FUENTES v. WORKMEN COMPENSATION APPEALS BOARD

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Court of Appeal, First District, Division 1, California.

John FUENTES, Petitioner, v. WORKMEN'S COMPENSATION APPEALS BOARD of the State of California et al., Respondents.

Civ. 34851.

Decided: January 08, 1975

Barry J. Williams, Levy, Van Bourg & Hackler, Oakland, for petitioner. Frank H. Batlin, Philip M. Miyamoto, Thomas J. McBirnie, Workmen's Compensation Appeals Bd., San Francisco, for respondent Workmen's Compensation Appeals Bd. T. Groezinger, James J. Vonk, George S. Bjornsen, Robert A. LaPort, State Compensation Ins. Fund, San Francisco, for respondent State Compensation Ins. Fund. Hogen J. Kallemeyn, Hanna & Brophy, Oakland, for respondents California Indem. Exchange and California Compensation and Fire Co. Charles F. Lee, Mullen & Filippi, San Francisco, for respondent Pacific Employers Ins. Co.

Under California's workmen's compensation act, found in Labor Code sections 3201 through 6149, benefits to a workman with permanent disability attributable to industrial causes are ordinarily paid weekly in a fixed proportion of the workman's previous average weekly earnings. Often the permanent disability is not total, but is instead a lesser percentage as fixed by the Workmen's Compensation Appeals Board (hereinafter the ‘Board’). In such cases the greater percentage of permanent disability suffered by the workman, the greater the number of such fixed weekly benefits are paid him.

Sometimes a workman's permanent disability results from a combination of industrial and nonindustrial causes. In such situations the Board is required to determine the percentage of such permanent disability attributable to industrial causation, and award weekly benefits for that percentage alone.

For many years Labor Code section 4658 had directed that the number of such weekly benefits be directly proportional to the percentage of permanent disability suffered from industrial causation. (See Stats.1949, ch. 1583, p. 2833.) But in 1971 section 4658 was amended, operative April 1, 1972, giving effect to a different legislative scheme; as the percentage of such permanent disability increased, the number of weekly benefits was increased in even greater proportion.

The general effect of the 1971 amendment of section 4658 may best be shown by the following selected comparisons:

The facts of the case before us are undisputed.

On May 10, 1972, petitioner John Fuentes had a permanent disability of 58 percent. The portion attributable to industrial causation was 33.75 percent. The remaining 24.25 percent had a nonindustrial origin. The Board applied the presently effective tables of section 4658 to the 33.75 percent of Fuentes' permanent disability attributable to industrial causation. This computation resulted in an award of 143.25 weekly benefits, for a total amount of $10,027.50.

We granted Fuentes' application for a writ of review to consider his representation that the Board had erroneously calculated the number of weekly benefits to which he was entitled. The contention is one of first impression.

Fuentes argues that in its calculations the Board was required initially to apply the 1972 tables of section 4658 to his 58 percent permanent disability of both industrial and nonindustrial causation. Doing so, in his case, would tentatively show entitlement to 297 weekly benefits aggregating $20,790. He then urges that from those amounts respectively, 91.75 weekly benefits $6,422.50 should be deducted, according to section 4658's present schedule for 24.25 percent permanent disability. (Note that 24.25 percent is the percentage of Fuentes' nonindustrially caused permanent disability.)

The result would be an award of 205 weekly benefits amounting in the aggregate to $14,367.50, instead of the 135 such benefits totaling $10,027.50 awarded by the Board.

A basic underlying principle of the workmen's compensation act is stated by State Compensation Ins. Fund v. Industrial Acc. Com., 59 Cal.2d 45, 49, 27 Cal.Rptr. 702, 705, 377 P.2d 902, 905, as the encouragement of ‘employment of physically disabled persons by assuring an employer that he will not be liable for the total combined disability present after an industrial injury, but only for that portion which attributable to the subsequent industrial injury.’ Earlier, the court in Wolski v. Industrial Acc. Com., 70 Cal.App.2d 427, 432, 161 P.2d 283, 285, said that ‘the purpose of such legislation is to remove any reasonable ground for an employer to refuse to hire one-armed, one-legged, or one-eyed men. In short, it is intended for the long-range benefit of handicapped workmen, and it is not for the court to say that it is not calculated to effect that result.’

Giving effect to this principle are the following statutes.

Labor Code section 4663:

‘In case of aggravation of any disease existing prior to a compensable injury, compensation shall be allowed only for the proportion of the disability due to the aggravation of such prior disease which is reasonably attributed to the injury.’

Labor Code section 4750:

‘An employee who is suffering from a previous permanent disability or physical impairment and sustains permanent injury thereafter shall not receive from the employer compensation for the later injury in excess of the compensation allowed for such injury when considered by itself and not in conjunction with or in relation to the previous disability or impairment. [¶] The employer shall not be liable for compensation to such on employee for the combined disability, but only for that portion due to the later injury as though no prior disability or impairment had existed.’ (Emphasis added.)

California's Supreme Court has spoken further on the subject. State Compensation Ins. Fund v. Industrial Acc. Com., supra, 59 Cal.2d 45, 48–49, 27 Cal.Rptr. 702, 705, 377 P.2d 902, 905, quoting earlier authority states: “An employer [or his insurer] of a workman who has a permanent physical impairment and who thereafter sustains a compensable injury resulting in permanent disability, is not liable for compensation for the ensuing combined disabilities, but only for that portion of permanent disability which is caused by the last injury.” (To the same effect see Smith v. Industrial Acc. Com., 44 Cal.2d 364, 365, 282 P.2d 64; Edson v. Industrial Acc. Com., 206 Cal. 134, 139, 273 P. 572; Ford Motor Co. v. Industrial Acc. Com., 202 Cal. 459, 463–464, 261 P. 466; Avila v. Workmen's Comp. App. Bd., 14 Cal.App.3d 33, 37, 91 Cal.Rptr. 853; Truck Ins. Exch. v. Industrial Acc. Com., 235 Cal.App.2d 207, 209–211, 45 Cal.Rptr. 178; Pacific Gas & Elec. Co. v. Ind. Acc. Com., 126 Cal.App.2d 554, 556–557, 272 P.2d 818; Wolski v. Industrial Acc. Com., supra, 70 Cal.App.2d 427, 428–432, 161 P.2d 283; Gardner v. Industrial Acc. Com., 28 Cal.App.2d 682, 684–685, 83 P.2d 295.)

Were we to accept Fuentes' argument the following would result. Fuentes, who has concededly suffered but a 33.75 percent permanent disability from industrial causation, would be paid the same benefits (according to § 4658's present schedule) as a workman with a 44 percent permanent disability attributable only to his employment. The employer would be obliged to pay Fuentes $10,027.50, the legally required amount for his 33.75 percent industrially caused disability, as well as $4,340 ($14,367.50 less $10,027.50) for the portion of his disability without industrial origin. And violence would be done the provision of section 4750 declaring that in cases of disability from industrial and nonindustrial causes, the workman ‘shall not receive from the employer compensation for the later injury in excess of the compensation allowed for such injury when considered by itself and not in conjunction with or in relation to the previous disability or impairment.’ (Emphasis added.)

Further, it is not within our power to reject the previously quoted holding of State Compensation Ins. Fund v. Industrial Acc. Com., supra, 59 Cal.2d 45, 48–49, 27 Cal.Rptr. 702, 705, 377 P.2d 902, 905, that: “An employer . . . of a workman who has a permanent physical impairment and who thereafter sustains a compensable injury resulting in permanent disability, is not liable for compensation for the ensuing combined disabilities, but only for that portion of permanent disability which is caused by the last injury.” (See Auto Equity Sales, Inc. v. Superior Court, 57 Cal.2d 450, 455, 20 Cal.Rptr. 321, 369 P.2d 937.)

Nothing is seen in the 1971 amendment of Labor Code section 4658 which indicates, as suggested by Fuentes, an implied renunciation of the rule we have discussed. It will not be presumed that the Legislature, in the enactment or amendment of statutes, “intends to overthrow long-established principles of law unless such intention is made clearly to appear either by express declaration or by necessary implication.” (Theodor v. Superior Court, 8 Cal.3d 77, 92, 104 Cal.Rptr. 226, 237, 501 P.2d 234, 245.)

Nor are we persuaded by the argument that the required liberal construction of the workmen's compensation act (see Lab. Code, § 3202) requires the result sought by Fuentes. As said in Wolski v. Industrial Acc. Com., supra, 70 Cal.App.2d 427, 431–432, 161 P.2d 283, 285: ‘While it is provided by the Workmen's Act itself, and generally held by the courts, that such statutes are to be liberally construed in favor of the employee, this does not mean that the legislative mandate of Sec. 4750 is to be ignored.’

We hold that the Board properly assessed the award to which Fuentes was entitled.

The award is affirmed.

I respectfully dissent.

As pointed out in the decision of the Workmen's Compensation Appeals Board, and the majority opinion, the adoption of the amendments to section 4658 of the Labor Code, operative April 1, 1972, created a problem with regard to apportionment which did not exist when uniform compensation was paid for each percentage of disability, irrespective of the degree of total disability. In my opinion the resolution of this problem is akin to the old conundrum of which came first, the chicken or the egg. The appeals board and the majority have resolved this riddle by ready reference to sections 4663 and 4750 as a starting and finishing point. I would look first to the amendment as evidencing the latest expression of the legislative will on the subject, and then give full effect to that will except as it may be absolutely prohibited by prior law.

Reference to the amended section reveals that the Legislature intended that a person who suffers a disability of 58 percent should receive compensation of $20,790 payable at the rate of $70 per week for 297 weeks. If a non-smoker suffered from solely industrial causes the same lung injuries which were found to have permanently disabled the petitioner as of May 10, 1972, the revised compensation in the foregoing amount represents the Legislature's view of what would be fair compensation. In the instant case it has been determined by stipulation and by rulings on the stipulated facts that of the total permanent disability rated at 58 percent, 24.17 (rounded to 24.25) percent was not, and 33.83 (rounded to 33.75) percent was, industrially caused. It, therefore, would appear reasonable to conclude that of the total indemnity contemplated by the Legislature, that sum should be paid which is the equivalent of the percentage of disability which was industrially covered, or 58.33 percent (33.83/58.00). This produces compensation of $12,126.81, or a sum the equivalent of the $12,127.50 which the referee awarded by finding permanent disability of 38.75 percent which called for 173.25 weekly payments of $70, for a total of $12,127.50.

The respondents contend that it is improper to compute the compensation in the foregoing manner because traditionally it has been the practice to deduct the percentage of non-industrially related permanent disability from the total disability and then compute the compensation for the remaining percentage of permanent disability.1 That practice worked equitably under a system of compensation which merely progressed arithmetically with the percentage of disability. The fact that it is not equitable under a system where the rate of compensation increases with the severity of the disability is sufficient to warrant its rejection under the new rates. To apply the pre-1972 formula would deprive the employee of a proportion of the compensation which the legislature intended for a worker suffering permanent disability to the total extent of that incurred by petitioner. To award the top bracket as all industrially caused, as contended for by the petitioner, would unduly enrich him at the expense of the employer or its insurer. The solution selected by the referee does justice to both.

It is contended that the provisions of section 4663 and 4750 of the Labor Code require that the percentage of non-industrial related disability be first subtracted from the percentages of total permanent disability before computing the award. These sections2 refer to ‘compensation’. It may be noted that ‘the proportion of the disability due to the aggravation of such prior disease which is reasonably attributed to the injury’ as referred to in section 4663, is, as we have seen above, 58.33 percent of the 58 percent disability. The formula proposed in this opinion does not purport to give more than 58.33 percent of the compensation for a 58 percent disability under the tables as amended effective April 1, 1972.

Section 4750 has more stringent requirements. In the first paragraph it prohibits ‘compensation for the later injury in excess of the compensation for such injury when considered by itself and not in conjunction with or in relation to the previous disability or impairment.’ The second paragraph reiterates, ‘The employer shall not be liable for compensation to such employee for the combined disability, but only for that portion due to the later injury as though no prior disability or impairment had existed.’ Read by themselves the provisions of this section appear to unalterably prohibit consideration of that portion of petitioner's disability which is not related to the industrially related injury for which he seeks compensation. 58.33 percent of his total 58 percent disability, or a disability of 33.83 percent, should be considered and the balance would be completely disregarded in determining the compensation.

Section 4750 relates to subsequent injuries. (See §§ 4750–4755.) Therefore it is questionable whether it is properly applicable to the situation here where only one physical impairment has resulted from compensable and non-compensable causes.3 In any event if it is applied literally to the progressive rates it would defeat the intent of the Legislature. In this case for example it is stipulated that the compensable industrial injury occurred over a period of a little over 20 years with varying periods of exposure for each of five carriers. The carriers jointly are apparently reluctantly prepared to assume a collective liability for the compensation payable for 33.75 percent permanent disability at the revised rates in the sum of $10,027.50. Logically, however, if each had represented a separate employer who in turn had taken the employee with the injury suffered under the prior exposure, the sum of each exposure would not equal the total compensation provided for an industrial injury by the graduated rates. (E. g., if the employee had worked four years for each of five employers, each could claim a liability limited to 12 weeks, or $40, and the aggregate would be $4,200, rather than $10,027.50 contemplated by the Legislature.) Of course the exposure cannot be so split by having different carriers for the same employer. The record does show, however, that after working 182 months for one employer, the petitioner worked 54 months for another, and then returned to his original employer for the 8 months preceding his injury. Should the compensation be that for 33.75 percent disability, or, if section 4750 is applied literally, the sum of several fractional parts of 33.25 percent measured by the ratios of 182/244, 54/244 and 8/244?

In applying the provisions of article 5 (§§ 4750–4755) the employee should be entitled to the full compensation provided by section 4658 when a prior industrial condition is involved. It is unnecessary to determine in these proceedings if, when there are disrelated physical impairments, the formula proposed herein should be used to apportion the total compensation, or whether, in appropriate cases the subsequent injuries fund should bear that full burden of the increased rates. (See State Compensation Ins. Fund v. Industrial Acc. Com. [Hutchinson], supra, 59 Cal.2d 45, 52, 27 Cal.Rptr. 702, 377 P.2d 902; Subsequent Injuries Fund v. Ind. Acc. Com. [Harris], supra, 44 Cal.2d 604, 609–610, 283 P.2d 1039; and Subsequent Injuries Fund v. Workmen's Comp. Appeals Bd. (1974) 40 Cal.App.3d 403, 409–410, 115 Cal.Rptr. 204.) Where, as here, there is but one impairment, the formula applied by the referee and approved herein would equitably apportion the total compensation for the total resultant permanent disability between the last employer and those who preceded him. It is concluded that the legislative intent to increase the rate of compensation can only be implemented by applying a factor determined from the proper graduated rate to the total portion of the last industrially related portion of the total permanent disability as was done by the referee.

It is contended that the construction adopted in this opinion will thwart the recognized intent of the provisions of sections 4663 and 4750 to encourage the employment of the partially disabled.4 If one concludes that the last employer is called upon to pay more than a fair share of the higher rate, such is the case. As pointed out in the majority opinion if the compensation equivalent to that for the percentage of the non-industrial connected disability is taken off the bottom, as urged by petitioner, the employee would get a considerable windfall and the employer a commensurate penalty. It may also be urged that to require an employer to pay the equivalent of compensation for a rated 38.75 percent disability when the employment has only contributed the disability to a rated amount of 33.83 percent will discourage the employment of the partially disabled. The Legislature in increasing the rates on a graduated scale may be deemed to have had this effect in mind and to that extent has acted to deter the employment of the partially disabled. In return, by its latest enactment it increased the compensation for all who are disabled as a result of industrially related causes.

I would annul the decision of the appeals board and remand the case with instructions to reinstate the award made by the referee.

FOOTNOTES

1.  See: State Compensation Ins. Fund v. Industrial Acc. Com. [Hutchinson] (1963) 59 Cal.2d 45, 50–54, 27 Cal.Rptr. 702, 377 P.2d 902; Subsequent Injuries Fund v. Ind. Acc. Com. [Harris] (1955) 44 Cal.2d 604, 609, 283 P.2d 1039; Edson v. Industrial Acc. Com. (1928) 206 Cal. 134, 139–140. 273 P. 572; Ford Motor Co. v. Industrial Acc. Com. (1927) 202 Cal. 459, 463–464, 261 P. 466; Subsequent Injuries Fund v. Workmen's Comp. Appeals Bd. (1974) 40 Cal.App.3d 403, 409, 115 Cal.Rptr. 204; Avila v. Workmen's Comp. App. Bd. (1970) 15 Cal.App.3d 33, 39, 91 Cal.Rptr. 853; Truck Ins. Exch. v. Industrial Acc. Com. (1965) 235 Cal.App.2d 207, 209–211, 45 Cal.Rptr. 178; Pacific Gas & Elec. Co. v. Ind. Acc. Com. (1954) 126 Cal.App.2d 554, 556–557, 272 P.2d 818; Wolski v. Industrial Acc. Com. (1945) 70 Cal.App.2d 427, 428–432, 161 P.2d 283; and Gardner v. Industrial Acc. Com. (1938) 28 Cal.App.2d 682, 684, 83 P.2d 295.

2.  Section 463 provides: ‘In case of aggravation of any disease existing prior to a compensable injury, compensation shall be allowed only for the proportion of the disability due to the aggravation of such prior disease which is reasonably attributed to the injury.’Section 4750 provides: ‘An employee who is suffering from a previous permanent disability or physical impairment and sustains permanent injury thereafter shall not receive from the employer compensation for the later injury in excess of the compensation allowed for such injury when considered itself and not in conjunction with or in relations to the previous disability or impairment. [¶] The employer shall not be liable for compensation to such an employee for the combined disability, but only for that portion due to the later injury as though no prior disability or impairment had existed.’

3.  See: State Compensation Ins. Fund v. Industrial Acc. Com. [Hutchinson], supra, 59 Cal.2d 45, 50–53, 27 Cal.Rptr. 702, 377 P.2d 902; and Subsequent Injuries Fund v. Ind. Acc. Com. [Harris], supra, 44 Cal.2d 604, 608, 283 P.2d 1039. In the former case, the court after reviewing the earlier case, stated: ‘Were section 4663 applicable it appears from the above case that the proper apportionment method then is to determine the combined disability and then assign a proportion thereof to the prior and subsequent disabilities to obtain a percentage disability attributable to each. Here, however, section 4750 applies and for the reasons discussed above this figure should be obtained by applying the method of apportionment used in the Gardner [Gardner v. Industrial Acc. Com., supra, 28 Cal.App.2d 682, 83 P.2d 295] case.’ (59 Cal.2d at p. 56, 27 Cal.Rptr. at p. 709, 377 P.2d at p. 909. See also Hegglin v. Workmen's Comp. App. Bd. (1971) 4 Cal.3d 162, 173–174, 93 Cal.Rptr. 15, 480 P.2d 967; and Granado v. Workmen's Comp. App. Bd. (1968) 69 Cal.2d 399, 402, 71 Cal.Rptr. 678, 445 P.2d 294.)

4.  In State Compensation Ins. Fund v. Industrial Acc. Com. [Hutchinson], supra, 59 Cal.2d 45, 27 Cal.Rptr. 702, 377 P.2d 902, the court observed, ‘The purpose of this statutory provision [§ 4750] is to encourage the employment of physically disabled persons by assuring an employer that he will not be liable for the total combined disability present after an industrial injury, but only for that portion which is attributable to the subsequent industrial injury. [Citations.]’ (59 Cal.2d at p. 49, 27 Cal.Rptr. at p. 705, 377 P.2d at p. 905. See also Hegglin v. Workmen's Comp. App. Bd., supra, 4 Cal.3d 162, 173, 93 Cal.Rptr. 15, 480 P.2d 967; Jones v. Workmen's Comp. App. Bd. (1968) 267 Cal.App.2d 302, 305, 72 Cal.Rptr. 766; and Wolski v. Industrial Acc. Com., supra, 70 Cal.App.2d 427, 432, 161 P.2d 283.)

ELKINGTON, Associate Justice.

WEINBERGER, J.,* concurs.

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