Leinon v. Fishermen’s Grotto, 082504 CAWC, WCK 45264

Case DateAugust 25, 2004
CourtCalifornia
JAMES L. LEINON, Applicant,
v.
FISHERMEN’S GROTTO; MID-CENTURY INSURANCE COMPANY, Defendant(s).
No. WCK 45264
California Workers Compensation Decisions
Workers Compensation Appeals Board State Of California
August 25, 2004
          OPINION AND DECISION AFTER RECONSIDERATION (EN BANC)           MERLE C RABINE, CHAIRMAN.          On April 3, 2003, the Appeals Board granted reconsideration of the Supplemental Findings and Award issued by the workers' compensation administrative law judge ("WCJ") on January 13, 2003. In that decision, the WCJ found defendant Mid-Century Insurance Company liable for a penalty under Labor Code section 4650(d)[1] on all temporary disability indemnity ("TDI"), where it paid the TDI within fourteen (14) days after finality of a prior Findings and Award that had determined the disputed issues of injury and temporary disability.          In its petition for reconsideration, defendant contended that it avoided a section 4650(d) penalty by sending applicant a delay letter, that there is no obligation to pay benefits until adjudication of industrial injury, that there is no penalty in this case because TDI was timely paid, that the imposition of a section 4650(d) penalty is a denial of due process and equal protection, that section 4650 does not apply in a post-award situation, and that the WCJ's decision is not supported by the legislative record and scheme relating to penalties.          Applicant filed an answer.          In order to secure uniformity of decision in the future, and because of important legal issues raised by the Court of Appeal in Rivera v. Workers' Comp. Appeals Bd. (2003) 112 Cal.App.4th 1124 [68 Cal.Comp.Cases 1460], the Chairman of the Appeals Board, upon a majority vote of its members, assigned this case to the Appeals Board as a whole for an en banc decision. (Lab. Code, §115.)2 Based on our review of the relevant statutory and case law, we hold that where injury, disability or indemnity rate is disputed, no section 4650(d) penalty arises if the disputed disability indemnity payments are made within 14 days of a final order, decision or award imposing liability for those benefits or within 14 days of a defendant's acceptance of liability for the injury and disability benefits. We also hold that an order, decision or award becomes final for purposes of section 4650(d) when a defendant has exhausted all of its appellate rights or has not pursued them.          BACKGROUND          Applicant claimed a cumulative trauma (CT) injury to his spine, left hip, and right knee for the period ending November 1, 1998. Defendant disputed injury from the outset by sending applicant a timely delay letter; later it timely denied the claim.3 In a Findings and Award issued May 30, 2001, the WCJ found that applicant sustained the CT injury as alleged, and that the injury caused temporary total disability from November 2, 1998 to March 6, 2001 and continuing. The Appeals Board denied defendant's petition for reconsideration, followed by the Court of Appeal's denial of defendant's petition for writ of review, followed by the Supreme Court's denial of review on January 3, 2002. Thereafter, applicant claimed that defendant failed to pay a section 4650(d) penalty when it paid the TDI required by the May 30, 2001 Findings and Award. The WCJ heard the penalty claim based on the parties' stipulation that on January 9, 2002 (i.e., within 14 days of the Supreme Court's denial of review), defendant paid the correct amount of TDI but did not include any section 4650(d) penalty. In the decision reconsidered here, the WCJ found defendant liable for a section 4650(d) penalty on the TDI due under the May 30, 2001 Findings and Award.          DISCUSSION          Section 4650 provides in relevant part:
"(a) If an injury causes temporary disability, the first payment of temporary disability indemnity shall be made not later than 14 days after knowledge of the injury and disability, on which date all
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