Opinion
NOT TO BE PUBLISHED
WCAB No. OAK 325239.
STEIN, Acting P. J.
The University of California, San Francisco and Octagon Risk Services, its third-party administrator for workers’ compensation benefits (collectively, University), timely petition for review (Lab. Code, §§ 5950 & 5952) of the Workers’ Compensation Appeals Board’s (Board) order and opinion affirming an award to respondent, Rana Rand. It is undisputed that Rand, while employed by the University, sustained industrial injury to her upper extremities causing permanent disability and a need for further medical treatment. The workers’ compensation judge (WCJ) applied the 1997 schedule for rating permanent disabilities to rate Rand’s disability at 56 percent. The University contends that the WCJ should have used the rating schedule that went into effect on January 1, 2005. We agree, and accordingly will annul that portion of the award.
Further statutory references are to this Code.
“Section 4660 governs the calculation of permanent disability awards. As amended effective April 19, 2004, the section requires regular revisions in the rating schedule and, as relevant here, provides generally that ‘[t]he 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 . . . .’ [Citation.] But the section also provides that for ‘compensable claims arising before January 1, 2005, ’ the new schedule ‘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.’ [Citation.]” (State Comp. Ins. Fund v. Workers’ Comp. Appeals Bd. (2007) 146 Cal.App.4th 1311, 1313 (Echeverria), italics omitted.) In addition, the statute requires application of the new rating schedule to compensable injuries occurring before its adoption date whenever, before January 1, 2005, “the employer is not required to provide the notice required by Section 4061.” (§ 4660, subd. (d).) Section 4061, in turn, requires a specified notice to an employee “[t]ogether with the last payment of temporary disability indemnity.” (§ 4061, subd. (a).) The Board found two of the foregoing exceptions applicable in Rand’s case.
The Board upheld the WCJ’s finding that Dr. Gordon’s December 2004 report concerning Rand was a comprehensive medical-legal report within the meaning of section 4660, subdivision (d). Although that report did not discuss permanent disability, the Board upheld the WJC’s decision to apply the 1997 schedule, holding that the language of section 4660, subdivision (d) prohibited use of the new schedule if a comprehensive medical-legal report existed prior to January 1, 2005, even if the report did not indicate the existence of permanent disability. In doing so, the Board followed its en banc decision in Baglione v. Hertz Car Sales (2007) 72 Cal.Comp. Cases 86. (Baglione I.)
In April 2007, however, the Board reversed its position. (Baglione v. AIG (Apr. 6, 2007, SJ00251644) ____ Cal. Comp. Cases ____ [2007 WL 1039088 (Cal.W.C.A.B.)].) (Baglione II.)
University strenuously argues that Dr. Gordon’s report was not a comprehensive medical-legal report; however, we need not decide the point because the Board’s interpretation was recently rejected by Division Four of this Court in Costco Wholesale Corp. v. Workers’ Comp. Appeals Bd. (2007) 151 Cal.App.4th 148 (Chavez), which held that “under section 4660, subdivision (d), a medical-legal report, like a treating physician’s report, must contain an indication of permanent disability to trigger use of the pre-2005 rating schedule.” (Id. at p. 155.) Chavez explained that section 4660, subdivision (d) “provides that the new rating schedule will apply to pre-2005 injuries unless one of three circumstances [has] occurred before 2005. One such circumstance is the preparation of a physician’s report indicating the existence of permanent disability. Another . . . is the obligation of the employer to serve notice under section 4061, which advises the employee of the employer’s position regarding the entitlement to permanent disability at the time the last payment of temporary disability is made. These two circumstances are clearly tied to a determination of permanent disability before January 1, 2005. We can conceive of no rational basis for the Legislature to include a third circumstance—the comprehensive medical-legal report at issue here—unless it was tethered to a similar requirement.” (Id. at p. 154.)
We agree with the reasoning of Chavez, supra, 151 Cal.App.4th 148, and conclude that a comprehensive medical-legal report must contain an indication of permanent disability in order to trigger the use of the 1997 rating schedule.
At oral argument, Rand conceded this point, but argued that the report of her treating physician, Dr. Wu, also triggered use of the 1997 schedule as a “report by a treating physician indicating the existence of permanent disability” within the meaning of section 4660, subdivision (d). The WCJ had rejected this argument and Rand did not petition for reconsideration of this finding (§§ 5901, 5904, 5905). She did make the argument in her answer to the University’s petition. The Board did not address the issue.
Dr. Wu stated that he believed “her prognosis is poor and she will require a rather prolonged period of recovery. She will ultimately require vocational rehabilitation.” We question whether this statement is a sufficient indication of permanent disability. The governing regulations explain that “[a] disability is considered permanent when the employee has reached maximal medical improvement, meaning his or her condition is well stabilized, and unlikely to change substantially in the next year with or without medical treatment.” (Cal. Code Regs., tit. 7, § 10152.) Dr. Wu suggested acupuncture for several weeks “to assess whether better control of the sympathetic-mediated aspects of her pain might be accomplished, ” and noted that she was “released to modified duties on December 23, 2004, ” with restrictions for one month. If the restrictions were unavailable, “she was to be temporarily totally disabled for one month.”
Rand’s argument fails because Dr. Wu’s report did not issue until January 6, 2005. Rand stresses the fact that Dr. Wu examined her on December 22, 2004, arguing that this date should control for purposes of section 4660, subdivision (d), speculating that“Christmas probably delayed the report into the new year, a circumstance Rand had no control over.” And, she relies on a dissent in a Board opinion (Biller v. WCAB (2006) 71 Cal.Comp.Cases 513), in which the majority rejected the very argument she makes here [that the date of examination controls] in a case in which the examining doctor declared the worker permanent and stationary as of December 23, 2004. The plain language of section 4660, subdivision (d) is otherwise. Moreover, Dr. Wu’s report describes an ongoing evaluation, with the “initial office visit” followed by record review, report preparation, and a subsequent January 6, 2005 telephone consultation with Rand.
We do not agree with Rand that the statute is ambiguous requiring an interpretation favorable to her. (§ 3202.)
As noted, the Board applied a second exception in Rand’s case, one not relied upon by the WCJ. At the time the Board issued its decision in this case, it had recently filed its en banc decision in Pendergrass v. Duggan Plumbing and State Compensation Insurance Fund (2007) 72 Cal.Comp.Cases 95 (Pendergrass I), holding 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.” (Id. at p. 98.) There is no dispute that Rand received temporary disability benefits from October 18, 2004, through July 22, 2005. Following Pendergrass I, the Board applied the 1997 rating schedule because temporary disability benefits commenced prior to January 1, 2005.
After the Board’s decision in this case became final, it reversed itself and rejected its conclusion in Pendergrass I. (Pendergrass v. Duggan Plumbing and State Compensation Insurance Fund (2007) 72 Cal.Comp.Cases 456 (Pendergrass II).) Moreover, Chavez, supra, addressed, and rejected, the reasoning of Pendergrass I, explaining that although “the statute is not a model of linguistic clarity, its intent is clear. The intent is to apply the new rating schedule to injuries suffered prior to 2005 in 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. [Citations.] If . . . the commencement of any temporary disability payments before 2005 required application of the rating schedule in effect at the time of injury, this legislative goal would be defeated. It would be rare, indeed, for temporary disability payments not to be owed or paid prior to 2005 for an injury occurring in or before 2004. Such a limited exception would be pointless where the Legislature could more easily have drafted the statute to apply the schedule in effect on the date of injury in all cases. [¶] Chavez’s proposed interpretation of the section 4061 notice exception under section 4660, subdivision (d), would also render meaningless that portion of the statute that requires application of the 2005 schedule if, before 2005, there was ‘no comprehensive medical-legal report or no report by a treating physician indicating the existence of permanent disability . . . .’ Temporary disability will have been paid or owed before January 1, 2005, in virtually every case where a qualified medical examiner or doctor prepared a pre-2005 medical report indicating permanent disability, meaning there would be no practical need for the other two exceptions. ‘ “[A]n interpretation that renders statutory language a nullity is obviously to be avoided.” ’ [Citation.]” (Chavez, supra, 151 Cal.App.4th at p. 157.)
Again, we agree with the reasoning in Chavez, supra, 151 Cal.App.4th 148, and conclude that the employer’s duty to provide the notice required by section 4061 is not triggered simply by the commencement of temporary disability benefits.
As noted, there is no dispute that Rand received temporary disability benefits from October 18, 2004, through July 22, 2005. She received total temporary disability payments from October 18, 2004, through October 31, 2004, and partial wage-loss temporary disability indemnity from November 1, 2004, through December 26, 2005. She contends that this change from total to partial disability indemnity triggered the University’s obligation under section 4061.
Initially, she argues that when she returned to work on November 1, 2004, the University had no way of knowing whether she would remain on any temporary disability. She theorizes that the University then had a duty to provide the statutory notice, because of the potential that the last payment of total temporary disability might in fact be the “last payment of temporary disability.” (§ 4061, subd. (a).) She speculates that whether she would continue to receive temporary disability payments hinged on how many hours she worked, which could only be calculated after the fact.
She offers no legal or factual support for this argument, which we find runs contrary to the express language of section 4061, and therefore fails.
Rand stipulated that she was temporarily disabled from November 1, 2004, through December 26, 2004, and that temporary disability indemnity was in fact paid through December 26, 2004. Dr. Wu’s report supports the conclusion that she remained temporarily disabled during this period. Nothing in the record suggests that the University denied her partial temporary disability indemnity benefits.
The notice required by section 4061, subdivision (a) concerns the decision of the employer to deny temporary disability benefits because of a decision about permanent disability. It requires a statement from the employer either “that no permanent disability indemnity will be paid” or “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.” (§ 4061, subds. (a)(1) & (2).) In either case, the employer is required to explain the further steps to be taken by the employee. (§ 4061, subd. (b).) In other words, the obligation to provide “the notice required by section 4061” (§ 4660, subd. (d)) occurs at the time the employer in fact denies a claim for temporary disability benefits made by the employee. And, in Rand’s hypothetical [that the University could not know if temporary disability would continue], no denial of temporary disability payments occurred. Moreover, even if the University had made a decision to deny any claim, no notice was due for 14 days.
“Notice that Benefits Are Ending (TD, SC, PD, VRTD/VRMA). With the last payment of temporary disability indemnity, permanent disability indemnity, salary continuation, or vocational rehabilitation temporary disability indemnity or maintenance allowance, the claims administrator shall advise the employee of the ending of indemnity payments and the reason, and shall make an accounting of all compensation paid to or on behalf of the employee in the species of benefit to which the notice refers, including the dates and amounts paid and any related penalties. If the decision to end payment of indemnity was made after the last payment, the claims administrator shall send the notice and accounting within 14 days of the last payment. The notice shall include the employee’s remedies.” (Cal. Code Regs., tit. 8, § 9812, subd. (d).)
Finally, Rand relies on section 9812, subdivision (a) of title 8 of the California Code of Regulations to argue that the November 1, 2004 change from total to partial temporary disability payments also triggered the notice requirement of section 4601. But that regulation requires an employer to give notice of a change of the benefit rate. As University correctly observes, section 4660, subdivision (d) makes no reference to notice of a change in benefit rate.
Because none of the exceptions to application of the January 1, 2005 rating schedule were applicable in Rand’s case, the use of the 1997 schedule was error. Therefore, the portion of the decision and opinion after reconsideration applying the 1997 rating schedule to the calculation of permanent disability is annulled. The matter is remanded to the Board for further proceedings consistent with this opinion.
The parties shall bear their own costs.
We concur: SWAGER, J., MARGULIES, J.