SUBSEQUENT INJURIES FUND OF CALIFORNIA v. INDUSTRIAL ACCIDENT COMMISSION OF CALIFORNIA (1959)

Subsequent Injuries Fund of the State of California (hereinafter called the ‘Fund’), by its petition here seeks to annual an award to the respondent Baldes against it.

On November 6, 1953, while in the employ of the respondent Bethlehem Pacific Coast Steel Corporation (hereinafter called ‘Bethlehem’), petitioner sustained an injury which resulted in the loss of the sight of his right eye. After hospitalization for this injury he returned to work and then developed a nervous condition which was diagnosed as schizophrenic psychosis. On December 28, 1954, pursuant to the provisions of section 4751 of the Labor Code, Baldes filed an application for hearing against the Fund, alleging that prior to the industrial injury to his eye he was permanently and partially disabled with a mental disease which he described as follows: ‘Psychotic depressive reaction manifested by depression, psychomotor retardation, anxiety, worry, transient hallucinations, and delusions, feelings of helplessness, and inability to cope with difficulties, in partial remission.’ He further alleged that the combined disability resulting from the existing nonindustrial condition and the industrial disability due to the injury to his eye was in excess of 70 per cent of total disability. The commission found that Baldes had suffered from a prior permanent disability and that the total disability resulting from his industrial injury and the prior nonindustrial disability amounted to 79 per cent of total disability. There was no evidence offered before the commission as to whether Bethlehem had knowledge of the prior nonindustrial disability and the commission made no findings upon that issue.

On a writ of certiorari issued on the Fund's petition, this court annulled the award against the Fund upon the ground that the Fund could only be held liable in cases where the ‘preexisting injury was known or would have been known to the employer’ and the cause was ‘remanded to the respondent commission for further proceedings not inconsistent with the views expressed herein.’ State of California, etc. v. Industrial Acc. Comm., 150 Cal.App.2d 716, 311 P.2d 26. The decision of this court was based upon three prior decisions rendered in the appellate courts of the state, towit: State Subsequent Injuries Fund v. Industrial Acc. Comm., 135 Cal.App.2d 544, 288 P.2d 31; Urquiza v. Industrial Acc. Comm., 144 Cal.App.2d 322, 300 P.2d 871 and State v. Industrial Acc. Comm., 147 Cal.App.2d 818, 306 P.2d 64.

Upon the remittitur from this court being filed with the commission, it gave notice of intent to issue its decision that the applicant take nothing from the Fund unless good cause could be shown to it within 7 days why such a decision should not be made. No further evidence having been offered the commission entered its decision denying applicant any recovery from the Fund.

On June 6, 1958, the Supreme Court of this state rendered its decision in the case of Ferguson v. Industrial Acc. Comm., by which it ruled that knowledge by the employer of a preexisting permanent disability of the employee was not required as a condition to an award against the Fund. 50 Cal.2d 469, 326 P.2d 145, 148.

On June 27, 1958, applicant petitioned the commission to reopen the matter of his application against the Fund upon the ground that the decision denying petitioner an award against the Fund was made under a mistake of law. His petition was granted and an award was made to applicant against the Fund in the sum of $3,960 payable at the rate of $30 per week beginning June 5, 1957, and continuing until the whole of the award had been paid and thereafter the sum of $8.77 per week for the balance of his life; this award being based upon findings that the applicant had a previous permanent disability and that that disability together with the industrial injury to his eye had resulted in a permanent disability equal to 79 per cent of total and that the previous permanent disability was equal to 33 per cent of total disability.

The Fund petitioned the commission for reconsideration. Its petition was denied. In its petition for reconsideration and in its petition here the Fund asserts that the findings of the commission that ‘applicant had a previous permanent partial disability’ is unsupported by the evidence.

In Ferguson the Supreme Court held that in order for an employee to qualify for resort to the Subsequent Injuries Fund he must show that prior to the occurrence of an industrial injury he had attained the factual status of the permanently partially disabled and that such previous disability was in fact labor disabling. In so holding the court said in part:

‘The fund, in support of its argument favoring an employer-knowledge rule, refers to the fact that as pointed out in the Strauss case [State Subsequent Injuries Fund v. Industrial Acc. Comm.] (135 Cal.App.2d 544, 553, 288 P.2d 31), in the ‘Subsequent Injuries Fund Report of the Subcommittee of Assembly Interim Committee on Finance and Insurance’ (vol. 15, No. 7, 1953–1955, Assembly Interim Committee Reports), attention is called to the wide variety of pathologies (most of them asymptomatic, i. e., unmanifested) which have been urged as a basis for commission awards against the Subsequent Injuries Fund: ‘heart disease; arthritic processes; nervous termors; Parkinson's disease; tuberculosis; syphilis; varicosities; diabetes; hysteria, and other forms of mental derangement; harelip; speech impediments; weak abdominal walls; decreased mental capacity; epilepsy; nervousness; hemorrhoids; false teeth; general debility and undernourishment; flat feet; tonsilities; calluses and bunions on feet; knock-knees; and schizophrenia of the paranoid type.’ The report further states that to apply the provision for preexisting permanent partial disability to more than easily recognizable permanent objective disabilities would convert the Subsequent Injuries Law into a state health insurance plan, applicable only to one class, the employed. In addition, it would provide life annuity benefits when the combined effect of a previous disease and subsequent injury results in a permanent disability of 70 per cent or more of total disability. Such a legislative intnet should not be inferred. It should clearly appear. This point of view was reiterated by the court in the Bachrach case (State v. Industrial Acc. Comm. (1957), supra, 147 Cal.App.2d 818, 822–823, 306 P.2d 64) and is one with which we are in accord.

‘Further, we are of the view that as indicated by the Subcommittee report mentioned in the Strauss case, * * * and as is implicit in the legislative language, the statute contemplates that the previous condition must be actually ‘labor disabling,’ and that such disablement, rather than ‘employer knowledge,’ is the pertinent factor to be considered in determining whether the employe is entitled to subsequent injuries payments under the terms of section 4751. As commented in Larson's Workmen's Compensation Law (1952), section 59.33 (Vol. 2, p. 63), ‘the prior injury under most statutes should be one which, if industrial, would be independently capable of supporting an award. It need not, of course, be reflected in actual disability in the form of loss of earnings [as this court has already held in Smith v. Industrial Acc. Com. (1955), 44 Cal.2d 364, 367[2, 3], [288 P.2d 64]], but if it is not, it should at least be of a kind which could ground an award of permanent partial disability. This must be so, because when the second-injury question later arises, the prior injury must be one capable of accounting separately for a portion of the ensuing disability, as distinguished from condition rendered disabling only as the result of ‘lighting up’ by the second injury.'' (Emphasis added.)

We have reached the conclusion that the evidence here falls short of meeting the requirements laid down by the Supreme Court in the Ferguson case as they are above stated.

The evidence establishes the following facts: Baldes, at the time of the industrial accident was 48 years of age. After completing the eighth grade he served in the United States Navy for 23 years where he worked primarily in the engine room and was discharged to the fleet reserve in 1949 with the rating of chief engine man. In 1951 he was recalled to active service and was assigned to teach a class in diesel engine mechanics. He felt himself unequal to the task of teaching and developed a nervous condition the symptoms of which were a lumpy sensation in the throat, occasional precordial pains and a burning sensation in the esophagus, (applicant described his condition as ‘stage fright’). He was confined to the Navy hospital and after observation for a period of 22 days was discharged to duty; he was not assigned to teaching but performed duty as a master at arms and had no recurrence of his nervous symptoms. He was released from active duty in the early part of January, 1953, and shortly thereafter was employed by Bethlehem.

Baldes testified that during his employment by Bethlehem he wasn't nervous at all and he had no trouble performing his work as a mechanic.

On November 6, 1953, the industrial accident occurred in which a splinter of steel entered his right eye with the result that he eventually lost the sight of it. About three weeks after returning to work, after a short period of hospitalization for his eye injury, he again exhibited his nervous symptoms. This was after he had come to the belief that he would lose the sight of his right eye. This nervous condition developed to the point where he was totally unable to care for himself and he was confined in the Veteran's hospital where his condition was diagnosed as ‘Psychotic depressive reaction manifested by depression, psychomotor retardation, anxiety, worry, transient hallucinations and delusions, feelings of helplessness, and inability to cope with difficulties, in partial remission. a. Precipitating Stress: Unknown.’

Dr. Louise J. Gordy who examined Baldes at his request and whose report was received by the commission stated that in her opinion Baldes had suffered from a lifelong ‘personality difficulty’ that he had, however, been able to make an adjustment until he was given an assignment while in the Navy ‘entailing more responsibility than he could handle’; that at the time of the industrial injury he was suffering from a ‘preexisting personality disorder with borderline adjustment’ and that the industrial injury aggravated this preexisting disorder so that he became completely disabled.

Dr. George N. Thompson a specialist in neurology and psychiatry who was appointed by the commission as an independent medical examiner and whose examination was made in 1956, testified that at the time of his examination the applicant was in a remission from a schizophrenic psychosis; that prior to the psychotic break (that is the episode that caused his confinement in the Veteran's hospital after the industrial injury) the patient has suffered from a schizoid personality and that he had not and did not suffer from any mental deterioration and that his psychotic break was precipitated by his injury of November 6, 1953. He testified that while it was his opinion that Baldes had some impairment of personality prior to his industrial accident, he had no way of knowing to what extent it existed.

Both Baldes and his wife testified that from the time he entered the service at Bethlehem until after the industrial accident he was all right, had no complaints of a nervous or mental nature and that no symptoms developed until after the accident which resulted in the loss of his eye and that then he became frightened and gradually developed the symptoms that were diagnosed by the physicians as schizophrenic psychosis.

The record does not contain any evidence whatsoever that Baldes was immediately prior to his industrial injury permanently partially disabled or suffering from any condition that was ‘labor disabling.’ The most that can be said is, as expressed by Dr. Thompson, that he then was of an asymptomatic schizoid personality and that the psychotic break which resulted in disability beyond that due to the injury to his eye was precipitated i. e. ‘lighted up’ by that injury. In so stating we have in mind the opinion expressed by the expert that at the time of his examination the applicant's disability due to his schizophrenic personality had been increased by 25 per cent beyond that existing before the accident.¹ The fact remains that that condition was not prior to the accident ‘labor disabling.’

In view of our conclusion that the evidence fails to sustain the award we do not reach the contention made by the Fund that under the doctrine of the ‘law of the case’ the commission was without power to reopen the matter and vacate the award made pursuant to the remittitur of this court after the former proceedings. The award is annulled.

FOOTNOTES

1.  It may be noted that there is no basis for this opinion expressed by the witness for he also testified that he did not know and had no way of knowing to what extent Baldes' personality was impaired before the accident. It seems impossible to establish an unknown disability by subtracting 25 per cent of an unknown quantity from 100 per cent and this in effect is what the commission did in fixing the Fund's liability. In other words testimony that X (the unknown quantity) has been increased by 1/4 only leaves us with the insolvable algebraic zero equation that X equals X plus x/4 minus x/4.

NOURSE, Justice pro tem.

WHITE, P. J., and LILLIE, J., concur.