Opinion
NOT TO BE PUBLISHED
W.C.A.B. No. SAL0109255
Bamattre-Manoukian, ACTING P.J.
I. INTRODUCTION
Respondent Kim Costa injured her back while working for petitioner Bed, Bath & Beyond. The Workers’ Compensation Appeals Board (WCAB) affirmed the decision of the workers compensation administrative law judge (WCJ) awarding Costa permanent disability benefits under the 1997 permanent disability rating schedule that was in effect at the time of her work-related injury in 2004. Bed, Bath & Beyond petitions for review of the WCAB’s decision, contending that the WCJ should have applied the 2005 permanent disability rating schedule.
For reasons that we will explain, we conclude that the WCAB erred in determining that the 1997 permanent disability rating schedule applied on the ground that Bed, Bath & Beyond’s duty to provide the Labor Code section 4061 notice regarding permanent disability benefits arose prior to January 1, 2005, when Costa’s temporary disability payments commenced. Therefore, we will annul the WCAB’s decision and remand the matter for further proceedings.
All further statutory references are to the Labor Code.
II. FACTUAL AND PROCEDURAL BACKGROUND
Costa was employed by Bed, Bath & Beyond as a shipping and receiving clerk when she sustained a work-related injury to her back on a cumulative trauma basis through October 7, 2004. Costa received temporary disability payments from November 28, 2004 through September 21, 2005. The WCJ determined that Costa’s disability became permanent and stationary on September 21, 2005, as stated in the findings and award issued on June 7, 2006.
After a hearing, the WCJ issued a findings and award on December 12, 2006, in which the WCJ concluded that the applicable rating schedule for Costa’s permanent disability was the 1997 permanent disability rating schedule. Applying the 1997 permanent disability rating schedule, the WCJ awarded Costa permanent disability of 37 percent in the amount of $38,950 payable at the rate of $200 per week, beginning September 22, 2005.
Bed, Bath & Beyond petitioned the WCAB for reconsideration of the permanent disability award, arguing that the WCJ should have applied the 2005 permanent disability rating schedule to calculate Costa’s permanent disability, pursuant to section 4660, subdivision (d). Subdivision (d) of section 4660 provides that where, as here, a compensable claim arose before January 1, 2005, the new 2005 permanent disability rating schedule applies unless one of the three exceptions set forth in subdivision (d) is met. Under the third exception, the 2005 permanent disability rating schedule applies unless the employer was “required to provide the notice required by Section 4061 to the injured worker [regarding permanent disability benefits]” prior to January 1, 2005. (§ 4660, subd. (d); Energetic Painting & Drywall, Inc. v. Workers’ Comp. Appeals Bd. (2007) 153 Cal.App.4th 633, 636 (Energetic Painting.)
In seeking reconsideration, Bed, Bath & Beyond argued that the WCJ misinterpreted section 4660, subdivision (d) when the WCJ determined that Costa had satisfied the third exception. The WCJ reasoned that “the duty to send the notice required in Labor Code section 4061 arose with the first payment of disability to the applicant,” which occurred prior to January 1, 2005. Bed, Bath & Beyond asserted that the WCJ’s decision was contrary to the plain language of section 4660, subdivision (d), which provides that the employer’s duty to send the permanent disability notice required by section 4061 arises with the last payment of temporary disability, not the first payment.
In her answer to the petition for reconsideration, Costa contended that both the second exception and the third exception set forth in section 4600, subdivision (d), were triggered before January 1, 2005, and therefore the WCJ had correctly determined that the 1997 permanent disability rating schedule was applicable. The second exception applies where there has been a report by a treating physician that indicates the existence of permanent disability prior to January 1, 2005. (§ 4660, subd. (d); Costco Wholesale Corp. v. Workers' Comp. Appeals Bd. (2007) 151 Cal.App.4th 148, 154-155 (Costco).) Costa contended that the second exception applied because her treating physicians had reported that she was permanently disabled in December 2004.
In its opinion and order granting reconsideration and decision after reconsideration, dated February 27, 2007, the WCAB, among other things, affirmed the WCJ’s use of the 1997 permanent disability rating schedule to calculate Costa’s permanent disability award. Relying on the en banc decision of the WCAB in Pendergrass v. Duggan Plumbing (2007) 72 Cal.Comp.Cases 95 (Pendergrass I), the WCAB panel reasoned that the third exception was triggered because Bed, Bath & Beyond’s duty to provide the section 4061 notice regarding permanent disability benefits arose prior to January 1, 2005, when Costa’s temporary disability payments commenced.
On September 20, 2007, we granted Bed, Bath & Beyond’s petition for review of that portion of the WCAB’s decision after reconsideration affirming the WCJ’s decision that Costa’s permanent disability should be calculated under the 1997 permanent disability rating schedule.
III. DISCUSSION
A. The Parties’ Contentions
Bed, Bath & Beyond reiterates its arguments below regarding the correct interpretation of the third exception provided by sections 4660, subdivision (d) and the application of the 2005 permanent disability rating schedule. According to Bed, Bath & Beyond, where, as here, payment of temporary disability benefits continued past January 1, 2005, the employer had no duty to provide the notice regarding permanent disability benefits required under section 4061 before 2005. Consequently, Bed, Bath & Beyond maintains that the third exception has not been met and the 2005 permanent disability rating schedule applies pursuant to the plain language of section 4660, subdivision (d).
Costa asks that the petition for review be denied on the basis of both the third exception and the second exception set forth in Labor Code section 4660, subdivision (d). As she argued below, Costa contends the second exception applies because her treating physicians reported that she was permanently disabled in December 2004. While Costa acknowledges that neither the WCJ nor the WCAB considered the issue of whether the second exception applied, she notes that she raised the second exception issue in her answer to the petition for reconsideration.
As to the third exception, Costa acknowledges that while this matter was pending the WCAB reversed its position and issued a decision regarding the interpretation of the section 4660, subdivision (d), third exception that supports Bed, Bath & Beyond’s position. (Pendergrass v. Duggan Plumbing (2007) 72 Cal.Comp.Cases 456, 462 (Pendergrass II.) However, Costa asserts that the WCAB’s current interpretation of the third exception (that the 2005 permanent disability rating schedule applies unless the last temporary disability payment was made before January 1, 2005) offends both the California Constitution, article 14, section 4 and the statutory mandate that Labor Code provisions be liberally interpreted in favor of the worker.
A petition for review in Pendergrass v. Workers’ Compensation Appeals Board (H031562) is pending in this court.
In pertinent part, article 14, section 4 of the California Constitution provides, “A complete system of workers' compensation includes adequate provisions for the comfort, health and safety and general welfare of any and all workers and those dependent upon them for support to the extent of relieving from the consequences of any injury or death incurred or sustained by workers in the course of their employment . . . to the end that the administration of such legislation shall accomplish substantial justice in all cases expeditiously, inexpensively, and without incumbrance of any character; all of which matters are expressly declared to be the social public policy of this State, binding upon all departments of the State government.”
B. Standard of Review
The appellate courts are authorized to review WCAB decisions and to issue a writ of review pursuant to section 5950. However, the scope of review is limited by section 5952, which provides, “The review by the court shall not be extended further than to determine, based upon the entire record which shall be certified by the appeals board, whether: [¶] (a) The appeals board acted without or in excess of its powers. [¶] (b) The order, decision, or award was procured by fraud. [¶] (c) The order, decision, or award was unreasonable. [¶] (d) The order, decision, or award was not supported by substantial evidence. [¶] (e) If findings of fact are made, such findings of fact support the order, decision, or award under review. [¶] Nothing in this section shall permit the court to hold a trial de novo, to take evidence, or to exercise its independent judgment on the evidence.”
Section 5950 provides, “Any person affected by an order, decision, or award of the appeals board may, within the time limit specified in this section, apply to the Supreme Court or to the court of appeal for the appellate district in which he resides, for a writ of review, for the purpose of inquiring into and determining the lawfulness of the original order, decision, or award or of the order, decision, or award following reconsideration. The application for writ of review must be made within 45 days after a petition for reconsideration is denied, or, if a petition is granted or reconsideration is had on the appeal board's own motion, within 45 days after the filing of the order, decision, or award following reconsideration.”
Accordingly, the appellate court may not disturb the WCAB's factual determinations “where they are supported by substantial evidence, or by inferences that may fairly be drawn from the evidence.” (Phoenix Indemn. Co. v. Industrial Acc. Com. (1948) 31 Cal.2d 856, 859; Ybarra v. Workers’ Comp. Appeals Bd. (2002) 103 Cal.App.4th 987, 990 .) However, “[t]he interpretation of a labor statute is a legal question which we review independently from the determination of the appeals board. [Citation.] Nonetheless, we generally defer to the [WCAB]’s interpretation of labor statutes, unless the interpretation is clearly erroneous.” (Boehm & Associates v. Workers’ Comp. Appeals Bd. (1999) 76 Cal.App.4th 513, 515-516.) The WCAB’s erroneous interpretation or application of the law is a ground for annulment of the WCAB’s decision. (Matea v. Workers’ Comp. Appeals Bd. (2006) 144 Cal.App.4th 1435, 1444.)
C. The Permanent Disability Rating Schedules
The percentage of permanent disability to be attributed to an injury is determined by a schedule adopted by the administrative director of the Division of Workers’ Compensation as amended from time to time since 1950. (§ 4660, subd. (c); 2 Hanna, Cal. Law of Employee Injuries and Workers’ Compensation (Rev. 2d ed. 2007) § 32.01[3][a], at pp. 32-7 to 32-8.) The present case involves a challenge to the WCAB’s determination that Costa’s permanent disability should be rated under the 1997 permanent disability rating schedule rather than the 2005 permanent disability rating schedule.
The 2005 permanent disability rating schedule came into existence as a result of legislative reform in 2004. On April 19, 2004, the Legislature enacted a comprehensive reform of workers compensation law that included a significant amendment to section 4660. (Stats. 2004, ch. 34, § 30; Vera v. Workers’ Comp. Appeals Bd. (2007) 154 Cal.App.4th 996, 1000 (Vera).) As amended, section 4660 required, among other things, that the administrative director adopt a new permanent disability rating schedule based upon the American Medical Association (AMA) Guides to the Evaluation of Permanent Impairment (5th ed.). (§ 4660, subd. (b)(2); Vera, supra, 154 Cal.App.4th at p. 1000.) The new 2005 permanent disability rating schedule, which incorporates the AMA Guides and is “effective for dates of injury on or after January 1, 2005 and for dates of injury prior to January 1, 2005, in accordance with subdivision (d) of Labor Code section 4660. . . .” became operative on January 1, 2005. (Cal. Code of Regs., tit. 8, § 9805.)
The interpretation of subdivision (d) of section 4660 is at issue in the present case. Subdivision (d) of section 4660 provides in pertinent part: “For compensable claims arising before January 1, 2005, the schedule as revised pursuant to changes made in legislation enacted during the 2003-04 Regular and Extraordinary Sessions shall apply to the determination of permanent disabilities when there has been either no comprehensive medical-legal report or no report by a treating physician indicating the existence of permanent disability, or when the employer is not required to provide the notice required by Section 4061 to the injured worker.”
Section 4061 provides in pertinent part: “(a) Together with the last payment of temporary disability indemnity, the employer shall, in a form prescribed by the administrative director pursuant to Section 138.4, provide the employee one of the following: [¶] (1) Notice either that no permanent disability indemnity will be paid because the employer alleges the employee has no permanent impairment or limitations resulting from the injury or notice of the amount of permanent disability indemnity determined by the employer to be payable. . . . [¶] (2) Notice that permanent disability indemnity may be or is payable, but that the amount cannot be determined because the employee’s medical condition is not yet permanent and stationary. . . .”
Thus, while section 4660 is “not a model of linguistic clarity, its intent is clear. The intent is to apply the rating schedule in effect on the date of injury to injuries suffered prior to 2005 in only three circumstances: (1) when a comprehensive medical-legal report issued prior to 2005 indicates permanent disability, (2) when a report from a treating physician issued prior to 2005 indicates permanent disability, and (3) when an employer has been required to give notice under section 4061 prior to 2005 concerning its intentions regarding payment of permanent disability benefits.” (Costco, supra,151 Cal.App.4th at p. 157.)
D. The 2005 Permanent Disability Rating Schedule Applies
The WCAB affirmed the WCJ’s ruling in the present case that the 1997 permanent disability rating schedule applied to Costa’s permanent disability pursuant to the third exception, which is triggered when an employer was required prior to 2005 to give notice under section 4061 concerning its intentions regarding payment of permanent disability benefits. The WCAB panel relied on the en banc decision in Pendergrass I, supra, 72 Cal.Comp.Cases at page 98, where the WCAB stated that “for purposes of section 4660 . . . an employer’s duty ‘to provide the notice required by’ section 4061 arises with the first payment of temporary disability indemnity.” For that reason, the WCAB concluded that Bed, Bath & Beyond’s duty to provide the notice required by section 4061 arose on November 28, 2004, when Costa became temporarily disabled.
Since the WCAB’s decision was issued on February 27, 2007, its interpretation of the third exception has been uniformly rejected by the appellate courts. As one appellate court recently stated, “[A]n employer is not ‘required to provide the notice required by Section 4061,’ as stated in section 4660, subdivision (d), until the employer is making the last payment of temporary disability benefits. Although an employer who has started to pay temporary disability benefits will eventually be required to provide the notice required by section 4061, that is not the language used by the statute. Accordingly, the plain meaning of the language at issue here is that the old schedule will apply only when the employer has made, or is required to make, the last payment of temporary disability benefits before January 1, 2005.” (Vera, supra, 154 Cal.App.4th at p. 1009; accord, Costco, supra, 151 Cal.App.4th at p. 157; Energetic Painting, supra, 153 Cal.App.4th at p. 639; Zenith Insurance Co. v. Workers’ Comp. Appeals Bd. (2007) 153 Cal.App.4th 461, 686.)
Applying the rules of statutory construction, we agree with the plain language interpretation of section 4660, subdivision (d) discussed in the appellate court decisions cited above. “In statutory construction cases, our fundamental task is to ascertain the intent of the lawmakers so as to effectuate the purpose of the statute. [Citation.]” (Estate of Griswold (2001) 25 Cal.4th 904, 910.) “ ‘We begin by examining the statutory language, giving the words their usual and ordinary meaning. [Citation.]’ ” (Id. at p. 911.) “If the terms of the statute are unambiguous, we presume the lawmakers meant what they said, and the plain meaning of the language governs. [Citations.]” (Ibid.) “If there is ambiguity, however, we may then look to extrinsic sources, including the ostensible objects to be achieved and the legislative history. [Citation.]” (Ibid.) “In such cases, we ‘ “ ‘ select the construction that comports most closely with the apparent intent of the Legislature, with a view to promoting rather than defeating the general purpose of the statute, and avoid an interpretation that would lead to absurd consequences.’ ” ’ [Citation.]” (Ibid.)
The plain language interpretation of section 4660, subdivision (d) was aptly described in Energetic Painting, supra, 153 Cal.App.4th at page 639: “Because section 4061 provides that the employer must give the notice required by that statute to the injured worker ‘[t]ogether with the last payment of temporary disability indemnity,’ it follows as a matter of simple reasoning that an employer is ‘not required’ to provide that notice (within the meaning of section 4660(d)) until the last temporary disability payment is made or has become due. To conclude, as the original majority in [Pendergrass I, supra, 72 Cal.Comp.Cases 95] did, that an employer is required to provide the section 4061 notice as soon as the first payment of temporary disability indemnity is made, even though that requirement does not have to be satisfied until the last payment is made, simply stretches the statutory language beyond its plain and ordinary meaning.”
Moreover, the WCAB recently reversed its original position on the third exception, as set forth in Pendergrass I, in a subsequent decision. In Pendergrass II, the WCAB ruled that the duty to give the permanent disability notice required by section 4061 arises with the last payment of temporary disability, which must be made before January 1, 2005, for the 1997 permanent disability rating schedule to apply. (Pendergrass II, supra, 72 Cal.Comp.Cases at p. 462.)
In the present case, the record reflects that Costa received temporary disability benefits for the period November 28, 2004 through September 21, 2005. Thus, Bed, Bath & Beyond’s obligation to give the permanent disability notice required by section 4061 did not arise until September 2005, well after the January 1, 2005 cutoff date set forth in section 4660, subdivision (d). For that reason, we conclude the WCAB erred in applying the 1997 permanent disability rating schedule on the ground that third exception was triggered because Bed, Bath & Beyond’s duty to provide the section 4061 notice regarding permanent disability benefits arose prior to January 1, 2005, when Costa’s temporary disability payments commenced. We will therefore annul the WCAB’s decision after reconsideration and remand the matter for further proceedings.
Our conclusion is not affected by Costa’s alternative argument that she is entitled to application of the 1997 permanent disability rating schedule under the second exception set forth in section 4660, subdivision (d). As we have discussed, the second exception applies when a report from a treating physician issued prior to 2005 indicates permanent disability. (Costco, supra,151 Cal.App.4th at p. 157.) Costa contends that her treating physicians reported that she was permanently disabled in December 2004. However, the issue is not properly before us. As Costa concedes, neither the WCJ nor the WCAB made any findings with respect to the second exception. Under section 5950, we are limited to “inquiring into and determining the lawfulness of the original order, decision, or award or of the order, decision, or award following reconsideration.” Therefore, in the absence of a decision by the WCJ or the WCAB concerning the applicability of the second exception, we may not reach the issue.
IV. DISPOSITION
The portion of the WCAB’s February 27, 2007, opinion and order granting reconsideration and decision after reconsideration is annulled to the extent the opinion and order determined that the 1997 permanent disability rating schedule applied on the ground that Bed, Bath & Beyond’s duty to provide the Labor Code section 4061 notice regarding permanent disability benefits arose prior to January 1, 2005, when Kim Costa’s temporary disability payments commenced.
The matter is remanded for further proceedings consistent with the views expressed in this opinion. Our remand is without prejudice to further proceedings concerning Costa’s alternative argument that she is entitled to application of the 1997 permanent disability rating schedule under the second exception set forth in Labor Code section 4660, subdivision (d). In all other respects, the February 27, 2007, decision after reconsideration is affirmed. The parties are to bear their own costs in this original proceeding.
WE CONCUR: MIHARA, J., MCADAMS, J.
Section 4660, subdivision (d) provides, “The schedule shall promote consistency, uniformity, and objectivity. The schedule and any amendment thereto or revision thereof shall apply prospectively and shall apply to and govern only those permanent disabilities that result from compensable injuries received or occurring on and after the effective date of the adoption of the schedule, amendment or revision, as the fact may be. For compensable claims arising before January 1, 2005, the schedule as revised pursuant to changes made in legislation enacted during the 2003-04 Regular and Extraordinary Sessions shall apply to the determination of permanent disabilities when there has been either no comprehensive medical-legal report or no report by a treating physician indicating the existence of permanent disability, or when the employer is not required to provide the notice required by Section 4061 to the injured worker.”