Pebworth v. Allan Hancock College, 080803 CAWC, GRO 0023699

Case DateAugust 08, 2003
CourtCalifornia
CLARENCE A. PEBWORTH, Applicant,
v.
ALLAN HANCOCK COLLEGE, Permissibly Self-Insured; and WORKERS’ COMPENSATION ADMINISTRATORS (Third Party Administrators), Defendant(s).
No. GRO 0023699
California Workers Compensation Decisions
Workers Compensation Appeals Board State Of California
August 8, 2003
          OPINION AND DECISION AFTER RECONSIDERATION (EN BANC)           MERLE C. RABINE, CHAIRMAN.          On July 2, 2003, the Appeals Board granted reconsideration of the Finding of Fact and Order issued by the workers' compensation administrative law judge ("WCJ") on May 6, 2003. In that decision, the WCJ held in substance that, although Labor Code section 4646 has been amended to permit a defendant and a represented employee to settle prospective vocational rehabilitation services under certain circumstances, this amendment applies only to injuries sustained on or after the January 1, 2003 effective date of the amendments.1 Therefore, the WCJ affirmed a Determination of the Rehabilitation Unit, which had disapproved of the parties' proposed settlement of prospective vocational rehabilitation services on the basis that the applicant's date of injury occurred before January 1, 2003.          In their respective petitions for reconsideration, applicant, Clarence A. Pebworth ("applicant"), and defendant, Allan Hancock College ("defendant"), both contend: (1) the plain meaning of section 4646, as amended, authorizes the settlement of prospective vocational rehabilitation services, irrespective of the employee's date of injury, if the section's criteria have been met; (2) the amendments to section 4646 are remedial (i.e., the amendments do not affect existing contractual or vested rights, but simply provide a means for an injured worker to settle his or her prospective claim for vocational rehabilitation) and, therefore, the amendments are subject to retrospective application; and (3) a letter from the Assemblyman who authored the amendments to section 4646 establishes it was the Legislature's intent that the amendments be considered procedural, not substantive, and that they be applied to all dates of injury.          Because of the important legal issue presented, and in order to secure uniformity of decision in the future, the Chairman of the Appeals Board, upon a majority vote of its members, has 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 conclude that the amendments to section 4646, which permit a defendant and a represented employee to settle prospective vocational rehabilitation services under specified circumstances, cannot be applied to injuries sustained before the January 1, 2003 effective date of the amendments because the amendments are substantive, not procedural, and because there is no clear indication that the Legislature as a whole intended that the amendments operate retrospectively.          I. BACKGROUND          Applicant claimed to have sustained industrial injuries to both knees while employed by defendant on November 6, 1997 and from 1985 to August 20, 2002.3          Formerly, Labor Code section 4646 had provided:
"Settlement or commutation of prospective vocational rehabilitation services shall not be permitted under Chapter 2 (commencing with Section 5000) or Chapter 3 (commencing with Section 5100) of Part 3 except upon a finding by a workers' compensation judge that there are good faith issues that, if resolved against the employee, would defeat the employee's right to all compensation under this division."4
         Effective January 1, 2003, however, section 4646 was amended to provide:
"(a) Settlement or commutation of prospective vocational rehabilitation services shall not be permitted under Chapter 2 (commencing with Section 5000) or Chapter 3 (commencing with Section 5100) of Part 3 except as set forth in subdivision (b), or upon a finding by a workers' compensation judge that there are good faith issues that, if resolved against the employee, would defeat the employee's right to all compensation under this division.
"(b) The employer and a represented employee may agree to settle the employee's right to prospective vocational rehabilitation services with a one-time payment to the employee not to exceed ten thousand dollars ($10,000) for the employee's use in self-directed vocational rehabilitation. The settlement agreement shall be submitted to, and approved by, the administrative director's vocational rehabilitation unit upon a finding that the employee has knowingly and voluntarily agreed to relinquish his or her rehabilitation rights. The rehabilitation unit may only disapprove the settlement agreement upon a finding that receipt of rehabilitation services is necessary to return the employee to suitable gainful employment.
"(c) Prior to entering into any settlement agreement pursuant to this section, the attorney for a represented employee shall fully disclose and explain to the employee the nature and quality of the rights and privileges being waived."5
         On or about November 19, 2002, the parties submitted (and the WCJ approved) a compromise and release agreement ("C&R"), settling most issues relating to applicant's November 6, 1997 specific injury and 1985 to August 20, 2002 cumulative injury claims. Among other things, the approved C&R provided that applicant "does not wish to pursue vocational rehabilitation services and benefits at this time," that applicant waives any and all claims for retroactive vocational rehabilitation benefits or services to date, and that applicant was settling "all injuries…that might occur in the future during participation in vocational rehabilitation." The C&R did not seek to resolve prospective vocational rehabilitation benefits or services, presumably because, at the time the C&R was executed and approved, such prospective benefits or services unquestionably could not be settled absent a good faith issue that could have defeated applicant's right to all workers' compensation benefits. (Former Lab. Code, §4646; see also, Lab. Code, §5100.6; Thomas v. Sports Chalet, Inc. (1977) 47 Cal.Comp.Cases 625 (Appeals Board en banc).)          However, on January 29, 2003 (i.e., after the effective date of the amendments to section 4646), the parties submitted to the Rehabilitation Unit a "Settlement of Prospective Vocational Rehabilitation Services [Lab. Code, §4646(b)]" (DWC Form RU-122). This proposed settlement, which was signed by applicant and his attorney,6 stated: "The parties hereby agree to settle the employee's right to prospective Vocational Rehabilitation services with a one-time payment to the employee for the sum of $10,000… ."          Thereafter, the Rehabilitation Unit issued a Determination that disapproved of the parties' proposed settlement of prospective vocational rehabilitation services because "the injured employee's date of injury predates 1-1-03."          Defendant filed a timely appeal with the Workers' Compensation Appeals Board ("WCAB"), together with a declaration of a readiness, challenging the Rehabilitation Unit's Determination.          At the trial on the rehabilitation appeal, applicant submitted into evidence a September 1, 2002 letter to Richard Gannon, the Administrative Director of the Division of Workers' Compensation, from Assemblyman Thomas M. Calderon, the Chair of the Assembly's Insurance Committee. We take judicial notice that it was Assemblyman Calderon who introduced Assembly Bill No. 749 ("AB 749"), which made the amendments to section 4646 at issue here and which was signed by the Governor on February 15, 2002. In this letter, Assemblyman Calderon stated, in relevant part:
"I have recently reviewed various proposed regulations to implement AB 749 (Calderon), including regulations relating to settlement of prospective vocational rehabilitation.
"It appears as though the Department of Industrial Relations (DIR) has taken the position that the legislative intent of AB 749 is to limit such settlements to injuries occurring on or after Jan[uary] 1, 2003, and are proposing regulations to bar settlement of vocational rehabilitation for injuries prior to that date.7
"Such an interpretation flies in the face of our intent. If the legislature wishes to specify the effective date of a
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