BulletinSpringing into Fall

October 15, 20180

As Fall officially begins in and we all move towards the last few months of 2018, it’s a time to start “closing files” on the year that was and begin planning for the developments that lie ahead.  In that spirit, Mullen and Filippi had its annual partnership retreat which provided opportunities to build stronger partner relationships, have some fun, and reflect on developments in the law.  Most importantly, it allowed the partners from the 15 office locations across the state of California to analyze the work performed over the year and discuss methods to improve the efficiency and quality of the work to ensure that Mullen and Filippi continues to provide consistent and extraordinary defense representation to employers, carriers, and the workers’ compensation community.

Recovery:  Mullen and Filippi is Proud to Announce a Dedicated Subrogation Department

After the well deserved retirement of long-time subrogation attorney Lawrence Moore, who provided expert representation in 3rd party cases to our clients before all venues in the state, Mullen and Filippi has created a multiple attorney dedicated subrogation unit that can handle all cases in which an employer or carrier may be entitled to recovery in subrogation.  In Northern and Central California, Edward Hummer and Daniel Stevens of our Santa Rosa Office will be handling all claims.  In Southern California, all claims will be handled by Peter Golden, the Managing Partner of our San Diego office.  All have extensive civil litigation backgrounds and would be happy to answer any questions you might have if the facts of a case suggest possible recovery in subrogation.

In Accordance with the Law: The Fitzpatrick Decision

The 3rd District Court of Appeal recently issued a major decision that rejected a WCJ’s award of permanent and total disability “in accordance of the fact,” that had been upheld by the WCAB.  The Court in California Department of Corrections and Rehabilitation v. WCAB (Fitzpatrick) addressed the question of whether a finding of permanent total disability must be made in accordance with Labor Code 4660 or if Labor Code 4662(b) provides an alternative path to a permanent and total finding.  The Court answered that Labor Code 4662(b) does not allow for a separate path to a finding of permanent and total disability and indicated that only Labor Code 4660 provides the method by which permanent and total disability can be found.

In wake of the Dahl decision there appeared to have been less reliance by applicants’ attorneys on vocational evidence to prove permanent and total disability as the methods for rebutting scheduled disability were clarified and, arguably, limited.  Many attorneys representing injured workers in cases where there were allegations of permanent and total disability seemed to shift efforts to instead proving that level of disability under Labor Code section 4662(b).  Labor Code section 4662(a) sets forth four conditions that are conclusively presumed totally disabling and subsection (b) states that “in all other cases, permanent total disability shall be determined in accordance with the fact.”  The Labor Code, of course, does not indicate what the “fact” or “accordance” in that sentence actually means, but the WCAB had long interpreted the subsection to mean that the WCAB had the discretion to find permanent total disability based on the factual and medical evidence in any given case.

In the Fitzpatrick case the applicant sustained an injury to his heart and psyche.  After medical legal evaluation, the applicant had 97% permanent disability for his heart and 71% permanent disability for his psyche (on the basis of a GAF of 45), which the parties stipulated combined to 99% under the 2005 PDRS.  The psyche medical legal evaluator, however, stated that the applicant was totally and permanently disabled on strictly psychiatric grounds.  The WCJ agreed at Trial and the WCAB affirmed.  On appeal, defendants argued that Labor Code 4660 requires that permanent disability must be rated in accordance with the 2005 PDRS.  The Court of Appeal agreed.

The Court, in rejecting prior interpretations of the law indicated that the interpretation of Labor Code 4662(b) by the WCAB in the case would return the workers’ compensation system to “the ad hoc decision making that prevailed prior to 2004,” and stated that the Legislature had clear intent in developing the schedule to promote uniformity and consistency in permanent and disability ratings, which could not be reconciled with allowing a WCJ to making a finding of permanent and total disability in accordance with the fact.

This case involved a pre-2013 injury and so addresses Labor Code 4660 and not Labor Code 4660.1, which applies to post-2013 injuries.  However, the language and reasoning of the Court focused on the legislative intent to promote uniformity and consistency in the 2004 amendments, and similar concerns led to the passage of SB 863 and the promulgation of Labor Code 4660.1 per statements contained in SB 863.  Arguably the removal of reference to diminished earning capacity in Labor Code 4660.1 indicates continued legislative intent to reduce unpredictability in the awarding of permanent disability, such that the rationale of Fitzpatrick might also be applied by higher courts to post-2013 cases.

However, it should also be noted that Labor Code 4660.1 specifically states at subsection (g) that “nothing in this section shall preclude a finding of permanent and total disability in accordance with Section 4662.”  That language was not present in Labor Code 4660 and Labor Code 4660.1 does not specify that subsection (g) only references subsection (a) of Labor Code 4662.  It remains to be seen if the logic of Fitzpatrick would be looked to in a post-2013 injury such that Labor Code 4660.1 would be seen as providing the exclusive method by which permanent and total disability can be awarded, or if the inclusion of subsection (g) of Labor Code 4660.1 revives the argument that there is a separate path to permanent and total disability.  In discussing legislative intent, it may be pointed out that if the legislature had intended for Labor Code 4662 to only set forth specific situations requiring a conclusive presumption of total disability, it would not have needed to include subsection (b) or the “in accordance with the fact” language.  The question of the significance of Labor Code 4662(b) in post-2013 injuries will almost certainly be litigated in the future.

The Bulletin was written in October 2018 by James Cotter, an Associate Partner in our Oakland office.

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