ALLIED COMPENSATION INSURANCE COMPANY v. INDUSTRIAL ACCIDENT COMMISSION

Reset A A Font size: Print

District Court of Appeal, First District, Division 2, California.

ALLIED COMPENSATION INSURANCE COMPANY, Petitioner, v. INDUSTRIAL ACCIDENT COMMISSION of the State of California, and Marge E. Lawler Lintz, Respondents.*

Civ. 19758.

Decided: July 19, 1961

Mullen & Filippi, John W. Moore, San Francisco, for petitioner. Everett A. Corten, Emily B. Johnson, San Francisco, for respondent Industrial Accident Commission. Magee, Ott & Haywood, San Francisco, for respondent Lintz.

Petitioner seeks the review and annulment of an award made by respondent Industrial Accident Commission, which awarded applicant Marge Lintz a 77% permanent disability rating in a decision after reconsideration.

The record discloses that the applicant sustained an injury to her back in the performance of her activities as a celery trimmer. Her injury required an operation for the removal of a herniated intervertebral disc. Subsequently, her back continued to bother her and there is a decided conflict in the evidence as to the degree of pain and disability that remained.

In due time Marge Lintz filed her application for compensation and at the hearings medical reports from her attending physicians and an independent medical examiner were introduced. The referee submitted the ‘factors' of her disabilities to the rating bureau of the Commission, which recommended a 32 1/2% rating. This figure was adopted by the Commission in its findings and award of April 22, 1960. The applicant claimed that the rating was too low and petitioned for reconsideration. Petitioner herein answered the said request for reconsideration but did not ask that a transcript be prepared. Thereafter, Panel One of the Commission, feeling that an independent medical report would be of assistance, granted reconsideration to obtain the opinion of such an examiner, ‘if the parties so agree,’ and a formal order was so entered. After negotiations between the parties as to the bearing of the costs of the proposed examination had failed, and even though the petitioner herein advised the Commission that it would abide by its practice with respect to such matters, the Commission, without more, proceeded to decide the issue upon the medical evidence previously offered. No independent examination was ever made.

Some time between the order granting reconsideration and the hearing, the Industrial Accident Commission submitted certain ‘factors' to a rating expert. This was done twice, once informally in which the resulting report was never noticed or in evidence, and once formally when petitioner received a copy, and which was later placed in evidence. It was the latter report that recommended a 77% disability rating and concerning which the rate specialist was later cross-examined by petitioner. It was also this report that served as a basis for the decision which is the subject of this proceeding.

The main question before us is whether or not the Industrial Accident Commission denied petitioner due process in making an award which differed from that of the referee without reviewing the transcript of the evidence in the matter. Petitioner contends that when the Commission's decision is contrary to that of the referee hearing the evidence, the whole record must be reviewed. We agree with this contention.

In Bethlehem Steel Co. v. Ind. Acc. Comm., 1940, 42 Cal.App.2d 192, 194, 108 P.2d 698, hearings were had before one referee whose award of 31 1/414% permanent disability was set aside upon rehearing by a second referee who took some additional testimony and raised the disability rating to 61 1/414%. The second findings and award were adopted by the Commission. Upon appeal the award was annulled upon the ground that it was based upon the findings of the second referee who had not read the transcript of the first hearing. In Helmick v. Industrial Acc. Comm., 1941, 46 Cal.App.2d 651, 116 P.2d 658, a decision of the Commission was upheld which adopted the findings of a second referee contrary to those of the first referee who heard the evidence. However, it was pointed out that the second referee had read the transcript of the hearing before the first referee. The court also pointed out by way of dicta that the findings of the second referee could not have been adopted by the Commission had not that referee read or heard all the evidence in the case.

In Pacific Indem. Co. v. Industrial Acc. Comm., 1946, 28 Cal.2d 329, 335, 170 P.2d 18, we find the court stating that when the Commission makes a contrary finding to that of the hearing referee, it must make an independent examination of the record. Also bearing upon this question is Labor Code, § 5315, which permits the Commission, upon the filing of the referee's report, to confirm, adopt, modify or set aside the findings, order, decision or award, and with or without further proceedings or notice to enter its order, findings, decision or award ‘* * * based upon the record in the case.’ It is elemental that the ‘record in the case’ includes the transcript of evidence.

The only difference between the instant case and Bethlehem, supra, is that there the decision was based upon the contrary findings of a referee who had not read the transcript, and here the Commission, rather than refer the case to a second referee, itself decided the issues contrary to the findings of the referee without reviewing the transcript of the testimony. This distinction does not invoke a different rule as between the impropriety of adopting the contrary views of a second referee who had not read the transcript and the Commission making a contrary decision without an independent review of the transcript.

The case of Santa Maria Gas Co. v. Ind. Acc. Comm., 1941, 46 Cal.App.2d 775, 117 P.2d 43, 951, appears to present a similar problem, but it is readily distinguishable. After hearings extending over a period of three years, a disability rating had gone from 35 3/4% to 54 1/4% and finally to 76%. Upon appeal, the award of the Commission adopting the recommendations of a final referee who had not read the transcripts of the former hearings was approved. However, it is apparent that the court found that the evidence adduced at the final hearing was sufficient and hence the requirement that we are discussing did not apply. In the instant case there were no hearings by a referee or the Commission prior to annulling the decision of the first referee. We have only a revised rating by the rating bureau, and no additional evidence as to the applicant's condition was offered. The Commission based its decision upon the report of Dr. Sirbu, merely a portion of the record, without fully examining the whole record. It is to be noted that in the referee's report particular emphasis is placed upon the demeanor of the applicant upon the stand, as well as the content of her testimony describing her disability and its subjective symptoms. In view of this situation, it cannot be successfully contended that the disputable presumption that the Commission regularly performed its duty overcomes the petitioner's assertion that the record was not considered, as it did in Pac. Emp. Ins. Co. v. Ind. Acc. Comm., 1942, 19 Cal.2d 622, 633, 122 P.2d 570, 141 A.L.R. 798, where it was pointed out that lack of adequate review by the Commission was a ‘bare assertion,’ whereas in the case at bar respondent Commission did not examine a transcript for admittedly none existed.

Respondents next contend that even though petitioner's contention as to the examination of the transcript may be correct, nevertheless it has waived the right to have the respondent Commission examine the transcript because it never raised the question prior to the petition for review. Our attention is directed to the following administrative order adopted by the respondent Commission on July 25, 1958:

‘Administrative Order Experimentally Establishing Transcript Practice

‘It is ordered that the following transcript practice be, and it hereby is experimentally established in connection with the consideration and disposition of petitions for reconsideration filed pursuant to Labor Code 5900 et seq.

“Where, in a petition for reconsideration or in an answer thereto, it is alleged that consideration of a transcript of testimony is essential to the panel's evaluation of case upon reconsideration, or it so appears to the panel, the transcript of testimony will automatically be prepared. The provision for automatic transcripts is experimentally introduced. Continuance of such practice is dependent upon the availability of implementing reportorial personnel, under legislative budgetary grant. This practice may be terminated under notice given by the Commission to the person, persons and organizations identified in Rule 9701. Copies of the transcript may be obtained by the parties upon payment of the regular charge.'

“Where death, incapacity or separation from service of a reporter intervenes to prevent transcription of proceeding, the Commission, or a panel, may, in the exercise of discretion, grant reconsideration and order the same retried. Failure to secure a transcript as herein outlined will not vitiate past, pending or subsequent proceedings in in cause.”

Respondents claim that under this rule, if the petitioner had deemed a transcript necessary, it was bound to ask for it. While the rule indicates that petitioner could have exercised the right to a transcript in its answer, in applying the rule to an answering party we are faced with the question as to how is that party to know that the Commission will find it necessary to decide contrary to the referee. Further, we are mindful of the power of the panel itself to order a transcript. Under this rule, experimental in nature, it would be unjust to foreclose the rights of the petitioner on the basis of a purported waiver, for as was said in Roberson v. Industrial Acc. Comm., 1956, 146 Cal.App.2d 627, 629, 304 P.2d 202, 203:

“A waiver of a right cannot be established without a clear showing of an intent to relinquish such right, and doubtful cases will be decided against a waiver', Greninger v. Fischer, 81 Cal.App.2d 549, 554, 184 P.2d 694; nor will a waiver be presumed or implied contrary to the intention of a party whose rights would be injuriously affected unless by his conduct the opposite party has been misled to his prejudice into the honest belief that such waiver was intended. Craig v. White, 187 Cal. 489, 498, 202 P. 648.'

Factually, we find no support in the record of any waiver. Rather, petitioner has consistently and conscientiously attempted to press its cause. We are convinced that the respondent Commission acted in excess of its powers when it made an award contrary to that of the hearing referee, without making an independent examination of the record.

Petitioner next contends that evidence was added to the record without according it the opportunity for cross-examination, and that it was precluded from producing further evidence, and that such action constitutes a denial of due process. As the contention applies to the informal unnoticed rating first procured by the Commission, such contention is sound (see Young v. Industrial Acc. Comm., 1940, 38 Cal.App.2d 250, 100 P.2d 1062). However, it is clear that the Commission based its award upon the regularly noticed formal recommendation of a second rating expert, Latino. Petitioner admits that Latino merely applied a mathematical formula to the ‘factors' given by the panel of the Commission. Cross-examination of the expert in such a case need not cover the ‘factors,’ since the rating report does not make a value judgment as to them, but merely applies formulae to them. Therefore, any contention as to unduly limited cross-examination is without merit. Cross-examination here was sought from one without knowledge or control of the subject.

As to petitioner's attempt to produce further evidence, it complains that it was not allowed to present rebuttal evidence in the form of testimony as to disability and classification. Labor Code, § 5704, provides as follows:

‘Transcripts of all testimony taken without notice and copies of all reports and other matters added to the record, otherwise than during the course of an open hearing, shall be served upon the parties to the proceeding, and an opportunity shall be given to produce evidence in explanation or rebuttal thereof before decision is rendered.’ [Emphasis supplied.]

Since the rating expert's report was submitted after the open hearing, respondent Commission's refusal to allow production of further evidence by way of rebuttal to the rating clearly violates said section. Denial of opportunity to present testimony in rebuttal to a rating expert is denial of due process. Caesar's Restaurant v. Ind. Acc. Comm., 1959, 175 Cal.App.2d 850, 853, 854, 1 Cal.Rptr. 97. In the Caesar's Restaurant case, reports were submitted after open hearing by a doctor and a rating expert, and the petitioner therein was neither allowed to cross-examine nor present rebutting evidence. In annulling the award, the court quoted with approval from Massachusetts Bonding & Ins. Co. v. Ind. Acc. Comm., 1946, 74 Cal.App.2d 911, 913, 170 P.2d 36, that “The reasonable opportunity to meet and rebut the evidence produced by his opponent is generally recognized as one of the essentials of these [due process] minimal requirements * * *.” 175 Cal.App.2d at page 855, 1 Cal.Rptr. at page 100.

We have examined the two remaining contentions of petitioner and find them to be without merit, for if the respondent Commission had acted in accordance with the rules we have been discussing, there would be sufficient evidence to support its conclusions.

Award annulled.

SHOEMAKER, Justice.

KAUFMAN, P. J., and DRAPER, J., concur.

Copied to clipboard