LyngsoGarden Materials v. WCAB

Filed 8/20/07 Lyngso Garden Materials v. WCAB CA1/2

NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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

FIRST APPELLATE DISTRICT

DIVISION TWO

The Workers Compensation Appeals Board (Board) issued an order denying reconsideration of a decision by a workers compensation Judge (WCJ) awarding Vincente Ruiz permanent disability based on the 1997 rating schedule that was in effect on the date of his injury in 2004. Ruizs employer, Lyngso Garden Materials, Inc., and its workers compensation carrier, Travelers Indemnity Company of Connecticut (collectively, Lyngso), argue that the Board should have applied the new permanent disability rating schedule that went into effect on January 1, 2005. (Lab. Code,  4660, subdivision (d).)[1] We agree and annul that portion of the award.

BACKGROUND

Ruiz began working as a yard specialist in 1996. On December 16, 2004, he left work due to a cumulative back injury that occurred during the course and scope of his employment. He returned to work for brief intervals during the next several months and was paid temporary disability benefits for periods between December 17, 2004, and January 2, 2006. His condition was permanent and stationary as of August 12, 2005.

A trial was held before a WCJ, who awarded permanent disability based on the 1997 rating schedule that was in effect at the time of Ruizs injury. The WCJ also ordered that Lyngso pay the fees of Ruizs vocational rehabilitation expert as an item of costs under section 5811. Lyngso filed a petition for reconsideration before the Board, arguing that permanent disability should have been rated under the new schedule that went into effect on January 1, 2005, and that Ruiz was not entitled to recover the cost of his expert. The Board denied reconsideration, and we granted Lyngsos petition for writ of review.

DISCUSSION

Permanent Disability Rating Schedule

Labor Code section 4660 governs the calculation of the percentage of permanent disability for injured workers. That statute was amended on April 19, 2004, as part of Senate Bill 899 (2003-2004 Reg. Sess.), a comprehensive workers compensation reform package, to require regular revisions of the permanent disability rating schedule. A new rating schedule incorporating the American Medical Association Guides to the Evaluation of Permanent Impairments (5th ed.) went into effect on January 1, 2005. This schedule superseded the 1997 rating schedule that was in effect when Ruiz was injured in 2004. (See State Comp. Ins. Fund v. Workers Comp. Appeals Bd. (2007) 146 Cal.App.4th 1311, 1313.)

Section 4660, subdivision (d), provides generally that [t]he schedule and any amendments 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. The statute then extends the new schedule to pre-2005 claims 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.)

Phrased another way, when a qualifying medical report was prepared before January 1, 2005, or notice under section 4061 was required before January 1, 2005, the percentage of permanent disability will be calculated using the earlier schedule that was in effect on the date of the injury.[2] (See State Comp. Ins. Fund v. Workers Comp. Appeals Bd., supra, 146 Cal.App.4th at p. 1313.) Here, the WCJ and the Board both concluded that the 1997 schedule applied because notice was required under section 4061 prior to January 1, 2005.

Section 4061 provides in relevant part: (a) Together with the last payment of temporary disability indemnity, the employer shall, in a form prescribed by the administrative director pursuant to Section 138.4, provide the employee one of the following: [] (1) Notice either that no permanent disability indemnity will be paid because the employer alleges the employee has no permanent impairment or limitation resulting from the injury or notice of the amount of permanent disability indemnity determined by the employer to be payable. . . . []  (2) Notice that permanent disability indemnity may be or is payable, but that the amount cannot be determined because the employees medical condition is not yet permanent and stationary. . . .

Temporary disability benefits were paid to Ruiz for periods between December 17, 2004, and January 2, 2006. Lyngso was required to provide notice under section 4061, [t]ogether with the last payment of temporary disability indemnity, on January 2, 2006. Because that notice was not required until after January 1, 2005, the 2005 permanent disability rating schedule applies to Ruizs case and the Board erred in concluding otherwise.

Ruiz argues that Lyngso was required to give notice under section 4061 before January 1, 2005, because the duty to provide such notice arises when temporary disability payments are commenced rather than when they are terminated. Another division of this court recently rejected an identical argument in Costco Wholesale Corp. v. Workers Compensation Appeals Board (2007) 151 Cal.App.4th 148 (Costco), concluding that such an interpretation would violate the Legislatures intent to bring as many cases as possible under the new workers compensation law and would render nugatory the other two exceptions under section 4660, subdivision (d), which require application of the 2005 schedule to a pre-2005 injury if, before 2005, there was no comprehensive medical-legal report or no report from a treating physician indicating the existence of permanent disability. . . . The court in Costco reasoned: Temporary disability will have been paid or owed before January 1, 2005, in virtually every case where a qualified medical examiner or doctor prepared a pre-2005 medical report indicating permanent disability, meaning there would be no practical need for the other two exceptions. (Costco at p. 157.)

We agree with the reasoning of Costco. We also observe that the Board has, since its decision in this case, reached the same conclusion as the court in Costco. In Pendergrass v. Duggan Plumbing and State Compensation Ins. Fund (2007) 72 Cal.Comp.Cases 456, the Board in an en banc decision held that the duty to give notice under section 4061 arises with the last payment of temporary disability, which must be made before January 1, 2005, if the 1997 schedule is to apply.[3]

Award of Expert Witness Fees to Applicant

At the trial before the WCJ, Ruiz presented the testimony of vocational rehabilitation expert Jeff Malmuth on the issue of diminished future earning capacity. The WCJ ordered Lyngso to pay Malmuths fees as an item of costs, and the Board denied reconsideration of this aspect of the award.[4] Lyngso argues that the expert fees were not a reasonable item of costs because permanent disability was calculated using the 1997 rating schedule, and the WCJ concluded there is no need to determine whether or not the diminished future earning capacity of applicant should be considered with regard to the [permanent disability rating schedule] since that amount is less than the amount he would receive under the old schedule. We disagree that the fees were incorrectly assessed.

The primary issue at trial was whether the 1997 or the 2005 permanent disability rating schedule applied. Future earning capacity was relevant to determining the percentage of permanent disability under the 2005 rating schedule, because section 4660, subdivision (a), now provides, In determining the percentage of permanent disability, account shall be taken of the nature of the physical injury or disfigurement, the occupation of the injured employee, and his or her age at the time of the injury, consideration being given to an employees diminished future earning capacity. (Italics added.) Although the WCJ and Board did not assess future earning capacity due to their erroneous utilization of the 1997 schedule, future earning capacity was an issue squarely presented as a result of Lyngsos contention that the 2005 schedule applied. Fees for an expert witness on this issue were appropriate.

DISPOSITION

That portion of the award applying the 1997 permanent disability rating schedule is annulled. In all other respects, the award is affirmed. The parties shall bear their own costs herein.

_________________________

Haerle, Acting P.J.

We concur:

_________________________

Lambden, J.

_________________________

Richman, J.

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[1] All further statutory references are to the Labor Code.

[2] The full text of section 4660, subdivision (d), states: The schedule shall promote consistency, uniformity, and objectivity. The schedule and any amendment thereto or revision thereof shall apply prospectively and shall apply to and govern only those permanent disabilities that result rom compensable injuries received or occurring on and after the effective date of the adoption of the schedule, amendment or revision, as the fact may be. For compensable claims arising before January 1, 2005, the schedule as revised pursuant to changes made in legislation enacted during the 2003-04 Regular and Extraordinary Sessions 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.

[3] Pendergrass is not binding on this court, but we consider it for the limited purpose of pointing out the contemporaneous interpretation and application of the workers compensation law by the Board. (Smith v. Workers Comp. Appeals Bd. (2000) 79 Cal.App.4th 530, 537, fn. 2.)

[4] . . . In all proceedings under this division before the appeals board, costs as between the parties may be allowed by the appeals board. ( 5811, subd. (a).)