Metropolitan News-Enterprise


Wednesday, September 17, 2003


Page 3


Penalty Based on Workers Compensation Mileage Payment Delay Voided


By DAVID WATSON, Staff Writer


A delay by the State Compensation Insurance Fund in paying a claimant less than $1,000 in medical mileage benefits cannot support a penalty of $350,000, this district’s Court of Appeal ruled yesterday.

In an unpublished opinion, Div. Six overturned a Workers Compensation Appeals Board order making the award to Joseph Mike, who suffered severe brain injuries in a fall from a roof. The WCAB, relying on Labor Code Sec. 5814, assessed a 10 percent penalty on Mike’s estimated lifetime benefits of $3.5 million because the SCIF was late in reimbursing him for the mileage costs.

Sec. 5814 provides:

“When payment of compensation has been unreasonably delayed or refused, either prior to or subsequent to the issuance of an award, the full amount of the order, decision, or award shall be increased by 10 percent.”

Writing for the court, Justice Paul Coffee said the penalty was disproportionate to the amount of benefits involved under the Court of Appeal’s 2001 decision in County of San Luis Obispo v. Workers’ Comp. Appeals Bd. (Barnes), 92 Cal.App.4th 869. That case, he noted, held that WCAB decisions may be overturned if they are inequitable in light of the entire record in the case and the overall statutory scheme.

Coffee said Sec. 5814 should be amended to take account of the Barnes ruling.

“We cannot rewrite legislation, but we do not decide cases in a vacuum or with disregard for the consequences of our opinions,” the justice declared. “We urge the Legislature to amend section 5814 and any other workers’ compensation statutes that seemingly authorize the WCAB to assess exorbitant penalties for delays in paying insubstantial sums.”

The justice said the WCAB had no adequate justification for failing to consider Barnes in reaching its decision. He explained:

“The WCAB’s decision cannot stand. The record contains a detailed estimate of Mike’s future medical costs attached as an exhibit to a deposition that was admitted into evidence. Its reason for refusing to apply our decision in Barnes—SCIF’s failure to reference the exhibit—does not excuse the WCAB from complying with its statutory duties to review the entire record and apply existing appellate decisions.”

The WCAB also erred in failing to consider that Mike contributed to the delay in paying the mileage benefit, Coffee said.

“Although Mike was provided a printed mileage record form by his attorney, he did not use it but instead submitted an unsigned, confusing, multiple page, handwritten document that overstated mileage and did not contain critical information,” the appellate jurist wrote. “As a result, SCIF was required to make multiple requests for more information.”

On remand, he added, the WCAB should consider +Barnes+ and make findings as to the exact amount of benefits unreasonably delayed, the length of the delay, the effect of Mike’s failure to provide correct mileage and other critical information, the SCIF’s history of prompt payment, and whether any penalty assessed is “fair, reasonable, and proportional in the overall scheme of the workers’ compensation law and the purposes sought to be accomplished by that law.”

Justice Steven Perren and Presiding Justice Arthur Gilbert concurred.

The Los Angeles City Attorney’s Office, represented by Special Assistant City Attorney Katie Buckland and Deputy City Attorney William W. Koepcke, filed an amicus brief in the case.

The case is State Compensation Insurance Fund v. Workers Compensation Insurance Board (Mike), B161566.


Copyright 2003, Metropolitan News Company