REECE v. WORKERS COMPENSATION APPEALS BOARD

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Court of Appeal, Second District, Division 4, California.

Lloyd REECE, Petitioner, v. WORKERS' COMPENSATION APPEALS BOARD and City of Los Angeles, Respondents.

No. B039823.

Decided: October 19, 1989

Lewis, Marenstein & Kadar and Lawrence D. Rosenberg, Los Angeles, for petitioner. James K. Hahn, City Atty., H. John Wittorff, Asst. City Atty., and William A. Stephenson, Deputy City Atty., for respondent City of Los Angeles. No appearance for respondent W.C.A.B.

We review a decision after reconsideration in which respondent Workers' Compensation Appeals Board (Board) determined applicant's request for vocational rehabilitation benefits was untimely because it was filed more than five years after the date of injury.

On January 28, 1977, applicant sustained industrial injury to the back and left lower extremity during employment as a storekeeper and warehouseman by the City of Los Angeles (City).

In July 1977 applicant, represented by counsel, filed the application alleging the parties had a disagreement regarding temporary disability indemnity, permanent disability indemnity, medical treatment, and “[a]ll other benefits under the [L]abor [C]ode.”

On June 17, 1977, Dr. Hirabayashi reported to City that applicant was permanently precluded from returning to his pre-injury work.   However, City neither notified applicant of his rehabilitation rights nor reported applicant's disability status to the Rehabilitation Bureau (Bureau).

On July 19, 1977, City issued a certificate releasing applicant to return to restricted duty.   However, City made no attempt to return applicant to a modified position.

In October 1977 Dr. Hirabayashi reiterated applicant could not return to his pre-injury work and concluded applicant was limited to light work.

On April 4, 1978, applicant and City stipulated the industrial injury resulted in temporary disability from February 7, 1977, through June 17, 1977, and 73 percent permanent disability, and the workers' compensation judge (WCJ) awarded temporary and permanent disability indemnity pursuant to the stipulations.

Applicant and the Subsequent Injuries Fund (SIF) later stipulated that the permanent disability resulting from the industrial injury and a prior permanent disability was 95 percent and SIF was liable for 22 percent permanent disability indemnity.   On February 16, 1979, the WCJ awarded permanent disability indemnity payable by SIF pursuant to this stipulation.

On October 11, 1985, applicant filed a request with the Bureau for vocational rehabilitation.

Applicant later testified that in 1983 and 1984 he worked for his son's check cashing business by dusting, emptying trash baskets, answering the telephone, and running errands.   The son sometimes gave applicant money for gasoline but did not pay him a salary.   Applicant stated City never contacted him regarding vocational rehabilitation and he would be interested in rehabilitation if he were contacted.

In an order served by mail on February 5, 1987, the Bureau awarded applicant vocational rehabilitation temporary disability indemnity (VRTD) for the June 17, 1977, through February 16, 1979, period.   The Bureau concluded that, because City failed to notify applicant of his potential right to rehabilitation, the request for rehabilitation was timely.   The Bureau found applicant was a qualified injured worker from June 17, 1977, until February 16, 1979, when he was found 95 percent permanently disabled.

City and applicant timely appealed the Bureau's order to the WCJ.1

Regarding City's appeal, the WCJ opined that applicant's representation by counsel did not limit City's duty to notify applicant concerning his rehabilitation rights and thus applicant's request for rehabilitation was timely.   There was no hearing on applicant's appeal, and the WCJ did not address that appeal in his opinion.

City petitioned for reconsideration.

In a decision after reconsideration dated July 15, 1988, the Board reversed the WCJ's decision.   The Board concluded the Bureau had no jurisdiction to award VRTD because applicant filed the rehabilitation request more than five years after the date of injury;  City had no duty to notify applicant regarding his rehabilitation rights because an application was filed;  and applicant must be deemed to have had knowledge of his rehabilitation rights since he was represented by an attorney.

One Board panel member concurred in the result, noting that in 1977 the rules of the Administrative Director of the Division of Industrial Accidents did not require the employer to notify the applicant regarding the right to rehabilitation.   Explaining that the SIF award was for preexisting disability, the separately concurring panel member opined applicant was too disabled to benefit from rehabilitation services and thus did not request rehabilitation in good faith.

Applicant petitioned for reconsideration of the Board's decision.

In a decision after reconsideration dated December 22, 1988, the Board reiterated its previous conclusions and affirmed its decision.   The Board also stated that because applicant was 95 percent permanently disabled at the time of the original award, there was no prima facie evidence he was a qualified injured worker during the period for which he claims VRTD.

I

Applicant contends the five-year period of Labor Code section 5804 was tolled because City breached its duty to notify applicant regarding the potential right to rehabilitation and to report disability status to the Bureau.

In 1977 former California Administrative Code, title 8, chapter 4.5, section 10004 (former rule 10004) provided an employer had the duty to file a disability status report with the Bureau immediately upon knowledge the employee was unlikely to be able to return permanently to the employee's usual and customary occupation or occupation at the time of injury.  (Cal.Admin.Register, tit. 8, Register 75, No. 1.) 2

In Webb v. Workers' Comp. Appeals Bd. (1980) 28 Cal.3d 621, 170 Cal.Rptr. 32, 620 P.2d 618, the Supreme Court held an employer has a duty to inform an injured employee of the potential right to rehabilitation when the duty to report disability status arises and breach of either duty excuses the employee's failure to request rehabilitation and justifies an award of VRTD from the date of the employer's breach.  (Id., at pp. 626, 630–631, 632, fn. 8, 170 Cal.Rptr. 32, 620 P.2d 618.)

 City knew applicant was unlikely to be able permanently to return to his usual and customary occupation when it received Dr. Hirabayashi's June 17, 1977, report.   City breached the duties described in Webb because it failed to notify applicant regarding his rehabilitation rights and report disability status to the Bureau after receiving Dr. Hirabayashi's June 17, 1977, report.

 The Webb court stated that the Legislature intended to place on the employer the primary duty to make rehabilitation available and concluded that general notification of workers' compensation rights under an administrative regulation implementing Labor Code section 5402 would not alone fulfill the employer's duty to notify an employee regarding rehabilitation when the employer learns the employee may be entitled to vocational rehabilitation.  (Webb, supra, 28 Cal.3d at pp. 630–631, fn. 6, 170 Cal.Rptr. 32, 620 P.2d 618.)   The court explained:  “Employers are already required, within five days after receiving knowledge of an injury, to inform the employee of the benefits to which he may be entitled, including ‘vocational rehabilitation where appropriate.’  (Reg. § 9880 [former Cal.Admin.Code, tit. 8, ch. 4.5, § 9880].)  But this information comes at a time when the recently injured employee may be unable to attend to it, and it details the whole array of rights and benefits to which he may or may not be entitled.   Even if the employee reads and fully understands the description of his rehabilitation rights, he may be ignorant of the point at which he will actually become eligible.   Furthermore, many months may pass between the time the employer learns of the injury and the time it is determined the employee will be unable to resume his former occupation.”  (Id., at p. 631, fn. 6, 170 Cal.Rptr. 32, 620 P.2d 618.)   Although Labor Code section 5402 provides an exception to the general notification duty in the event an application has been filed, Webb provides no such exception to the employer's duty to notify an employee regarding rehabilitation rights.   We note Labor Code section 138.3 provides the Board shall establish regulations pursuant to Labor Code section 5402 regarding the employer's duty to notify injured employees of their rehabilitation rights.   We conclude the exception in Labor Code section 5402 for situations in which an application has been filed does not apply to the employer's duty to notify an injured employee of his rehabilitation rights since injured employees are often not capable of benefiting from vocational rehabilitation until after the application has been filed and the Supreme Court has held legislation regarding rehabilitation must be liberally construed in favor of the injured worker.  (Webb v. Workers' Comp. Appeals Bd., supra, 28 Cal.3d 621, 626–627, 170 Cal.Rptr. 32, 620 P.2d 618.)

 The notification duty described in Webb is not limited to situations in which the employee is unrepresented by counsel.  (Pereira v. Workers' Comp. Appeals Bd. (1987) 196 Cal.App.3d 1, 7, 241 Cal.Rptr. 302.)   As explained in Pereira, “Such a limitation would contravene the legislative intent [of Labor Code section 139.5] to place on employers the primary duty of promptly making rehabilitation services available.”  (Ibid.)

 Although Webb held breach of either the notification or reporting duty excuses the employee's failure to request rehabilitation and justifies an award of VRTD from the date of breach, Webb did not involve a request for rehabilitation more than five years after the date of injury.

Labor Code section 5804 provides that no award of compensation may be amended after five years from the date of injury except upon a petition filed within the five-year period.   The issue whether vocational rehabilitation may be first requested more than five years after the date of injury where the employer breached the notification and reporting duties described in Webb appears to be one of first impression.3

In Kaiser Foundation Hospitals v. Workers' Comp. Appeals Bd. (1985) 39 Cal.3d 57, 60, 216 Cal.Rptr. 115, 702 P.2d 197, the court held that the limitations period of Labor Code section 5405 is tolled if the employer breaches its duty to notify the injured employee of his workers' compensation rights and the employee lacks actual knowledge of those rights.

In General Foundry Service v. Workers' Comp. Appeals Bd. (1986) 42 Cal.3d 331, 228 Cal.Rptr. 243, 721 P.2d 124, the court held the provisions of Labor Code section 5804 are jurisdictional but also concluded section 5804 is a statute of limitations and should not be construed in a manner that will result in a right being lost before it accrues.  (General Foundry, supra, 42 Cal.3d at pp. 333, 336–337, 228 Cal.Rptr. 243, 721 P.2d 124.)

We conclude that because City breached its duties to notify applicant of his rehabilitation rights and report disability status to the Bureau, the jurisdictional five-year period of Labor Code section 5804 was tolled until applicant obtained actual knowledge of his rehabilitation rights.  (See General Foundry Service v. Workers' Comp. Appeals Bd., supra, 42 Cal.3d at pp. 333, 336–337, 228 Cal.Rptr. 243, 721 P.2d 124;  Kaiser Foundation Hospitals v. Workers' Comp. Appeals Bd., supra, 39 Cal.3d at p. 60, 216 Cal.Rptr. 115, 702 P.2d 197;  Webb v. Workers' Comp. Appeals Bd., supra, 28 Cal.3d at pp. 626, 630–631, 632, fn. 8, 170 Cal.Rptr. 32, 620 P.2d 618.)   Since the record does not reflect when applicant obtained actual knowledge of his rehabilitation rights, the matter must be remanded to the Board for a determination when he obtained actual knowledge.

II

Applicant also contends he is a qualified injured worker and is entitled to a hearing on that issue.

 The determination whether applicant is a qualified injured worker is a factual matter to be decided by the WCJ and the Board, not by this court.   (Bostwick v. Protectal Corp. (1978) 43 Cal.Comp.Cases 1 (in bank);  see Lamb v. Workmen's Comp. Appeals Bd. (1974) 11 Cal.3d 274, 280–281,) Applicant is entitled to a hearing on his appeal from the Bureau.  (Bostwick v. Protectal Corp., supra, 43 Cal.Comp.Cases 1.)

 For guidance of the Board on remand, we note that Dr. Hirabayashi's June 17, 1977, report constitutes prima facie evidence of entitlement to rehabilitation.  (Industrial Indemnity Co. v. Workers' Comp. Appeals Bd. (1985) 165 Cal.App.3d 633, 641, 211 Cal.Rptr. 683).   In view of the evidence applicant worked for his son in 1983 and 1984 by dusting, emptying trash baskets, answering the telephone, and running errands, the finding applicant is 95 percent permanently disabled does not necessarily establish applicant is either medically or vocationally ineligible for rehabilitation.   (Id., at pp. 640–641, 211 Cal.Rptr. 683;  Cal.Code Regs., tit. 8, ch. 4.5, § 10003, subds. (c), (h);  City of Visalia v. Workers' Comp. Appeals Bd. (1983) 48 Cal.Comp.Cases 387, 388 [100 percent permanently disabled employee was qualified injured worker];  Silberman & Wulz, Rehabilitation:  The California System (4th ed. 1988) p. 265.)

The December 22, 1988, decision after reconsideration is annulled, and the matter is remanded for proceedings consistent with the views expressed herein.

FOOTNOTES

1.   After this court filed its initial opinion, applicant requested modification, asserting he had located a copy of his appeal from the Bureau to the WCJ reflecting the appeal was filed on February 27, 1987, and was thus timely.  (Cal.Code Regs., tit. 8, ch. 4, 5, § 10014, subd. (e).)  Applicant has provided this court with a copy of his appeal on which there is a date stamp of February 27, 1987.   In its petition for rehearing, the Board concedes that in addition to the March 4, 1987, date stamp reflecting filing at one Board location, there is a faint date stamp on applicant's appeal to the WCJ indicating the appeal may have been filed at another Board location on February 27, 1987.   In view of the Board's assertion that there are two date stamps on the appeal, one of which may be February 27, 1987, we conclude applicant's appeal was timely filed.  (Ibid.)

2.   Effective July 1, 1988, the published rules regarding vocational rehabilitation were extensively revised.The provisions of former rule 10004 regarding the submission of a disability status report were deleted, and the rules currently provide in essence that a disability status report need only be filed if the parties have a dispute regarding entitlement to rehabilitation services.  (Cal.Code Regs., tit. 8, ch. 4.5, §§ 10006–10009.)

3.   We note that, effective January 1, 1983, the Legislature enacted Labor Code section 5405.5, which reads:  “Except as otherwise provided in Section 5410, the period within which an employee may request vocational rehabilitation benefits provided by Section 139.5 is one year from the date of the last finding of permanent disability by the appeals board, or one year from the date the appeals board approved a compromise and release of other issues.”Effective January 1, 1983, the Legislature also amended Labor Code section 5410 to provide:  “Nothing in this chapter shall bar the right of any injured employee to institute proceedings for the collection of compensation within five years after the date of the injury upon the ground that the original injury has caused new and further disability or the need for vocational rehabilitation benefits.   The jurisdiction of the appeals board in these cases shall be a continuing jurisdiction at all times within this period․”Because one year after the last finding of permanent disability Labor Code section 5405.5 had not yet been enacted, we need not decide whether section 5405.5 may ever be applied retroactively.  (See Aronson v. Superior Court (1987) 191 Cal.App.3d 294, 297, 236 Cal.Rptr. 347;  3 Witkin, Cal.Procedure (3d ed. 1985) Actions, § 331, p. 360;  id. (1989 Supp.) Actions, § 331, p. 57.)

ARLEIGH M. WOODS, Presiding Justice.

GEORGE and GOERTZEN, JJ., concur.