HSR Inc. v. WCAB (Mariscal)

Filed 9/24/07 HSR Inc. v. WCAB (Mariscal) CA6

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SIXTH APPELLATE DISTRICT

Esturberto Mariscal was employed as a construction worker by HSR Inc. when he sustained an admitted injury to his left leg while using a concrete saw on October 21 2004.[1] On December 22, 2004, Mr. Mariscal's treating physician Dr. Genest, issued a "check the box" report in which he purported to "[i]ndicate the existence of a permanent disability."

The crux of this case is whether that "check the box" report was sufficient to bring Mr. Mariscal within the 1997 Permanent Disability Rating Schedule (hereinafter 1997 PDRS) or whether the revised 2005 PDRS should apply to his claim.

Background

HSR Inc. employed Mr. Mariscal as a construction worker. On October 21, 2004, Mr. Mariscal sustained a leg injury to his left leg in the course of his employment. Specifically, a concrete saw impacted the middle left thigh resulting in a laceration. Mr. Mariscal was taken to a local hospital where the wound was sutured. Mr. Mariscal received temporary disability payments from November 9, 2004, through January 10, 2005, when he was released to full duties.

On December 8, 2004, Mr. Mariscal filed an application for adjudication of his claim for permanent disability. According to the worker's compensation administrative law judge (hereafter WCJ), on the same date, Mr. Mariscal requested a change of treating physician to Dr. Stephen Genest. As noted, Dr. Genest issued a report dated December 22, 2004, "[i]ndicating the existence of permanent disability."

After trial, on August 9, 2006, the WCJ issued her findings and award. The WCJ found that Mr. Mariscal was entitled to 25 percent permanent disability under the 1997 PDRS based on the report of Dr. Genest. In finding this level of permanent disability, the WCJ followed the medical findings of Mr. Mariscal's qualified medical evaluator Dr. Gravina in his reports dated August 4, 2005 and June 26, 2006.

On September 6, 2006, HSR Inc. filed a petition for reconsideration with the Worker's Compensation Appeals Board (hereafter WCAB). The WCJ filed a report and recommendation regarding the petition for reconsideration recommending that the WCAB deny reconsideration. In the report, the WCJ noted that she had made findings that Dr. Genest's " 'check the box' "report, while not in compliance with all the requirements of "8 CCR 10606,"[2] was substantial evidence of the existence of a permanent disability prior to January 1, 2005. Furthermore, the WCJ noted that the actual calculation/amount of the level of permanent disability was not disputed.

On November 6, 2006, the WCAB issued its opinion and order denying reconsideration. In denying reconsideration, the WCAB concurred with the WCJ's reasons for her findings and award and adopted and incorporated her report.

HSR Inc. now petitions this court to annul, vacate and set aside the WCAB opinion and order denying reconsideration. We shall annul the order and direct WCAB to issue a new decision consistent with this opinion.

Appellate Review

All judicial powers under the workers' compensation system are vested in the WCAB, subject only to the review by the appellate courts of this state. (Lab. Code, 111, 5301, 5950.)[3] WCJs hear and decide compensation claims as trial judges, and the WCAB functions as an appellate body. The WCAB has the power to reject the factual findings of a WCJ and to make its own findings of fact, and may affirm, rescind, alter or amend a WCJs decision or award. ( 5906, 5908.5; Lamb v. Workmen's Comp. Appeals Bd. (1974) 11 Cal.3d 274, 280-281 (Lamb).)

Our review of a decision by the WCAB is limited. "As to findings of fact, we defer to the [WCAB]'s findings if supported by substantial evidence. ( 5952 [fn. omitted]; [citation].)" (Department of Rehabilitationv. Workers' Comp. Appeals Bd. (2003) 30 Cal.4th 1281, 1290 (Department of Rehabilitation).) The WCAB has extensive expertise in interpreting and applying the workers' compensation scheme. Consequently, we give weight to its interpretations of workers' compensation statutes unless they are clearly erroneous or unauthorized. (Honeywell v. Workers' Comp. Appeals Bd. (2005) 35 Cal.4th 24, 34; Judson Steel Corp. v. Workers' Comp. Appeals Bd. (1978) 22 Cal.3d 658, 668-669.) "While we accord ' "significant respect" ' to the [WCAB]'s interpretation of statutes in the area of workers' compensation [citation], we subject the [WCAB]'s conclusions of law to de novo review [citations]." (Department of Rehabilitation, supra, 30 Cal.4th at p. 1290.)

Discussion

As we have explained, "California has a no-fault workers' compensation system. With a few exceptions, all California employers are liable for the compensation provided by the system to employees injured or disabled in the course and scope of their employment, regardless of the fault of either party. (Cal. Const., art. XIV, 4.) The Workers' Compensation Act intends comprehensive coverage of injuries during employment. [Citations.] 'The purposes of the Act are several. It seeks (1) to ensure that the cost of industrial injuries will be part of the cost of goods rather than a burden on society, (2) to guarantee prompt, limited compensation for an employee's work injuries, regardless of fault, as an inevitable cost of production, (3) to spur increased industrial safety, and (4) in return, to insulate the employer from tort liability for his employees' injuries. [Citations.]' [Citation.]" (Matea v. Workers' Comp. Appeals Bd. (2006) 144 Cal.App.4th 1435, 1442-1443.)

The employee has the burden of proving, by a preponderance of the evidence, that he or she has sustained a compensable industrial injury. ( 3202.5, 3208.) Section 3202 "provides that issues of compensation for injured workers 'shall be liberally construed by the courts with the purpose of extending their benefits for the protection of persons injured in the course of their employment.' " (Department of Rehabilitation, supra, 30 Cal.4th at p. 1290.) This rule is binding upon the WCAB as well as this court. (Lamb, supra, 11 Cal.3d 274, 280; Department of Rehabilitation, supra, 30 Cal.4th at p. 1290.) Moreover, " '[a]ll aspects of workers' compensation law . . . are to be liberally construed in favor of the injured worker.' [Citation.]" (Department of Rehabilitation, supra, at pp. 1290-1291.)

In 2004, however, the Legislature enacted omnibus reform of the workers' compensation system. (Brodie v. Workers' Comp. Appeals Bd. (2007) 40 Cal.4th 1313.) Those reforms were enacted as urgency legislation to drastically reduce the cost of workers' compensation insurance, and the Legislature intended that the majority of the changes go into effect as soon as possible. (Stats. 2004, ch. 34,  49, p. 75; Brodie v. Workers Comp. Appeals Bd., supra, 40 Cal.4th 1313; Green v. Workers' Comp. Appeals Bd. (2005) 127 Cal.App.4th 1426, 1441.) As part of that reform, the Legislature revised the 1997 PDRS effective January 1, 2005. The new 2005 PDRS is to apply to all injuries sustained after January 1, 2005. ( 4660.)

As amended, effective April 19, 2004, section 4660 requires regular revisions in the rating schedule and, as relevant here, provides that "[t]he schedule and any amendment thereto or revision thereof shall apply prospectively and shall apply to and govern only those permanent disabilities that result from compensable injuries received or occurring on and after the effective date of the adoption of the schedule . . . ." ( 4660, subd. (d).) However, the section provides for three exceptions for "compensable claims arising before January 1, 2005." The 2005 PDRS "shall apply to the determination of permanent disabilities when there has been either no comprehensive medical-legal report or no report by a treating physician indicating the existence of permanent disability, or when the employer is not required to provide the notice required by Section 4061 to the injured worker." ( 4660, subd. (d), italics added.) Thus, "the [2005] revised permanent disability rating schedule applies to the rating of permanent disability for injuries occurring prior to the January 1, 2005 effective date of the revised rating schedule, unless the applicant can establish that one of the exceptions set forth in . . . section 4660, [subdivision] (d) is applicable." (Aldi v. Carr, McClellan, et al. (2006) 71 Cal Comp Cases 783, 794.)

In finding that the 1997 PDRS applied to Mr. Mariscal's case, the WCJ found that only one of the three exceptions applied.[4] Specifically, as noted, the WCJ found that the December 22, 2004 report of Dr. Genest indicated the existence of permanent disability. The letter, which was sent to the claims examiner, identifies Dr. Genest as Mr. Mariscal's treating physician and notes that the letter is being sent "to [i]ndicate the existence of permanent disability." The letter goes on to say that Dr. Genest has "indicated the anticipated permanent disability below." Thereafter, there appears the following:

"YES NO

Will there be permanent disability? √

Are Work Restrictions Anticipated? √

Are Subjective Permanent Disability Factors Anticipated? √

Are Objective Permanent Disability Factors Anticipated? √

Is Loss of Pre-injury Work Capacity Anticipated? √"

Below this last sentence, there is a space for additional comments regarding the particular patient and spaces for date and signature. The letter contains the date of "22 Dec 04" written in, and what appears to be the signature of Dr. Genest. The Board agreed with the WCJ that this letter constituted a "report by a treating physician indicating the existence of permanent disability" within the meaning of section 4660, subdivision (d).

HSR Inc. argues that the "check the box" letter is not a report or substantial evidence because the letter contains no reference to the facts of the case other than the applicant's name and the date of the injury. There is no medical history, no history of the injury or examination of Mr. Mariscal, no review of the medical record, no diagnosis, no discussion of permanent disability, and no basis for the conclusion that permanent disability was anticipated.

Initially, we note that we need not address the issue of whether the check the box letter is a "report" because HSR Inc. made no objection to the introduction of the letter at trial, thereby waiving the issue. (Lumbermen's Mut. Cas. Co. v. Ind. Acc. Com. (1946) 29 Cal.2d 492, 499-500; 5709.)

However, "it has been long established that, in order to constitute substantial evidence, a medical opinion must be predicated on reasonable medical probability. (McAllister v. Workmen's Comp. Appeals Bd. (1968) 69 Cal.2d 408, 413, 416-417, 419 [33 Cal.Comp.Cases 660]; Travelers Ins. Co. v. Industrial Acc. Com. (Odello) (1949) 33 Cal.2d 685, 687-688 [14 Cal.Comp.Cases 54]; Rosas v. Workers' Comp. Appeals Bd. (1993) 16 Cal. App.4th 1692, 1700-1702, 1705 [58 Cal.Comp.Cases 313].) Also, a medical opinion is not substantial evidence if it is based on facts no longer germane, on inadequate medical histories or examinations, on incorrect legal theories, or on surmise, speculation, conjecture, or guess. (Hegglin v. Workmen's Comp. Appeals Bd. (1971) 4 Cal.3d 162, 169 [36 Cal.Comp.Cases 93]; Place v. Workmen's Comp. Appeals Bd. (1970) 3 Cal.3d 372, 378-379 [35 Cal.Comp.Cases 525]; Zemke v. Workmen's Comp. Appeals Bd., supra, 68 Cal.2d at p. 798.) Further, a medical report is not substantial evidence unless it sets forth the reasoning behind the physician's opinion, not merely his or her conclusions. (Granado v. Workers' Comp. Appeals Bd. (1970) 69 Cal. 2d 399, 407 (a mere legal conclusion does not furnish a basis for a finding); Zemke v. Workmen's Comp. Appeals Bd., supra, 68 Cal.2d at pp. 799, 800-801 (an opinion that fails to disclose its underlying basis and gives a bare legal conclusion does not constitute substantial evidence); see also People v. Bassett (1968) 69 Cal.2d 122, 141, 144 (the chief value of an expert's testimony rests upon the material from which his or her opinion is fashioned and the reasoning by which he or she progresses from the material to the conclusion, and it does not lie in the mere expression of the conclusion; thus, the opinion of an expert is no better than the reasons upon which it is based).)" (Escobedo v. Marshalls (2005) 70 Cal.Comp.Cases 604, 620-621.)

Thus, to put it succinctly, a medical opinion is not substantial evidence if it is based on an inadequate history, speculation or guess. (Escobedo v. Marshalls, supra, 70 Cal.Comp.Cases 604, 620 (Escobedo).) Furthermore, to be substantial evidence a medical report must indicate the reasoning behind the doctor's opinion. (Granado v. Workmen's Comp. Appeals Bd., supra, 69 Cal. 2d 399, 407 (Granado).)

The issue in Escobedo and Granado was one of apportionment of a non-industrial injury and an industrial injury. (Granado, supra, 69 Cal. 2d at p. 407; Escobedo, supra, 70 Cal.Comp.Cases at p. 620.)

The question we must address is whether the same standards should apply in a situation such as is presented in this casethat is should the same standard apply to a "report by a treating physician indicating the existence of permanent disability." ( 4660, subd. (d).)

Mr. Mariscal argues "a medical report 'indicating the existence of permanent disability' need be no more than a brief suggestion, a sign or an inference that demonstrates the existence of permanent disability." For the following reasons we disagree.

California Code of Regulations, title 8, section 10606 provides in pertinent part: "The Workers' Compensation Appeals Board favors the production of medical evidence in the form of written reports. . . . [] These reports should include where applicable: (a) the date of the examination; [] (b) the history of the injury; [] (c) the patient's complaints; [] (d) a listing of all information received from the parties reviewed in preparation of the report or relied upon for the formulation of the physician's opinion; [] (e) the patient's medical history, including injuries and conditions, and residuals thereof, if any; [] (f) findings on examination; [] (g) a diagnosis; [] (h) opinion as to the nature, extent, and duration of disability and work limitations, if any; [] (i) cause of the disability; [] (j) treatment indicated; [] (k) opinion as to whether or not permanent disability has resulted from the injury and whether or not it is stationary. If stationary, a description of the disability with a complete evaluation; . . . [] (n) the reasons for the opinion; and, [] (o) the signature of the physician. [] Failure to comply with (a) through (o) will be considered in weighing the evidence."

Dr. Genest's "check the box" letter does not even reference what type of injury Mr. Mariscal suffered let alone describe Mr. Mariscal's medical history, findings on examination, a diagnosis, opinion as to the nature, extent, and duration of disability and work limitations, cause of the disability, treatment indicated, or the reasons for the opinion. To the contrary, Dr. Genest's letter simply declares that he is indicating "the existence of permanent disability," without any suggestion as to why he concludes that Mr. Mariscal is permanently disabled.

In order to be substantial, evidence must be solid and credible. (See Lamb, supra, 11 Cal.3d 274, 281.) To be solid and credible, the evidence must comply with California Code of Regulations, title 8, section 10606. (See Insurance Co. of North America v. Workers' Comp. Appeals Bd. (1981) 122 Cal.App.3d 905, 917, ["Unless a medical report complies with [California Code of Regulations, title 8,] section 10606 . . . neither the workers' compensation judge, the WCAB, nor this court on review can make a rational decision on whether such report constitutes the kind of evidence on which a reasoned decision can be based"].) Measured against California Code of Regulations, title 8, section 10606, Dr. Genest's "check the box" letter of December 22, 2004, is woefully inadequate.

Accordingly, we conclude that the WCAB's decision to apply the 1997 PDRS schedule is not supported by substantial evidence. As a result, we must annull the WCAB's decision and remand to the WCAB for further proceedings consistent with this opinion.

Disposition

The WCAB's opinion and order denying reconsideration filed on November 9, 2006, is annulled. The matter is remanded to the WCAB with directions to issue a new and different order in the case consistent with this opinion. HSR Inc. shall recover costs.

_____________________________

ELIA, J.

WE CONCUR:

_____________________________

PREMO, Acting P. J.

_____________________________

DUFFY, J.

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[1] At the time of Mariscal's injury XL Specialty Insurance adjusted by GAB Robins, insured HSR Inc. against all liability arising under California worker's compensation laws. For the sake of clarity we will refer to this group as HSR, Inc.

[2] California Code of Regulations, title 8, section 10606.

[3] Unless noted, all statutory references are to the Labor Code.

[4] The WCJ made no findings with respect to the other two exceptions contained in section 4660. As for the potential alternative exceptions it is inappropriate to consider these at this time because the WCJ and the WCAB did not make any such findings. However, we point out that recently the WCAB in an en banc decision held that under the plain language of section 4660, subdivision (d) and 4061, "defendant's obligation to provide notice [under section 4061 does] not arise until the actual last payment of temporary disability . . ." (John Pendergrass v. Duggan Plumbing and State Compensation Insurance Fund (2007) 72 Cal.Comp. Cases ___.) Since Mr. Mariscal's last payment of temporary disability was paid on January 10, 2005, his employer was not required to provide the notice required by Section 4061 until then. Thus, temporary disability payments paid prior to January 1, 2005, do not provide an exception to the new rating schedule.

Furthermore, in another en banc decision, the WCAB held that a comprehensive medical-legal report issued prior to January 1, 2005 must indicate the existence of permanent disability in order to create an exception to the new rating schedule. (Joseph Baglione v. Hertz Car Sales and AIG adjusted by Cambridge Integrated Services (2007) 72 Cal.Comp. Cases ___.) We see no reason not to follow the WCAB's decision on this issue. (See Costco Wholesale Corporation et al. v. Workers' Compensation Appeal Board (2007) 151 Cal.App.4th 148, 154 ["Our reading of section 4660 as a whole is to require that the implementation of the new permanent disability rating schedule be tied to an actual indication of permanent disability prior to the statutes effective date. It follows that the requirement of an indication of permanent disability would apply to medical-legal reports as well as to reports prepared by a treating physician"].)

Since the record does not support a finding that there is a comprehensive medical-legal report issued prior to January 1, 2005 indicating the existence of permanent disability, this exception would not apply.