Minatta Transportation Co. v. WCAB (Lanning)

Filed 7/13/07 Minatta Transportation Co. v. WCAB (Lanning) CA1/4

NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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

THE COURT:^*

Minatta Transportation Company (Minatta) and its workers compensation insurer, St. Paul Travelers, petitioned for review of a decision by the Workers Compensation Appeals Board (WCAB). There being no facts or circumstances to distinguish the instant case from Costco Wholesale Corp. v. Workers Comp. Appeals Bd. (2007) 151 Cal.App.4th 148 (Costco), we follow that decision and annul the award of permanent disability indemnity to respondent Paul D. Lanning, and remand the matter for recalculation of that award.

BACKGROUND

Lanning sustained an industrial injury on October 5, 2004, while employed by Minatta. Lanning received temporary disability benefits from October 2004 until July 2005. His condition became permanent and stationary on July 25, 2005.

In proceedings before a workers compensation judge (WCJ), the parties stipulated that Lanning was permanently partially disabled. The parties submitted the matter of calculating the permanent disability award to the WCJ, who initially used a new disability rating schedule that went into effect on January 1, 2005 (see Lab. Code,^[1]  4660), to determine the award. But after Lanning petitioned for reconsideration, the WCJ reversed himself and recalculated the award using the disability rating schedule in effect at the time Lanning was injured in 2004. The result was a substantially higher award. The WCAB upheld the revised award.

DISCUSSION

Labor Code section 4660 governs the calculation of the percentage of permanent disability. Effective April 19, 2004, that statute was amended as part of Senate Bill No. 899 (20032004 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 [AMA] Guides to the Evaluation of Permanent Impairment (5th ed.) went into effect on January 1, 2005. This schedule superseded the 1997 rating schedule that was in effect . . . in 2004. (Costco, supra, 151 Cal.App.4th at pp. 151-152, fn. omitted.)

Although the new AMA rating schedule was to apply prospectively ( 4660, subd. (d)), the Legislature made an exception for cases in which there had been no determination of permanent disability prior to January 1, 2005. More specifically, the AMA schedule would apply to injuries occurring before January 1, 2005, when before that date 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.)

The notice required by section 4061 informs an injured employee whether the employer disputes either the existence of permanent disability, or the amount of permanent disability indemnity payable. ( 4061, subd. (a)(1).) The notice must be provided by the employer with the last payment of temporary disability indemnity. (Id., at subd. (a).)^[2]

At the time it upheld the award in this case, the WCAB had decided in a prior decision that the employers duty to issue the section 4061 notice arose upon the first payment of temporary disability. (See Pendergrass v. Duggan Plumbing (2007) 72 Cal.Comp.Cases 95.) Under this interpretation of section 4061, the proper disability schedule was the schedule in effect when temporary disability benefits commenced. But the WCABs interpretation of section 4061 is simply untenable in light of the sections direction to provide the notice with the last payment of temporary disability. Further, as discussed in Costco, the WCABs interpretation would render portions of section 4660, subdivision (d), meaningless and defeat the legislative goal of bringing as many cases as possible under the new workers compensation law. (Costco, supra, 151 Cal.App.4th at p. 157.)

Minatta complied with section 4061 when it mailed the required notice to Lanning after the last temporary disability payment was made in July 2005. Because there was no medical report indicating permanent disability before January 1, 2005, and because Minatta was not required to mail a section 4061 notice before that date, the AMA rating schedule applies to Lannings case. ( 4660, subd. (d).)

We note the WCAB itself no longer adheres to the view that the first payment of temporary disability triggers a duty to provide the section 4061 notice: We believe that interpreting section 4660(d) so that the triggering of the employers obligation to provide section 4061 notice attaches with the last payment of temporary disability accomplishes this Legislative intent [to apply the 2005 rating schedule at the earliest possible time]. (Pendergrass v. Duggan Plumbing (2007) 72 Cal.Comp.Cases 456, 462.)

DISPOSITION

The award of permanent disability indemnity is annulled, and the case is remanded for recalculation of that award using the permanent disability rating schedule effective January 1, 2005. The parties shall bear their own costs.

Publication Courtesy of California lawyer directory.

Analysis and review provided by Escondido Property line Lawyers.

^* Ruvolo, P.J., Reardon, J., Rivera, J.

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

^[2] Section 4061, subdivision (a), provides in pertinent part: 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 limitations 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. . . .