Third Appellate District Upholds Award of Penalties for Late Advance Disability Pension Payments

In the recently decided Gage v. Workers Compensation Appeals Board, (CA3, Nov. 22, 2016 No. C081618)  the Court upheld the ability for employees to receive penalties for late advance disability pension payments. In this case, a Sacramento County Sheriff’s Deputy, represented by Greg Gomez of Mastagni Holstedt, APC, sustained a job-related injury and applied for an industrial disability retirement. In cases like these involving peace officers, the injured party can also apply for advance disability pension payments in order to cover living expenses while the disability retirement application is being decided.

Here, Gage petitioned for these advance payments and applied for industrial disability retirement on March 6, 2015. When payments did not arrive, Gage petitioned for late payment penalties against the County on June 2. The County claimed not to have received the application until June 11. The County also asserted that the Workers Compensation Appeal Board (WCAB) did not have authority over advance payments of pension because that would fall under another a different law (County Employees Retirement Law of 1937), and thus it could not apply penalties.

While this issue was being decided, the County continued to stall payments due to some additional technicalities (legal joinder). On June 29, it finally approved payment of benefits. Gage filed a petition for penalties because the benefit check wouldn’t arrive until July 2, almost 4 months after her initial request.

A workers compensation judge initially agreed with Gage that disability pension payments were considered compensation, and thus were subject to penalties for late payment. The County appealed arguing that advance pension disability payments were an obligation of the retirement system, and thus not subject to the penalty. On appeal, the WCAB overturned the workers compensation judge’s initial decision.

When the case was finally appealed to the Third Appellate District, the Court explained that the workers compensation law was intended to be liberally construed for the purpose of extending benefits to those injured in the course of employment. This includes making sure that those in law enforcement are given all the rights attendant to the workers compensation law. The advance disability pension payments are specifically provided to help officers who would otherwise have difficulty making the monthly bills if they had no income due to being injured. In fact, the payment of such benefits was made mandatory in 2002.

The Court also discredited the County’s argument that under the applicable code section, the repayment of retirement benefits was outside of WCAB’s jurisdiction. The Court stated that while the repayment of retirement benefits once disability retirement was approved was outside the scope of the WCAB’s jurisdiction, that did not bar it from asserting penalties on late payments, because such payments are considered compensation and therefore fall under WCAB’s jurisdiction. While the court remanded the case to determine if the delay in this case was sufficiently unreasonable such that penalties were required, this case still stands as a big win for employees seeking disability retirement. Mastagni Holstedt, APC is requesting that this case be published so that it has precedential value.

Mastagni Holstedt, APC is privileged to have represented the Sacramento Deputy Sheriffs Association and Ms. Gage in obtaining this important result. Greg Gomez of Mastagni Holstedt, APC represented Ms. Gage in this matter.

Supreme Court Denies Active Duty Peace Officers Labor Code 4458.2 Disability Benefits Provided to Volunteer Peace Officers

On October 26th, the California Supreme Court decided the case of Larkin v. Workers’ Compensation Appeals Board. The Supreme Court ruled that Labor Code section 4458.2 does not apply to sworn peace officers who are regular, salaried employees of a law enforcement agency.  The Court held that this enhancement of disability benefits was only applicable to so-called "Posse Comitatus" (i.e. volunteer or certain reserve officers) and declined to extend the benefit to regular active duty officers.

Brian Dixon and Gregory Gomez from the Law Offices of Mastagni Holstedt, A.P.C. represented Officer Larkin before the California Supreme Court.  Larkin filed a claim for TD benefits under Section 4458.2 arguing the express language of the Section did not exclude full time active duty officers. Larkin sought these enhanced benefits after having utilized all available 4850 time.  The Workers’ Compensation Appeals Board had denied his claim for these post-4850 benefits. The Court of Appeal upheld the WCAB.

Under Labor Code section 4458.2 an officer’s temporary disability (or “TD”) benefit is set at the maximum statutory rate instead of being based on what they were actually earning. This means that if an officer was serving as a volunteer or reserve officer when they were injured on duty, they would receive TD benefits as if they were full-time employees of the agency. And the officer would receive TD benefits at the highest possible rate even if they were actually paid less while they were working.

This makes a huge difference in the amount an officer is paid for an on-the-job injury. Normally, an employee’s TD benefit payment is only two-thirds (2/3) of their regular salary. But under Section 4458.2 an officer would receive the maximum statutory rate of TD, as if they were among the highest paid employees.

To put this in real terms, in 2008 Police Officer John Larkin was seriously injured in a vehicle accident while on duty. His average weekly salary at that time was around $1000. The City of Marysville said it would only pay Larkin TD at two-thirds of his salary, meaning around $670 per week. But if Section 4458.2 was applied and Larkin was paid TD at the maximum statutory rate, he would receive over $900 per week in TD benefits. That is a difference of more than $10,000 over a year.

 

The Supreme Court’s explained Section 4458.2 was originally written to provide disability coverage to volunteer peace officers. Officer Larkin’s attorneys pointed out that the word “volunteer” was removed from the law in 1989 and is not in the other law it references (Labor Code section 3362). Selectively relying upon the legislative history, the Court held these amendments were not intended to broaden the law to apply to all peace officers. 

The Court further opined that regular peace officer employees are covered under Labor Code sections 4850 and 4853. These laws allow an injured officer to take up to one year of full-paid leave and then up to one year of TD benefits at the normal two-thirds rate. The Court argued that it was “balancing” the interests of regular and volunteer peace officers by denying regular officers Section 4458.2 benefits.

The Court ignored the reality facing many peace officers in smaller cities and rural counties. Officers like Larkin choose to serve in dangerous positions for less pay than their colleagues in wealthier cities and counties. They should not be punished when they suffer an on-the-job injury. But now, not only will officers like Larkin get less in TD benefits than many regular peace officers. They cannot even get the same TD benefits that volunteer peace officers receive. This ruling affects the rights of more than 73,000 police and sheriff patrol officers across in the state. (Employment Development Department, Police and Sheriff Patrol Officers in California.)

On behalf of the thousands of peace officers hurt by this inequity, Mastagni Holstedt, A.P.C. hopes the Legislature immediately fixes the law and overturns the Supreme Court’s ruling.

California Supreme Court Grants Review of Mastagni Holstedt, APC Workers Compensation Case

The California Supreme Court agreed to hear oral arguments on one of Mastagni Holstedt, APC's workers compensation cases. At issue in the case is whether a permanent peace officer is entitled to the maximum temporary disability benefit as a result of an on the job injury.

Officer John Larkin was injured in a motor vehicle accident in November of 2008 while employed as an active police officer with the City of Marysville. He received benefits under Labor code section 4850 which expired. He then received temporary disability benefits. The temporary disability benefits are paid at two thirds the weekly earning rate. Officer Larkin's weekly earnings were $1008 resulting in a $671 weekly temporary disability benefits rate.

However, Labor Code section 4458.2 states temporary disability benefits are paid at the maximum statutory rate for eligible peace officers. The maximum rate in 2008, the time of the case, was $916 per week. Labor Code section 4458.2 makes reference to Labor Code section 3362 which defines who is eligible for the maximum benefit. Labor Code section 3362 states that every person registered as an active police officer shall be considered an employee of the municipality he or she works for.

Labor Code section 3362 has evolved over time. Originally the language included only men and specified the peace officer had to be a volunteer to receive the maximum benefit. However, the California State Legislature in 1989 modernized the statute including both genders and removing the word "volunteer." This evidences the intent of the legislature to provide maximum benefits to all peace officers.

Officer Larkin challenged the lower compensation rate in front of the Workers' Compensation Appeals Board. He argued he was entitled to the full $916 per week rather than the $671 per week. The Workers' Compensation Appeals Board argued that since Labor Code section 3362 only applied to volunteer peace officers, Officer Larkin was not entitled to the maximum temporary disability benefit. On appeal, the California Court of Appeal for the Third District upheld the Workers' Compensation Appeals Board determination.

Mastagni Holstedt, APC appealed the decision to the California Supreme Court. In its briefs, the firm argues all officers, regardless of status, are entitled to maximum benefits. This is the clear language of the statute which must be followed by the court system. By reading extra terms into the statute, the Court of Appeal created an absurd result which harms peace officers across the state.

Oral argument for the case will be held on September 2, 2015 at 9 AM in San Francisco. The case will be argued by Mastagni Holstedt, APC attorney Brian A. Dixon. Mastagni Holstedt, APC attorney Gregory G. Gomez assisted in drafting the briefing materials for the case.

Court of Appeal Gives Retroactive Effect to Firefighter Injury Presumption

The California Court of Appeal ruled statutory changes to workers' compensation injury presumptions apply to cases pending prior to the change in the statute. In doing so, the Court of Appeal overruled the Workers' Compensation Appeals Board ("WCAB") who refused to apply the presumption to a pending case. This decision could affect the presumptions involved in many workers compensation cases.

 

The facts of Lozano v. W.C.A.B. are tragic. William Lozano worked as a firefighter for a Department of Defense installation. Lozano was diagnosed with stomach cancer and succumbed to the disease in September of 2007. In November of 2009, Lozano's wife and two young children filed a workers compensation claim alleging the stomach cancer was work related.

 

On January 1, 2009 the legislature amended the Labor Code so that firefighters like Lozano could take advantage of the cancer presumption. This means the family would not need to prove Lozano's employment caused stomach cancer. Rather, the court would assume the cancer was from his employment and the employer would have to prove the cancer was not job related.

 

The Agreed Medical Examiner ("AME") concluded Lozano was exposed to carcinogens as part of his work activities. However, he could not conclusively say the carcinogens caused Lozano's cancer. However, if the firefighter cancer presumption applied to Lozano's case, the AME concluded the cancer should be presumed as work related.

 

The WCAB determined the presumption did not apply to Lozano's case. The WCAB noted Lozano was not a qualifying firefighter under the statute at the time of his death. The WCAB refused to apply the statutory change retroactively because the Legislature did not provide for retroactive application in the statute.

 

The Second District Court of Appeal reversed the WCAB's decision and held the presumption did apply to Lozano's claim. In general new statutes operate prospectively unless the Legislature clearly indicates otherwise. However, this general rule does not apply to new statutes that simply alter procedural or evidentiary statutes to trials occurring after enactment. Thus, if a new statute alters substantive legal rights, like who is liable for an injury, that statute cannot be applied retroactively. But, if the statute only alters procedural rights, like who has the burden of proof, the statute can be applied retroactively.

 

Here, the presumption test does not change who is liable for the injury, but rather who has the burden of producing evidence. Making the cancer presumption available to firefighters like Lozano only addresses the procedure to follow, not the substantive legal rights. Thus, the Court of Appeal overruled the WCAB and allowed Lozano's heirs to retroactively apply the cancer presumption.

 

This case should help a great number of public safety employees in the future. The instant statute only dealt with firefighters working at Department of Defense facilities. But the court's logic could be applied to any new statute which changes the evidentiary burdens for workers compensation claims. Thus, when the legislature changes the statute to help more people, any pending claims can take advantage of that new rule.