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

Jose Adalberto M. MARTIN, Petitioner, v. WORKERS' COMPENSATION APPEALS BOARD; Mon-Dale, Inc. et al., Respondents.

No. D024364.

Decided: September 18, 1996

Petitioner Jose Adalberto M. Martin seeks review of a decision of the Workers' Compensation Appeals Board (WCAB) denying Labor Code1 section 5814 and section 4650 penalties. We conclude the Board correctly denied the section 5814 penalty, but erred in denying the section 4650 penalty.

Martin sustained injury on the job in August 9, 1990. On August 10, 1990, he filed an application for workers' compensation claiming back, shoulder, and neck injuries. On June 17, 1992, he added hernia and psychological injuries. In 1995, the workers' compensation judge (WCJ) found he sustained back, hernia, and psychological injuries in the course of his employment as a laborer for Mon-Dale, Inc. Martin claims the psychological injury was caused by loss of self-esteem resulting from his inability to work due to the physical injuries. Until May 1994 doctors were in disagreement over whether the psychological injury was caused by the job injury. (Compare the 1991 opinions of Dr. Grabel and Dr. Dodge, the opinions of Dr. Rose and Dr. Rothbard, and the May 1994 opinion of Dr. Grabel.) Prior to the hearing, the employer paid benefits for the periods of August 10, 1990 through January 13, 1991; August 10, 1992 through October 12, 1992; and December 17, 1992 through February 18, 1993. Martin claims the employer failed to pay temporary disability benefits caused by the psychological injury from June 17, 1992, until the present, in spite of overwhelming evidence he sustained psychological injury on the job. The WCJ found total disability commencing on the date of the injury. The WCJ denied penalties. WCAB denied reconsideration.

Martin contends the WCJ erred in denying the penalties. Section 5814 provides for a 10 percent penalty for unreasonably refusing or delaying temporary workers' compensation. Martin argues several doctors said he sustained the psychological injury on the job. Martin recognizes Dr. Grabel initially found no job-injury causation of his psychological injury, but argues Grabel corrected this position on May 18, 1994. Martin argues it was unreasonable to delay or refuse payment in light of this medical evidence.

Delay or refusal is unreasonable if there is a genuine medical or legal doubt about the employer's liability. (Kerley v. Workmen's Compensation Appeals Board (1971) 4 Cal.3d 223, 230.) Here, until May 18, 1994, the delay in payment was based on the opinions of Dr. Dodge and Dr. Grabel that Martin did not sustain an ongoing industrial psychological injury. The reasonableness of the employer's doubt is bolstered by Martin's failure to claim the psychological injury until June 17, 1992, almost two years after the incident. While Dr. Grabel changed his opinion in May 1994, this change does not make the doubt unreasonable. There is sufficient disagreement to create a medical or legal doubt as to liability.

Section 4650 provides for a 10 percent penalty when temporary disability benefits are not paid or are denied within 14 days. An employer is liable for a section 4650 penalty if it does not pay temporary or permanent disability benefits within 14 days of learning of the injury. The statute creates strict liability regardless of the employer's belief in the merits of the claim. (Rhiner v. Workers' Compensation Appeals Board (1993) 4 Cal.4th 1213, 1227.) Claiming no liability under section 4650, the employer argues there is no industrial injury, contrary to the WCJ, WCAB and most of the evidence.

The July 28, 1995 decision of the WCAB denying reconsideration of the Labor Code section 5814 penalty is affirmed. The decision is annulled as to denial of reconsideration of the Labor Code section 4650 penalty.


FN1. All statutory references are to the Labor Code..  FN1. All statutory references are to the Labor Code.

HUFFMAN, Acting Presiding Justice.

NARES and HALLER, JJ., concur.

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