I. AOE/COE PEOVICH v. COUNTY OF CONTRA COSTA (May 6, 200), Decision After Reconsideration, 30 CWCR 128 Inference that an unexplained death arose out of employment and evidence of usual activities is sufficient to show work contribution. Deceased employee employed as a custodian had chest pains while at work. The employee was diagnosed with an aorta tear and died two days later. There were no witnesses to the employee’s activities before the problem started (he started at 6:00 a.m. and the problems developed at approximately 8:30 a.m.). Defendant denied liability. At trial on the death benefits witnesses testified they couldn’t say what applicant had actually done on the morning of his problems, but did discuss his usual duties, custodial duties, cleaning, lifting, etc. The applicant’s QME felt that the duties the employee usually performed were strenuous enough to raise blood pressure and accelerate an aortic rupture. Defendant’s QME felt that the aorta problems were spontaneous. The WCJ found the injury/death non-industrial. Applicant filed for reconsideration. Decision: Reconsideration granted. The WCJ’s belief that the employee’s duties were “relatively light” overlooked lifting at times up to 32 lbs., etc., which would be “heavy lifting”. The Panel felt that the applicant’s QME’s opinion that the employee’s duties were sufficiently strenuous enough to cause the dissection was substantial evidence. Here the evidence of what the employee’s customary duties were was sufficient to show that the work was strenuous enough to cause the problem. There is still an “inference” that an unexplained death in the course of employment arose out of it, but, there must still be a preponderance of evidence per Labor Code §3202.5 to support an industrial finding. Case Law Update June 12, 2002 Page 2 ATASCADERO UNIFIED SCHOOL DISTRICT v. WCAB (May 28, 2002), Court of Appeal Decision, 30 CWCR 121, 67 CCC 519 Gossip about personal life not a part of the employment relationship. Applicant had an extramarital affair with a co-worker which became the subject of gossip, spread mainly by another co-worker and his wife. Applicant complained to her supervisor who in turn met with the parties and ordered it to stop. The gossip stopped, but applicant filed a stress claim alleging a psychiatric injury due to a hostile work environment. The WCJ at trial found no industrial injury and felt that the gossip concerned a personal matter unrelated to applicant’s employment. Reconsideration was granted, the Board felt that the gossip was an actual event of the employment that occurred in the work place. Defendant appeals. Decision: Annulled. A finding of industrial causation cannot be made when a worker’s duties merely provided a stage for the injury. The employment must not be a mere passive element focused on by a non-industrial condition – it must play an “active” role in the development of the psychological condition. There must be some “work connection” to establish compensability. There must be a link in some causal fashion. Gossip about an employee’s personal life is not part of the employment relationship. Although applicant and the other employee were both employed by defendant, and although the gossip occurred at work, the nature of applicant’s duties had nothing to do with her injury – it only provided a stage for the incident, and did not contribute to the injury. [The California Supreme Court has denied review of the Court of Appeals decision.] Case Law Update June 12, 2002 Page 3 LAND v. WCAB (September 25, 2002), Court of Appeals Decision, 2002 DJDAR 11203 College student injured during field portion of cattle breeding course not entitled to workers' compensation benefits. Applicant was a full time student at a California college and enrolled in an elective course in animal husbandry which provided practical hands-on experience in commercial cattle breeding. The course was administered by a non-profit corporation/foundation and the animals, tools, and equipment for the class were provided by the foundation. Students paid a tuition to attend the year long class and signed an agreement which included a provision that students who had at least 70 hours in the class would be eligible to receive a portion of any net profits from the sale of the cattle at the end of the year. Applicant sustained an injury to her knees while checking cattle one day. She filed a workers' compensation claim alleging that she was an employee of the foundation. At trial, the WCJ concluded that applicant was not entitled to workers' compensation benefits because she was not paid wages and the purpose of the class was to provide students with hands-on experience, not monetary gain. A Petition for Reconsideration was denied as was a Petition for Writ of Review. However, the Supreme Court granted the Petition and transferred the case back to the Appellate Court. Decision: Petition denied. Under Labor Code §3351 a covered employee is “every person in the service of an employer under any appointment or contract of hire or apprenticeship, express or implied, oral or written, whether lawfully or unlawfully employed”. Labor Code §3357 augments this definition by stating that “any person rendering service for another, other than as an independent contractor, or unless expressly excluded herein, is presumed to be an employee”. Applicant here was not an employee! The applicant was not working with paid workers, the participants in the project were all students in the same position as the applicant and the applicant was not working in an established business or institution. The project was created exclusively for an educational purpose. Although the applicant received a portion of profits from the project, she did not receive wages and would have received nothing if the project had not made any money. The crucial question is whether the student is whether the student is “rendering service” for the university in participating in its educational programs. Here, the court concluded that the university was actually rendering service to the student by providing educational services for the student’s use. Case Law Update June 12, 2002 Page 4 II. COMPROMISE AND RELEASE AGREEMENTS JEFFERSON v. CALIFORNIA DEPARTMENT OF YOUTH AUTHORITY, (July 1, 2002), Supreme Court Decision, 30 CWCR 169, 67 CCC 727 Wording in a Compromise and Release may preclude workers’ suits against employers. Applicant filed a workers' compensation psychiatric claim alleging the injuries were caused by sexual harassment, hostile work environment, etc. Seven months later she also filed a claim with the DFEH against the employer, co-employees, etc. The DFEH issued her a “right to sue” letter. Approximately 28 months after filing the workers' compensation claim, the parties agreed to a Compromise and Release. Applicant was represented at this time as well. The standard Compromise and Release was signed which in part states that the settlement “releases and forever discharges said employer . . . from all claims and causes of action whether now known or ascertained or which may hereafter arise or develop as a result of said injury”. An attached typewritten Addendum also indicated applicant was releasing the employer from all potential claims, including those under the Civil Code. The Compromise and Release was approved by a WCJ. Three weeks later, applicant filed a lawsuit against the defendant alleging sex discrimination. Summary judgment in favor of the defendant was granted. Applicant appealed and the Appeals Court affirmed. The Supreme Court granted applicant’s Petition for Review. Decision: Affirmed. The Addendum, if nothing else, demonstrates the parties’ intent to settle all issues including those outside of the scope of workers' compensation and there was nothing shown to indicate that the worker wanted to exclude the DFEH case from the settlement. Applicant should have realized the words “all claims and causes of action” encompassed every claim. To not allow this settlement would cause employers to be disinclined to settle, not knowing what the extent of future liability might be. Furthermore, the WCJ who approved the settlement also had sufficient information to access the fairness of the release. Furthermore, the fact that the words “all claims and causes of action” is pre-printed in the Compromise and Release appears to encourage comprehensive settlements that will bring a close to all possible litigation. The typed Addendum further supports the conclusion that the parties intended to close all possible future litigation. The Addendum also released all of the Case Law Update June 12, 2002 Page 5 defendants’ employees so when the applicant signed it she knew she would be releasing both the employer and its employees – as co-employees are not subject to workers' compensation only civil actions, this also showed the applicant’s intent to settle all claims. Further, even though the attached Addendum was “boilerplate”, and not created for the specific cause that was not controlling nor did it diminish its effect in this case. Case Law Update June 12, 2002 Page 6 III CREDIT WILSON v. NATIONAL UNION FIRE INSURANCE CO., (July 5, 2002), Order Denying Reconsideration, 30 CWCR 217 Credit for overpayment of permanent disability against future treatment when applicant’s conduct and symptom magnification contributes to cause. Applicant’s sustained an industrial back injury. On September 26, 1997 applicant received a Findings and Award of 26%, $12,172.35. At that time the defendant had already advanced more than that amount. The defendant subsequently did provide vocational rehabilitation services and paid vocational rehabilitation maintenance allowance benefits from May 13, 1998 through July 15, 1999. In July of 1998, an Agreed Medical Examiner reported that a Functional Capacity Evaluation might be necessary and that applicant could have a disability up to between heavy work and light work. Applicant filed a Petition to Reopen and demanded additional permanent disability and also raised penalties for unreasonable delay of payment of benefits. The defendant resumed permanent disability advances. However, a functional capacity test concluded that applicant was exaggerating his disability. The Agreed Medical Examiner then submitted a supplemental report indicating that permanent disability was not much different than the original award of 1997. A WCJ issued a Findings and Award that permanent disability had increased from 26% to 33-1/4%, and that applicant had been overpaid in excess of $11,000.00 which he allowed as credit against all future benefits including further medical care. Applicant filed a Petition for Reconsideration. Decision: Denied. The WCJ on reconsideration had written that applicant had “unclean hands”. Applicant created the overpayment by his own actions and should not benefit from his actions. Although applicant didn’t ask for the additional permanent disability advances, filing for penalties for unreasonable delay of payment of benefits was in essence a claim for additional permanent disability. Furthermore, the Board felt that the advances were made because of applicant’s “significant symptoms magnification”. Denying credit here would award applicant’s behavior and penalize the defendant. Case Law Update June 12, 2002 Page 7 IV. FIREFIGHTER’S RULE MC ELROY v. STATE COURT OF APPEAL (June 28, 2002), Court of Appeal Decision 30 CWCR 203, 67 CCC 879 Firefighter’s rule bars police officers’ damages. Plaintiff, a police officer, was in a pursuit. A CHP officer returning to his station observed the pursuit ahead of him and joined the chase without knowing what the pursuit was about and without making radio contact with the City police department. The CHP car ultimately hit plaintiff’s car injuring the plaintiff. Plaintiff sued the CHP contending that the CHP officer caused his injuries. Summary judgment granted pursuant to a Firefighter’s Rule. Plaintiff appealed. Decision: Affirmed. The exception to the Firefighter’s Rule does not apply to officers in a different public entity “jointly engaged” with the injured officers in police or rescue activities. To do otherwise would impair the ability of separate agencies to coordinate or for the individual officers involved to make judgment calls when responding to rapidly developing emergencies. Case Law Update June 12, 2002 Page 8 V. LABOR CODE SECTION 3208.3(h) CITY OF OAKLAND v. WCAB (June 11, 2002), Court of Appeal Decision, 30 CWCR 151, 67 CCC 705 Correct standard must be applied for an employer to meet the burden for good faith personnel actions. Applicant worked for the defendant and rose through the ranks to an administrative position. In 1998 applicant was informed his position would probably be eliminated in the following years due to budgetary issues. Applicant was advised to think about a different position such as management assistant and for the first half of 1999 he worked in that position for which he was assured budgetary authority existed. In mid- 1999 as part of a reduction in the work force, applicant was demoted to a lesser position without warning. Applicant left work, obtained psychological counseling and filed a workers' compensation stress claim. Medical reports stated that applicant’s distress was related to the demotion. A WCJ held that the demotion coupled with the assurances that applicant’s position was “safe” substantially caused a psychiatric injury. The WCJ also concluded that the city had failed to carry its burden of proving that its actions were in good faith. Defendant filed for reconsideration which was denied. The defendant appealed and defendant’s Writ was granted. Decision: Award vacated. The court indicated that employers must have some freedom in making regular and routine personnel decisions, including transfers, demotions, discipline, layoffs, and terminations. As long as the act is done with “subjective good faith” and the employer’s conduct meets “the objective reasonableness standard”, the exemption under Labor Code §3208.3 applies. Here the demotion was the result of an honest and sincere attempt to streamline the City budget and there was no evidence suggesting deception or unlawful collusion. Budget cuts should be allowed without an employer having to defend psychiatric claims by workers whose jobs are eliminated. The promise made to the applicant, although not being kept, was not broken in bad faith. Case Law Update June 12, 2002 Page 9 VI LABOR CODE SECTION 9785 DETKA v. OCTAGON RISK SERVICES (June 3, 2002), Administrative Director’s Decision, 30 CWCR 198 Bitterness between an attorney and a chiropractor alone is insufficient for a change of treating physicians. Applicant chose a chiropractor as her PTP. An attorney for the claims administrator sent the chiropractor a letter pursuant to California Code of Regulations § 9785. The letter was addressed “Dear Chiropractor Hamby”. The chiropractor took offense at the “salutation”, and called the attorney, and, that call ended up in a heated conversation deteriorating to the point where the chiropractor referred to the attorney as a “little skank”. Defendant petitioned the AD for a change of treating doctors contending that the chiropractor had a clear bias that could significantly interfere with disability to the extent that he could not be objective and impartial in making medical decisions. Decision: Denied. Bias had not been shown. Chiropractors are allowed to be referred to as “doctor”, or use the preface “Dr.” provided they add the word “chiropractor”, or the letters “D.C.” following their name. Both chiropractor and the attorney were guilty of unprofessional behavior and as the applicant had no apparent dissatisfaction with the treatment, there was no basis for the change. Case Law Update June 12, 2002 Page 10 SANCHEZ v. THE TRAVELERS INDEMNITY CO., June 4, 2002, Administrative Director Decision, 30 CWCR 199. PTP must detail treatment. Applicant designated a PT P. The defendants provided the doctor with a 9785 letter before he began treatment. The first exam was on December 19, 2000. However, the doctor did not submit his first report until January 3, 2001. Thereafter, he submitted timely progress reports, but they only contained brief, 1 or 2 word references to the type of treatment being provided. The defendant filed a Petition for a Change of Treating physicians with the AD. Decision: Granted. First, the doctor failed to comply with 9785(e)(1) which requires the PTP to submit his first report to the claims administrator within 5 working days following the PTP’s initial examination. The PTP’s report was a week late! 9785(f)(8) requires progress reports discussing in part methods, frequency, duration and planned treatment. These must be “detailed”. Failure to adequately detail this information in the progress report was also a violation of 9785. Case Law Update June 12, 2002 Page 11 VII. MEDICAL TREATMENT PARK MEDICAL PHARMACY v. SAN DIEGO ORTHOPEDIC ASSOCIATES MEDICAL GROUP (June 11, 2002), Court of Appeal Decision, 67 CCC 770 Medical group may dispense medication for profit for the conditions for which they are treating their patients. The defendant, a medical group and its physicians, dispensed drugs for profit to their workers' compensation patients. Patients were advised that they could get the medication from the defendant or go to a pharmacy. The drugs were maintained in a separate area in the medical office. Plaintiffs operate a pharmacy in the same building where the defendant’s offices are located and contend that the defendant’s dispensing of drugs violates the Business and Professions Code, that they were unlawfully operating a pharmacy, and that its business had dropped because of the dispensing of medication. The defendant’s Motion for Summary Judgment was granted and the plaintiffs appealed. Decision: Affirmed. The Business and Professions Code, specifically Section 4170 lays out the provisions under which a physician can dispense drugs. The defendants were not operating a “pharmacy” which, in essence, is defined as a drug store where items are sold to the general public. The defendant’s physicians may dispense medication to their own patients, for profit, for the medical conditions for which they are being treated. Case Law Update June 12, 2002 Page 12 VIII. STATUTE OF LIMITATIONS AMERICAN HOME ASSURANCE CO. v. WCAB (May 30, 2002), Writ Denied 67 CCC 822 Statute of Limitations is no bar to a claim if the applicant is not fully informed of workers' compensation rights. Applicant sustained an industrial injury on February 22, 1994. The defendants paid temporary disability and provided medical treatment. Applicant was released to modified duty on January 6, 1995 and filed a Claim Form with the employer on January 11, 1995. The defendant sent applicant a letter acknowledging the claim and enclosing a pamphlet of workers' compensation benefits. Temporary disability ended on January 18, 1995 and applicant was advised in a letter of that fact and was provided with a statement that the applicant may be entitled to other workers' compensation benefits. On April 14, 1995 a letter was sent to the applicant that pursuant to the treating physician, applicant was permanent and stationary, there was no permanent disability, and that applicant could obtain a Panel QME, and enclosed the request form and advised the applicant that they could also obtain a consultation with an attorney. Applicant filed an Application for Adjudication of Claim on May 30, 2000 and the defendant contended that the claim was barred by the Statute of Limitations per Labor Code §5405 and 5410. The WCJ found no Statute of Limitations. The defendant filed a Petition for Reconsideration contending that the applicant had adequate notice of her rights to workers' compensation benefits and how to seek them. The WCJ wrote that the material sent to the applicant did not set forth any time limits for the applicant to pursue her remedies. The WCAB granted reconsideration and issued its own decision that the Statute of Limitations barred applicant’s case. Applicant then filed a Petition for Reconsideration and the WCAB again granted reconsideration, this time reinstating the WCJ’s decision. The defendants appealed. Decision: Affirmed. The defendant had failed to advise the applicant that any further action on her part was necessary to continue to receive benefits and had failed to provide any notification to the applicant of any time limitations within which the applicant could pursue further workers' compensation benefits or that she would be barred if she would not pursue the benefits within those time frames. Case Law Update June 12, 2002 Page 13 IX. WCAB PROCEDURE MARRIOTT INTERNATIONAL v. WCAB (June 12, 2002) Appellate Court Decision, 30 CWCR 156, 67 CCC 713 Service by fax not valid unless parties expressly agree to it. After an expedited hearing, the record reflects service on the parties of a decision. Defendant claimed that it never received it. Applicant’s attorney faxed a copy thereafter to the defendant’s counsel and followed up with a copy by mail. The defendant filed a Petition for Reconsideration 23 days after receipt of the fax, and 21 days after receipt of the mailed copy. The Petition was dismissed. The WCAB felt it had to be filed within 20 days after the fax which they deemed as “personal service”, thereby not allowing for the additional five days for mailing. The defendant appealed. Decision: Decision annulled. Per CCP 1013, unless service by fax is “agreed to by the parties” it does not constitute personal service.