CANTY v. WORKERS COMPENSATION APPEALS BOARD (1996)

Petitioner Bertha Canty (applicant) seeks review of a decision from respondent Workers Compensation Appeals Board (Board) rescinding her award of medical temporary disability indemnity on the basis of a “newly discovered” medical report presented by respondent State Compensation Insurance Fund (State Fund) at the time of reconsideration.   We issue the writ and annul the Board's decision.   The Board erred in granting State Fund's petition for reconsideration where State Fund failed to provide any reasons why the newly discovered evidence reasonably could not have been discovered or produced prior to submission of the case.

BACKGROUND

Applicant was employed as a field representative by respondent State of California/Department of Motor Vehicles (DMV) from July 1988 to January 1994.   The parties stipulated that applicant sustained cumulative bilateral industrial injury to her wrists and upper extremities.

Applicant first experienced physical symptoms of numbness and tingling in her hands and wrists in the fall of 1990 which continued on an intermittent basis until 1992 when they became constant.   State Fund, the agency responsible for adjusting compensation claims on behalf of DMV, provided compensation benefits, including medical treatment, temporary disability until approximately January 13, 1994, and vocational rehabilitation maintenance allowance payments commencing on approximately March 24, 1994.

Giles Floyd, M.D., evaluated applicant and reported to State Fund on February 9, 1994.   Dr. Floyd diagnosed applicant with (1) a mild chronic nonindustrial cervical strain;  and (2) mild bilateral overuse syndromes of the upper extremities manifested as mild tendinitis due to repetitive cumulative trauma associated with applicant's work activities at DMV. Dr. Floyd stated that applicant was not temporarily totally disabled and that her condition was permanent and stationary.   It was his opinion that applicant did not need further medical treatment on an industrial basis.

Applicant requested further medical opinion and saw hand specialist Mathias Masem, M.D. Dr. Masem reported to State Fund on August 20, 1994, and diagnosed bilateral carpal tunnel syndrome, wrist tendinitis, and lateral epicondylitis.   Dr. Masem did not agree that applicant's condition was permanent and stationary, stating “she is not in a position to be doing repetitive manual activity on account of her symptoms, and probably could not do keyboard work, or work requiring repetitive grasping and lifting.”   Dr. Masem was of the opinion that applicant needed further medical treatment.

On December 24, 1994, applicant filed a declaration of readiness to proceed to a pretrial conference.   Workers' Compensation Judge (WCJ) Philip Miyamoto set the case for conference on February 2, 1995.   The issues were framed as follows:  (1) further medical treatment for applicant's neck,¹ arms and hands;  and (2) “[m]edical temporary disability from on or about May 1994 to date and continuing.”  (Italics added.)   The matter was continued for a one-hour hearing on March 9, 1995.   Rather than proceed to hearing and submit the issues for decision on the basis of the medical opinions of Drs. Floyd and Masem, the parties selected Leonard Gordon, M.D., orthopedic hand specialist, to evaluate applicant as an agreed medical examiner (AME).

Dr. Gordon examined applicant in the capacity of an AME on March 22, 1995, and issued his report on that same date.   Dr. Gordon diagnosed unspecified upper extremity problems related to industrial cumulative trauma and indicated that applicant would need future medical care on a supportive basis, including splinting, anti-inflammatory medication, and perhaps cortisone injections.   The report noted applicant could not return to the type of work she was performing at DMV which required typing and repetitive tasks on a frequent and full-time basis.   Dr. Gordon did not specifically mention the temporary disability dispute or refer to the disagreement between Drs. Floyd and Masem.²  His sole comment relevant to the issue of temporary disability was as follows:  “At this time, it is my opinion that the patient's condition is permanent and stationary and rateable [sic].”  (Italics added.)

Following receipt of Dr. Gordon's report, the matter was returned to the Board on May 24, 1995, for a one-hour hearing before WCJ Miyamoto concerning primarily applicant's claim for temporary disability.   In the minutes of hearing, the judge recited as follows:  “Medical temporary disability is being claimed from on or about January 14, 1994 to the date of Dr. Gordon's examination on March 22, 1995.[¶]  The ISSUE of permanent disability and apportionment is DEFERRED for now.”   Applicant testified, in particular, that her condition had worsened in the year since her consultation with Dr. Floyd.   At the close of the hearing, the matter was submitted for decision without objection from either party.   Counsel for State Fund did not request additional time to obtain a supplemental report from Dr. Gordon.

After submission of the case on May 24, 1995, but prior to issuance of Judge Miyamoto's decision, State Fund claims representative, Betty Hawley, wrote to Dr. Gordon copying both counsel for State Fund and applicant.   The letter dated June 13, 1995, stated in relevant part:  “Thank you for your [AME] report dated March 22, 1995.[¶]  There is one remaining issue you can assist the parties in resolving.   It is the question of when [applicant's] condition first became permanent and stationary.  [Applicant] left her employment with the [DMV] in mid-January of 1994 and was offered vocational rehabilitation services shortly thereafter.   The offer was based on Dr. Glass' [sic ] opinion, her treating physician at Kaiser Permanente.   Dr. Glass found [applicant's] condition permanent and stationary at her January 21, 1994 visit.   Please see the February 25, 1995 report of Dr. Glass.  [¶] The medical-legal reports of Dr. Floyd (for [State Fund] ) and Dr. Masem (for applicant), do not agree on a permanent and stationary date.   Dr. Floyd found [applicant's] condition permanent and stationary on January 25, 1994.   Dr. Masem did not find her condition permanent and stationary because of an expressed interest in surgery on August 20, 1994.[¶]  I have enclosed copies of the reports of Dr. Glass, Dr. Floyd, and Dr. Masem for your review.  [¶] Continuing in the capacity of the [AME], kindly submit a supplemental report with your opinion as to when [applicant's] condition became permanent and stationary.”

Dr. Gordon's supplemental report dated June 16, 1995,³ was received by State Fund on July 6, 1995, and was filed with the Board on July 24, 1995.   In the interim, having not seen Dr. Gordon's supplemental report, the judge had issued his findings, award and decision on July 12, 1995.   As pertinent, WCJ Miyamoto stated:  “Based primarily on the expert medical opinion of the [AME], Dr. L. Gordon, it will be found the applicant did sustain a cumulative industrial injury to her right and left wrists and upper extremities.   Consistent with Dr. Gordon's assessment, the applicant's medical temporary disability ended on March 22, 1995 when she was examined and found permanent and stationary by Dr. Gordon.   An award for further medical treatment will also issue consistent with Dr. Gordon's opinion.” ⁴  (Italics added.)

On August 4, 1995, State Fund petitioned the Board for reconsideration, contending the WCJ's temporary disability award “should be rescinded or appropriately amended based on newly discovered evidence” which the WCJ had not considered.⁵

On August 16, 1995, the WCJ filed his report on reconsideration, recommending that the Board grant State Fund's petition.⁶

On September 29, 1995, the Board granted State Fund's petition for reconsideration and issued its decision.   The Board concluded in substantive part, as follows:  “In his report, the WCJ recommends that we grant [State Fund's] Petition for Reconsideration.   After a review of the record, we concur.  [¶] Labor Code section 5903(d) provides that reconsideration may be granted if the petitioner has discovered new material evidence that could not, with reasonable diligence, have been discovered and produced at hearing.   Consistent with the WCJ's recommendation that the record be developed on the issue of temporary disability, we will grant [DMV's] Petition for Reconsideration, rescind the Findings and Award, and return the matter to the trial level for further proceedings on the issue of temporary disability, for all further proceedings, and for issuance of a new decision thereafter.”

This timely petition followed.   State Fund filed an answer.   We granted review.

DISCUSSION

-I-

Labor Code 7 section 5903, which sets forth the exclusive grounds for petitioning the Board for reconsideration by any person aggrieved by the decision of a WCJ, provides under subdivision (d) that a petition may be filed on the basis that “the petitioner has discovered new evidence material to him or her, which he or she could not, with reasonable diligence, have discovered and produced at the hearing.” ⁸  This provision seeks to achieve the orderly and efficient conduct of compensation cases and requires that all parties present their evidence in a timely fashion at the compensation hearing.  (Redner v. Workmen's Comp. Appeals Bd. (1971) 5 Cal.3d 83, 90.)   “Where reconsideration is sought on the ground of newly discovered evidence which could not with reasonable diligence have been produced before submission of the case ․, the petition must contain an offer of proof, specific and detailed, providing:  [¶] (e) as to newly discovered evidence, a full and accurate statement of the reasons why such testimony or exhibits could not reasonably have been discovered or produced before submission of the case.”   (Cal.Code Regs., tit. 8, § 10856 [hereafter Board Rules];  Redner, supra, 5 Cal.3d at p. 90;  see generally, 2 Hanna, Cal.Law of Employee Injuries and Workers' Compensation (2d rev. ed.1995) § 28.22[2], pp. 28-21-28-22.)

We note initially that neither the WCJ nor the Board panel appear to be aware of the fact that State Fund sought the “newly discovered” evidentiary report from Dr. Gordon after the matter had been submitted for decision at the hearing on May 24, 1995.   Hawley's letter dated June 13, 1995, which specifically solicits Dr. Gordon's supplemental opinion about the disagreement between Drs. Masem and Floyd regarding applicant's claim for temporary disability, was not mentioned in State Fund's petition for reconsideration nor is it part of the certified Board record of proceedings before this court.   Moreover, State Fund offers no explanation for Hawley's letter in its answer herein, even though applicant refers to the letter and includes it with her exhibits to the petition seeking review.   Turning to the record, the only explanation State Fund provides for Dr. Gordon's supplemental report is that the “report could not have been discovered or produced at the time of the May 24, 1995 hearing because it was not then in existance [sic ].”

State Fund argues that the mere appearance of Dr. Gordon's supplemental report dated June 6, 1995, expressing a medical opinion contrary to the WCJ's award to applicant of temporary disability benefits through March 22, 1995, singularly constitutes “reasonable diligence” as required by section 5903, subdivision (d) and Board Rules section 10853(e).   We disagree.   There is no explanation why Dr. Gordon's opinion regarding applicant's permanent and stationary date was not discovered and produced prior to the hearing or submission of the matter.   The parties initially proceeded to hearing on March 9, 1995, primarily because of the disputed temporary disability claim.   On that date, both parties agreed to have Dr. Gordon examine applicant as an AME for the obvious purpose of soliciting his expert medical opinion on the temporary disability/permanent and stationary controversy, as well as the other pertinent medical-legal issues.   Dr. Gordon prepared his AME report on March 22, 1995.   Approximately one to two months elapsed between State Fund's receipt of the AME report and the hearing before Judge Miyamoto on May 24, 1995.⁹  When the matter was tried and submitted, applicant relied on Dr. Gordon's opinion to claim medical temporary disability up to the date of the examination when he declared her permanent and stationary.   The judge had every reason to infer that applicant's condition became permanent and stationary on March 22, 1995, the date declared by Dr. Gordon.   In conclusion, this record is bereft of any reason why State Fund could not have obtained clarification or supplemental narration from Dr. Gordon prior to hearing or submission.

Despite our opinion that the grant of reconsideration on this record does not meet the requirements of section 5903 (see Michon v. Workmen's Comp.App. Bd. (1971) 15 Cal.App.3d 917, 924-925), we recognize that even within the limitations of section 5903, the Board retains considerable discretion.   Indeed, the breadth of powers is further illustrated by section 5903, subdivision (c), which permits the Board to grant reconsideration if the evidence does not “justify” the findings of fact.   Moreover, where the medical evidence is in conflict, section 5906 allows the Board to “grant reconsideration and direct the taking of additional evidence.”  (See, e.g., Zozaya v. Workmen's Comp. Appeals Bd. (1972) 27 Cal.App.3d 464, 468-469;  Solomon v. Workmen's Comp. Appeals Bd. (1972) 24 Cal.App.3d 282, 285-286.)   However, “[t]he word ‘justify’ indicates that the board enjoys broad authority to correct injustices, but at the same time by definition inhibits an arbitrary grant of reconsideration.”  (Redner, supra, 5 Cal.3d at p. 92.)   Under the instant circumstances, the Board abused its discretion in granting the petition for reconsideration.¹⁰  In summary, to allow State Fund through lack of diligence to benefit from its disregard of the mandatory legislative requirements of section 5903 and the Board's own administrative rule would render both pointless, as well as sanction repeated retrial of workers' compensation hearings.   This, as State Fund comments in its answer, would serve only to defeat the constitutional mandate that workers' compensation laws be administered to accomplish justice in all cases “expeditiously, inexpensively, and without encumbrance of any character.”  (Cal. Const., art.   XIV, § 4.)

-II-

We turn now to State Fund's contention that applicant's petition for writ of review is not sought from a final order, decision or award of the Board as required by section 5901.¹¹  Because the Board on reconsideration remanded the proceedings to the original judge, State Fund claims there is no final order determining any substantive right or liability of either party.   To the contrary, the Board granted State Fund's petition for reconsideration and entered a decision rescinding the award of temporary disability to applicant.   Although the Board remanded the proceedings for further development of the record, a decision clearly affecting a substantive right of the parties already had been entered.  (Safeway Stores, Inc. v. Workers' Comp. Appeals Bd. (1980) 104 Cal.App.3d 528, 534-535.)   Applicant's petition for writ of review is sought from a final Board order and is properly before this court.

CONCLUSION

The Board's order and decision dated September 29, 1995, is annulled and the matter remanded with directions to reinstate the award initially made in accordance with the views expressed herein.

McGUINESS, J.*

CORRIGAN, Acting P.J., and PARRILLI, J., concur.