Phillips v. Sacramento Municipal Utilities District, 040898 CAWC, RDG 57899

• Case Date: April 08, 1998
• Court: California

VINCE PHILLIPS (Deceased); TINA PHILLIPS, individually, and as Guardian ad Litem and Trustee for COLE PHILLIPS and JAKOB PHILLIPS, Applicants, v. SACRAMENTO MUNICIPAL UTILITIES DISTRICT, Permissibly self-insured, Defendant. No. RDG 57899 California Workers Compensation Decisions Workers Compensation Appeals Board State of California April 8, 1998           OPINION AND DECISION AFTER RECONSIDERATION (EN BANC)           Douglas M. Moore, Jr., Chairman.          The issue presented in this case involves the rate at which death benefits are payable to a decedent's dependents. Because of the significant legal issue presented, and in order to secure uniformity of decision, the Chairman of the Appeals Board, pursuant to a majority vote of the Board, reassigned this case to the Appeals Board as a whole for an en banc decision. We granted reconsideration in order to allow sufficient opportunity to study the factual and legal issues presented. We sought amicus curiae briefs in order to ensure that all points of view were considered. For the reasons expressed below, we conclude that the decision of the workers' compensation referee (WCR) applying Labor Code section 4661.5 to the death benefit indemnity rate should be affirmed.          The decedent, Vince Phillips, was employed as a tree trimmer by the Sacramento Municipal Utilities District. On June 30, 1993, he died as a result of being electrocuted in the course of his employment. On November 30, 1993, based on the stipulations of the parties, a WCR awarded applicants, the decedent's dependents, death benefits of $277,824.96 payable at the rate of $336 per week. On January 23, 1997, another WCR issued a corrected award which awarded applicants death benefits of $115,000 payable at various rates up to $441.40 per week, consistent with Labor Code section 4661.5, and thereafter benefits pursuant to Labor Code section 4703.5 payable at the rate of $441.40 per week until decedent's younger child reached the age of 18. Defendant filed a timely petition for reconsideration contending that Labor Code section 4661.5 is inapplicable to death benefits and to benefits under section 4703.5. Defendant contends that benefits should have been awarded at the rate of $336, rather than $441.40, per week.          The issue is before us because of legislative changes in 1990, which created a new type of workers' compensation death benefits. Originally, there was only one type of death benefit — a fixed amount which was determined by the date of the injury, the number of decedent's dependents, and the extent of their dependency. In this case, the fixed amount under Labor Code section 4702(a)(1) is $115,000, payable in installments. In addition to this amount, for injuries occurring in 1990 and thereafter, Labor Code section 4703.5 provides for the continuation of death benefit payments, after the fixed death benefit amount has been paid, until the youngest dependent child reaches the age of 18. This is generally referred to as the special minors' death benefit. The issue in this case is the weekly rate at which the fixed death benefit and the special minors' death benefit are to be paid.          THE PLAIN LANGUAGE OF LABOR CODE SECTIONS 4702(b), 4703.5 AND 4661.5 REQUIRES THAT RATES OF DEATH BENEFITS BE INCREASED          The statutes which establish the weekly rates for the fixed death benefit and the special minors' death benefit are similar, but not identical. For the fixed death benefit, Labor Code section 4702(b) provides that

"The death benefit in all cases shall be paid in installments in the same manner and amounts as temporary total disability indemnity would have to be made to the employee, unless the appeals board otherwise orders. However, no payment shall be made at a weekly rate of less than two hundred twenty-four dollars ($224)."

         With regard to the special minors' death benefit, Labor Code section 4703.5 provides, in part, that

". . . payment of death benefits shall continue until the youngest child attains age 18 in the same manner and amount as temporary total disability indemnity would have been paid to the employee, except that no payment shall be made at a weekly rate of less than two hundred twenty-four dollars ($224)."

         Thus, the rate of payment of both the fixed death benefit and the special minors' death benefit is determined by the temporary disability indemnity rate.          Pursuant to Labor Code section 4653, the temporary disability indemnity rate is two-thirds of a worker's "average weekly earnings." But Labor Code section 4453 limits "average weekly earnings" to a maximum amount which depends on the date of injury.          In this case, the parties stipulated that the decedent's earnings were $662.80 per week. Two-thirds of that amount is $441.87. In 1993, the maximum temporary disability rate was $336 per week so the proper rate to pay death benefits initially in this case was $336 per week. However, Labor Code section 4661.5 provides that

"Notwithstanding any other provision of this division, when any temporary total disability indemnity payment is made two years or more from the date of injury, the amount of this payment shall be computed in accordance with the temporary disability indemnity average weekly earnings amount specified in Section 4453 in effect on the date each temporary total disability payment is made unless computing the payment on this basis produces a lower payment because of a reduction in the minimum average weekly earnings applicable under Section 4453."

         Beginning July 1, 1995, the maximum temporary disability rate was increased to $448 per week. Relying on Labor Code section 4461.5, the WCR awarded death benefits at rates of up to $441.40 per week.          The plain language of sections 4702(b) and 4703.5 requires that death benefits be paid in the same manner and amount as temporary disability benefits would have been paid to the employee. Therefore, when the temporary disability rate is increased pursuant to section 4661.5, the death benefit rate must similarly be increased. The words of sections 4702(b) and 4703.5 leave no room for any other interpretation. "It is an established principle of statutory interpretation that where the words of a statute are clear and unambiguous, its plain language should be followed." Midas Recovery Services, Inc. v. Workers' Comp. Appeals Bd. (1997) 55 Cal.App.4th 1321, 62 Cal.Comp.Cases 763.          THE APPLICATION OF LABOR CODE SECTION 4661.5 TO DEATH BENEFITS IS JUSTIFIED BY CASE LAW AND THE LABOR CODE          In its petition for reconsideration defendant argues that section 4661.5 refers only to payment of temporary total disability indemnity and that the Appeals Board has previously refused to apply that section to other species of benefits, citing Duncan v. The Singer Company (1978) 43 Cal.Comp.Cases 467. In that case, the Appeals Board, en banc, held that benefits for total permanent disability, although subject to the same maximum rate as temporary disability benefits, is a separate species of benefits to which Labor Code section 4661.5 does not apply. In reaching this conclusion, the Appeals Board noted that Labor Code section 4659(b) provided that the indemnity rate for permanent total disability was to be determined under Labor Code section 4453. Labor Code section 4453 provided that temporary disability indemnity and permanent total disability indemnity were to be calculated based upon the same earnings formula. Thus, although they are different species of compensation, they...