MYRON ABNEY, Applicant,
v.
AERA ENERGY; and LIBERTY MUTUAL INSURANCE COMPANY, Defendant(s).
No. GRO 024430
California Workers Compensation Decisions
Workers’ Compensation Appeals Board State Of California
December 8, 2004
OPINION AND DECISION AFTER RECONSIDERATION (EN
BANC)
MERLE
C. RABINE, CHAIRMAN.
The
Appeals Board granted reconsideration in this matter to allow
time to study the record and applicable law. Because of the
important legal issue presented as to the meaning and
application of Senate Bill (SB) 899 (Stats. 2004, ch. 34)
enacted April 19, 2004, to the penalty issues in this case
under Labor Code section 5814,
1 and in order to secure
uniformity of decision in the future, 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
For the
reasons discussed below, we hold that section 5814, as
enacted by SB 899 and operative June 1, 2004, applies to
unreasonable delays or refusals to pay compensation that
occur prior to the operative date where the finding of
unreasonable delay is made on or after June 1, 2004. We also
conclude that section 5814(c), involving the conclusive
presumption of the resolution of accrued penalty claims,
applies as of the June 1, 2004 operative date of section
5814, and that the statute of limitations set forth in
section 5814(g) applies to actions to recover penalties
brought on or after the June 1, 2004 operative date.
BACKGROUND
The
relevant facts of this case do not appear to be in dispute.
In a Findings and Award issued on April 14, 2003, it was
determined that applicant, while employed as a reliability
specialist from 1996 to September 21, 2000, sustained
industrial injury to his hands and wrists, causing temporary
disability from January 16, 2001, to date and continuing, and
the need for further medical treatment. The parties
stipulated that applicant's compensation rate for
temporary disability indemnity was maximum.
On
March 26, 2004, applicant filed a petition for penalty under
section 5814, alleging that defendant unreasonably delayed
increasing his temporary disability benefit rate as required
by section 4661.5 and Hofmeister v. Workers' Comp.
Appeals Bd. (1984) 156 Cal.App.3d 848 [49 Cal.Comp.Cases
438], which provide that payment of temporary disability
indemnity two or more years after the date of injury is to be
made at the rate in effect on the date of payment. Following
a July 26, 2004 hearing on the issue, the WCJ issued a
Findings and Award on August 5, 2004. The WCJ determined that
defendant unreasonably delayed adjustment of the
applicant's temporary disability indemnity rate from
$490.00 to $602.00 per week beginning April 15, 2003, and
$602.00 to $728.00 per week beginning January 1, 2004. In
accordance with new section 5814, which became operative on
June 1, 2004, the WCJ found the defendant liable for a
penalty in the amount of $658.00 (25% of the delayed
payment), less credit to defendant for $263.20 in section
4650(d) penalty payments, for a net payment of $394.80.
Applicant
timely petitioned for reconsideration from the WCJ's
decision, contending that it was error to apply the newly
enacted section 5814 to this case because the legislation
revising that section, SB 899, does not contain a
retroactivity clause, and there is no evidence that the
Legislature intended the new penalty provision to apply to
delays that had occurred prior to June 1, 2004. Therefore,
applicant argues that he is entitled to a 10 percent increase
on all past, present and future temporary disability
indemnity under section 5814 as it existed prior to the
enactment of SB 899.
DISCUSSION
A.
SECTION 5814, AS ENACTED BY SB 899 AND OPERATIVE JUNE 1,
2004, APPLIES TO UNREASONABLE DELAYS OR REFUSALS TO PAY
COMPENSATION THAT OCCUR PRIOR TO THE OPERATIVE DATE WHERE THE
FINDING OF UNREASONABLE DELAY IS MADE ON OR AFTER JUNE 1,
2004.
At the
time of the unreasonable delays in this case, section 5814
provided as follows:
"When payment of compensation has been unreasonably
delayed or refused, either prior to or subsequent to the
issuance of an award, the full amount of the order, decision,
or award shall be increased by 10 percent. Multiple increases
shall not be awarded for repeated delays in making a series
of payments due for the same type or specie of benefit unless
there has been a legally significant event between the delay
and the subsequent delay in payments of the same type or
specie of benefits. The question of delay and the
reasonableness of the cause therefor shall be determined by
the appeals board in accordance with the facts. This delay or
refusal shall constitute good cause under Section 5803 to
rescind, alter, or amend the order, decision, or award for
the purpose of making the increase provided for herein."
Section
5814, as enacted by SB 899, now provides:
"(a) When payment of compensation has been unreasonably
delayed or refused, either prior to or subsequent to the
issuance of an award, the amount of the payment unreasonably
delayed or refused shall be increased up to 25 percent or up
to ten thousand dollars ($10,000), whichever is less. In any
proceeding under this section, the appeals board shall use
its discretion to accomplish a fair balance and substantial
justice between the parties.
"(b) If a potential violation of this section is
discovered by the employer prior to an employee claiming a
penalty under this section, the employer, within 90 days of
the date of discovery, may pay a self-imposed penalty in the
amount of 10 percent of the amount unreasonably delayed or
refused, along with the amount of the payment delayed or
refused. This self-imposed penalty shall be in lieu of the
penalty in subdivision (a).
"(c) Upon the approval of a compromise and release,
findings and awards, or stipulations and orders by the
appeals board, it shall be conclusively presumed that any
accrued claims of penalty have been resolved, regardless of
whether a petition for penalty has been filed, unless the
claim for penalty is expressly excluded by the terms of the
order or award. Upon the submission of any issue for
determination at a regular trial hearing, it shall be
conclusively presumed that any accrued claim for penalty in
connection with the benefit at
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