From Casetext: Smarter Legal Research

Service Rock Products v. Workers' Compensation Appeals Bd.

California Court of Appeals
Sep 11, 2008
F055340 (Cal. Ct. App. Sep. 11, 2008)

Opinion

         NOT TO BE PUBLISHED

         ORIGINAL PROCEEDINGS; petition for writ of review from a decision of the Workers’ Compensation Appeals Board No. BAK 146964, Deidra E. Lowe, Alfonso J. Moresi, and Frank M. Brass, Commissioners. Terrence E. McEvoy, Workers’ Compensation Administrative Law Judge.

          Stockwell, Harris, Widom, Woolverton & Muehl and Robert M. Grant for Petitioner.

          No appearance by Respondent Workers’ Compensation Appeals Board.

          Jospeh Pluta for Respondent Robert Marquis.


          OPINION

         THE COURT

Before Wiseman, Acting P.J., Levy, J., and Kane, J.

         Service Rock Products (SRP) petitions this court for a writ of review from a decision of the Workers’ Compensation Appeals Board (WCAB). (Lab. Code, §§ 5950, 5952; Cal. Rules of Court, rule 8.494.) SRP claims the WCAB erred by applying the 1997 permanent disability rating schedule (PDRS) instead of the less-generous 2005 PDRS to rate an injury that occurred on April 26, 2004. Section 4660, subdivision (d), as amended by Senate Bill No. 899 (Stats. 2004, ch. 34, § 32), establishes that the 2005 PDRS applies not only to claims arising after its effective date, but also to pending claims filed before January 1, 2005, “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.” (Emphasis added.) SRP argues that even though it sent a section 4061 notice terminating temporary disability benefits to its injured worker in 2004, it was not required to do so, and therefore the corresponding statutory exception authorizing the use of the 1997 PDRS should not apply. Unconvinced SRP was not legally required to send the notice before January 1, 2005, under the particular facts presented, we will deny the petition.

Further statutory references are to the Labor Code unless otherwise stated.

Although commonly referred to as the PDRS, the schedule is formerly known as the Schedule for Rating Permanent Disabilities.

         BACKGROUND

Because SRP failed to include a copy of the minutes of hearing with its petition for writ of review, as required under California Rules of Court, rule 8.494(a)(1)(B), we accept as true the undisputed facts set forth in the parties and by the workers’ compensation administrative law judge (WCJ).

         Robert Marquis was employed by SRP as a heavy equipment mechanic when he sustained an admitted industrial injury to his left shoulder while attempting to install a drive shaft in a cement truck on April 26, 2004. Nitin A. Shah, M.D. performed rotator cuff surgery on Marquis in mid-June 2004, and on or about August 25, 2004, Dr. Shah released Marquis to return to work at his usual and customary duties on a trial basis.

         On September 3, 2004, SRP, through its workers’ compensation insurer Tokio Marine Management, served Marquis with a section 4061 notice stating payment of temporary disability indemnity was ending because he had been released to work. At the end of August and beginning in September 2004, Marquis worked for a week or two at his usual and customary job with SRP until he was placed back on temporary disability by Dr. Shah. The parties stipulated that Marquis received temporary disability indemnity the periods of April 28, 2004, through September 3, 2004, and again from November 5, 2004, through January 2, 2005.

         In February 2008, a WCJ issued findings that Marquis became permanent and stationary as of November 6, 2006, and therefore was entitled to weekly payments of $561.68 in temporary disability indemnity from April 26, 2004, through November 6, 2006, less the time he worked in August and September 2004. The WCJ also concluded Marquis’s permanent disability rating must be based on the 1997 PDRS, because the section 4061 notice requirement was triggered when SRP stopped providing temporary disability indemnity in August and September 2004. Based on the 1997 PDRS and the qualified medical evaluation of John M. Larsen, M.D., the WCJ found Marquis sustained a permanent disability of 45 percent and that he required future medical treatment. SPR petitioned for reconsideration, but the WCAB denied the petition based on the report and recommendation of the WCJ.

         DISCUSSION

         The Legislature adopted omnibus reforms to the state’s workers’ compensation system effective April 19, 2004, as part of Senate Bill No. 899. (Brodie v. Workers’ Comp. Appeals Bd. (2007) 40 Cal.4th 1313, 1323.) Among the changes, revised section 4660, required the Administrative Director of the Division of Workers’ Compensation to amend the PDRS effective January 1, 2005, and every five years thereafter. (§ 4660, subds. (c) & (e); Stats. 2004, ch. 34, § 32.) The Legislature specifically mandated the revisions “incorporate the descriptions and measurements of physical impairments and the corresponding percentages of impairments published in the American Medical Association (AMA) Guides to the Evaluation of Permanent Impairment (5th Edition.).” (§ 4660, subd. (b)(1).) As directed, the Administrative Director subsequently adopted a new PDRS effective January 1, 2005. (Cal. Code Regs., tit. 8, § 9805.) In most cases, the use of the 2005 PDRS results in significantly reduced awards to injured workers when compared to disabilities rated under the 1997 PDRS. (See Zenith Insurance Co. v. Workers’ Comp. Appeals Bd. (2008) 159 Cal.App.4th 483, 493 & fn. 24 (Zenith); Genlyte Group, LLC v. Workers Comp. Appeals Bd. (2008) 158 Cal.App.4th 705, 715-716 (Genlyte).) Following Dr. Larson’s medical opinion, Marquis’s permanent disability amounts to 45 percent, or $50,150, under the 1997 PDRS, but only 32 percent, or $31,950, under the 2005 PDRS.

         Establishing the use of the 2005 PDRS, section 4660, subdivision (d), now 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.” (Emphasis added.)

         “The interpretation of section 4660, subdivision (d) … is a legal issue subject to our de novo review.” (Costco Wholesale Corp. v. Workers’ Comp. Appeals Bd. (2007) 151 Cal.App.4th 148, 153.) “While the statute 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. This interpretation supports the legislative goal of bringing as many cases as possible under the new workers’ compensation law.” (Costco Wholesale Corp., supra, at p.157.) “‘On the other hand, when none of the three circumstances has occurred before January 1, 2005, then the 2005 schedule applies.’” (Zenith, supra, 159 Cal.App.4th at p. 492, citing Energetic Painting and Drywall, Inc. v. Workers’ Comp. Appeals Bd. (2007) 153 Cal.App.4th 633 and Aldi v. Carr (2006) 71 Cal.Comp.Cases 783 [writ den.].) “Although the statute does not expressly set a January 1, 2005 cutoff date for the issuance of the treating physician’s report or the medical-legal report or for the existence of the requirement that the employer give the notice required by section 4061, a cutoff date of January 1, 2005, should logically be implied.” (Vera v. Workers’ Comp. Appeals Bd. (2007) 154 Cal.App.4th 996, 1004.)

         In adopting the WCJ’s recommendation, the WCAB applied the third exception to section 4660, subdivision (d) – the section 4061 notice requirement – in finding the 1997 PDRS applied to Marquis’s disability claim. An employer’s duty to send a section 4061 notice arises “[t]ogether with the last payment of temporary disability indemnity” and mandates the employer notify the employee of its position that (1) no permanent disability indemnity is warranted, (2) permanent disability benefits will be paid in a particular amount, but may be contested, or (3) permanent disability indemnity is or may be payable, but cannot be determined because the employee is not yet permanent and stationary. (§ 4061, subd. (a).) Unlike the first two grounds for applying the 1997 PDRS established under section 4660, subdivision (d), the section 4061 notice exception authorizes the use of the 1997 PDRS without a pre-January 1, 2005, medical report indicating the existence of permanent disability, so long as the employer terminates temporary disability payments and therefore was required to send the section 4061 notice before that date. (Zenith, supra, 159 Cal.App.4th at p. 494.)

Section 4061, subdivision (a) provides: “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. The notice shall include information concerning how the employee may obtain a formal medical evaluation pursuant to subdivision (c) or (d) if he or she disagrees with the position taken by the employer. The notice shall be accompanied by the form prescribed by the administrative director for requesting assignment of a panel of qualified medical evaluators, unless the employee is represented by an attorney. If the employer determines permanent disability indemnity is payable, the employer shall advise the employee of the amount determined payable and the basis on which the determination was made and whether there is need for continuing medical care. [¶] (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. The notice shall advise the employee that his or her medical condition will be monitored until it is permanent and stationary, at which time the necessary evaluation will be performed to determine the existence and extent of permanent impairment and limitations for the purpose of rating permanent disability and to determine the need for continuing medical care, or at which time the employer will advise the employee of the amount of permanent disability indemnity the employer has determined to be payable. If an employee is provided notice pursuant to this paragraph and the employer later takes the position that the employee has no permanent impairment or limitations resulting from the injury, or later determines permanent disability indemnity is payable, the employer shall in either event, within 14 days of the determination to take either position, provide the employee with the notice specified in paragraph (1).”

         SRP asks this court to determine if “the 2004 permanent disability rating schedule must apply whether there may have been a triggering event suggesting an employer give notice per Labor Code Section 4061, but a trier of fact ultimately determines that as a matter of law, the applicant had remained temporarily totally disabled, obviating the requirement to send notice per Labor Code Section 4061?” Not denying it sent Marquis a section 4061 notice on September 3, 2004, as found by the WCJ, SRP contends the notice was not required because Marquis subsequently discovered he was physically unable to work and returned to receiving temporary disability indemnity until he was declared permanent and stationary as of November 6, 2006. In the report and recommendation to the WCAB, the WCJ responded to the same argument:

Although SRP repeatedly refers to the 2004 PDRS, like the WCAB and Marquis, we presume the reference is to 2005 PDRS as the only update to the schedule since 1997. (Cal. Code Regs., tit. 8, § 9805; <http://www.dir.ca.gov/dwc/dwcrep.htm#4> as of Sept. 11, 2008.)

         “Defendant argues that the use of the 1997 PDRS in this case is inconsistent with the award of temporary total disability ending November 6, 2006. The defendant misconstrues the temporary total disability award as one period from April 2004 to November 2006. In fact, the temporary total disability award specifically excluded the period when applicant had returned to work, and for which the defendant was allowed credit .… [¶] … [¶] Thus the award of temporary total disability was really for two separate periods, one period from April 26, 2004 until applicant returned to work in August or September 2004 and a second period when applicant stopped work and returned to temporary total disability status and until his permanent and stationary date on November 6, 2006, as established by Dr. Larsen.

         “Labor Code § 4660(d) provides in pertinent part that the 1997 PDRS is to be used in rating permanent disabilities when the employer is required to provide notice pursuant to Labor Code § 4061. Labor Code § 4061 provides that the employer provide the applicant with certain notices and information with the last payment of temporary total disability. According to defendant’s stipulation, it commenced payment of temporary total disability on April 28, 2004 and stopped payment of temporary total disability after September 3, 2004. This would trigger the notice requirement under Labor Code § 4061. The defendant recognized this requirement and in fact did provide the applicant with the notice on September 3, 2004 [citation]. This actual event triggered the use of the 1997 PDRS. It appears irrelevant for purposes of Labor Code § 4660(d) that the applicant was later placed back onto temporary total disability status, because Labor Code 4660(d) states only that the use of the old schedule is triggered when the obligation to provide the notice arises.”

         The WCJ continued by explaining that SRP had misconstrued the findings as awarding a single period of uninterrupted temporary disability and added:

         “First [SRP] starts with the false premise that the temporary total disability [a]ward was uninterrupted, then uses this false premise in an attempt to negate an obligation that in fact arose on September 3, 2004. This argument is circular, is no better than the false premise on which it is founded, and is basically nonsense.”

         We too disagree with SRP. Pursuant to Dr. Shah’s medical recommendation, Marquis returned to work in late August and early September 2004. Accordingly, SRP immediately ceased providing temporary disability indemnity. As required under section 4061, SRP provided Marquis with a notice that his temporary disability benefits were being terminated and advising him of his rights to dispute the termination. SRP’s belief that because Marquis subsequently became eligible for further temporary disability does not retroactively dissolve its prior obligation to notify Marquis that his benefits were ending.

         SRP also suggests the section 4061 notice requirement never truly arose because the WCJ found Marquis was not permanent and stationary until November 6, 2006. However, an employer’s obligation to send the section 4061 notice is not attached to whether an injured employee is actually permanent and stationary, but instead arises when the employer believes temporary disability indemnity is no longer warranted. The notice relates to the employers’ intentions regarding the payment of permanent disability benefits. (Costco Wholesale Corp, supra, 151 Cal.App.4th at p. 157.) By its very terms mandating the employer notify the employee of his or her right to dispute the temporary disability termination, the section 4061 notice must be sent regardless of the WCAB’s ultimate determination on the issues of temporary disability and permanent and stationary status.

         Similarly, the other two exceptions under section 4660, subdivision (d), authorizing the use of the 1997 PDRS are not tied to an ultimate determination of permanent and disability status. Instead, they look to only whether “there has been either no comprehensive medical-legal report or no report by a treating physician indicating the existence of permanent disability .…” (§ 4660, subd. (d), emphasis added; Genlyte, supra, 158 Cal.App.4th at pp. 719-722; Zenith, supra, 159 Cal.App.4th at pp. 497-498.) Thus, none of the three exceptions authorizing the use of the 1997 PDRS require an actual finding or determination that the employee was permanent and stationary before 2005.

         Here, SRP stopped providing Marquis with temporary disability based on its reasonable belief temporary disability payments would no longer be required because he had returned to work. SRP was legally required to send the section 4061 notice in August or September 2004, and the WCAB appropriately rated Marquis’s disability under the 1997 PDRS pursuant to section 4660, subdivision (d).

         DISPOSITION

         The petition for writ of review is denied. This opinion is final forthwith as to this court.


Summaries of

Service Rock Products v. Workers' Compensation Appeals Bd.

California Court of Appeals
Sep 11, 2008
F055340 (Cal. Ct. App. Sep. 11, 2008)
Case details for

Service Rock Products v. Workers' Compensation Appeals Bd.

Case Details

Full title:SERVICE ROCK PRODUCTS et al., Petitioners, v. WORKERS’ COMPENSATION…

Court:California Court of Appeals

Date published: Sep 11, 2008

Citations

F055340 (Cal. Ct. App. Sep. 11, 2008)