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BREESE v. ARGONAUT INSURANCE COMPANY

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

Robert K. BREESE, Plaintiff, v. Rikki PRICE, Defendant and Appellant. ARGONAUT INSURANCE COMPANY, Intervenor and Respondent,

Civ. 56593.

Decided: September 15, 1980

Kennett M. Patrick, Los Angeles, for defendant and appellant. Bodkin, McCarthy, Sargent & Smith, Eileen L. McGeever and Gordon F. Sausser, Los Angeles, for intervenor and respondent.

Defendant Rikki Price appeals a judgment of the trial court ordering that defendant reimburse Argonaut Insurance Company (hereinafter referred to as Argonaut) the sum of $10,885 paid to Robert K. Breese in settlement of a claim.

FACTS

On January 17, 1974, plaintiff Breese, an employee of Hughes Aircraft Company driving his car on company business, was stopped at an intersection in Culver City when his automobile was struck in the rear by the car driven by defendant Price. As a result of the collision, on December 12, 1974, Breese filed a complaint for damages for personal injuries against Price. Breese also made a claim for workers compensation benefits against Argonaut, the insurance carrier for Hughes Aircraft Company.

At the hearing on February 5, 1976, a Workers Compensation Appeals Board referee found that there was no need for medical treatment for the injury and that it caused neither temporary nor permanent disability; and Breese was awarded $25 for reimbursement of medical-legal expense. On May 11, 1976, a compromise and release of claim which was entered into by and between Breese and Argonaut reflecting a payment of $10,885 including medical expenses was approved by the Workers Compensation Appeals Board (hereinafter referred to as WCAB).

On June 9, 1976, Argonaut filed a complaint in intervention in the personal injury action claiming that it was entitled to subrogation to the rights of Breese against Price as to the $10,885 it paid as to the workers compensation claim. By answer Price alleged as to Breese that the injuries, if any, were proximately caused by the negligent failure of Breese to exercise ordinary care. As to Argonaut it was alleged that Breese's injuries, if any, were proximately caused by his own negligence or that of his fellow employees or employer.

The parties in their appellate briefs concur that a pretrial settlement was reached in Breese's action against Price. The matter of Argonaut as intervenor against Price proceeded to trial on November 13, 1978. Argonaut's case was presented on a stipulated oral statement of facts of the collision, the filing of the workers compensation claim and the payment of $10,885 by way of compromise and release. Plaintiff's counsel added, “There is a stipulation as to liability as far as the automobile accident itself is concerned. (Price) would then offer to establish that the settlement entered into by the workers compensation carrier was not a reasonable settlement.” The court rejected the offer of Price's counsel to place in evidence a certified copy of the WCAB referee's findings of February 5, 1976, and medical testimony. The court awarded Argonaut the amount prayed for and defendant Price has appealed.

ISSUE

Defendant contends on appeal that the trial court erred in rejecting his evidence offered to prove that the workers compensation settlement was not reasonable in defense against Argonaut's claim.

DISCUSSION

Defendant Price in her opening brief on appeal states: “Defendant admits that the collision was caused by defendant's negligence and that Robert K. Breese was not contributorily negligent.” It is the position of Argonaut that as a matter of law any amount paid by a workers compensation insurer to an employee is by statute considered to proximately result from the employee's injuries. (Lab. Code, ss 3852, 3854.)

An employer has a statutory right of action to recover from a third person tortfeasor the total amount of compensation and damages it has paid to its employee which are the proximate result of an injury sustained. (Lab. Code, s 3852.) An insurer falls within the definition of employer for this purpose. (Lab. Code, s 3850.) The amount an employer has paid to an employee by reason of such injury may be admitted into evidence in this action pursuant to Labor Code section 3854.

The right of the employer or insurer to indemnification from the tortfeasor is well established on constitutional grounds. (Board of Administration v. Ames (1963) 215 Cal.App.2d 215, 29 Cal.Rptr. 917.) The court in that case further concluded that where liability for injury to an employer by a third party tortfeasor is determined at the trial court level, the amount of damages may be determined in some proceeding other than that which determines the liability of the third party. (Id., at pp. 225-226, 29 Cal.Rptr. 917.)

In the present case defendant reached a settlement with Breese and at the trial liability of the defendant was stipulated and it is conceded on this appeal. Argonaut entered into a compromise and release which the WCAB approved and the amount of that settlement, $10,885, became a WCAB order which Argonaut introduced in evidence.

In the recent case of State Comp. Ins. Fund v. Williams (1974) 38 Cal.App.3d 218, 112 Cal.Rptr. 226, a tortfeasor sought to be permitted to contest the reasonableness and necessity of the employer's payments. The court commented: “It may well be that in an action by the employee against the third party tortfeasor the employee would have the burden of proving that the various items claimed were reasonable and necessarily incurred as the proximate result of the third party's negligence. The reason for the difference is that as to the employee the amount of the award by the state agency is not an element of the employee's damage. As to the employee, the amount of the award is an account receivable. It is not an obligation to pay. The amount of such an award is therefore not an element of damage insofar as the employee is concerned. Insofar as the employer is concerned, such an award is an element of damage since there is no legal escape from the obligation to pay once the award becomes final.” (Id., at p. 226, 112 Cal.Rptr. at 231.)

The court in Williams further pointed out (pp. 225-226, 112 Cal.Rptr. 226) that as to the employer the WCAB award constitutes the minimum measure of damage. There appears to be for this purpose no persuasive difference between a WCAB order and a WCAB order approving the compromise and release entered into by Argonaut.

Defendant has referred this court to no legal authority, and we have found none, supporting his claim that he should be permitted to introduce evidence to contest the reasonableness of the amount of the employer's or insurer's statutory damages. The right of defendant Price was limited to contesting liability. (See, e. g., Ventura County Employees' Retirement Association v. Pope (1978) 87 Cal.App.3d 938, 943, 151 Cal.Rptr. 695.) Defendant's stipulation as to liability was inclusive of causality, and he was not entitled to introduce evidence to attack the reasonableness of the amount of the compromise and release approved by the WCAB.

DISPOSITION

The judgment is affirmed.

L. THAXTON HANSON, Associate Justice.

LILLIE, Acting P. J., and RIMERMAN (Assigned by the Chairperson of the Judicial Council), J., concur.

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