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CHEVRON U.S.A., INC., Petitioner, v. WORKERS' COMPENSATION APPEALS BOARD and Lucille STEELE, Respondents.
We granted review in this case to consider whether the Workers' Compensation Appeals Board (Board) (1) properly calculated the death benefit awarded to Lucille Steele (respondent) under former Labor Code 1 section 4702, subdivision (d) [now subd. (a)(4) ]; and (2) correctly assessed a 10 percent penalty against petitioner Chevron U.S.A., Inc. (Chevron) under section 5814.
We conclude the Board erred in its calculation of respondent's partial dependency by including community income unchanged or unaffected by the death of respondent's spouse, Harvey Steele (decedent), rather than making a determination for death benefit purposes based on the actual loss of support annually devoted by decedent to respondent or the community at the time of injury. We further conclude the Board lacked jurisdiction to assess a penalty under section 5814, where the previously denied petition for penalty was unchallenged and thus a final judgment entitled to full res judicata effect.
The basic facts are not disputed. Decedent was employed by Chevron as an insulator and was exposed to asbestos from 1951 through September 15, 1975. On September 28, 1976, he was diagnosed with asbestosis, a lung injury, resulting from said exposure and filed a compensation claim. In 1981, four years after his retirement in 1977, decedent received a permanent disability award of 63 percent for the asbestosis injury. Subsequently, on August 12, 1987, decedent was diagnosed with further injury, mesothelioma, also caused by the earlier occupational asbestos exposure. He died in November 1987.
In December 1987 respondent filed for a statutory death benefit. Chevron contested the August 1987 date of injury of the mesothelioma claimed by respondent for purposes of calculating the death benefit and also raised the issue of respondent's dependency. On March 29, 1989, respondent filed a petition for penalty under section 5814, claiming Chevron's delay in death benefit payments was without reasonable basis. The case initially proceeded to hearing to determine the appropriate date of injury for the mesothelioma for purposes of calculating the death benefit. The Board concluded that August 12, 1987, was the correct date of injury. Division Five of this court issued a writ and upheld the Board's finding on review. (Chevron U.S.A., Inc. v. Workers' Comp. Appeals Bd. (1990) 219 Cal.App.3d 1265, 268 Cal.Rptr. 699, review den. July 10, 1990].) 2
The matter returned to the Board for further hearing on the extent of partial dependency in the year preceding August 12, 1987, for purposes of calculating respondent's death benefit. On November 1, 1990, the Workers' Compensation Judge (WCJ) issued a decision finding, as pertinent, that (1) respondent was partially dependent on decedent at the time of his injury in 1987 and was entitled to a death benefit of $63,600 based on decedent's support; 3 and (2) Chevron had not unreasonably delayed payment of respondent's death benefit. Both respondent and Chevron petitioned the Board for reconsideration. Respondent claimed the WCJ erred in not awarding her a 10 percent penalty under section 5814. Chevron contested the amount of the death benefit awarded. Both petitions were granted. On July 22, 1991, the Board issued a decision after reconsideration, concluding without explanation that respondent was entitled to the maximum statutory death benefit of $70,000, and that Chevron had not unreasonably delayed in the payment of said death benefit. Respondent did not seek appellate review of the Board's denial of her petition for penalty.
Chevron, however, sought review and contested the computation and amount of the death benefit award. In an unpublished decision (Chevron U.S.A., Inc. v. Workers' Comp. Appeals Bd. (1992) 57 Cal.Comp.Cases 421), we annulled the Board's $70,000 death benefit award on procedural grounds because the Board “failed to address the issue regarding determination of respondent's partial dependency, and ․ comply with Labor Code section 5908.5.” (Id., at p. 424.) The matter was remanded. The Board was directed to comply with section 5908.5 and explain its computation of respondent's partial dependency under section 4702. In addition, we specifically acknowledged the Board's determination that Chevron “had not unreasonably delayed payment of benefits” and further opined: “These [penalty] rulings are not involved in this appellate proceeding.” (Id., at p. 423.)
On March 6, 1995, the Board issued its opinion and decision after remittitur. On the issue of partial dependency and calculation of the death benefit payable to respondent, the Board first determined that respondent was partially, not totally, dependent on decedent at the time of his injury.4 This finding is not contested.
The Board then proceeded to calculate the death benefit pursuant to section 4702, subdivision (a)(4), which mandates payment of a death benefit in cases of partial dependency based on “four times the amount annually devoted to the support” of the partial dependent by the deceased employee, not to exceed $70,000, which was the allotted statutory maximum at the time of decedent's injury in 1987.5 Respondent was awarded a death benefit of $64,657.92, payable at the maximum statutory rate of $224 per week, based on evidence regarding her financial status at the time of decedent's injury in 1987, as follows: “Mrs. Steele testified to several items of family income that were used for their mutual support. These included $8,646.00 per year in Social Security benefits and $756.00 per year in army pension benefits received in Mr. Steele's name and $418.26 in interest received in 1987 from a Bank of America account derived from Mr. Steele's Social Security deposits. In addition, the couple had investment accounts with Franklin Fund and Dean Witter which, under California community property laws, produced 1987 income of $2,159.47 and $2,209.70 to Mr. Steele and similar amounts to Mrs. Steele. Also, the couple received mortgage payments from the Beavers which, in 1987, added up, under community property laws, to $1,975.05 for each of them. Based on these figures, it appears that the support provided by Mr. Steele at the time of his injury was $16,164.48 per year.” 6 This figure, concluded the Board, represented the financial support provided by decedent to the community in 1987, consisting of investment and retirement income, as well as social security and pension payments received by decedent.
The Board next addressed respondent's previously denied “petition for 10% penalty [filed on March 29, 1989] because of [Chevron's] alleged unreasonable termination of death benefits to her.” The Board opined: “Upon further reconsideration ․, the Board agrees ․ that Mrs. Steele's death benefits were terminated without reasonable legal basis. Whether Mrs. Steele was entitled to a presumption of total dependency for an earlier claimed date of injury or was only a partial dependent as of the later actual date of injury, it appears obvious from the record that she was legally entitled to more death benefits than she was, in fact, paid.” 7 Accordingly, the Board ordered the full amount of the death benefit award increased by 10 percent.
On March 31, 1995, Chevron petitioned the Board for reconsideration.
On May 18, 1995, the Board issued its opinion and order denying reconsideration, from which Chevron now seeks review. Section 4702, reasons the Board, does not reference “loss,” but rather states that a death benefit is based on four times the amount annually devoted to the “support” of the partial dependent. Regarding its penalty award, the Board states: “[Chevron] also contends that the Board was without jurisdiction to change the decision on the issue of penalty because the Court of Appeal remanded the decision only on the issue of earnings. We disagree. The Court did not express an opinion on the other issues and when the Court annulled the Board's Opinion and Decision After Reconsideration, the entire Decision was annulled. The Board was free then, on remand, to reconsider every issue.”
Chevron's timely petition followed. Respondent filed an answer. We granted review.
I. Death Benefit and Dependency IssuesA. Statutory Death Benefit In General
When the death of an employee is proximately caused by an injury arising out of and in the course of the employment, the employer is liable for a death benefit “to be allowed to the dependents when the employee leaves any person dependent upon him or her for support.” (§ 4701, subd. (b).) Dependency may be partial or total. (§§ 3501, 3502; see generally, 1 Hanna, Cal. Law of Employee Injuries and Workers' Compensation (2d rev. ed.1996) § 9.05, pp. 9-17-9-26.) In general, “questions of entire or partial dependency and questions as to who are dependents and the extent of their dependency shall be determined in accordance with the facts as they exist at the time of injury of the employee.” (§ 3502.)
Section 4702 sets forth the amount and manner of a death benefit payment. It is payable in weekly installments at the total temporary disability indemnity rate of the deceased employee. (§ 4702, subd. (b).) Here, in the case of “no total dependents and one or more partial dependents,” the death benefit payable to respondent is calculated as follows: “four times the amount annually devoted to the support of the partial dependents, but not more than seventy thousand dollars ($70,000) ․” (§ 4702, subd. (a)(4).)
Before discussing the meaning of the word “support,” the central issue before this court, we find it instructive to briefly review the evolution of the partial dependency laws in California.
B. The Development of “Partial” Dependency
Prior to Arp v. Workers' Comp. Appeals Bd. (1977) 19 Cal.3d 395, 138 Cal.Rptr. 293, 563 P.2d 849, widows were entitled to a statutory presumption of total dependency under former section 3501, subdivision (a). In Arp, the Supreme Court declared the conclusive presumption unconstitutional as a denial of equal protection. (Id., at p. 407, 138 Cal.Rptr. 293, 563 P.2d 849.) Rather than extending the presumption to widowers, the court held that “all applicants, widows and widowers alike, will be required to prove their dependency, and will be compensated in accordance with the facts and circumstances shown. (§ 3502.).” (Id., at p. 410, 138 Cal.Rptr. 293, 563 P.2d 849.) In 1979 the Legislature allowed Arp to stand and amended section 3501 to remove the statutory presumption as to widows in subdivision (a). It retained the presumption of total dependency for minor children or children 18 or older who, because of incapacitation, were dependent upon the deceased parent. (§ 3501, subd. (a).) 8
In Atlantic Richfield Co. v. Workers' Comp. Appeals Bd. (1982) 31 Cal.3d 715, 182 Cal.Rptr. 778, 644 P.2d 1257 (hereafter ARCO ), the Supreme Court was presented with the post-Arp question of how to determine or calculate actual partial dependency of a spouse in a community property state under section 4702. Utilizing the method originally adopted by the Board sitting en banc in Oropeza v. Newman Seed Company (1980) 45 Cal.Comp.Cases 1148,9 the court opined: “Given the relevant legislative framework, we conclude that the approach which is most consistent with our Arp analysis and the liberal construction of the payment of benefits mandated by the Legislature (§ 3202) is one which considers the actual amount which the deceased spouse devoted to the community and to the surviving spouse. ” (ARCO, supra, 31 Cal.3d at p. 722, 182 Cal.Rptr. 778, 644 P.2d 1257, italics added.) In this calculation, expenses which are “an integral and reasonable part of the standard of living enjoyed by the community” are to be included in the computation; whereas, “expenses incurred for the decedent's own personal use” are not reasonably part of the amount annually devoted to the support of the partial dependent. (Ibid.)
The court emphasized: “We fully recognize that arguably inconsistent results may accrue depending on the fortuitous employment status of the surviving spouse. Moreover, we do not attempt to anticipate every variant of cost and expense incurred by spouses and the community, observing that the adjustment of workers' compensation death benefits is properly and primarily a legislative function.” (ARCO, supra, 31 Cal.3d at p. 722, 182 Cal.Rptr. 778, 644 P.2d 1257, italics added.) “Our conclusion in Arp that applicants for benefits ‘will be required to prove their dependency’ [citation],” reasoned the court, “is consistent with the view which we have long held that partial dependents must establish proof of their dependency.” (Id., at p. 720, 182 Cal.Rptr. 778, 644 P.2d 1257, citing Spreckels Sugar Co. v. Industrial Acc. Com. (1921) 186 Cal. 256, 258, 199 P. 8 [dependents shall be compensated for loss of support]; see also Industrial Indem. Co. v. Industrial Acc. Com. (1966) 243 Cal.App.2d 700, 707, 52 Cal.Rptr. 647 [dependency in fact based on contributions for support actually made by the deceased employee].) “Our belief that this comports with legislative intent is further confirmed by the Legislature's action, consistent with Arp, in repealing the conclusive presumption of total dependency formerly contained in section 3501, subdivision (a), without attempting to provide any other applicable conclusive presumptions.” (ARCO, supra, 31 Cal.3d at p. 720, 182 Cal.Rptr. 778, 644 P.2d 1257.) 10
C. Analysis of Instant Case
Here, to substantiate the extent of her partial dependency, respondent is required to prove the actual dollar amount annually contributed by decedent to respondent, including maintenance of the accustomed standard of living of the community household. Although decedent was retired and not earning wages, he was apparently contributing his annual retirement from social security in the amount of $8,646 and a pension from the army in the amount of $756 to respondent and the community. Assuming these were decedent's only contributions to respondent and the community which terminated upon his death, as this record appears to represent, the actual annual support to respondent from decedent lost after death, would be $9,402. Four times this figure would be $37,608, seemingly the death benefit to which respondent is entitled, subject on remand to verification of the monetary figures indicating support lost as a result of the decedent's death.
The Board's decision to include the “income” from community investments which did not terminate upon decedent's death as part of the “amount annually devoted to the support of” respondent by decedent for purposes of calculating the death benefit is without basis in fact, law or logic. The Board seems to have lost sight of a relatively clear record of actual support by converging on two facts that should not have affected the death benefit calculation: (1) decedent was retired and no longer devoting “wages” or “earnings” to the community at the time of injury; and (2) decedent's former earnings were in part the basis of the investments producing the retirement income. It is undisputed, however, that the investment accounts were neither lost nor affected by decedent's death. Thus, for all intents and purposes, respondent currently holds the same investment accounts and will continue to collect whatever income they generate. The facts that (a) the investment accounts and the income generated were community property and (b) decedent was retired at the time of injury are irrelevant to the calculation of respondent's statutory death benefit.
Dependency in fact or the amount annually devoted to respondent and the community must be calculated according to amounts that terminated with the death of decedent in the same way that a death benefit would be calculated if decedent had been employed and his earnings had terminated. (ARCO, supra, 31 Cal.3d at p. 723, 182 Cal.Rptr. 778, 644 P.2d 1257.) The amount of the death benefit depends on the extent of actual dependency; the only way this amount reasonably and consistently can be determined is to identify support at the date of injury that terminated upon the injured employee's death. Whether one is retired or employed at the time of industrial injury is not pertinent. It is the loss of annual monetary support to the respondent and the community that controls and is consistent with constitutional and legislative directives creating an employer's liability for death benefit payments to compensate dependents where an industrial injury causes death. (Spreckels Sugar Co. v. Industrial Acc. Com. (1921) 186 Cal. 256, 258, 199 P. 8; see ARCO, supra, 31 Cal.3d at pp. 721-723, 182 Cal.Rptr. 778, 644 P.2d 1257.)
To calculate respondent's death benefit according to the support she lost is consistent with the law. She has not been treated any differently because she and decedent were retired at the time of the injury which caused his death. “The whole theory of the compensation act as to death cases is that the dependents of the employee killed through some hazard of his employment shall be compensated for the loss of the support they were receiving from him at the time of his injury. This necessarily means that the death benefit must be computed on the rate of contribution at that time. It is the rate which is the measure of the loss․” (Spreckels Sugar Co., supra, 186 Cal. at p. 258, 199 P. 8; 11 accord, ARCO, supra, 31 Cal.3d at p. 720, 182 Cal.Rptr. 778, 644 P.2d 1257; Wings West Airlines, supra, 187 Cal.App.3d at p. 1052, 232 Cal.Rptr. 343; Lynch, supra, 164 Cal.App.3d at pp. 598-599, 210 Cal.Rptr. 589; Industrial Indem. Co. v. Industrial Acc. Com., supra, 243 Cal.App.2d at p. 707, 52 Cal.Rptr. 647.) “The California courts have consistently articulated the foregoing principles and repeatedly based dependency in fact on contributions for support actually made by the deceased employee to the dependent and relied upon by the latter rather than upon a mere legal obligation or liability to furnish support unaccompanied by any contributions. [Citations.]” (Industrial Indem. Co., supra, 243 Cal.App.2d at p. 707, 52 Cal.Rptr. 647.)
II. Penalty and Jurisdictional Issues
It is long standing law that a decision of the Board becomes final upon expiration of the time for review. (Marsh v. Workmen's Comp.App. Bd. (1968) 257 Cal.App.2d 574, 580, 65 Cal.Rptr. 69.) Here, respondent did not petition for writ of review (see § 5950) after the July 1991 denial by the Board of her March 1989 petition for penalty pursuant to section 5814.12 As to the penalty issue, therefore, the previously uncontested Board decision was final and entitled to full res judicata effect. (Marsh, supra, 257 Cal.App.2d at p. 579, 65 Cal.Rptr. 69; accord, General Insurance Co. of America v. Workers' Comp. Appeals Bd. (1980) 104 Cal.App.3d 278, 283-284, 163 Cal.Rptr. 537.)
Moreover, in our prior reversal of the Board on other grounds (Chevron v. Workers' Comp. Appeals Bd., supra, 57 Cal.Comp.Cases 421), we explicitly stated that the Board's denial of respondent's penalty petition was not before us. (Id., at p. 423.) The reversal in favor of Chevron on procedural grounds did not permit relitigation by respondent of her petition for penalty. (General Insurance Co., supra, 104 Cal.App.3d at p. 284, 163 Cal.Rptr. 537.) Respondent did not petition for review, and the question raised by Chevron concerning dependency did not affect the Board's denial of the penalty petition. (Ibid.)
The Board has erred as a matter of law. Respondent is entitled to a death benefit based on four times the annual amount actually devoted to respondent and the community by decedent at the time of injury which caused his death. On remand, we instruct the Board to determine the actual loss of annual support from decedent to respondent and the community at the time of injury. Retirement income and investments which did not terminate or change as a result of death should not be part of the computation. Additionally, the Board was without jurisdiction to alter its prior finding on respondent's 1989 petition for penalty, the denial of which occurred in 1991, was not contested and is hence a final judgment.
Accordingly, the Board's opinion and order denying reconsideration dated May 18, 1995, is annulled and the matter remanded for further proceedings consistent with the views expressed herein.
1. All statutory references are to the Labor Code unless otherwise specified.
2. Chevron contended on review that the date the asbestosis manifested (September 28, 1976) should also apply to the mesothelioma inasmuch as both resulted from the same period of asbestos exposure, even though the mesothelioma did not first manifest until August 12, 1987. Division Five held that where two separate and distinct occupational disease processes resulting from a single period of exposure to asbestos manifest themselves at different times, each is entitled to a different date of injury, consistent with the time limitations of section 5412, for purposes of calculating the applicable rate of the statutory death benefit payable under section 4702. (219 Cal.App.3d 1265, 268 Cal.Rptr. 699.)
3. Kerry and Eric Haggett originally were joined as parties and awarded death benefits of $2,000 and $4,400, respectively. However, the Board ultimately held neither child was partially dependent on decedent and thus not entitled to a death benefit. This finding is not in issue.
4. It is undisputed that respondent, also retired, was receiving both social security and Teamster pension benefits in 1987 and was not totally dependent on decedent.
5. At the time of decedent's injury, section 4702 provided, as pertinent: “Except as otherwise provided in this section ․, the death benefit in cases of total dependency ․ shall be as follows:“․“(d) In the case of no total dependents and one or more partial dependents, four times the amount annually devoted to the support of the partial dependents, but not more than sixty thousand dollars ($60,000), if the injury resulting in death occurred on and after January 1, 1983, or seventy thousand dollars ($70,000) if the injury occurred on and after January 1, 1984.”Prior section 4702, subdivision (d), is presently subdivision(a)(4), and provides as follows: “(4) In the case of no total dependents and one or more partial dependents, four times the amount annually devoted to the support of the partial dependents, but not more than seventy thousand dollars ($70,000), for injuries occurring on and after January 1, 1991, a total of ninety-five thousand dollars ($95,000), for injuries occurring on or after July 1, 1994, one hundred fifteen thousand dollars ($115,000), and for injuries occurring on or after July 1, 1996, one hundred twenty five thousand dollars ($125,000).”
6. The record does not reveal what moneys annually contributed by decedent to the support of the community actually terminated upon or as a result of his death. At one point, the WCJ indicated “[t]here does not seem to be a dispute concerning [decedent's] Social Security or Army pension, but there is clearly a dispute concerning the income from the Franklin, Dean Witter, and from the Beavers.” Chevron, however, concedes only that the army pension terminated upon decedent's death. The Board is directed to clarify these facts on remand in order to reach a proper determination of respondent's partial dependency in compliance with the opinion herein.
7. If Chevron had prevailed on its original argument that the date of injury of the mesothelioma was the same as the asbestosis (September 28, 1976), respondent would have been presumed totally dependent on decedent under former section 3501, subdivision (a) and, as such, would not have had to prove the extent of her dependency in fact. The record indicates Chevron paid respondent death benefit payments at $119 per week through February 28, 1989, totaling $8,041.
8. Where the injury causing death occurs on or after January 1, 1990, there is a conclusive presumption of total dependency for a surviving spouse whose earnings were $30,000 or less during 12-month period prior to the death of the employee-spouse. (§ 3501, subd. (b).) Other than this exception, as a general rule, the question of dependency is referable to the date of injury, not the date of death.
9. In Oropeza, the Board awarded a death benefit of $21,554.32, reached by multiplying the decedent's total earnings of $5,388.58 in the year preceding his death by four. In so doing, the Board discerned a legislative intent “to treat the earnings of the deceased spouse as the measure of actual support to the surviving spouse․” (Oropeza, supra, 45 Cal.Comp.Cases at p. 1152.) “[A]ny other method,” concluded the Board, “would lead to grossly disparate results depending on whether the surviving spouse was totally dependent or partially dependent ․” because totally dependent spouses are entitled to the full benefit no matter what the earnings of the deceased spouse may have been. (Ibid.) The Board therefore held that “the actual earnings of the deceased spouse which are utilized for the benefit of the community represent the support provided for the surviving spouse.” (Id., at p. 1154, italics added.)
10. We note that two First District cases have followed ARCO, supra, 31 Cal.3d 715, 182 Cal.Rptr. 778, 644 P.2d 1257, in partial dependency cases. In Wings West Airlines v. Workers' Comp. Appeals Bd. (1986) 187 Cal.App.3d 1047, 232 Cal.Rptr. 343, Division Three held that actual contribution or support, as opposed to a mere promise of future support, by the deceased employee to his sister was a prerequisite for a finding of partial dependency. (Id., at p. 1054, 232 Cal.Rptr. 343.) In Lynch v. Workers' Comp. Appeals Bd. (1985) 164 Cal.App.3d 594, 210 Cal.Rptr. 589, Division One held “personal use” deductions will not include food, clothing and transportation related to the deceased's employment because such expenditures, like the employment, are for the “benefit” of the community's standard of living. (Id., at p. 599, 210 Cal.Rptr. 589.) One commentator noted that after Lynch the “personal use” apportionment in most cases will be negligible inasmuch as most married couples' expenditures will be primarily related to the benefits of the community. (1 Herlick, Cal. Workers' Compensation Law (5th ed.1995) § 9.13, p. 9-18.)
11. At oral argument, counsel for respondent suggested that the foregoing language from Spreckels is dicta. Respondent is mistaken. The quote speaks to the force of the holding in Spreckels, to wit, partial dependents are to be compensated for the loss of support at the time of the deceased employee's injury. This is a correct statement of law and, as such, a controlling precedent.
12. Section 5814 provides, as pertinent: “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 [Board] in accordance with the facts․”
HAERLE, Associate Justice.
KLINE, P.J., and LAMBDEN, J., concur.
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