California Court of Appeals Closes Apportionment Loophole

California Court of Appeals Closes Apportionment Loophole

The Court of Appeal has closed what could have ended up being an enormous loophole in Labor Code § 4663 with a decision reversing a W.C.A.B. opinion on apportionment and then ordering publication after the decision was initially ordered unpublished.  In State Compensation Insurance Fund v W.C.A.B. (Dorsett) the 6th appellate district reversed a W.C.A.B. trial decision, adopted and incorporated by the W.C.A.B. which had combined the effects of 2 injuries into a single PD rating in contravention to the decision in Benson v W.C.A.B.  In obtaining the initial combined award the applicant attorney argued and W.C.A.B. accepted an argument for combining the injuries that could have effectively gutted the application of Labor Code § 4663 and Benson in cases involving consecutive multiple injuries to the same part of the body.

In these cases the applicant, who worked as a glazier (glass installer) sustained a specific injury while employed by the first of two employers, both insured by State Fund.  The applicant underwent a multilevel cervical fusion and ultimately returned to work for employer two.  While continuing to work as a glazier, the applicant’s symptoms increased, he subsequently left work and a new injury was established.  The parties agreed to obtain the opinion of an AME, Dr. Joseph Izzo (coincidentally the same AME as reported in Benson).  Dr. Izzo concluded the employee was totally disabled and the combined effects of the two injuries equally contributed to the disability. 

Dr. Izzo also opined the second injury would never have occurred but for the initial trauma and he considered the second injury to be a compensable consequence of the initial injury.  Applicant attorney and the WCJ seized on the doctor’s compensable consequence opinion to advance the theory the two injuries met the criterion of being so interwoven that apportionment between the two claims was legally impermissible.  In his decision the WCJ opined:

“As to apportionment between the two injuries, Dr. Izzo indicates that the 11/15/02 through 6/8/04 cumulative injury is a compensable consequence of the 3/21/00 injury at South Valley Glass.  Though Dr. Izzo also indicates that he would apportion permanent disability equally between the two injuries, since he indicated that the cumulative injury is a compensable consequence of the first specific injury, in essence there is only one injury, with the specific and subsequent cumulative trauma injury being inextricably intertwined to the extent that there can be no apportionment under Benson.  The award of permanent disability is therefore made joint and several against both the 3/21/00 and 11/15/02 through 6/8/04 dates of injury.”

The WCJ further supported his opinion in his Report and Recommendation on Reconsideration recommending denial of defendants’ appeal (State Fund appealed on behalf of each employer):

Benson dealt with two successive injuries that were admittedly separate and distinct,” and “[t]he AME in Benson (also Dr. Izzo) did not indicate there that one was a compensable consequence of the other.”  “Though there is discussion in his deposition . . . of his opinion that each injury contributed equally to the disability . . . Dr. Izzo did indicate that it did not negate the concept of the two being ‘inextricably intertwined.’. . .  He also confirmed on further questioning . . . that he considered the CT a compensable consequence of the specific as ‘an injury that is a direct and natural occurrence of an earlier injury that would not have occurred absent the earlier injury.’ ”  “As the two injury claims are inseparable as one being a compensable consequence of the other it is appropriate to make the award jointly against both SCIF defendants.”

The Appellate Court however was not swayed by the WCJ’s or applicant attorney logic on this issue.  Taking a very straight approach the Court noted the AME specifically did make an apportionment determination and divided the claim. After a lengthy review of both old and new case law on Labor Code § 4663 and the Wilkinson/Benson line of cases the W.C.A.B. reversed the W.C.A.B.  While acknowledging Benson provided some limited circumstances for not dividing permanent disability the Court firmly rejected the argument of applicant attorney that the finding by the AME of the second injury being a compensable consequence of the initial injury met the exception outlined in Benson

The Court held:

The WCJ and the Board in the case before us found that there could be no apportionment pursuant to Benson because here, unlike in Benson, the evaluating physician found that the second industrial injury was a compensable consequence of the first industrial injury.  We disagree with the Board’s finding.  Section 5302 states that decisions and awards of the Board shall be presumed to be reasonable and lawful.  However, pursuant to SB 899, Brodie and Benson, successive injuries to the same body part that become permanent and stationary at the same time can no longer be rated as a single injury.  Rather, successive injuries must be rated separately, except when physicians cannot parcel out the causation of disability…. 

Here, the AME stated that Dorsett’s two injuries became permanent and stationary at the same time and that his “current level of permanent disability—whatever that level may be—is apportioned 50 percent to the specific injury and 50 percent to the cumulative trauma injury.”  “The doctor made a determination based on his medical expertise of the approximate percentage of permanent disability caused by [the employee’s two injuries].  Section 4663, subdivision (c), requires no more.”  (E.L. Yeager Construction v. Workers’ Comp. Appeals Bd. (2006) 145 Cal.App.4th 922, 930.)  Therefore, based on the testimony of the AME, the successive injuries can be rated separately and Dorsett’s joint and several award of 100 percent permanent disability must be annulled. 

The Court ordered the case remanded with instructions for apportionment to be applied.


From the defense perspective, publication of this case serves to put a plug in the proverbial dike, the breach of which could have washed away the benefit of Labor Code § 4663 in a large number of cases.  If the Court had not reversed this case and possibly even if it had not published the decision, the predictable result would have been a relatively routinely made argument that any injury from subsequent employment activities (or even subsequent non-employment related activity) was a “compensable consequence “of the original injury and an assertion apportionment was not legally supportable even where, as here, the medical record indicated a clear division between the two injuries. The Appellate Court was clearly cozignant of the history of apportionment and stated purpose behind the adoption of Labor Code § 4663 as expressed by both the Legislature and prior court decisions including the Supreme Court in Brodie v W.C.A.B.

Thanks should go to State Compensation Insurance Fund and C.W.C.I. for requesting publication of this important opinion and to the Court for recognizing its holding as adding to the existing body of law in this developing area.

© Copyright 2011 Richard M. Jacobsmeyer. All rights reserved. Reprinted with permission.

Shaw Jacobsmeyer Crain Claffey LLP

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