Richard KEMPE, Petitioner, v. WORKERS' COMPENSATION APPEALS BOARD, City of Albany et al., Respondents.
In this case we hold the method utilized by respondent Workers' Compensation Appeals Board (Board) to apportion permanent disability between successive industrial injuries is erroneous pursuant to the principles enunciated in State Compensation Ins. Fund v. Industrial Acc. Com. (1963) 59 Cal.2d 45 (Hutchinson) and Mercier v. Workers' Comp. Appeals Bd. (1976) 16 Cal.3d 711 (Mercier).
Petitioner Richard Kempe (applicant) seeks annulment or modification of a 24-1/2 percent permanent disability award for an industrial neck injury, after apportionment, to account for overlapping factors of disability from an earlier industrial back injury which resulted in a 10-3/4 percent permanent disability award. Applicant claims he is entitled to a permanent disability award of 25-3/4 percent, not 24-1/2 percent, for the neck injury. We agree.
The facts are undisputed. Applicant was employed as a police officer/sergeant by respondent City of Albany (City). On November 17, 1987, he sustained an industrial back injury. In 1988, applicant was awarded a permanent disability of 10-3/4 percent, after adjustment of the standard rating, 8 percent, for his occupation and age on the date of injury. This award was neither challenged on reconsideration nor reopened within five years from the date of injury, at which time it became final.
On July 26, 1992, applicant sustained an industrial neck injury. Relying on the opinion expressed by the agreed medical examiner, the parties stipulated to a combined, overall permanent disability award of 36-1/2 percent for both injuries. The matter was submitted on the record on May 9, 1994, for decision to determine the permanent disability rating for the neck injury after apportionment.
On July 15, 1994, the Workers' Compensation Judge (WCJ) issued his findings and award. Engaging in a two-step process, the WCJ first readjusted the permanent disability rating issued for the 1987 back injury to account for applicant's occupation and age immediately preceding the 1992 neck injury, which produced a 12 percent rating for the back injury due to the fact that appellant was older in 1992 than he was in 1987 at the time of injury. The WCJ then subtracted the newly adjusted rating of 12 percent from the overall, combined rating of 36-1/2 percent, thereby arriving at the disputed 24-1/2 percent permanent disability rating awarded to applicant for the neck injury.
Applicant petitioned for reconsideration, arguing he was entitled to a permanent disability of 25-3/4 percent, achieved by subtracting the prior final award of 10-3/4 percent from the combined disability rating of 36-1/2 percent. In denying reconsideration, the Board adopted and incorporated the WCJ's report and recommendation on petition for reconsideration. This timely petition followed. An answer was filed on behalf of City. We granted review.
Cases that arise from successive injuries and successive disabilities fall into three categories: (1) those in which there is a preexisting nonindustrial disability at the time of the industrial injury; (2) successive industrial injuries where the disabilities become permanent and stationary at the same time; or (3) successive industrial injuries where the disabilities become permanent and stationary at different times. (See generally 1 Herlick, Cal. Workers' Compensation Law (5th ed. 1995) § 7.46, pp. 7-64 -- 7-71.) Here, we encounter the latter situation.
Applicant concedes that his successive industrial disabilities overlap, that apportionment between the two is justified, and that his combined, overall permanent disability rating is 36-1/2 percent. The question in controversy concerns the correct method of computation to ascertain the rating for the neck injury. Where successive industrial injuries result in disabilities which become permanent and stationary at different times and also involve factors of disability which overlap, apportionment pursuant to Labor Code1 section 47502 is undertaken according to principles established by the Supreme Court in Hutchinson, supra, 59 Cal.2d 45, and Mercier, supra, 16 Cal.3d 711. (See also Gardner v. Industrial Acc. Com. (1938) 28 Cal.App.2d 682.)3 The “[p]roper computation of overlapping disabilities -- either partial or total -- calls for determining the percentage of combined disability and then subtracting the percentage of disability due to the prior injury.” (Mercier, supra, 16 Cal.3d at p. 716; see also Hutchinson, supra, 59 Cal.2d at p. 55; Johns-Manville Products Corp. v. Workers' Comp. Appeals Bd. (1978) 87 Cal.App.3d 740, 748; State Comp. Ins. Fund v. Workers' Comp. Appeals Bd. (Gaba) (1977) 72 Cal.App.3d 13, 16; Subsequent Injuries Fund v. Workmen's Comp. Appeals Bd. (Royster) (1974) 40 Cal.App.3d 403, 409-410; Avila v. Workmen's Comp. App. Bd. (1970) 14 Cal.App.3d 33, 39; Gardner, supra, 28 Cal.App.2d at pp. 683, 684; see generally 1 Herlick, op. cit. supra, § 7.46, pp. 7-67 -- 7-68; Cal. Workers' Compensation Practice (Cont.Ed.Bar 3d ed. 1985) § 16.42, p. 712.)
The WCJ, justifying his method of apportionment, misconstrues the following dicta from a Mercier footnote: “As Hutchinson recognized, the injuries from the first accident may heal or improve prior to the second. [Citation.] In such case the disability percentage to be subtracted would be based on the employee's condition immediately prior to the second injury. In the instant case, no claim of rehabilitation was made.” (Id., at p. 716, fn. 2.) The Mercier court, like the Hutchinson court,4 was acknowledging that while subtraction of the first rating from the overall, combined rating is the proper method of computation in cases of successive industrial injuries with overlapping factors of disability, there may be situations where the permanent residuals of the first injury to a considerable extent have healed or improved prior to the second injury. (See, e.g., Robinson v. Workers' Comp. Appeals Bd. (1981) 114 Cal.App.3d 593, 603-605.)5 In factual settings such as Robinson, the permanent disability rating for the second or successive industrial injury is not subject to apportionment under section 4750 where the employee has “rehabilitated” from the first injury. (Robinson, supra, 114 Cal.App.3d at p. 602.)
Turning to the record before us, “rehabilitation,” as explained in Robinson, is not at issue. Applicant's neck disability did not change. At the time of the subsequent back injury, the neck condition had not improved. Thus, apportionment under section 4750 to applicant's preexisting neck disability is proper given the existence of overlap. (Mercier, supra, 16 Cal.3d at p. 716; Robinson, supra, 114 Cal.App.3d at p. 602.) The only method by which the Board can legally apportion on this record is to ascertain the aggregate amount of the permanent disability attributable to both injuries and then subtract the percentage of the previously compensated award from the overall, combined award. (Mercier, supra, 16 Cal.3d at p. 716; Hutchinson, supra, 59 Cal.2d at p. 55.) This results in a permanent disability rating of 25-3/4 percent for applicant's neck injury.
Turning to the jurisdictional issue, even if the Board's method of apportionment were accurate, the Board is without jurisdiction to alter the permanent disability award for the 1987 back injury. (§§ 5803, 5804.) Section 5803 confers upon the Board “continuing jurisdiction over all its orders, decisions, and awards” limited to five years after the date of injury. (§ 5804 [[[[“No award of compensation shall be rescinded, altered, or amended after five years from the date of the injury ․”]; Liberty Mut. Ins. Co. v. Workers' Comp. Appeals Bd. (1981) 118 Cal.App.3d 265, 275; see Department of Education v. Workers' Comp. Appeals Bd. (1993) 14 Cal.App.4th 1348, 1355-1358.) Here, upon expiration of five years after the date of injury on November 17, 1987, the Board's continuing jurisdiction to alter applicant's prior permanent disability award terminated. (Ibid.) As a final judgment, the award of 10-3/4 percent for the 1987 back injury was entitled to full res judicata effect. (Smith v. Workers' Comp. Appeals Bd. (1985) 168 Cal.App.3d 1160, 1170.)
To conclude, applicant is entitled to a permanent disability award of 25-3/4 percent, as a matter of law, for his industrial neck injury. Accordingly, the Board's order denying reconsideration dated September 20, 1994, is annulled and the cause remanded for further proceedings consistent with the views expressed herein.
FN1. All further statutory references are to the Labor Code unless otherwise noted.. FN1. All further statutory references are to the Labor Code unless otherwise noted.
2. Section 4750 provides: “An employee who is suffering from a previous [PD] 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 employee for the combined disability, but only for that portion due the later injury as though no prior disability or impairment had existed.”
3. In Gardner, the employee sustained an injury to his left foot and ankle which resulted in a 12 percent permanent disability. Subsequently, he sustained injury to his left leg which necessitated amputation between the knee and hip joint. The court upheld the Board's finding of overlap and its permanent disability award of 46-3/4 percent for the second injury, reached by subtracting 12 percent from the overall, combined rating of 58-3/4 percent for both injuries. (Gardner, supra, 28 Cal.App.2d at pp. 683-684.)In Hutchinson, which is factually very similar to the case at bar, the employee first sustained an injury to his neck resulting in a permanent disability award of 26 percent. He subsequently injured his back which also resulted in a permanent disability rating of 26 percent. Although there was overlap in the factors of disability, the Board awarded two separate 26 percent permanent disability ratings. Reversing, the Supreme Court followed Gardner and remanded the matter to the Board to issue a permanent disability rating computed in accordance with the subtraction method of apportionment set forth in Gardner. (Hutchinson, supra, 59 Cal.2d at pp. 55-56.)In Mercier, the employee sustained successive industrial injuries to his back and his heart. Citing Hutchinson, the Supreme Court upheld the subtraction method of apportionment for the permanent disability in the second injury taking into account the extent of overlap with the disability factors from the first injury. (Mercier, supra, 16 Cal.3d at pp. 714-716.)
4. Mercier was referring to similar dicta pronounced in Hutchinson, as follows: “It can, of course, be argued that if the injuries sustained from the first accident heal or improve, then there will remain at least a 26 per cent disability caused by the subsequent injury for which no compensation has been paid. This may be so. But this is a factor that should be found as a fact, based on evidence. It was not here found. It is a factor that, upon proper evidence, the [Board] may consider when it reappraises the existing disability in accordance with the view herein expressed.” (Hutchinson, supra, 59 Cal.2d at p. 56, italics added.)
5. In Robinson, the employee, while working as a warehouseman, sustained an industrial injury in 1965 to his back which required surgery and resulted in a permanent disability rating of 32 percent. Commencing in 1968 for a seven-year period, the employee returned to essentially the same work duties in the capacity of warehouse foreman. During this time he observed no work limitation because of his back, experienced no difficulty with his back, never saw a physician for his back, and lost no time from work. (Robinson, supra, 114 Cal.App.3d at p. 599.) The employee then sustained a second back injury in 1975 leaving him 100 percent disabled. (Id., at p. 598.) The Board determined that 19 percent of the permanent disability was attributable to the prior injury and accordingly apportioned it by subtracting 19 percent from 100 percent. (Ibid.) This court [Div. One] annulled the Board on the basis that competent evidence did not support apportionment. “Here ․, ‘[t]he fact that this applicant made a better recovery than he had a right to expect from his first operation should not place him in a position inferior to that of a fellow worker whose industrially caused disability is compounded by the existence of a pathological condition which was previously asymptomatic.”’ (Id., at p. 605, quoting Amico v. Workmen's Comp. Appeals Bd. (1974) 43 Cal.App.3d 592, 606.) The employee was entitled to a permanent disability rating commensurate with his rehabilitated condition, not limited by the terms of the prior award. (Robinson, supra, 114 Cal.App.3d at p. 602.)
ANDERSON, Presiding Justice.
POCHÉ, and REARDON, JJ., concur.