Opinion
Rehearing Denied Aug. 20, 1968.
Everett A. Corten, San Francisco, Edward A. Sarkisian and Nathan Mudge, Los Angeles, for respondent Appeals Board.
Ghitterman, Spielman & Steel and Allan S. Ghitterman, Ventura, for petitioner.
T. Groezinger, Loton Wells, and G. K. Bogue, San Francisco, for respondent Fund.
McCOY, Associate Justice pro tem.
Retired Judge of the Superior Court sitting under assignment by the Chairman of the Judicial Council.
This is a proceeding to review a decision of the Workmen's Compensation Appeals Board affirming the decision of a referee, after hearing, that petitioner take nothing on his claim for compensation by reason of an industrial injury suffered by him.
On December 16, 1966, petitioner filed with the Workmen's Compensation Appeals Board an application to adjust his claim for compensation for an industrial accident (later found to have occurred on January 5, 1965) While employed as a foreman by respondent Goleta Lemon Association. In his application, filed as Case No. 7276, he claimed that the accident resulted in a compensable industrial disability for the period from September 19 to November 19, 1966.
We are not here concerned with the decision of the board that petitioner take nothing by reason of his claim in Case No. 7275 based on an accident in March 1965 while working for the same employer. Petitioner does not seek a review of that decision. All references herein to the record are those which relate only to Case No. 7276.
Following a hearing on petitioner's claim the referee made his findings and award on January 30, 1967. Among other things the referee found that petitioner sustained a compensable injury on January 5, 1965; that his earnings resulted in a weekly compensation rate of $64.12; that his earnings for purposes of permanent disability were maximum; and that the injury caused temporary total disability from September 19, 1966, through November 19, 1966, for which indemnity is payable at $64.12 per week. On the basis of these findings the referee made an award against the employer's insurance carrier, State Compensation Insurance Fund, of temporary total disability indemnity of $567.92 payable forthwith, together with certain other items which are not important here.
In due time both respondents petitioned for reconsideration which was granted. The petition for reconsideration was on the ground that during the two months petitioner was off work his employer 'paid the applicant his full wages,' that in awarding applicant temporary disability for this period the applicant in effect is being awarded a double recovery which is not permissible under the law, and that the award is therefore erroneous. In their petition the respondents asked the board to make new findings that the applicant suffered no The decision of the board after reconsideration which is here under review was filed September 12, 1967. by their decision a majority of the board vacated the referee's findings and award of January 30, 1967, and found that on January 5, 1965, the applicant 'sustained injury arising out of and occurring in the course of his employment to his right foot,' and that 'Said injury caused no compensable wage loss.' The award made the same day was limited to reimbursement for the expenses incurred by the applicant for self-procured medical treatment. The reasoning of the board as stated in the opinion of the majority on reconsideration was that 'when wages are continued even during a period of an employee's temporary total disability, the employee suffers no wage loss, and the carrier has no liability to pay temporary disability indemnity.' It further concluded that 'Evidence Code Section 631 states 'Money delivered by one to another is presumed to have been due the latter.' There is nothing in the record to rebut this presumption. Further, common sense dictates that continued salary to an employee even during a period of absence because of disability is not intended merely as a gift.' It distinguished the case of Mercury Aviation Co. v. Ind. Acc. Comm., 186 Cal. 375, 199 P. 508. It stated: 'In that case the employer sought a lien against an award of compensation for wages paid during the period of the employee's disability. The Court did not directly face the issue of whether or not the employee in fact and in law suffered a compensable wage loss entitling him to temporary disability indemnity during the period in which he received his wages despite his disability. Further the Court was primarily concerned with the employer's right to a lien, an issue with which we are not concerned herein since no lien claim is being asserted by this employer. We are therefore convinced that the award of temporary disability indemnity must be vacated and appropriate Finding and Order substituted in lieu thereof.'
Applicant contends that he was entitled to temporary disability indemnity from the insurance carrier in addition to the full salary paid by his employer. He asserts that the salary was a gratuity and that the conclusion of the appeals board that the carrier has no liability because he suffered no wage loss is contrary to the law.
We granted the petition for a review of the board's decision in order to determine whether the board followed the law in making its decision. In our opinion it did not. Here the board, in effect, determined that because the employer paid the applicant full salary during the period of total disability there was no 'wage loss' and consequently no temporary total disability. In making this determination the board clearly disregarded the applicable sections of the Labor Code and the decided cases and, in effect, put the cart before the horse.
In a case such as the one before us it is the duty of the board to determine in the first instance whether the injury to the applicant has caused temporary total disability. In other words, the board must first find whether the employer or his compensation insurance carrier is liable to the applicant for disability payments as provided in section 4653 of the Labor Code. The question is whether the applicant has suffered a compensable industrial injury. 'Disability' as used in the Workmen's Compensation Law means a combination of physical incapacity and inability to work. (Associated Indem. Corp. v. Ind. Acc. Comm., 124 Cal.App. 378, 12 P.2d 1075; Subsequent Injuries Fund v. Ind. Acc. Comm., 135 Cal.App.2d 544, 288 P.2d 96.) 'The period of 'temporary disability' is the period of time following injury during which the employee is recovering from the effects of the injury and is not able to work--the 'healing period." (California Workmen's Comp. Practice, C.E.B. 1963.) Whether the employee suffered a 'loss of wages' during that period has In the case before us the board based its decision in part on Fred Gledhill Chevrolet v. Ind. Acc. Comm., 62 Cal.2d 59, p. 62, 41 Cal.Rptr. 170, p. 173, 396 P.2d 586, p. 589, where the court said: 'The primary element of temporary as distinguished from permanent disability is loss of wages.' Allied Compensation Ins. Co. v. Ind. Acc. Comm., 211 Cal.App.2d 821, 831, 27 Cal.Rptr. 918, and American Can Co. v. Ind. Acc. Comm., 196 Cal.App.2d 445, 451, 16 Cal.Rptr. 424, are cited in support of this statement. In American Can Co. the court said (p. 451, 16 Cal.Rptr. p. 428) that 'Temporary disability indemnity is measured in terms of wage loss.' Allied Compensation Ins. Co. is to the same effect. The court there said, among other things, that "disability,' as that term is used in connection with the Workmen's Compensation Act, is a composite of two principal elements that, although distinct, generally coincide in greater or lesser degree but need not necessarily do so, i. e., (1) actual incapacity to perform the tasks usually encountered in one's employment and the wage loss resulting therefrom, and (2) physical impairment of the body that may or may not be incapacitating.' It is our opinion that, when read together, these cases go no further than to hold that, in cases of temporary disability as distinguished from cases of permanent disability, the applicant's loss of wages is the primary element in determining the amount of indemnity to be paid as compensation for such disability.
Once it has been determined that the applicant has sustained a compensable temporary total disability, it is the proper function of the board to determine the liability of the employer and his compensation insurance carrier for the payment of the disability benefits computed in the manner provided by the Labor Code. In making that determination it is proper to consider, whether the applicant has sustained a 'loss of wages.' As indicated by the cases discussed above, this is a primary element to be considered in determining the amount of such liability.
The mere fact that an employer has paid to an employee during the period of his incapacity an amount of money equal to the wages he would have earned had he been on the job does not necessarily require the board to deny the applicant's claim. Section 4909 of the Labor Code provides that 'Any payment, allowance, or benefit received by the injured employee during the period of his incapacity, or by his dependents in the event of his death, which by the terms of this division was not then due and payable or when there is any dispute or question concerning the right to compensation, shall not, in the absence of any agreement, be an admission of liability for compensation on the part of the employer, but any such payment, allowance, or benefit may be taken into account by the appeals board in fixing the amount of the compensation to be paid. The acceptance of any such payment, allowance, or benefit shall not operate as a waiver of any right or claim which the employee or his dependents has against the employer.' Section 5001 of the Labor Code provides that 'Compensation is the measure of the responsibility which the employer has assumed for injuries or deaths which occur to employees in his employment when subject to this division. No release of liability or compromise agreement is valid unless it is approved by the appeals board or referee.' With these sections in mind, the board must determine whether the payment made by the employer satisfied his compensation liability. That determination City of Los Angeles v. Ind. Acc. Comm.,
Bryant v. Industrial Acc. Com. Bulger v. Industrial Acc. Com. Evans v. L. A. Ry. Corp. Mercury Aviation Co. v. IndustrialAcc. Com. Stan v. California Golf Club Brooks v. City of Los Angeles [I.A.C.]In Mercury Aviation Co. v. Ind. Acc. Comm., 186 Cal. 375, 199 P. 508, the applicant was paid his full wages of $35 a week for five weeks when he was unable to work because of an industrial injury and for four weeks in which he was able to do only light work. He was subsequently discharged and filed a claim for benefits. The commission fixed his compensation at $20.83 a week and allowed the employer a credit for four weeks of the five-week period of total disability, that is, a credit of $83.32. The employer contended that a larger credit should have been allowed. The court, relying on the former statute which incorporated Labor Code, section 3752, concluded that where the employer chose to continue full payment during a period of total disability in the absence of any agreement and thereafter to accept services from the employee and make regular payments to him without any understanding that the services were not worth the sums paid and that some portion thereof was paid as compensation, it was not entitled as a matter of legal right to insist upon the deduction of the payments from the amount of the award. It further concluded that it was logical for the commission to allow the credit to the extent of compensation payable during the period of total disability and for it to refuse to credit the employer with the amount by which the payments exceeded the payments called for by the act and refusing to allow any credit for payments made after the employee returned to work. As the court said in that case, even though the weekly payments by the employer 'exceeded the actual value of the services rendered by the employee subsequent to his injury, nevertheless, the employer cannot intstst upon a crekit for any sums paid as pure gratuities from benevolent motives, and not paid and accepted with the understanding that they constituted payments of compensation under the provisions of the Workmen's Compensation Act. Blackford v. Green, 87 N.F.Law 359 94 A. 401, affirmed 89 N.J.Law 357, 100 A. 1069.' (Mercury Aviation Co. v. Ind. Acc. Comm., supra, 186 Cal. 375, 377-378, 199 P. 508, 509.) (Ejkmphasis added.)
As we stated at the outet, we granted a review in this case in order to determine the validity of the decision of the board. As we have pointed out, it is our opinion that the board's decision is based on an erroneous interpretation of the law, in that the absence of a loss of wages is not the controlling factor in determining whether the applicant has suffered total partial disability, whatever bearing the absence of a loss of wages may have on the amount of indemnity to be paid, if any, for such disability.
In this connection it should be noted that 'If the injury causes temporary total disability, the disability payment is 65 per cent of the average weekly earnings during the period of such disability, consideration being given to the ability of the injured employee to compete in an open labor market. (Lab.Code, § 4653), whereas 'If the injury causes temporary partial disability the disability payment is 65 per cent of the weekly loss in wages during the period of such disability; provided, howewer, that such disability payment shall be reduced by the sum of unemployment compensation benefits and extended duration benefits received by the employee during the period of temporary partial disability.' (Lab.Code, § 4654.)
In our opinion the board's decision cannot be sustained because of its Mcrcury Aviation Co. v. Ind. Acc. Comm.,
In Fidelity & Cas. Co. of New York v. Workmen's Comp. App. Bd., 252 Cal.App.2d 327, 60 Cal.Rptr. 422, it was held that even though the board is not bound to accept the findings of the referee, it may not rely on secret findings of the probative facts upon which the determination of the issues before it depend. On the contrary, where the board, following reconsideration, rescinds the findings, decision and award of a referee, the law requires that the decision of the board shall be in writing 'and shall state the evidence relied upon and specify in detail the reasons for the decision.' (Lab. Code, § 5908.5.) The purpose of this requirement 'appears analogous to that of the requirement of section 1705 of the Public Utilities Code that decisions of the Public Utilities Commission contain separately stated findings of the basic facts upon all material issues. In each instance, the purpose is to assist the reviewing court to ascertain the principles relied upon by the lower tribunal, to help that tribunal avoid careless or arbitrary action, and to make the right of appeal or of seeking review more meamingful. (See MERCER V. PEREZ (1968) 68 Cal.2d ----, ----, 65 CAL.RPTR. 315, 436 P.2d 315;[a] Greyhound Lines, Inc. v. Public Utilities Comm. (1967) 65 Cal.2d 811, 813 , 56 Cal.Rptr. 484, 423 P.2d 556, and cases there cited.)' (EVANS V. WORKMEN'S COMP. APP. BD., 68 Cal.2d ----, 68 CAL.RPTR. 825, 441 P.2d 633 [b] [June 24, 1968].)
In the case before us the board failed to comply with the provisions of section 5908.5 of the Labor Code in the particulars discussed in this opinion.
The decision of the board after reconsideration is annulled and the case is remanded for further proceedings consistent with the views expressed in this opinion.
HERNDON, J., concurs.
ROTH, P. J., dissents.
[a]Advance Report Citation: 68 A.C. 102, 111.
[b] Abvance Report Citation: 68 A.C. 791.