Zenith Ins. Co. v. WORKERS'COMP. APP. BD.

Citations: 124 Cal. App. 3d 176; 176 Cal. Rptr. 920Docket: 25606

Court: California Court of Appeal; October 1, 1981; California; State Appellate Court

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Zenith Insurance Company seeks to annul a Workers' Compensation Appeals Board decision that awarded full death benefits, medical benefits, and burial expenses to the widow of an employee who died from work-related congestive heart failure. Zenith argues that 50% of the employee's death was due to a cumulative heart injury from prior employment, claiming that the widow should only recover half of the benefits. The California Supreme Court's earlier ruling in Pacific Gas & Elec. Co. v. Ind. Acc. Com. established that death benefits are not apportionable without explicit legislative direction. Zenith contends that Labor Code section 3208.2, added in 1968, requires apportionment for deaths resulting from multiple injuries. However, the court holds that this section does not override the previous ruling, confirming that death, medical, and burial benefits are not subject to apportionment under workers' compensation law. The employee had a history of heart issues linked to different employers and had filed for workers' compensation benefits prior to his death. His widow subsequently amended one application for death benefits and settled another case through a compromise agreement.

At the hearing regarding death benefits, Grove's compensation carrier claimed that section 3208.2 mandated a 50 percent apportionment of benefits for a cumulative heart injury sustained by the decedent while employed by D.N. Inc., suggesting that only half of the benefits should be awarded against Grove. The judge denied this request, awarding the widow the full death benefits of $50,000, along with $6,782.92 for medical expenses and $1,500 for burial expenses. Upon reconsideration, the board upheld the full death benefits but reduced the burial expenses to the maximum allowable amount of $1,000, stating that section 3208.2 did not necessitate apportionment. 

The board emphasized that section 3208.2 applies prospectively and does not permit merging injuries occurring before January 1, 1969, into later cumulative injuries. Even if applicable, under the precedent set by the Pacific Gas & Electric decision, employers are liable for full death benefits if a work-related injury contributes to the employee's death, without apportionment due to other causes. Zenith contended that deaths resulting from multiple injuries should require apportionment of benefits and related costs. 

The Pacific Gas & Electric case established that full death benefits could be awarded to dependents when the death resulted from a combination of a work-related injury and a nonindustrial disease, rejecting the employer's argument for apportionment based on the existence of a preexisting condition. The court noted the absence of legislative provisions for death benefits apportionment, interpreting this as an intent to ensure adequate support for dependents, regardless of an employee's earnings. The court reaffirmed that statutory recovery must be provided as applicable, disregarding perceived individual hardships. Consequently, unless section 3208.2 invalidates it, death benefits remain nonapportionable. 

The 1968 anti-merger legislation, which includes sections 3208.1 and 3208.2, was created to address the merger of specific injuries into cumulative trauma injuries, effective January 1, 1969.

Cumulative trauma injury has been recognized in California law since before its legislative acknowledgment in 1968. Judicial decisions established that cumulative injuries could result from multiple specific incidents during an employment period that necessitated medical treatment or caused time off work. Employees could claim full recovery for cumulative injuries, even if part of their disability stemmed from specific incidents barred by the statute of limitations, as seen in cases like DeLuna and Miller.

Injuries from continuous cumulative trauma, despite being minor individually, could qualify as "occupational diseases" under the statute of limitations defined in section 5412. The 1968 legislative response introduced an anti-merger package, which included definitions of "specific injury" and "cumulative injury" in section 3208.1. A cumulative injury is defined as resulting from repetitive traumatic activities over time leading to disability or medical treatment. The law stipulated that the date of cumulative injury is the date of resulting disability.

Section 3208.2 mandates that when disability or medical treatment arises from multiple injuries, each injury's facts and law must be considered separately, including liability apportionment for benefits. Lastly, section 5303 states that there is a single cause of action for each injury under this division, allowing for claims related to an injury to be joined in one proceeding, but explicitly preventing any merging of injuries or combining of awards for specific and cumulative injuries.

The legislative committee comment aims to invalidate the impact of recent court decisions on Workmen's Compensation law, specifically referencing cases such as Dow Chemical Co. vs. Workmen's Compensation Appeals Board and others. Section 3208.2 does not require apportionment of death benefits awarded to an employee's widow from the employer, contrary to Zenith's assertion. The term "apportionment" in this context pertains to loss sharing among employers rather than the division of benefits among beneficiaries. The section serves procedural purposes regarding filing claims and determining facts and law for multiple injuries, rather than affecting substantive employee rights. Apportionment relates to liability for disability benefits and medical costs among employers or between an employer and the Subsequent Injury Fund, not between the employee and employer. The lack of reference to specific cases in the legislative comment indicates that the term "apportionment" was not intended to contradict existing rulings that classify certain benefits as nonapportionable. This interpretation aligns with expert views, reinforcing that "apportionment" pertains to aggregate liability among employers for various injuries or exposures, rather than reducing employee awards. Additionally, the nature of death benefits and established statutory interpretation principles further support the conclusion against apportionment.

The interpretation of death benefits under section 3208.2 aligns with the legislative intent to provide comprehensive support to workers and their dependents, as mandated by Article XIV, section 4 of the California Constitution. This section emphasizes the necessity for a robust workers' compensation system that addresses the welfare of workers and their dependents, relieving them of financial burdens resulting from workplace injuries or fatalities. 

The Legislature established a distinct right for dependents to receive death benefits, independent of the deceased employee's claims for disability compensation. The statutory amount of these benefits is fixed, determined by the relationship to the deceased, and not based on the employee's earnings. Benefits are required to be disbursed in installments akin to temporary disability payments, ensuring timely support for dependents. 

Apportionment of death benefits would undermine their intended humanitarian purpose, complicating the claims process and potentially leading to delays and increased costs for dependents. The laws governing workers' compensation are to be interpreted liberally in favor of injured employees, ensuring that any ambiguity benefits the claimant. The overarching goal is to facilitate the swift and fair provision of benefits to those reliant on the deceased employee.

Statutory and judicial canons of construction favor dependents and employees in death benefit claims. Apportionment of loss between claimants (employees or dependents) and employers disadvantages claimants, favoring employers instead. Therefore, any ambiguity in sections 3208.2 or 5303 should be interpreted against allowing the apportionment of death benefits. The California Supreme Court in Granado v. Workmen's Comp. App. Bd. concluded that temporary disability is not apportionable due to the statute's ambiguity, the principle of liberal construction, potential delays in payment, and the goal of ensuring timely compensation. These reasons similarly apply to death benefits and burial expenses, which are also deemed nonapportionable. Medical expenses are explicitly nonapportionable as per Granado, which noted that such expenses should not be partially covered, to prevent complications in treatment access for injured workers. The decision of the Workers' Compensation Appeals Board is affirmed, with the petition for a hearing by the Supreme Court denied on November 25, 1981.

All section references pertain to the Labor Code unless stated otherwise. Section 5412 defines the date of injury for occupational diseases or cumulative injuries as the date when the employee first experienced disability and realized, or should have realized, that it was work-related. The compromise and release agreement is not included in the case record. The compensation amount has been raised to $1,500 per Labor Code § 4701. Section 4663 allows for compensation related to the aggravation of pre-existing diseases only for the disability proportionately attributed to the compensable injury. An amendment in 1973 to Section 5412 explicitly included cumulative injuries. Additionally, Section 3208.1 was amended to specify that the date of a cumulative injury aligns with the determination under Section 5412. 

Legal precedent has established that the anti-merger legislation is non-retroactive and the De Luna and Miller merger doctrine applies to cumulative injuries before January 1, 1969. In the current case, apportioning death benefits based on cumulative injuries predating the statute's operative date could be considered retroactive. The board and respondent raised concerns about this retroactive application but, since death benefits, medical, and burial expenses are deemed non-apportionable under sections 3208.2 and 5303, the issue does not need further examination. 

Historically, prior to 1968, the absence of legislative authority for apportionment of death benefits meant such apportionment was improper. However, Section 3208.2 was introduced in 1968 to require apportionment among multiple injuries for disability benefits, medical costs, and death benefits. Commentary suggests that while there is a requirement for apportionment of liability for death benefits among employers, respected authorities maintain that death benefits themselves are not subject to apportionment based on prior conditions; if an injury causes or accelerates death, the full benefit is compensable for dependents.

The death benefit is protected from reduction or division due to any prior contributing causes if it is proven that the industrial injury contributed to the death. Liability for the death benefit may be shared among multiple defendants when various injuries together lead to the death. In instances of occupational diseases or cumulative injuries from successive employment, an employee can claim full disability compensation from one or more employers. The employer found liable must initiate proceedings to determine liability apportionment or seek contribution. However, liability apportionment does not affect the employee's recovery rights. This legal framework was established prior to the introduction of anti-merger legislation.