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MORRIS v. Department of Industrial Relations, Claimant and Respondent. (1975)

Court of Appeal, First District, Division 3, California.

Richard MORRIS, Plaintiff and Appellant, v. COUNTY OF MARIN, Defendant and Respondent, Department of Industrial Relations, Claimant and Respondent.

Civ. 34831.

Decided: August 19, 1975

Hoberg, Finger, Brown & Abramson, Richard H. Carlson, San Francisco, for plaintiff and appellant. Boornazian, King & Schulze, George King, James L. McIntosh, Oakland, Douglas T. Maloney, Marin County Counsel, Allen A. Haim, Deputy County Counsel, San Rafael, for defendant and respondent. Evelle J. Younger, Atty. Gen., Gordon Zane, Deputy Atty. Gen., San Francisco, for lien claimant.

Richatd Morris appeals from a judgment of dismissal after the sustaining of the demurrer of the County of Marin without leave to amend.

Appellant's first amended complaint seeks to state a cause of action for negligence against the County of Marin (hereafter, the County) on the theory that Labor Code, section 3800 establishes a mandatory duty upon the County to require evidence of workmen's compensation insurance prior to issuing a building permit for a project which will employ persons subject to workmen's compensation laws.

The complaint alleges that on October 4, 1972, which working in the course and scope of his employment for Guy Cahoon and performing certain construction work, appellant fell from a platform and suffered injuries causing permanent paraplegia. Cahoon carried no workmen's compensation insurance.1 Before Cahoon could lawfully commence the construction he was required by the County of Marin to apply for and obtain a building permit. Cahoon did apply for and obtain a building permit; however, County did not request or secure evidence that Cahoon was covered by workmen's compensation insurance. Appellant's injuries were compensable under the laws of workmen's compensation had such insurance existed.

Appellant alleges that an award under the Uninsured Employers Fund (Lab.Code, § 3706 et seq.) is uncollectible as the Uninsured Employers Fund is unfunded.

The Attorney General of the State of California, on behalf of the Department of Industrial Relations as Administrator of the Uninsured Employers Fund, Lien claimant below, adopts and urges the correctness of appellant's arguments.

Appellant urges that Labor Code, section 3800 places upon respondent the mandatory duty to obtain evidence that an employer who obtains a building permit from respondent has workmen's compensation insurance, and failure to discharge that duty gives rise to a cause of action for damages.

Labor Code, section 3800 provides:

Every county or city which requires the issuance of a permit as a condition precedent to the construction, alteration, improvement, demolition or repair of any building or structure shall require that each applicant for such permit have on file or file

(1) A certificate of consent to self-insure issued by the Director of Industrial Relations, or

(2) A certificate of workmen's compensation insurance issued by an admitted insurer, or

(3) An exact copy or duplicate thereof certified by the director or the insurer.

The certificate of insurance shall state that there is in existence a valid policy of workmen's compensation insurance in a form approved by the Insurance Commissioner. The certificate shall show the expiration date of the policy. No insurer shall issue such certificate unless the full deposit premium on the policy has been paid, and the insurer shall give the county or city at least 10 day's advance notice of the cancellation of the policy.

This section shall not apply if

(1) The permit is for one hundred dollars ($100) or less, or

(2) The applicant for the permit signs a certificate which reads as follows, or the wording of which has been approved by the Director of Industrial Relations:

‘I certify that in the performance of the work for which this permit is issued I shall not employ any person in any manner so as to become subject to the workmen's compensation laws of California.’

If, after making such certificate, the applicant for the permit should become subject to the workmen's compensation provisions of this code, he shall forthwith comply with the provisions of Section 3700 or his permit shall be deemed revoked.

Appellant cites Government Code, section 815.6, which provides: ‘Where a public entity is under a mandatory duty imposes by an enactment that is designed to protect against the risk of a particular kind of injury, the public entity is liable for an injury of that kind proximately caused by its failure to discharge the duty unless the public establishes that it exercised reasonable diligence to discharge the duty.’ He also cites Labor Code, section 15, which provides: “Shall' is mandatory and ‘may’ is permissive.'

County contends that Labor Code section 3800 imposes a discretionary duty, and as such no liability can result from its failure to obtain evidence of workmen's compensation insurance. We agree.

Even though the language of a statute may be permissive or mandatory, the use of the terms ‘may’ and ‘shall’ is not necessarily dispositive. (See Garcia v. Industrial Acc. Com. (1958) 162 Cal.App.2d 761, 328 P.2d 561; Giacalone v. Industrial Acc. Com. (1953) 120 Cal.App.2d 727, 262 P.2d 79, overruled on other grounds in Scott v. Industrial Acc. Com. (1956) 46 Cal.2d 76, 87, 293 P.2d 18.)

Requirements of statutes are directory, not mandatory, unless means be provided for their enforcement. (Gowanlock v. Turner (1954) 42 Cal.2d 296, 301, 267 P.2d 310 (concerning overtime pay for San Francisco municipal railway employee; held: no means in charter provision for enforcement of time-and-a-half overtime pay in charter provisions, so provisions directory); Castorena v. City of Los Angeles (1973) 34 Cal.App.3d 901, 110 Cal.Rptr. 569 (group challenging councilmen's redistricting of city, city council did not pass its ordinance over mayor's veto within time prescribed by city charter; held: charter silent as to effect of failure to comply with time limits, and was therefore directory [at p. 908, 110 Cal.Rptr. 569]); Adler v. City Council (1960) 184 Cal.App.2d 763, 7 Cal.Rptr. 85 (taxpayers' action challenging ordinance rezoning certain realty, various violations of procedures in enacting ordinance; held: no means of enforcement in the statute concerning those procedures render statute directory [at p. 774, 7 Cal.Rptr. 851]); Stribling v. Mailliard (1970) 6 Cal.App.3d 470, 85 Cal.Rptr. 924 (citizens challenging police officers carrying guns while off duty pursuant to regulation assertedly passed in violation of the Brown Act [Gov.Code, § 54950, antisecret legislation]; held: as per Adler, no means of enforcement render statute directory).)

It is clear that Labor Code, section 3800 does not provide within the statute itself the means of enforcement. Although various methods of enforcement of section 3800 can be conceived, it is necessary that the means of enforcement be specified in the statute itself, or else the requirement will be considered directory. (Gowanlock v. Turner, supra, 42 Cal.2d at p. 301, 267 P.2d 310; Adler v. Council, supra, 184 Cal.App.2d at p. 774, 7 Cal.Rptr. 85.)

Appellant urges that if to construe a statute as directory would render it ineffective and meaningless, the statute should not receive that interpretation. (Carter v. Seaboard Finance Co. (1949) 33 Cal.2d 564, 203 P.2d 758; Henderling v. Carleson (1974) 36 Cal.App.3d 561, 111 Cal.Rptr. 612; King v. Martin (1971) 21 Cal.App.3d 791, 98 Cal.Rptr. 711.) While this is a correct statement of the law, it is of no assistance to appellant here. It does not make section 3800 meaningless if a city or county does not become an insurer for workmen's compensation benefits. It is evident that the purpose of section 3800 is to assist the state in carrying out the purpose of the legislation creating the Uninsured Employers Fund, not to provide a substitute for such fund.

Appellant states: ‘Were Labor Code Section 3800 only directory, every public entity would remain free to conduct its business without the slightest regard to the statute, exactly as it had acted before the statute was enacted. Under such circumstances Labor Code Section 3800 would become totally ineffective, and would represent a totally ineffective legislative act.’ We do not conceive that such a course of conduct would be pursued by cities and counties of the State of California but, conversely, we contemplate that they would in good faith carry out the legislative direction, thus effectuating the purpose of the statute.

We can find no support for the proposition that the legislature, by enacting section 3800, intended to make cities and counties indemnitors to protect employees against the misfortune of working for uninsured employers. To do so would place an added burden on cities and counties, which are diligent in protecting their communities by requiring building permits. The Legislature in creating the Uninsured Employers Fund was attempting to provide, albeit ineffectively, the protection appellant here seeks. With the insolvency of the state fund and his employer, appellant is, understandably, attempting to find a solvent defendant.

We note that in California nearly all construction work requires permits from local agencies and they would therefore come within the purview of section 3800. We do not conceive an intent of the Legislature to foist upon cities and counties the burden of insuring the existence of workmen's compensation insurance within the construction industry.

Judgment is affirmed.


1.  Appellant also filed an application for adjudication of claim with the workmen's Compensation Appeals Board, seeking benefits through the Uninsured Employers Fund. The referees found that Cahoon was not willfully uninsured and made a temporary total disability award of $105 per week to continue indefinitely, plus reasonable medical expenses. The Attorney General concedes in his brief that the Fund is presently bankrupt and unable to make payments to plaintiff. In the event the Fund should become financed in the future, appellant will be able to file a claim against the Fund for the amount of the award he received. Should appellant prevail against respondent, the Fund would060006004 lien against any judgment against respondent for any amounts paid by the Fund to appellant.Cahoon commenced proceedings in bankruptcy in the United States District Court, Northern District of California, No. 1–73–777, pursuant to which he was adjudicated a bankrupt.

SCOTT, Associate Justice.

DRAPER, P. J., and HAROLD C. BROWN, J., concur.

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MORRIS v. Department of Industrial Relations, Claimant and Respondent. (1975)

Docket No: Civ. 34831.

Decided: August 19, 1975

Court: Court of Appeal, First District, Division 3, California.

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