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In Farris, we concluded that our decision in that case, on the application of section 5814 penalties to unreasonably delayed section 4650(d) penalties, should be applied prospectively to avoid "an undue burden on the administration of justice in the workers' compensation system" and the "overwhelming adverse effect on the workers' compensation system and on the reasonable expectations of the parties participating in it."
Summary of this case from 2011-EB-8 (2010) TSEGAY MESSELE vs. PITCO FOODS INC.; CALIFORNIA INSURANCE COMPANY DefendantsOpinion
OPINION AND DECISION AFTER RECONSIDERATION (EN BANC)
MERLE C. RABINE, Chairman.
On June 29, 2000, the Board granted applicant's petition for reconsideration of the Supplemental Findings and Order issued by the workers' compensation administrative law judge (WCJ) on April 26, 2000. In the relevant portion of that decision, the WCJ found that defendant, Liberty Mutual Insurance Company, had unreasonably failed to self-assess a ten-percent Labor Code section 4650(d) penalty against the late payments of permanent disability indemnity made to applicant under an October 8, 1999 Findings and Award. Accordingly, the WCJ imposed a penalty under section 5814 for the unreasonable failure to pay the section 4650(d) penalty. The WCJ specifically found that this section 5814 penalty "shall be calculated and paid on the total amount of the penalties calculated under section 4650(d) only." In his petition for reconsideration, applicant contends that the section 5814 penalty for defendant's unreasonable failure to self-assess the section 4650(d) penalty should not apply solely against the section 4650(d) penalty amount, but should also apply against "the whole class of permanent disability benefits."
Because of the important and novel legal issue presented, and in order to secure uniformity of decision in the future, the Chairman of the Board, upon a majority vote of its members, has reassigned this case to the Board as a whole for an en banc decision. (Lab. Code, § 115.) Based on our review of the relevant statutory and case law, we conclude that, whenever a defendant unreasonably delays or fails to pay a section 4650(d) penalty on late payments of disability indemnity, the section 5814 penalty for that unreasonable delay or failure to pay shall be ten-percent of the entire class of the underlying indemnity, as increased by the section 4650(d) penalty.
I. BACKGROUND
Applicant sustained an admitted cumulative industrial injury to both upper extremities from September 1, 1989 through August 17, 1997, while employed by Industrial Wire Products, the insured of defendant.
On August 24, 1999, a trial was held on various issues, including (1) the extent of permanent disability and (2) defendant's alleged unreasonable failure to pay permanent disability indemnity in accordance with applicant's treating doctor's permanent and stationary report. (It is not clear from the Board's record whether, by the time of the August 24, 1999 trial, defendant had made any permanent disability advances.)
On October 8, 1999, the WCJ issued a Findings and Award which determined that applicant's injury caused permanent disability of 52-percent, "entitling him to disability benefits payable at $170.00 per week over 282.25 weeks in the total sum of $47,982.50...." (The Findings and Award did not expressly state when the permanent disability indemnity payments were to commence, but it did find a permanent and stationary date of October 6, 1998. (See Lab. Code, § 4650(b).) The WCJ further found that defendant had unreasonably delayed payment of permanent disability indemnity because it failed to make permanent disability advances in accordance with applicant's treating physician's report, to which defendant had not timely objected under section 4062. Therefore, the WCJ also awarded applicant a ten-percent increase in his permanent disability indemnity award under section 5814.
Defendant did not seek reconsideration of the October 8, 1999 Findings and Award, so it became final.
On December 8, 1999, applicant filed a petition seeking further penalties under section 5814. This petition alleged, among other things, that defendant had not automatically increased the late permanent disability indemnity payments due under the October 8, 1999 Findings and Award by ten-percent, as required by section 4650(d).
On March 27, 2000, applicant's new penalty petition came on for trial. The disposition at trial was that the parties would have 20 days to file points and authorities; then, the matter would be submitted for a decision on the record.
On April 11, 2000, applicant filed his points and authorities. He contended that defendant should have self-assessed a ten-percent penalty under section 4650(d) against the accrued permanent disability indemnity due from applicant's October 6, 1998 permanent and stationary date to the date of the October 8, 1999 Findings and Award. Applicant argued that this section 4650(d) penalty was "automatic" and should have been paid by defendant without any application by him. Accordingly, applicant asserted that a section 5814 penalty should be imposed for defendant's failure to self-assess the section 4650(d) penalty.
On April 17, 2000, defendant filed its points and authorities. It argued that no additional penalty should be awarded because applicant had not alleged "additional separate and distinct acts [of delay] subsequent to the issuance of the [October 8, 1999] Findings and Award." It also argued that, because applicant did not seek reconsideration of the Findings and Award, he had waived his right to seek additional penalties.
On April 26, 2000, the WCJ issued the Findings and Award now before us. In relevant part, the WCJ first found that applicant was entitled to a ten-percent section 4650(d) penalty "on all payments of permanent disability delayed herein." The WCJ further found applicant was entitled to a new and separate section 5814 penalty for defendant's failure to self-assess the automatic ten-percent section 4650(d) penalty on the accrued permanent disability indemnity payable under the October 8, 1999 Findings and Award. The WCJ concluded, however, that this section 5814 penalty applied only to the section 4650(d) penalty amount, and not to all permanent disability indemnity (past, present, and future) as increased by the section 4650(d) penalty.
In reaching his conclusion regarding the calculation of the new section 5814 penalty, the WCJ reasoned, in essence: (1) that a section 4650(d) penalty is "a clearly defined and separate category of statutory benefit which is not calculated on the entire permanent disability award;" and (2) that, because a section 5814 penalty had previously been awarded against all permanent disability indemnity, "a second such penalty on the entire category is inappropriate."
Thereafter, applicant filed his petition for reconsideration. Again, applicant contends that where a defendant unreasonably delays or fails to pay the "automatic" section 4650(d) penalty for a late payment of disability indemnity, the ensuing penalty under section 5814 for that unreasonable delay or failure to pay applies to the entire class of disability benefits (as increased by the ten-percent section 4650(d) penalty), and does not merely apply to the ten-percent section 4650(d) penalty amount alone.
We emphasize that the sole issue presented for determination is the calculation of the section 5814 penalty where a defendant unreasonably delays or fails to pay a section 4650(d) penalty. The defendant here has not contested the WCJ's determination that the section 4650(d) penalty was unreasonably delayed and that, therefore, it is subject to a section 5814 penalty.
II. DISCUSSION
A. The Calculation Of The Section 5814 Penalty
We conclude that a section 4650(d) penalty is not a separate class or category of benefit, different from the underlying disability benefit to which it applies. Therefore, where it is determined that a defendant unreasonably delayed or failed to pay a section 4650(d) penalty, the ten-percent penalty under section 5814 for that delay or failure to pay is assessed against the underlying benefit to which the section 4650(d) penalty attaches, as increased by the section 4650(d) penalty amount. It is not assessed only against the amount of the section 4650(d) penalty.
We reach this conclusion for the following reasons.
Section 5814 states:
"When payment of compensation has been unreasonably delayed or refused, either prior to or subsequent to the issuance of an award, the full amount of the order, decision or award shall be increased by 10 percent...."
"[T]he phrase 'full amount of the...award' in section 5814 refers to the full amount of the award for the particular class of benefits delayed or withheld." (Gallamore v. Worker's Comp. Appeals Bd. (1979) 23 Cal.3d 815, 826 [44 Cal.Comp.Cases 321, 328] (emphasis added); see also Avalon Bay Foods v. Worker's Comp. Appeals Bd. (Moore) (1998) 18 Cal.4th 1165, 1171 [63 Cal.Comp.Cases 902, 905].) Thus, when "an award is readily severable into the different classes or categories of compensation as defined by the Workers Compensation Act (Lab. Code, § 3200 et seq.), then the [section 5814] penalty is to be assessed against only the amount awarded for the particular benefit of the kind delayed or refused." (Gallamore v. Worker's Comp. Appeals Bd., supra, 23 Cal.3d at p. 824 [44 Cal.Comp.Cases at p.326] (emphasis added); see also Avalon Bay Foods v. Worker's Comp. Appeals Bd. (Moore), supra, 18 Cal.4th at p.1171 [63 Cal.Comp.Cases at p. 905].)
In determining whether a particular payment or expense constitutes its own class or category of compensation, we are guided by the fact that a payment or expense is not a separate species of benefit where the payment or expense is "dependent on and ancillary to" another benefit, where the payment or expense does not have "a separate existence from" but is instead "derivative of" another benefit, or where the payment or expense is "an aspect of [a] broad class of...benefits." (Avalon Bay Foods v. Worker's Comp. Appeals Bd. (Moore), supra, 18 Cal.4th at p. 1175 [63 Cal.Comp.Cases at p. 909]; see also Jones v. Ukiah Timber Products (1997) 62 Cal.Comp.Cases 1257 (Board en banc) [concluding that a payment or expense is not a separate species where it is "an element of the underlying benefit" (62 Cal.Comp.Cases at p. 1259) or "an inseparable part of the class of ... benefits" (62 Cal.Comp.Cases at p. 1260)].)
Turning to section 4650, it provides, in relevant part:
"(a) If an injury causes temporary disability, the first payment of temporary disability indemnity shall be made not later than 14 days after knowledge of the injury and disability, on which date all indemnity then due shall be paid, unless liability for the injury is earlier denied.
"(b) If the injury causes permanent disability, the first payment shall be made within 14 days after the date of last payment of temporary disability indemnity....
"(c) Payment of temporary or permanent disability indemnity subsequent to the first payment shall be made as due every two weeks on the day designated with the first payment.
"(d) If any indemnity payment is not made timely as required by this section, the amount of the late payment shall be increased 10 percent and shall be paid, without application, to the employee, unless the employer continues the employee's wages under a salary continuation plan.... No increase shall apply to any payment due prior to or within 14 days after the date the claim form was submitted to the employer under Section 5401. No increase shall apply when, within the 14-day period specified under subdivision (a), the employer is unable to determine whether temporary disability indemnity payments are owed....
"(e) If the employer is insured for its obligation to provide compensation, the employer shall be obligated to reimburse the insurer for the amount of increase in indemnity payments, made pursuant to subdivision (d), if the late payment which gives rise to the increase in indemnity payments, is due less than seven days after the insurer receives the completed claim form from the employer...." (Lab. Code, § 4650 (emphasis added.)
Thus, by its express terms, section 4650 makes it clear that the penalty under subdivision (d) of that section is but an "increase" in the indemnity that is otherwise payable under that section. The section 4650(d) penalty has no "separate existence," independent of the late disability indemnity to which it attaches. Indeed, the section 4650(d) penalty only arises where an underlying indemnity payment is late. Therefore, the section 4650(d) penalty is clearly "derivative of" and "dependent on and ancillary to" the underlying disability indemnity. It is not a separate class or category of benefit.
Accordingly, when a section 4650(d) penalty payment has been unreasonably delayed, the ten-percent penalty under section 5814 for that unreasonable delay applies to all payments of the underlying species of disability indemnity (past, present, and future), as increased by the section 4650(d) penalty amount.
This conclusion is also consonant with related case law on the issue of penalties.
It has been held that interest is not a separate benefit from the species of benefit to which the interest attaches; therefore, if a payment of interest is unreasonably delayed, the penalty applies not merely to the delayed interest, but also to the underlying benefit. (Gellie v. Worker's Comp. Appeals Bd. (1985) 171 Cal.App.3d 917, 921-922 [50 Cal.Comp.Cases 470, 473-474]; U.S. Fidelity & Guaranty Co. v. Worker's Comp. Appeals Bd. (Boicelli) (1981) 46 Cal.Comp.Cases 270 (writ den.); see Soto v. Worker's Comp. Appeals Bd. (1996) 46 Cal.App.4th 1356, 1362 [61 Cal.Comp.Cases 578, 582].) We note that, in many ways, a section 4650(d) penalty is analogous to section 5800 interest. That is, when interest is payable against a particular species of benefit, it is generally not applicable to all payments of that benefit, because interest does not attach to pre-award payments or to non-delayed post-award periodic payments. (Lab. Code, § 5800.) Similarly, when a section 4650(d) penalty is payable against a particular species of indemnity, it is generally not applicable to all payments of that indemnity, because a section 4650(d) penalty does not apply to pre-award or post-award payments of indemnity that were timely made. (Lab. Code, § 4650(d).)
It has also been held that where a section 5814 penalty is awarded for an unreasonable delay in the payment of a benefit, the section 5814 penalty is not a separate and distinct class of benefit from the benefit unreasonably delayed; rather, the section 5814 penalty is "part and parcel" of the underlying benefit. (Anderson v. Worker's Comp. Appeals Bd., supra, 116 Cal.App.3d at p. 960 [46 Cal.Comp.Cases at p. 346].) Therefore, if payment of the section 5814 penalty award itself is then unreasonably delayed, the new and separate section 5814 penalty for that delay must be assessed against the underlying benefit as increased by the prior penalty award, and not assessed merely against the prior penalty award. (Anderson v. Worker's Comp. Appeals Bd., supra, 116 Cal.App.3d at p. 960 [46 Cal.Comp.Cases at pp. 346, 347].) We discern no reason why an unreasonable delay in the payment of a section 4650(d) penalty should be treated any differently.
Finally, the penalty provisions of section 5814 must be liberally construed in favor of the injured employee. (Lab. Code, § 3202; State Compensation Insurance Fund v. Worker's Comp. Appeals Bd. (Stuart) (1998) 18 Cal.4th 1209, 1215 [63 Cal.Comp.Cases 916, 920]; Avalon Bay Foods v. Worker's Comp. Appeals Bd. (Moore), supra, 18 Cal.4th at pp. 1173-1174 [63 Cal.Comp.Cases at p. 908]; Kerley v. Workmen's Comp. Appeals Bd. (1971) 4 Cal.3d 223, 227 [36 Cal.Comp.Cases 152, 154].) One purpose of section 5814 is to "provide[] an incentive to employers and insurance carriers to pay benefits promptly by making delays costly." (State Compensation Insurance Fund v. Worker's Comp. Appeals Bd. (Stuart), supra, 18 Cal.4th at p. 1214 [63 Cal.Comp.Cases at p. 919].) Where a defendant unreasonably delays or fails to pay a section 4650(d) penalty for its late payment of disability indemnity, a construction that the section 5814 penalty should apply to the underlying class of disability indemnity delayed (as increased by the section 4650(d) penalty) will more likely encourage the prompt payment of benefits than would a construction that the section 5814 penalty should apply to the section 4650(d) penalty amount alone. (Cf., Gellie v. Worker's Comp. Appeals Bd., supra, 171 Cal.App.3d at pp. 920, 921 (including fn. 4); [50 Cal.Comp.Cases at pp. 473, 474 (including fn. 4)].)
Thus, for all the reasons above, we conclude that when a defendant unreasonably fails to pay a section 4650(d) penalty, the ten-percent penalty under section 5814 for that delay is assessed against the underlying disability indemnity benefit to which the section 4650(d) penalty attaches, as increased by the section 4650(d) penalty amount; it is not assessed against section 4650(d) penalty amount alone.
B. The Delay Or. Failure To Pay The Section 4650(d) Penalty Must Be Unreasonable.
We do not mean to suggest that, whenever a defendant delays or fails to pay a section 4650(d) penalty, a section 5814 penalty will necessarily be awarded.
"The touchstone of a section 5814 penalty is a delay or refusal to pay benefits that is unreasonable." (State Compensation Insurance Fund v. Worker's Comp. Appeals Bd. (Stuart), supra, 18 Cal.4th at p. 1214 [63 Cal.Comp.Cases at p. 919] (emphasis in original).) Whether a delay or refusal to pay a benefit is "unreasonable" within the meaning of section 5814 is a question of fact to be determined by the Board. (Lab. Code, § 5814; Gallamore v. Worker's Comp. Appeals Bd., supra, 23 Cal.3d at p. 23 [44 Cal.Comp.Cases at p. 325].)
Of course, as with any other delay in the payment of compensation, it is the employer's burden to establish that a delayed payment of a section 4650(d) penalty was reasonable. (See Kerley v. Worker's Comp. Appeals Bd., supra, 4 Cal.3d at pp. 227, 230 [36 Cal.Comp.Cases at pp. 154-155, 157]; Waters v. Worker's Comp. Appeals Bd. (2000) 80 Cal.App.4th 652, 661-662 [65 Cal.Comp.Cases 484, 490]; County of Sacramento v. Worker's Comp. Appeals Bd. (Souza) (1999) 69 Cal.App.4th 726, 730 [64 Cal.Comp.Cases 30, 32].) Yet, the determination of whether a given delay is reasonable or unreasonable does not depend solely of the number of days that a payment was delayed or on the size of the delayed payment, but on the totality of the circumstances presented. (State Compensation Insurance Fund v. Worker's Comp. Appeals Bd. (Stuart), supra, 18 Cal.4th at p. 1219 [63 Cal.Comp.Cases at p. 924]; Waters v. Worker's Comp. Appeals Bd., supra, 80 Cal.App.4th at p. 662 [65 Cal.Comp.Cases at p. 490]; County of Sacramento v. Worker's Comp. Appeals Bd. (Souza), supra, 69 Cal.App.4th at p. 731 [64 Cal.Comp.Cases at p. 33].) Also, in determining reasonableness, the Board "should proceed with a view toward achieving a fair balance between the right of the employee to prompt payment of compensation benefits, and the avoidance of imposition upon the employer or carrier of harsh and unreasonable penalties." (Gallamore v. Worker's Comp. Appeals Bd., supra, 23 Cal.3d at p. 828 [44 Cal.Comp.Cases at p. 329]; State Compensation Insurance Fund v. Worker's Comp. Appeals Bd. (Stuart), supra, 18 Cal.4th at pp. 1215, 1219 [63 Cal.Comp.Cases at pp. 920, 923-924]; Christian v. Worker's Comp. Appeals Bd. (1997) 15 Cal.4th 505, 517 [62 Cal.Comp.Cases 576, 585]; Rhiner v. Worker's Comp. Appeals Bd., supra, 4 Cal.4th at p. 1230 [58 Cal.Comp.Cases at p. 181].)
Here, however, defendant did not seek reconsideration of the WCJ's finding that its failure to pay the section 4650(d) penalty was unreasonable under section 5814. Accordingly, that issue was waived (Lab. Code, § 5904), and we will not address it.
C. Prospective Application Of This Decision
One final point must be addressed: whether this decision is to be applied prospectively only.
In workers' compensation cases, it is not uncommon to provide that newly stated judicial rules or newly stated judicial interpretations of statutes shall be applied prospectively only. Such a declaration of prospective application is made primarily to prevent a landslide of reopenings in previously adjudicated workers' compensation cases, which would burden the workers' compensation system and result in unfairness to those parties who had relied on a different understanding of law or had accepted a different application of the law; a declaration of prospective application may also be made to harmonize statutory provisions. (E.g., LeBoeuf v. Worker's Comp. Appeals Bd. (1983) 34 Cal.3d 234, 246, fn. 13 [48 Cal.Comp.Cases 587, 597, fn. 13]; Sumner v. Worker's Comp. Appeals Bd. (1983) 33 Cal.3d 965, 972-973 [48 Cal.Comp.Cases 369, 375]; Atlantic Richfield Co. v. Worker's Comp. Appeals Bd. (Arvizu), supra, 31 Cal.3d at pp. 727-728 [47 Cal.Comp.Cases at pp. 509-510]; Estrada v. Worker's Comp. Appeals Bd. (1997) 58 Cal.App.4th 1458, 1472-1473 [62 Cal.Comp.Cases 1384, 1394-1395]; Messina v. Worker's Comp. Appeals Bd. (1980) 105 Cal.App.3d 964, 971-972 [45 Cal.Comp.Cases 505, 510-511]; cf., Camper v. Worker's Comp. Appeals Bd. (1992) 3 Cal.4th 679, 688-690 [57 Cal.Comp.Cases 644, 650-652].) Although decisions regarding procedural issues are more commonly given prospective effect than are decisions regarding substantive issues (e.g., Camper v. Worker's Comp. Appeals Bd., supra, 3 Cal.4th at p. 688 [57 Cal.Comp.Cases at pp. 651-652]), decisions affecting an applicant's substantive right to receive or a defendant's substantive duty to pay workers' compensation benefits will be applied prospectively under appropriate circumstances. (E.g., LeBoeuf v. Worker's Comp. Appeals Bd., supra, 34 Cal.3d at p. 234, fn. 13 [48 Cal.Comp.Cases at p. 597, fn. 13] (decision affecting injured employee's permanent disability rating in light of the results of his or her vocational rehabilitation applied prospectively); Atlantic Richfield Co. v. Worker's Comp. Appeals Bd. (Arvizu), supra, 31 Cal.3d at pp. 727-728 [47 Cal.Comp.Cases at pp. 509-510] (decision affecting employer's liability to pay State a sum equal to total dependent's death benefit applied prospectively); Messina v. Worker's Comp. Appeals Bd., supra, 105 Cal.App.3d at pp. 971-972 [45 Cal.Comp.Cases 510-511] (decision affecting surviving "widowers" entitlement to death benefits applied prospectively).)
We conclude that the circumstances here warrant prospective application of our decision. In particular, we are concerned that, if our decision were not applied prospectively only, there would be an undue burden on the administration of justice in the workers' compensation system as a whole. There have been innumerable payments of section 4650(d) penalties to date, as well as numerous decisions awarding such penalties. If all of these payments and/or decisions were now subject to section 5814 penalty petitions, this could have an overwhelmingly adverse effect on the workers' compensation system and on the reasonable expectations of the parties participating in it. Additionally, harmonizing these statutory provisions is an important objective that is not compromised by prospective application of this newly stated rule. Accordingly, our decision in this case will apply only to: (1) section 5814 penalty petitions which allege that a defendant unreasonably delayed or failed to self-assess a section 4650(d) penalty on late payments of disability indemnity occurring after the issuance date of this decision; and (2) section 5814 penalty petitions which allege that a defendant unreasonably delayed or failed to self-assess a section 4650(d) penalty on late payments of disability indemnity made before the issuance of this decision, but which petitions were already filed as of the issuance date of this decision and are now pending before the Board for trial, before the Board on reconsideration, or before the appellate courts on review.
For the foregoing reasons,
IT IS ORDERED as the Decision After Reconsideration of the Board (En Banc) that, consistent with this opinion, the Supplemental Findings and Award of April 26, 2000, be, and it is hereby AMENDED to read as follows and, as so amended, is otherwise AFFIRMED:
FINDINGS OF FACT ...
4. Defendant unreasonably failed to self-assess a section 4650(d) penalty against the late payments of permanent disability indemnity made to applicant under the October 8, 1999 Findings and Award. The ten-percent section 5814 penalty for this unreasonable failure shall be calculated against all of applicant's permanent disability indemnity (past, present, and future), as increased by the section 4650(d) penalty under Findings of Fact No. 3 herein and as increased by the prior section 5814 penalty awarded on October 8, 1999. ...
AWARD
AWARD IS MADE in favor of PATRICK FARRIS and against LIBERTY MUTUAL INSURANCE COMPANY of:
(a) A ten- percent section 4650(d) penalty against the late payments of permanent disability indemnity made to applicant under the October 8, 1999 Findings and Award, in an actual amount to be adjusted by the parties with jurisdiction reserved before the workers' compensation administrative law judge in the first instance, less an attorney's fee corresponding to 15% of this penalty sum, payable to Matthew Dee Rees, Esq.; and
(b) A ten-percent section 5814 penalty against all permanent disability indemnity (past, present, and future), as increased by the section 4650(d) penalty in paragraph (a) above, and as increased by the section 5814 penalty awarded on October 8, 1999, in an actual amount to be adjusted by the parties with jurisdiction reserved before the workers' compensation administrative law judge in the first instance, less an attorney's fee corresponding to 15% of this penalty sum, payable to Matthew Dee Rees, Esq.
ROBERT N. RUGGLES, Commissioner, COLLEEN S. CASEY, Commissioner, ROBERT E. BURTON, Commissioner
We also observe that section 4650(d) expressly provides that its penalty, where applicable, "shall be paid, without application, to the employee." (Lab. Code, § 4650(d) (emphasis added).) Thus, section 4650(d) is a "self-executing, strict liability provision" (Rhiner v. Worker's Comp. Appeals Bd., supra, 4 Cal.4th at p. 1227 [58 Cal.Comp.Cases at p. 83]; Mote v. Worker's Comp. Appeals Bd., supra, 56 Cal.App.4th p. 910 [62 Cal.Comp.Cases at p. 895]; State of California v. Worker's Comp. Appeals Bd. (Ellison), supra, 44 Cal.App.4th at p. 139 [61 Cal.Comp.Cases at p. 333]) and it is "an automatic, strict liability penalty." (State Compensation Insurance Fund v. Worker's Comp. Appeals Bd. (Stuart), supra, 18 Cal.4th at pp. 1216-1217 [63 Cal.Comp.Cases at p. 921].) As such, the Board need not expressly award a section 4650(d) penalty before there can be an unreasonable delay in its payment.