ARGONAUT INSURANCE COMPANY v. INDUSTRIAL ACCIDENT COMMISSION (1961)

This is a review of the findings, award and decision after reconsideration issued by respondent Industrial Accident Commission. Petitioner is the workmen's compensation insurance carrier for the employer of one Fred Montana, the applicant below.

On October 24, 1960, Montana filed his application in which he claimed temporary disability payments, permanent disability payments, further medical treatment and cost of medical expenses for an injury sustained June 20, 1960, and connected with his employment. The matter was set for hearing December 9, 1960, at which time medical reports were submitted by defendants below and admitted in evidence. The hearing was continued to January 11, 1961. On the latter date, the matter was heard upon the following issues: injury arising out of and occurring in the course of the employment; need for further medical treatment; liability for medical-legal costs; earnings; nature, extent and duration of disability; allowance of lien claim for medical-legal costs. Further medical evidence was admitted and other testimony taken. The commission then made its order referring applicant to an independent medical expert in the field of orthopedics and postponed disposition until after the report of such expert had been filed and served, defendants below to pay the cost of such reference. After this report of the independent medical examiner was filed, both parties requested a hearing to cross-examine him. This request was granted and such hearing was had on April 20, 1961, after which the matter was referred to the permanent disability rating bureau of the commission. On May 4, 1961, the rating bureau filed and served its recommendation of permanent disability rating after apportionment of 3 3/4 per cent permanent disability.

On June 2, 1961, findings and award issued from the commission, finding in substance among other things as follows: (1) that applicant sustained an injury arising out of and occurring in the course of his employment on June 20, 1960; (2) that applicant's average earning capacity is less than minimum for compensation purposes, and entitles him to the minimum workmen's compensation rate of $20 per week; (3) that defendant's paid temporary total disability compensation, in the amount of $928.57, from June 23, 1960, through September 30, 1960, at the rate of $65 per week. The period of payment of temporary indemnity was correct; however, applicant was overpaid temporary indemnity at the rate of $65 per week, instead of $20 per week, in the total amount of $642.85; (4) that said injury further resulted in permanent disability which, after apportionment, for appellant's age and occupation, constitutes a disability rate of 5 1/2 per cent entitling applicant to $20 per week for a period of 22 weeks, in the total sum of $440.

On June 6, 1961, applicant filed his petition for reconsideration, in which he objected to the apportionment of 75 per cent of permanent disability to his preexisting condition and to the finding that his earnings were minimum. Petition was granted and on August 4, 1961, respondent issued its decision after reconsideration, in which it held that the injury caused temporary total disability beginning June 23 to and including September 30, 1960, entitling applicant to $65 per week at said time, based upon maximum earnings for which he had been adequately compensated in the sum of $928.57; that said injury resulted in permanent disability which, for applicant's age and occupation, is rated at 22 per cent, entitling him to $52.50 per week for 88 weeks in the total sum of $4,620.

Petitioner seeks review of this decision after reconsideration. The question then is whether there is substantial evidence in the record to sustain such decision.

Applicant was a man 50 years of age on June 20, 1960, when he sustained an injury to his back while lifting a steel beam in the course of his employment. During the five years next preceding the date of the injury he had no regular steady job, but sought employment through a union hiring hall, taking any job available. During the 15-month period from March 1959 to the date of his injury, he had a total of four jobs. In March 1956, he worked three days on a job in Colton, California. In the summer of 1959, he worked three days on the freeway in Colton and earned $2.88 per hour, for a total of 24 hours. In December 1959 or January 1960, he worked 15 to 17 days at Kaiser as a brick tender and was paid at the rate of $104 to $125 per week. He next started working for defendant-employer April 20, 1960, and continued to June 22, 1960, two days after the date of his injury. He was hired for a particular job, described as a flood control project and which was completed at the time applicant returned after being released for work by the doctor in September 1960. Applicant earned $887.20 on this last job. His earnings for the 15-month period preceding his injury totaled between $1,200 and $1,300.

The testimony and report of the independent medical examiner shows, based upon his examination of March 8, 1961, that applicant had suffered an acute lumbosacral strain that had healed; that prior to the accident applicant had an unstable lumbosacral spine. He had some increase in the lumbosacral angle with mild scoliosis. His pelvis was tipped forward and he had some degenerative changes. This condition was not related to an injury sustained on the subject job nor did it arise out of his employment on previous jobs during the years he had worked.

Based upon applicant's physical make-up prior to the accident, he should not have lifted weights in excess of 75 pounds. After the accident and with the wearing of a corset, he may still work within the 75-pound weight limit. The corset is designed to reduce the probability of a reinjury.

It is clear from the medical testimony that prior to the injury applicant had an unstable lumbosacral spine with some arthritis and that he should not have engaged in work which would require him to lift objects in excess of 75 pounds in weight and that the accident of June 20, 1960, caused his acute lumbosacral strain; that the lifting episode aggravated the unstable condition of the spine; that by March 8, 1961, the injury had healed except for moderate subjective complaints referable to the lower back area, which would be expected and would not be abnormal for a man of applicant's age, engaged in hard labor; that after the injury healed applicant had the same capacity for work as he had prior thereto, except that he should wear a corset to insure against the probability of reinjury.

It is also clear from the evidence that at the time of applicant's injury, he was temporarily employed on a project of short duration; that he had worked for a total of 23 days during the year preceding his employment with defendant and had been intermittently employed during the five years preceding such employment.

The referee, in his opinion recommending denial of the petition to reconsider, found that applicant's earning capacity was established by his own work pattern and that his workmen's compensation rate for disability payments should be minimum; also that there was a proper basis for apportionment between his preexisting condition and his present injury. There is no evidence in the record to show that applicant's low earning pattern was the result of generally poor business conditions.

‘Earning capacity under subdivision (d) cannot properly be determined by reference to the rate of pay alone, as the Aetna (p. 493) and Colonial (p. 492) decisions erroneously assume. Fundamentally, earning capacity is total earnings measured against the period of time within which those earnings were made. Whether the earning capacity rate is identical with the pay rate depends upon the steadiness of employment. Thus, the particular wage rate an employee is receiving at the moment of injury may or may not be indicative of his actual earning capacity at that time.

‘The statutory formulae for the calculation of average earnings cannot be blindly applied. As stated earlier they are valid only to the extent their application results in ascertaining actual earning capacity at the time of injury. This is so because their use is subject to the reasonable and fair limitation stated in subdivision (d) which we have paraphrased and quoted. If they ‘can not reasonably and fairly be applied,’ earning capacity as defined in subdivision (d) must be determined. In making this determination due consideration must be given to the earning history of the disabled employee. We agree with the statement in the Aetna decision, 130 Cal.App. at page 492, 20 P.2d at page 372, that due consideration means reasonable and not exclusive consideration. But earning history must be considered in arriving at earning capacity, and more often than not, it will be determinative.' (West v. Industrial Acc. Comm., 79 Cal.App.2d 711, at 725, 180 P.2d 972, at 981.)

In the case of aggravation of any disease existing prior to a compensable injury, compensation shall be allowed only for the proportion of the disability due to the aggravation of such prior disease which is reasonably attributed to the injury. (Lab.Code, § 4663.) Under this rule, the commission's apportionment under the award before reconsideration was proper and equitable.

Applicant urges that the award after reconsideration is supported by the rule laid down in Colonial Ins. Co. v. Industrial Acc. Comm., 29 Cal.2d 79, 172 P.2d 884, 887. The case is distinguishable on its facts. In Colonial the applicant's injury was caused by a progressive occupational disease (silicosis) which had been contracted and accumulated during various employments. The court said: ‘* * * in cases of progressive occupational diseases the disease does not previously exist. It is building up over a period of time and is not theretofore disabling.’

The findings after reconsideration that applicant was a permanent employee working irregularly due to business conditions; that his earning capacity was maximum under section 4453, subdivision (d) of the Labor Code and that he was entitled to a rating based upon 22 per cent of 25 per cent to the injury of 25 percent to the injury and 75 per cent to applicant's preexisting condition, are not supported by substantial evidence and the award based thereon, including the sum of $400 to applicant's attorneys, is annulled.

The cause is remanded and the commission is directed to make its award based upon minimum earning capacity with a disability rating after apportionment of 25 per cent to the injury and 75 per cent to applicant's preexisting condition.¹

FOOTNOTES

1.  Sections 5950 to 5956, Labor Code; 1 Hanna, Law of Employee Injuries and Workmen's Compensation (1953), page 219.

FRAMPTON, Justice pro tem.

SHINN, P. J., and FORD, J., concur.