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E & J Gallo Winery v. WCAB (Dykes)
In its recent decision in E & J Gallo Winery v. WCAB (Dykes), the
Court of Appeal 5th District has considered another aspect of the
new apportionment law under SB 899.
In this decision, the court addresses the issue of successive
injuries for the employee who is working for the same employer,
concluding that its decision reaches balance from preventing the
employee from receiving a “double recovery” for the same disability,
while at the same time taking into account the “exponentially
progressive nature” of the workers’ compensation system.
The facts presented to the court were as follows:
• The employee sustained his
first injury to his back while working for this employer in
9/96, with the WCAB awarding a 20 ½% PD award. The employee then
returned to work with the same employer to a lighter duty and a
medical restriction of lifting 50 pounds.
• The employee then sustained his second back injury on
10/28/02; with the WCAB later awarding TTD benefits and a PD
award of 73% (453.50 weeks @ $230.00/week or $104,305.00) plus
life pension from which the prior Award ($11,680.00) was
subtracted. Noteworthy is that the WCAB rendered its decision
after implementation of SB 899, and thus was using is
retroactive application of the apportionment statutes.
• The employer then sought reconsideration (denied), contending
that the WCAB was incorrect in its approach, arguing that the
percentage of disability (rather than the dollars) should be
been subtracted to arrive at the current level of permanent
disability, which would have reduced the Award to 52 ½%. In
summary, the differences in the 2 approaches:
o WCAB/Dykes-The net award
would have been the amount awarded for 73% ($104,305.00)
less the prior Award of 20 ½% ($11,680.00) , or a net PD
award of $92,625.00 plus life pension of $50.25/week (which
the WCAB had apparently omitted from its original decision).
o Gallo-The net award would
be based on 73% less the 20 ½% previously awarded, or 52 ½%
for a new payment of $48,662.50 with no life pension.
The applicant’s age is not noted in
this decision, and thus the potential payout of the life pension
cannot be calculated, but the difference in the two above approaches
could easily approach $100,000.00 if this were a younger employee.
Noting the earlier Supreme Court decision in Fuentes v. WCAB (1976)
16 Cal 3d 1,3 this court noted that in Fuentes the court considered
three different approaches to this issue (identified as Formulas
“A”, “B” and “C”). This court also noted that the approach used in
Fuentes was the same approach which Gallo argued should be applied
in this case (Formula “A”), whereas the approach being argued by the
applicant (Formula “C”) was actually rejected by the Fuentes court,
which the applicant argued was valid due to the elimination of Labor
Code Section 4750 brought about by SB 899.
This court then considered recent decisions in Nabors v. Piedmont
Mill Company (2005) 70 C.C.C 856, in which the WCAB had looked at
the newly enacted Labor Code Sections 4663 and 4664, which would
essentially support Gallo’s position (and Formula “A”)in this case.
It was at this point in its decision that the court determined that
Fuentes was not controlling after SB 899, and thus by the same token
felt that the Nabors rationale was flawed.
It was on this basis that this court supported the WCAB (and
employee) position and applied Formula “C” in which the dollars (and
not the percentages) of disability were subtracted, thus arriving at
the higher recovery of permanent disability and protecting the life
pension (to which this court indicated the employee was entitled “by
operation of law” even though omitted by the WCAB in its original
decision.
As this decision would represent a significant departure from
Fuentes, the employer’s appeal to the California Supreme Court is
expected.
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