Guadalupe HERNANDEZ, Petitioner, v. WORKERS' COMPENSATION APPEALS BOARD, Home Van Vechten, et al., Respondents.
Guadalupe Hernandez, a laundry worker for The Home Van Vechten (laundry), suffered a work-related injury on March 20, 1991. Hernandez and respondents, the laundry and its workers' compensation insurer (CNA Casualty of California), agreed the accident injured Hernandez' back and right leg. Hernandez also claimed it injured her neck and left shoulder. After a January 12, 1995, hearing, a workers' compensation judge (WCJ) awarded Hernandez temporary and partial permanent disability, and continued medical payments and treatment. The WCJ and the Workers' Compensation Appeals Board denied Hernandez' petition for reconsideration. Hernandez petitioned to annul the Board's decision.
Hernandez claims three errors. (I) The WCJ violated Labor Code section 5502, subdivision (d)(3)1 and due process by keeping discovery open after the September 12, 1994, mandatory settlement conference (MSC). (II) The Board incorrectly refused to impose penalties on respondents for unreasonable delay in temporary and permanent disability payments, and medical payments and treatment. (III) The Board ignored substantial evidence that Hernandez' permanent disability percentage was greater than that set by the WCJ.
We reject Hernandez' first, but agree with her second and third, contentions. We annul the Board's decision and remand for further proceedings.
I. Keeping Discovery Open After the MSC.
At the MSC, Hernandez submitted a statement listing the reports of Drs. Brunjes, Levey, and Whittemore as “EXHIBITS TO BE OFFERED AT REGULAR HEARING.” The MSC minutes state the hearing was continued for trial. The minutes state: “REASON FOR CONTINUANCE: DISCOVERY REMAINS OPEN TO DATE OF TRIAL -- COMPLEX ISSUES.” The parties' joint “STIPULATIONS AND ISSUES” list notes as a contested issue that Dr. Gilbert's September 6, 1991, medical report “is not substantial evidence[.]”
At the January 12, 1995, hearing, the WCJ considered the reports of the three doctors listed in Hernandez' MSC statement, as well as reports of Drs. Gilbert, Snodgrass, and Endler. The latter three doctors' reports of various dates were listed as both Hernandez' and the laundry's exhibits. The exhibit list contains a notation that Drs. Brunjes', Levey's, and Whittemore's reports will be admitted. However, their names are lined out on the exhibit list.
In their answer to Hernandez' petition, respondents attached a copy of the exhibit list with Drs. Brunjes', Levey's, and Whittemore's names lined out, but without additional entries appearing on the January 12, 1995, hearing list. Respondents argue the issue of discovery was litigated at the MSC and Hernandez chose to withdraw the reports of the three listed doctors when respondents prevailed on their position that Hernandez' medical condition was not settled and further examinations would be required to determine it. In her answer, Hernandez does not dispute these claims but argues nothing in the record supports them.
We reject Hernandez' claim that the WCJ violated section 5502, subdivision (d)(3) or due process by leaving discovery open after the MSC. That section provides in relevant part: “Discovery shall close on the date of the [[[[MSC]. Evidence not disclosed or obtained thereafter shall not be admissible unless the proponent of the evidence can demonstrate that it was not available or could not have been discovered by the exercise of due diligence prior to the [MSC].” However, section 5502.5 authorizes WCJs to grant continuances “upon any terms as are just upon a showing of good cause. When determining a request for continuance, the WCJ shall take into consideration the complexity of the issues, the diligence of the parties, and the prejudice incurred on the part of any party ․” Moreover, Cal. Code Regs., Title 8, section 10353 gives WCJs power to “make orders and rulings regarding admission of evidence and discovery matters ․” Finally, failure to raise evidentiary objections at the MSC waives the right to do so later. (Zenith Ins. Co. v. Ramirez (1992) 57 Cal.Comp.Cases 719, 728, fn. 8.)
Here, the MSC minute order states the WCJ left discovery open because the case was complex, well within his statutory discretion. Moreover, the record does not disclose a timely objection by Hernandez. Both sides produced additional evidence at the hearing without objection. Contrary to Hernandez' claim, the laundry was not required to limit its medical examinations to her treating physician, Dr. Gilbert. (See §§ 4060-4062.)
For the first time on appeal and without citation to relevant authority, Hernandez claims keeping discovery open beyond the MSC violated due process. Hernandez knew of the reports the laundry sought to introduce and had an opportunity to challenge them and present conflicting evidence. Thus, there was no statutory or due process violation.
II and III. Failure to Impose Penalties and Permanent Disability Rating.
Section 5814 states: “When payment of compensation has been unreasonably delayed or refused, either prior to or subsequent to the issuance of an award, the full amount of the order, decision or award shall be increased by 10 percent. The question of delay and the reasonableness of the cause therefor shall be determined by the appeals board in accordance with the facts. Such delay or refusal shall constitute good cause under Section 5803 to rescind, alter or amend the order, decision or award for the purpose of making the increase provided for herein.” The Legislature has declared that the workers' compensation laws (§ 3200 et seq.) “shall be liberally construed by the courts with the purpose of extending their benefits for the protection of persons injured in the course of their employment.” (§ 3202.)
In annulling the Board's refusal to assess a section 5814 penalty despite the WCJ's assessment for unreasonably delaying an ordered payment, the Supreme Court stated: “The application of section 5814 has been the subject of a number of appellate decisions. A review of those cases clearly reveals that, although denominated a ‘penalty,’ the section is to be interpreted liberally, in accordance with the general purpose of the workmen's compensation laws. (E.g., [[[[citation]; Davison v. Industrial Acc. Com. (1966) 241 Cal.App.2d 15 ․ ; [[[citation].) In Davison, supra (p. 18), the court held that section 5814 authorized imposition of more than one penalty in cases of successive refusals to provide compensation, stating that, ‘We think a rule of liberal construction is applicable to all aspects of workmen's compensation, including penalties.’ We agree.” (Kerley v. Workmen's Comp. App. Bd. (1971) 4 Cal.3d 223, 227, fn. omitted.)
Later, in annulling the Board's affirmance of assessment of a single penalty for several delays and refusals of various payments, the Supreme Court held that “(1) both preaward and postaward delinquencies are equally subject to the 10 percent penalty, (2) the penalty is mandatory despite the arguably de minimus nature of the amounts involved, (3) multiple penalties must be assessed for successive delays so long as separate and distinct acts of misconduct are involved, and (4) the penalty is to be computed by assessing 10 percent of the entire amount ultimately awarded for the particular class of benefit which has been unreasonably delayed or withheld.” (Gallamore v. Workers' Comp. Appeals Bd. (1979) 23 Cal.3d 815, 827, emphasis added.)
Most recently, in holding that section 5814 penalties are calculated on the full amount of the award without setoffs for timely preaward payments, the Supreme Court reaffirmed that “successive delinquencies require the imposition of multiple penalties. (Gallamore, supra, 23 Cal.3d at pp. 823-824.)” (Rhiner v. Workers' Comp. Appeals Bd. (1993) 4 Cal.4th 1213, 1226, fn. 7, emphasis added.) The court noted that the 1989 amendment to section 4650, which required disability payments be made within 14 days and for an additional 10 percent penalty assessment on late payments, reinforced its conclusion. (Id. at p. 1227.)
The WCJ found Hernandez' “injury caused temporary total disability beginning March 21, 1991, to and including February 11, 1992, for which disability indemnity is payable at the rate of $126.00 per week. [¶]  This injury caused permanent disability of 57%, equal to 290 weeks of disability indemnity, in the total sum of $34,800.00, payable at the rate of $120.00 per week beginning February 12, 1992 and weekly thereafter until fully paid. [[¶] ․ [¶] [[ Disability herein was wholly caused by this injury. [[¶]  Further medical treatment to cure or relieve from the effects of this injury is required. [[[¶] ․ [¶]  Credit for overpayment of temporary disability indemnity is allowed only for the amount paid in excess of $120.00 a week during this time period. [¶]  [Hernandez] has failed to meet her burden of proof in showing any unreasonable delay or refusal of defendants in paying permanent disability indemnity and providing medical treatment․”
These findings were supported by the WCJ's Opinion on Decision. Regarding Hernandez' injury, the WCJ stated: “Based upon [Hernandez'] testimony and the medical reports of D. Thomas, M.D., dated April 2, 1991 and Paul K. Gilbert, M.D., dated March 27, 1991, it is found that applicant did not sustain injury to her neck and left shoulder, arising out of and occurring in the course of employment.”
Regarding Hernandez' temporary disability, the WCJ stated: “[Respondents] have paid temporary disability during the period beginning March 21, 1991, to and including November 18, 1991․ [¶] Based upon [Hernandez'] testimony and the medical report of Ronald S. Levey, M.D., dated February 1, 1992, ․ [[[[Hernandez] is entitled to temporary disability for the period beginning March 21, 1991, to and including February 11, 1992, less credit for time worked, at the rate of $126.00 per week.”
Regarding Hernandez' permanent disability, the WCJ stated: “The factors of permanent disability set forth in the rating instructions are based upon applicant's testimony, with due consideration to her credibility and demeanor as a witness and the medical report of [Dr.] Levey,  dated February 11, 1992 and Dr. Paul Endler, dated October 18, 1994. [¶] [Hernandez'] Petition to Strike the Recommended Rating is denied. [¶] In accordance with the rater's recommendation it is found that [Hernandez] is entitled to a permanent disability award of 57%, equivalent to 290 weeks of indemnity, at the rate of $120.00 per week, in the total sum of $34,800.00, payable beginning February 12, 1992.”
The opinion also stated: “There being no persuasive evidence supporting apportionment in accordance with correct legal principles, [Hernandez] is entitled to an unapportioned award. [¶] ․ [¶] Based upon the medical report of [Dr.] Levey,  of February 11, 1992, it is found that [Hernandez] is in need of further medical treatment to cure or relieve from the effects of the injury herein. [¶] ․ [¶] Based on the medical record, ․ [respondents] may have failed to render medical treatment when necessary and [Hernandez] incurred expense therefor[e] and for reasonable and necessary medical-legal expense, payable by [respondents] ․ [¶] ․ [¶] [Respondents] claim credit for alleged overpayment of temporary disability indemnity for the period September 6, 1991 to November 18, 1991. Based upon the medical report of Dr. Levey of February 11, 1992, credit is allowed only for the amount paid in excess of $120.00 a week for temporary disability indemnity during this time period.” Regarding penalties, the WCJ stated: “From the submitted evidence in this case, [Hernandez] has failed to meet her burden of proof in showing any unreasonable delay or refusal of [respondents] in paying permanent disability indemnity and providing medical treatment, so no penalties are appropriate in this case.”
Both sides petitioned the WCJ for reconsideration. The WCJ corrected a clerical error in the original award, noting Hernandez' correct temporary disability rate should be $120.00 per week. The WCJ rejected Hernandez' petition, stating that the permanent disability rating was “based upon the medical opinion of both Dr.  Levey, stated in his report of February 11, 1992, and Dr.  Endler, stated in his report of October 18, 1994․ [T]hese medical opinions constitute substantial evidence that [Hernandez] is limited to light work because of her spine injury.” Regarding penalties, the WCJ stated: “[Respondents] did make substantial permanent disability advances of over $6,800.00 in this case, and sufficient medical treatment was provided by the employer after the injury. Dr. Gilbert treated the applicant beginning on March 26, 1991, continuing until September 6, 1991, when [Hernandez] was declared permanent and stationary by the doctor. All of the treatment cost incurred from Dr. Gilbert was paid by [respondents].” As relevant, the Board affirmed the WCJ's decision.
We reject Hernandez' claims that there was any lapse in her temporary or permanent disability payments before respondents' unilateral June 28, 1992, termination of the permanent disability payments. Although there was some confusion regarding when temporary payments ceased and permanent payments began, payments were constant until the June 28, 1992, termination. There was no delay in payments. While two payments were paid a few days late, the delays were clerical and quickly corrected. Thus, there was no unreasonable delay in either form of disability payment before June 28, 1992.
However, when respondents unilaterally terminated permanent disability payments on June 28, 1992, they knew of Dr. Levey's report which rated Hernandez at least 57 percent permanently disabled. Respondents did not obtain another report until October 18, 1994, which rated Hernandez' disability higher. This payment delay was unreasonable and not supported by medical evidence. Thus, a penalty should be imposed. (Kerley v. Workmen's Comp. App. Bd., supra, 4 Cal.3d at p. 230.) Respondents' payment records disclose they advanced Hernandez $4,014 in permanent disability payments from November 18, 1991, through June 28, 1992. The Board should have awarded a 10 percent penalty on the total amount of permanent disability benefits awarded with interest from June 28, 1992, until payments resumed on September 5, 1994. (§§ 4650, 5814; Gallamore v. Workers' Comp. Appeals Bd, supra, 223 Cal.3d at p. 827.)
Moreover, the WCJ originally found respondents unreasonably withheld medical treatment. The Board should have awarded a 10 percent penalty on the entire medical treatment benefit. (See McCoy v. Industrial Acc. Com. (1966) 64 Cal.2d 82, 86-87; Ralphs Grocery Co. v. Workers' Comp. Appeals Bd. (1995) 38 Cal.App.4th 820, 826-832.)
Finally, Hernandez' claim that the Board erred in upholding the WCJ's permanent disability rating is well taken. The WCJ relied on Dr. Engler's report but ignored the report's discussion of subjective disability factors. The WCJ erred in disregarding portions of a report upon which he relied. (LeVesque v. Workmen's Comp. App. Bd. (1970) 1 Cal.3d 627, 639; Franklin v. Workmen's Comp. Appeals Bd. (1971) 18 Cal.App.3d 682, 684.)
We remand the matter for further proceedings to determine the amount of the two penalties described above, and to reconsider Hernandez' permanent disability rating in light of the entire contents of Dr. Engler's report.
We annul the Board's decision to deny Hernandez' request for penalties and to reconsider her permanent disability rating. We remand for further proceedings to determine the amount of the two penalties approved above, and to reconsider Hernandez' permanent disability rating as discussed above. In all other respects we affirm the Board's decision. Hernandez is entitled to her costs.
1. Unless otherwise noted, all further section references are to the Labor Code.
2. Relevant facts are discussed in each section below.
ORTEGA, Associate Justice.
SPENCER, P.J., and MASTERSON, J., concur.