acc. Comm'n. (1944) 66 Cal.App.2d 376, 152 P.2d 501.)
Properly applied, equitable doctrines place more weight on the defendant's duty than on the plaintiff's right. The idea was succinctly stated by Ames: "... the fundamental difference between law and equity ... [is] that the law acts in rem, while equity acts in personam. The difference between the judgment at law and the decree in equity goes to the root of the whole matter. The law regards chiefly the right of the plaintiff, and gives judgment that he recover the land, debt, or damages, because they are his. Equity lays the stress upon the duty of the defendant, and decrees that he do or refrain from doing a certain thing because he ought to act or forebear. It is because of this emphasis upon the defendant's duty that equity is so much more ethical than law." (Ames, Law and Morals (1908) 22 Harv.L.Rev. 97, 105-106, italics added.)
By limiting the significance of Reynolds to the misperceived "fact" that the employee in that case was ignorant of his rights, and by ignoring the conduct of the employer, [202 Cal.Rptr. 527] the Hurwitz court turns Reynolds on its head. Instead of operating to encourage employers to discharge their duty to provide employees the notification required by statute, which seems to us the purpose the Supreme Court had in mind, Reynolds is transformed into its opposite: a rationale for excusing the failure to fulfill that statutory responsibility.
III.
But there is yet a more fundamental defect in Hurwitz, one that can best be illustrated by returning to the Aristotelian formulation of the distinction between legal and equitable justice. Equitable justice is "better" than the legal kind, Aristotle contended, because by looking to the circumstances of the matter under adjudication it can cure the error that may result from the universal application of a legal generality. But at some point, though admittedly not one that is always clear, the introduction of equity challenges the development and administration of an ordered system of rules, a problem of considerably greater concern today than at the time and place in which Aristotle wrote. As has been stated in a somewhat different connection, "The problem for the law is: When will it be just to treat different cases as though they were the same? A working legal system must therefore be willing to pick out key similarities and to reason from them to the justice of applying a common classification. The existence of some facts in common brings into play the general rule." (Levi, An Introduction to Legal Reasoning, (U.Chi.Press 1948) p. 3.) Equity, which cannot afford and does not need to express itself in precise rules, but speaks through notably imprecise "principles," "doctrines" and "maxims" (see e.g., the maxims codified in Civ.Code, §§ 3509-3548), conflicts with this legal enterprise. Equity defines itself only through its application to peculiar circumstances so infinitely variable as frequently to defy classification. For example, it has been said that "[i]n the final analysis ... an equitable estoppel rests upon the facts and circumstances of the particular case in which it is urged, considered in the framework of the elements, requisites, and grounds of equitable estoppel, and consequently, any attempted definition usually amounts to no more than a declaration of [202 Cal.Rptr. 528] an estoppel under those facts and circumstances. The cases themselves must be looked to and applied by way of analogy rather than rule." (28 Am.Jur.2d, Estoppel & Waiver, § 27, p. 628.)
As noted by Sir Henry Maine, the development of an ordered system of legal rules was not among the goals or achievements of Green civilization. "The Greek intellect, with all its nobility and elasticity, was quite unable to confine itself within the strait waistcoat of a legal formula; and, if we may judge them by the popular courts of Athens, of whose working we possess accurate knowledge, the Greek tribunals exhibited the strongest tendency to confound law and fact. The remains of the Orators and the forensic commonplaces preserved by Aristotle in his Treatise on Rhetoric, show that questions of pure law were constantly argued on every consideration which could possibly influence the mind of the judges. No durable system of jurisprudence could be produced in this way. A community which never hesitated to relax rules of written law whenever they stood in the way of an ideally perfect decision on the facts of particular cases, would only, if it bequeathed any body of judicial principles to posterity, bequeath one consisting of the ideas of right and wrong which happened to be prevalent at the time. Such jurisprudence would contain no framework to which the more advanced conceptions of subsequent ages could be fitted...." (Maine, Ancient Law (3d Am. ed. 1885) pp. 72-73.)
The uncertainty that necessarily attends the application of such a doctrine is a source of some resistance in the law to the resort to equitable solutions. (See Pound, The Decadence of Equity (1905) 5 Col.L.Rev. 20.) The method of redress the law prefers, and one far better suited to the needs of our system of workers' compensation, is the refinement of an inadequate legal rule. By improving the rule, the need for equitable exceptions is reduced and certainty enhanced. In this manner law sometimes envelops equity, as "a part of what is now strict law was formerly considered as equity; and the equitable decisions of this age will unavoidably be ranked under the strict law of the next." (Millar, Historical View of Eng. Gov't., quoted in Pound, The Decadence of Equity, supra, 5 Col.L.Rev. at p. 24.) Such development of the law is sometimes described as the "equitable construction" of a legal rule. As noted by the United States Supreme Court, " '[i]n some cases the letter of a legislative act is restrained by an equitable construction; in others it is enlarged; in others the construction is contrary to the letter. The equitable construction which restrains the letter of a statute is defined by Aristotle, as frequently quoted, in this manner: "Aequitas est correctio legis generaliter latae qua parti deficit." ' " (Beley v. Naphtaly (1858) 169 U.S. 353, 360, 18 S.Ct. 354, 356, 42 L.Ed. 775, quoting Riggs v. Palmer (1889) 115 N.Y. 506, 510, 22 N.E. 188.) Thus, to paraphase our own Supreme Court, it may be said that law has its equity as equity its laws. (See Hulbert v. Calif. etc. Cement Co. (1911) 161 Cal. 239, 248, 118 P. 928.)
An attitude illustrated by the famous remark of Selden that: "Equity is a roguish thing; for the law we have a measure, know what to trust to; equity is according to the conscience of him that is chancellor, and as that is larger or narrower, so is equity. 'Tis all one as if they should make the standard for the measure the chancellor's foot. What an uncertain measure this would be! One chancellor has a long foot, another a short foot, another an indifferent foot; 'tis the same thing with the chancellor's conscience." (Selden, Table Talk, tit. Equity (circa 1654) Oper. tom. iv., p. 2028, quoted in Hohfeld, The Relations Between Equity and Law (1913) 11 Mich.L.Rev. 537, 566, fn. 22.)
This process of the law--which is accomplished through statutory construction rather than case-by-case application of an equitable doctrine--is exemplified by Reynolds. By deferring commencement of the statute of limitations until the employer discharges his statutory duty to notify, the Reynolds rule decreases the likelihood that an employee may be misled to his injury and thereby diminishes the need for an equitable caveat in any particular case. Moreover, since it turns upon a single readily ascertainable fact, the rule admits of easy uniform application that will enhance both certainty and predictability. These benefits are undone by Hurwitz. By shifting attention from a specific and easily ascertainable act of the employer to the state of mind of the employee, Hurwitz abandons a uniform test that is easy to apply in favor of an immensely more complicated analysis of myriad and often unique circumstances that cannot produce certain and predictable results. The Hurwitz approach also necessitates time consuming and expensive evidentiary hearings that will burden the parties no less than the system; even if it does not, as we think it will, work other mischief. These unhappy [202 Cal.Rptr. 529] results cannot be reconciled with the public policy, declared in our Constitution, that administration of the worker's compensation laws "shall accomplish substantial justice in all cases expeditiously, inexpensively, and without incumbrance of any character." (Cal. Const., art. 14, § 4.) Though it may not always work perfect justice, the Reynolds rule will accomplish substantial justice in a manner that better comports with the constitutional mandate. In short, the fundamental defect of Hurwitz is that it resurrects the equitable inquiry into factual circumstances which, with good reason, the rule of Reynolds was designed to eliminate.
For example, Hurwitz abandons not only the rationale of Reynolds but as well the one-year period of the statute of limitations, which Reynolds had left intact.
Our belief that the rule of Reynolds is superior to that of Hurwitz is not crucial to our decision. Having concluded that the court in Reynolds meant what it said, and that the reasoning of that case cannot be reconciled with that of Hurwitz, we are bound to follow Reynolds for the sufficient reason that it was rendered by a court of superior jurisdiction. (See Auto Equity Sales, Inc. v. Superior Court (1962) 57 Cal.2d 450, 455, 20 Cal.Rptr. 321, 369 P.2d 937.)
Since, as a matter of law, the one-year statute of limitations on the employee's claim commenced to run on that date in July, 1981, when he and Kaiser received notification of the employer's rejection of liability and denial of benefits, and since it is undisputed that the lien claimant's application in behalf of the employee was filed within one year of that date, we hold that the application was timely filed.
Accordingly, the opinion and order of the board is annulled and the case remanded for proceedings on the merits.
ROUSE and SMITH, JJ., concur.
In the instant case it appears that Kaiser provided medical treatment to Martin pursuant to a medical insurance plan for which Daly City paid premiums within one year before Kaiser filed the application as lien claimant. However, Kaiser neglected to include these facts in the stipulation entered below, and Daly City has refused to concede them. In these circumstances we cannot assume that Kaiser's application was timely filed under subdivision (c) of section 5405.
Thus true estoppels to raise the bar of statutes of limitations are ordinarily permitted only "... where the party who invokes them [i.e., a defendant or, in the present context, the employer] has been guilty of such conduct as would cause injustice to his adversary [i.e., the plaintiffs or, as here, the employee] should an order of dismissal be granted." (Hunt v. United Artists Studio (1947) 79 Cal.App.2d 619, 622, 180 P.2d 460, italics added.)
While Maine's opinion is not universally shared by those familiar with Attic law (see, e.g., Vinogradoff, Outlines of Historical Jurisprudence, vol. II, The Jurisprudence of the Greek City (Oxford Univ. Press 1920-1922); Calhoun, Greek Law and Modern Jurisprudence (1923) 11 Cal.L.Rev. 295), it remains the prevailing view, at least in Anglo-American jurisprudence. And, so too, does the Greek penchant for the equitable solution at the expense of settled rules remain the reason that, as Wigmore puts it, "Greek law now interests only the historian and the philologist." (Wigmore, Panorama of the World's Legal Systems (Library ed. 1936) p. 361.) As stated by Roscoe Pound, "[t]he development of a strict law out of codified primitive materials, which in Rome happily preceded the stage of equity and natural law, did not take place in the Greek city. Hence the rules of law were applied with an individualized equity that reminds us of the French droit coutumier [common law]--a mode of application which, with all its good points, must be preceded by a body of strict law, well worked out and well understood, if its results are to be compatible with the general security in a complex social order." (Pound, An Introduction to the Philosophy of Law (Yale 1954) pp. 4-5.)
Hurwitz states that the duty to notify the employee arises "when an employer has the requisite notice or knowledge of an employee's injury as to which there is a reasonable possibility the employee may be entitled to workers' compensation benefits ...." (97 Cal.App.3d at p. 873, 158 Cal.Rptr. 914.) If the employer does not at that time provide the employee the necessary notice, and if, as a consequence, the employee fails to apply for benefits within one year of the injury, "the employer is estopped to assert the statute of limitations for a period of time equal to the delay resulting from the failure to give the required notice." (Id., italics added.)
There are several related problems created by this rule, none of which arises under Reynolds. The first problem is the need to factually determine whether and, if so, to what extent the employee's failure to file earlier was "a consequence" of the employer's delay in providing notification. The second is the need to factually establish exactly when an employer obtained the "requisite notice or knowledge" that gives rise to the duty to notify the employee; for the duration of the employer's delay, and therefore the extension of time available to the employee, cannot be fixed except with reference to this starting point. The third problem arises when the duration of the employer's delay exceeds one year. Under the logic of Hurwitz the employee should be allowed an "equal" period of time within which to file; in the circumstance posited, however, the equal period would exceed and therefore conflict with the one-year period specified in the statute of limitation. In any event, the brief submitted by the board in this case indicates that it interprets Hurwitz to mean that whenever the employer has delayed notification the employee has a "reasonable time" from the delayed notification within which to file his claim. It is on this basis that the board here contends that "the eight months remaining [in the 12-month period commencing with the date of the injury] after the rejection letter was received [by Martin] was a reasonable time within which [Martin or the lien claimant] should have acted." Nowhere in the board's brief or in the case law known to us is any means identified for determining what period of time is "reasonable." This is another respect in which Hurwitz creates confusion and diminishes certainty. While the Hurwitz rule may provide some guidance for judges, who have the benefit of hindsight, it provides little assistance for injured workers and lien claimants, who are prospectively in need of a reliable measure of the time within which they are required to act.