Narrative Opinion Summary
The County of Los Angeles contested the imposition of a 10% penalty by the Workers' Compensation Appeals Board (WCAB) under Labor Code section 5814 for halting permanent disability payments to a claimant, Mary King, before a formal order was obtained to reduce her award. King had initially been awarded a 4% permanent disability rating due to an eye injury, later increased to 61% due to psychological impacts. The County, based on medical assessments indicating improvement, petitioned for a reduction and ceased payments. The WCAB reduced the award but imposed a penalty for the County's premature cessation of payments. The court annulled the penalty, ruling that the County's actions were not unreasonable given the circumstances, despite the lack of explicit procedural guidance for halting permanent disability payments. The decision highlights the need for formal modification of awards and clarifies that WCAB Rule 10462 pertains to temporary, not permanent, disability payments. The ruling underscores the principle that only genuine doubt regarding liability excuses payment delays, a standard not met in this case. The case, concluding with no penalty, was not reheard by the Supreme Court, affirming the appellate court's interpretation of the compensation laws.
Legal Issues Addressed
Interpretation of WCAB Rulessubscribe to see similar legal issues
Application: The court supported the WCAB's interpretation that Rule 10462 applies to temporary, not permanent, disability payments, and thus does not permit unilateral cessation of permanent disability payments.
Reasoning: The board's rules do not support the county's interpretation that section 10462 only pertains to temporary disability.
Modification of Permanent Disability Awardssubscribe to see similar legal issues
Application: The court emphasized that modifications to permanent disability awards require formal proceedings, and that payments cannot be adjusted based solely on petitions without a board order.
Reasoning: The board's authority to modify such awards does not negate the res judicata effect of its prior decisions during the five-year review period.
Penalty for Unreasonable Delay in Paymentssubscribe to see similar legal issues
Application: The court annulled the penalty imposed on the County, holding that the delay in payments was not unreasonable due to the County's reliance on credible medical evidence and its interpretation of the law.
Reasoning: The court affirmed that the county should not have terminated payments before the WCAB's order to reduce King's permanent disability award, but annulled the penalty, concluding the county did not act unreasonably under the circumstances.
Termination of Permanent Disability Paymentssubscribe to see similar legal issues
Application: The court determined that the County's cessation of permanent disability payments prior to obtaining a modification order was not justified, as permanent disability awards are res judicata and require formal modification to alter.
Reasoning: Unilateral termination of temporary disability indemnity may be permissible for good cause; however, terminating permanent disability compensation undermines the injured worker's expectations and conflicts with the intended definitiveness of the award, which is meant to be res judicata.