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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