California: Appellate Court Broadly Interprets Labor Code Section 5803

In a brief and to the point decision, the 2nd Appellate District has reversed a W.C.A.B. decision that had rescinded an award of increased benefits based upon a Petition to Reopen. The case, Benavides v W.C.A.B., is one of the briefest opinions on a workers’ compensation issue that this commentator has ever seen, which probably reflects the relative ease with which the court issued its unanimous opinion.

The applicant in this matter had previously received an award of PD of 51%. Based upon a timely petition to reopen, the WCJ found good cause to increase the level of PD to 72% based on a new AME report. On Reconsideration, the W.C.A.B. in a 2-1 decision had reversed the increased award. The basis for rescission of the increased award according to the W.C.A.B. majority was because the EMG study relied upon by the AME had existed at the time of the initial award but was not reviewed or commented upon by the AME. After the Petition to Reopen was filed, the AME re-evaluated applicant and while he concluded there was little change in his condition, he did note that the positive EMG study indicated a higher level of impairment than had previously been described.

At trial the WCJ initially declined to award increased benefits and then, in response to a Petition for Reconsideration, reversed his findings and increased the level of PD. The W.C.A.B. disagreed, finding that applicant had not sustained “new and further disability” because the increased disability was based on information that was in existence at the time of the initial award and did not reflect a change in the employee’s condition. The W.C.A.B. majority also felt that applicant did not show why the relevant information could not have been discovered and produced at the hearing (or provided to the AME) prior to the initial award.

The dissenting commissioner focused on the fact that the AME exam had been completed prior to the EMG being ordered by applicant’s PTP. Acknowledging that the AME should have either ordered his own EMG or reviewed the one that had been performed, the dissent would have ruled the award was based upon a mistake which rendered the award inequitable.

The Appellate Court took essentially the same route as the dissenting commissioner, noting Labor Code § 5803 only requires “good cause” to allow the W.C.A.B. to rescind or revise an award.

“..Such cause may consist of newly discovered evidence previously unavailable, a change in the law, or “any factor or circumstance unknown at the time the original award or order was made which renders the previous findings and award ‘inequitable.’ ” (LeBoeuf v. Workers’ Comp. Appeals Bd. (1983) 34 Cal.3d 234, 241-242 (LeBoeuf).) More specifically, an award based upon a stipulation may be reopened or rescinded if the “stipulation has been ‘entered into through inadvertence, excusable neglect, fraud, mistake of fact or law, . . . or where special circumstances exist rendering it unjust to enforce the stipulation.’ ” (Huston v. Workers’ Comp. Appeals Bd. (1979) 95 Cal.App.3d 856, 865-866 (Huston).)

…

Whether the stipulation was the result of inadvertence, excusable neglect, or mistake of fact, the error justifies reopening the resulting award. (Huston, supra, 95 Cal.App.3d at pp. 865-866.) Indeed, when Benavides brought his petition to reopen, the evidence clearly established that the stipulated award was inequitable. (LeBoeuf, supra, 34 Cal.3d at p. 242.)”

The Appellate Court ordered the W.C.A.B. to rescind its decision and reinstate the 72% award of PD.

COMMENTS AND CONCLUSIONS:

This case demonstrates, in a brief and very succinct manner, the breadth of the W.C.A.B.’s power to reconsider an existing award (even if the W.C.A.B. did not necessarily recognize it had the power). The Appellate Court was not terribly concerned about the fact that the applicant could have (and perhaps even should have) presented the EMG study to the AME. The fact was the report was clearly deficient in describing the applicant’s level of PD and the applicant did not get the award he was entitled to receive. The Appellate Court understandably fell squarely on the side of protecting the injured worker in this one.

This is certainly different than a case where an injured worker made a conscious decision not to present information to an AME with the intent that the PD rating would result in a specific result. In this case, everyone overlooked that relevant information that should have been considered by the AME.

When I first saw this case had been accepted, I was fairly certain the result was going to be predictable. Labor Code § 5803 is drafted quite broadly and the requirement to show “good cause” has traditionally been very liberally interpreted. What is unusual about this case is not the result but that it required an appellate court to come to the final result.

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