CPY Document - WorkCompCentral

1 SHEPPAR, MULIN, RICHTER& HAMPTON LLP

FRANK F ALZETT A (125146)MOE KESHA V ARI (223759)333 South Hope Street, 48th FloorLos Angeles , CA 90071- 1448Tel: (213) 620- 1780; Fac: (213) 620- 1398

Attorneys for DefendantSTATE COMPENSATION INSURNCEFUN

STATE COMPENSATION INSURNCEFUND

ROBERT W. DANRI (56833)JUITH D. SAPPER (116942)BETTY R. QUARES (155511)900 Corporate Center Drive, Suite 401

10 Monterey Park, CA 91754-7618Tel: (323) 526-2141; Fac: (323) 526-2012

Attorneys for Defendant12 STATE COMPENSATION INSURCE

FUND

MILAM & LARSEN , LLP14 PAUL A. LARSEN (136342)

234 E Colorado Boulevard, Suite 62015 Pasaden , CA 91101-2210

Tel: (626)585- 1888; Fac. (626) 585- 1886

Attorneys for Defendant17 REPUBLIC INDEMNITY COMPANY

OF CALIFORNIA

SONNNSCHEIN NATH& ROSENTHAL LLP

PAUL E.B. GLAD (79045)SEAN McENEANY (169105)685 Market Street, 6th FloorSan Francisco , CA 94105Tel: (415) 882-5000; Fac: (415) 543-5472

Attorneys for DefendantFIREMAN' FUN INSURNCE CO.

PROSKAUER ROSE , LLPLARY ALAN RAPAPORT (87614)2049 Century Park East, Suite 3200Los Angeles, CA 90067-3206Tel: (310) 557-2900; Fac: (310) 557-2193

Attorneys for DefendantZENITH INSURCE CO.

, GUMP, STRAUSS , HAUER& FELD , LLP

JOHN A. KACZYNSKI (93108)2029 Century Park East, Suite 2400Los Angeles, CA 90067Tel: (310) 229- 1000; Fac: (310) 229- 1001

Attorneys for DefendantsLIBERTY MUTUAL INSURACE CO.LIBERTY MUTUAL FIRE INSURNCECO. , LIBERTY MUTUAL INSURANCEGROUP , and HELMSMAN MANAGEMENTSERVICES , INe.

(OTHER DEFENDANTS AND COUNSEL LISTED AT END OF PLEADING)

WORKRS' COMPENSATION APPEALS BOARD

STATE OF CALIFORNIA

JACK HABLIAN, et al.

Plaintiffs

ZURICH, U. , et al.

Defendants.

) Case No. VNO 403724 , et al.

DEFENDANTS' JOINT PETITIONTO DISMISS APPLICANTS'SECOND AMENDED COMPLAINT

Date: August 30 , 2005Time: 1 :30 p.Place: Courtroom of the Hon. Roger A.

Tolman , Jr.

5477/9841-007LA WORD/69840v8

DEFENDANTS' JOINT PETITION TO DISMISS APPLICANTS' SECOND AMENDED COMPLAINT

II.

III.

IV.

5477/79841-007LA WORD/69840v8

TABLE OF CONTENTS

INTRODUCTION

.....................................................,""""""""""""""""""""""""'" ... ...

PROCEDUR HISTORY.................................................................................................

Dismissal of the Previous Pleadings ......

................ .................. ... ..... ......... ..... ....... ..

Applicants ' Second Amended Complaint..............................................................

ARGUMENT ............................................................................................................ .....

... ...

The WCAB Currently Does Not Have The Authority Or Rules AndProcedures Necessary To Hear Class Actions. ........................................................

The Legislature Has Not Authorized the WCAB to Hear ClassActions. ........................................................................................................ 6

Even if the WCAB Had the Authority to Hear Class Actions , ItLacks the Requisite Rules and Procedures to Do So. ................................

The Second Amended Complaint Violates Labor Code Section 5303 AndThe Rule Against Splitting A Cause of Action......................................................

Applicants ' Restitution Claim Is Neither Needed Nor Proper Since TheLabor Code Provides Applicants ' Exclusive Remedies ........................................

CONCLUSION................................................................................................................. .

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TABLE OF AUTHORITIES

CASES

Addin on v. Cave , 35 Cal. Compo Cas. 39 (1970) .............................................. , 10, 11 , 13 , 15

American Ps chometric Consultants Inc. V. Workers ' Com Appeals Bd.36 Cal. App. 4th 1626 (1995), rehearin denied (1995),review denied (1995) .................. ................................................................................... 6 , 19

Bell V. Industrial Accident Com. , 18 Cal. Compo Cas. 243 (1953) ...............................................

Beaida V. Workers ' Com o A eals Bd. , 263 Cal. App. 2d 204 (1968)........................................

Bernard V. Wall , 184 Cal. 612 (1921) ..............

................... ...........................................................

Charles J. Vacant Inc. V. State Com o Ins. Fund, 24 Cal. 4th 800 (2000)...................., , 17

Cross V. Pacific Gas & Electric Co. , 60 Cal. 2d 690 (1964).................................................

:.......

Currie V. Workers ' Co o A eals Bd. , 24 Cal. 4th 1109 (2001)...................................................

Med Inc. V. Fair E ment & Housin Com. , 43 Cal. 3d 1379 (1987) ........... , 10, 11 , 14

Glavitch V. Industrial Accident Com. , 44 Cal. App. 2d 517 (1944) ..............................................

Gold V. Los An eles Democratic Lea , 49 Cal. App. 3d 365 (1975) ........................................

Gracz k V. Workers ' Co Appeals Bd. , 184 Cal. App. 3d 997 (1986).................................. , 15

Greener V. Workers ' Com Appeals Bd. , 6 Cal. 4th 1028 (1993) ..................................................

Har rove v. Permanente Metals Co , 16 Cal. Compo Cas. 30 (1949).........................................

Hartford Accident & Indem. Co. v. Industrial Accident Com. , 216 Cal. 40 (1932)......................

Hilton Hotels Co . v. Workers ' Com o A eals Bd.60 Cal. Compo Cas. 1112 (1995), writ denied (1995).................................................. , 13

House V. Workers ' Com o A eals Bd. , 58 Cal. Compo Cas. 354 (1993),writ denied (1993), review denied (1993)......................................................................... .18

hes v. Ar onaut Insurance Com , 88 Cal. App. 4th 517 (2001).......................................

Masco Buildin Products Inc. v. Workers ' Com Appeals Bd.60 Cal. Compo Cas. 348 (1995), writ denied (1995),review denied (1995) .................................................................................................. . , 13

Moran v. Bradford Buildin Inc. , 57 Cal. Compo Cas. 273 (1992) .................................. , 13 , 14

Morris V. Williams , 67 Cal. 2d 733 (1967)....................................................................................

den v. WCAB , 11 Cal. 3d 192 (1974).......................................................................................

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5477/9841-007LA WORD/69840v8

Ramona Manor Convalescent Hos ital v. Care Ente rises177 Cal. App. 3d 1120 .(1986) ...........................................................................................

Rea v. Workers ' Com o A eals Bd. , 127 Cal. App. 4th 625 (2005) .............................. , 13 , 14

Roblesv. Workers ' Co o A eals Bd. , 60 Cal. Compo Cas. 536 (1995) ....................................

Rose V. Ci of Ha ard, 126 Cal. App. 3d 926 (1981 )......................................... ....................... 1 0

State Com o Iris. Fund V. Industrial Accident Comm. , 20 Cal. 2d 264 (1942)................................

Taliaferro V. Taliaferro , 144 Cal. App. 2d 109 (1956),cert denied 352 U.S. 971 (1957)......... ......

..................... ......................... .................. .. .... ..

Tidewater Marine Western Inc. V. Bradshaw, 14 Cal. 4th 557 (1996) ................................... , 14

Weaver v. Pasadena Tournament of Roses Assn. , 32 Cal. 2d 833 (1948).......................................

STATUTES

Cal. Civ. Proc. Code 9 382 ......................

..... ........ ...........................................................................

Cal. Gov. Code 9 11340...................................................................................................................

Cal. Gov. Code 9 11343......................................................... ....................................................... .

Cal. Gov. Code 9 11344.....

""'''''''''''''.......................................................................................... .

Cal. Gov. Code 9 11346.4(b)........................................................................................................ .

Cal. Gov. Code 9 11346.8............................. ........ ............................

........................................... ..

Cal. Lab. Code 9 111 (a)................................................................................................................... 6

Cal. Lab. Code 9 129 .................................... ............................................................................... ..

Cal. Lab. Code 9 133 ........

................ .................................................................... ........................ .

Cal. Lab. Code 9 139.5 ................................................................................................................. .

Cal. Lab. Code 9 3207 ................................... ............................................................................... .

Cal. Lab. Code 9 3208.2 .................................................................................................................. 7

Cal. Lab. Code 9 3600 ......................................................................................................... , 15 , 17

Cal. Lab. Code 9 3602 "".............................................................................................................. .

Cal. Lab. Code 9 3 602( a) ................................................................................................................. 6

Cal. Lab. Code 9 3753 ................................................................................................................. 6 , 7

Cal. Lab. Code 9 4642 .................................

.......... .......... ................................................. ...... .... ...

Cal. Lab. Code 9 4650 ..........

................... ............ ........ ..... ...... ....... ........ '''''''''''''''''''''''''''''''''''''' .... .

-ll-DEFENDANTS' JOINT PETITION TO DISMISS APPLICANTS' SECOND AMENDED COMPLAINT

5477/9841-007LAWORD/69840v8

Cal. Lab. Code 9 4903 .. .................. ..... ................ ...................... ...... ......... .............. ..................... 7 , 9

Cal. Lab. Code.9 5300

'"'''''''''''''''''''''''''''''''''''''' ....................................,.... .......... ................ ...

, 11

Cal. Lab. Code 9 5303 ..

............................. ............. ,....... ..,............. ............... ........................

, 7, 15

Cal. Lab. Code 9 5307 ..................,.... .

................................................................................... ....... .

Cal. Lab. Code 9 5307(b)............................................................................................................. ..

Cal. Lab. Code 9 5307 (c)...

..................... ................... ..................................................... ...

, 13 , 14

Cal. Lab. Code 9 5307.4 ................... .....................................................

,................................ ...... .

Cal. Lab. Code 9 5307 . 5( a)................................... ........................................................................... 8

Cal. Lab. Code 9 5307 .5(b).............................................................................................................. 7

Cal. Lab. Code 9 5308 ................ . .................................................................................................... 8

Cal. Lab. Code 9 5311 ......

....................... ........ .................,................................... ...........................

Cal. Lab. Code 9 5316 .................................................................,.............................. .....................

Cal. Lab. Code 9 5601

"""""""""""",,,,,,,,,,,,,, ...............................................................................

Cal. Lab. Code 9 5708 .....................................................................................................................

Cal. Lab. Code 9 5710 ..

....................................... ............................................................................

CALIFORNIA CONSTITUTION

Cal. Const. Ar. 14 , 9 4 .................................................................................................................. 1 0

CALIFORNIA RULES OF COURT

Cal. Rules of Court, Rules 1850- 1861 ............................................................................................. 8

CALIFORNIA CODE OF REGULATIONS

lOCal. Code of Regs. 9 10401 ............ ......................... ............................. ......................................

lOCal. Code of Regs. 9 10590......

...... ............................................................................................

lOCal. Code of Regs. 9 10591 .................................................................................................... ....

TREATISES

11 Witkin Summary ofCal. Law (9th ed. 2004) Equity, 9 3....................................................... .14

- IV -


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LA WORD/69840v8

INTRODUCTION

By their Second Amended Complaint, Applicants once again ask this Court to

adjudicate a sweeping class action claim for benefits , penalties and interest allegedly owed to tens

of thousands of injured workers with admitted workers' compensation claims over a 15-year

period. Though Applicants have deleted all civil causes of action from their latest pleading, and

have limited their prayer for relief to a request for "traditional indemnity benefits" and

restitution " the Second Atended Complaint remains fatally defective for three reasons.

First, the Legislature has never authorized the Workers ' Compensation Appeals

Board (the "WCAB") to hear class actions. The Labor Code only permits individual claims by

employees and their dependents, and does not allow one injured employee to act as the

representative" of another injured employee in seeking compensation benefits. Moreover, the

court administrator has not adopted appropriate rules of practice and procedure for class actions

pursuant to Labor Code section 5307(c) and the Administrative Procedures Act (Cal. Gov. Code

99 11340 et seq ) (the "APA"). In order to adjudicate Applicants ' class action claim , this Court

necessarily would have to fashion a host of class action rules and procedures to avoid serious due

process concerns , including rules governing class certification, notice to class members

, "

opt out"

and intervention mechanisms, class discovery and the like. As the Court of Appeal recently

reaffrmed in Rea v. Workers , Compo Appea1s Bd., 127 Cal. App. 4th 625 , 647-48 (2005), the

WCAB may not resort to such ad hoc rules and procedures in violation of Section 5307 and the

AP A without "overstepping its authority.

Second, consistent with the common law rule against splitting a cause of action

Labor Code section 5303 provides that the only cause of action allowed at the WCAB is an

individual claim for compensation benefits. Each Applicant and proposed class member already

has filed such an individual claim. The Second Amended Complaint violates Section 5303 by

asking this Court to award them the very same "traditional indemnity benefits" that they either

have obtained, could obtain, or, iftheir individual claims have been resolved, could have obtained

in their individual claims. The law clearly forbids splitting a cause of action and litigating it twice

-- once as an individual claim and a second time as a purported class action.

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547779841-007LA WORD/69840v8

Third, Applicants again seek to augment the express remedies provided by division

4 of the Labor Code with the equitable remedy of "restitution. The remedies provided in

division 4 remain Applicants exclusive relief, and bar any claim for "restitution.

For all of these reasons , Defendants respectfully request that the Cour grant their

Joint Petition and dismiss Applicants' Second Amended Complaint without leave to amend.

II. PROCEDURL HISTORY

Dismissal of the Previous Pleadings

Applicants ' original "Class Action Complaint " fied on January 3 , 2001

unsuccessfully attempted to assert a cause of action under California s Unfair Competition Law

(the "UCL") on behalf of themselves and a putative class of California employees who had

sustained work-related injuries since 1990, and allegedly were paid less than the amount of

compensation benefits due to them under the law. The Complaint was dismissed because: (i) the

proposed class action was not a "superior" method of litigating the proposed class ' claims for

unpaid benefits and penalties; and (ii) those claims would require resolution of "individual and

complex" fact questions.

Applicants thereafter petitioned the WCAB for reconsideration. By Opinion and

Decision After Reconsideration dated May 22 , 2003 (the "May 22 , 2003 Opinion ), the WCAB

dismissed the Complaint on the ground that Appellants ' UCL claim was precluded by the

exclusive remedies provisions of division 4 of the Labor Code. Although the WCAB ruled that

the dismissal of the Complaint rendered moot the issue of class certification, the WCAB

nonetheless observed that consideration of class issues was premature since a motion for class

certification had not yet been filed. The WCAB rescinded the initial dismissal order, and gave

Applicants thirt days within which to file an amended pleading. Applicants unsuccessfully

petitioned the Court of Appeal , and then the California Supreme Court, for review.

On December 31 , 2003 , Applicants served their First Amended Complaint for

Restitution. That pleading made only three substantive changes to Applicants ' defective

Complaint: (i) rather than stating a single claim under the UCL , Applicants asserted two civil

- 2 -DEFENDANTS' JOINT PETITION TO DISMISS APPLICANTS' SECOND AMENDED COMPLAINT

5477/9841-007LA WORD/69840v8

causes of action for conversion and imposition of a constructive trst; (ii) Applicants claimed

discretionary penalties pursuant to Labor Code section 5814;1 and (iii) Applicants recast their

remedies, seeking restitution, an accounting and imposition of a constructive trust.

On May 7 , 2004, Defendants filed a Joint Petition to Dismiss Applicants ' First

Amended Complaint on three independent grounds. First, Applicants improperly sought to import

civil causes of action for "conversion" and "imposition of a constrctive trust" into a WCAB

proceeding. Second, Applicants continued to seek certain relief beyond the exclusive remedies

defined in the Workers ' Compensation Act (Cal. Lab. Code 99 3201 , et seq.) (the "Act"). Third

the First Amended Complaint again improperly purported to assert a class action on behalf of

countless injured employees, each of whom already has an individual workers ' compensation

claim pending before the WCAB.

On April 4, 2005 , this Court ruled that Applicants

' "

causes of action for conversion

and for constructive trst be dismissed" with leave to amend "to state a cause of action not barred

by the exclusive remedy doctrine." (Orders on Petition for Dismissal at p. 1.) This Court found

that dismissal of the conversion count was required because such civil causes of action are barred

by the "exclusive remedy doctrine of Labor Code 9 3600. (Opinion on Decision at p. 1.

Rejecting Applicants ' argument that constrctive trust is an equitable remedy that may be

employed in a workers ' compensation claim , this Court held that:

Workers ' compensation courts are courts of limited jurisdiction.While equitable remedies are sometimes employed, they may beused only if they relate to recovery of one or more of the fourtraditional workers ' compensation remedies of permanent disabilityunder, temporary disability, vocational rehabilitation or medicaltreatment. Theoretically, they may also be applied if they relate toone of the five areas of special jurisdiction: appeal from a decisionand order of the Rehabilitation Unit, Labor Code 9 132a casesPetitions for Serious and Wilful Misconduct under Labor Code 94551 and 4552, credit applications under Labor Code 9 3681 andFindings under Government Code 9 21166. The Board also hasjurisdiction over penalties and interest under Labor Code 9 5814 andsanctions under Labor Code 9 5813. Since none of these

1 After Defendants petitioned for dismissal of the First Amended Complaint, Applicantsclaimed that the request for discretionary penalties under Section 5814 had been added by mistakeand voluntarily withdrew the request.


5477/9841-007LA WORD/69840v8

prerequisites to jurisdiction are alleged, the complaint must be

dismissed.

(Opinion on Decision at pp. 1-

Pursuant to the reasoning" of the May 22 , 2003 Opinion, this Court deferred

ruling on whether Applicants can maintain a class action. Nonetheless, this Court observed that

the Court of Appeal's recent decision in Rea v. Workers , Compo Appeals Bd. , 127 Cal. App. 4th

625 (2005), called into question the viability of the "thirt-five year old case" relied upon by the

WCAB and by Applicants Addington v. Cavey, 35 Cal. Compo Cas. 39 (1970), as grounds Jor

deferral:

On the other hand, the recent Second District Court of Appeal caseof Rea V. WCAB (Milbauer) (2005) Cal. App. 4th -Cal.Rptr. -' 70 CCC at pp. 16 - 18 & 23-28 of the slip opinion)would seem to. suggest that the Board may not adopt ad hocprocedures to govern a situation. While it is only persuasive

authority on the issue of certifying a Class, it is recent case of

importance on a similar issue.

Applicants ' Second Amended Complaint

On April 22 , 2005 , Applicants filed a Second Amended Complaint for restitution

(the "Second Amended Complaint" or "SAC" The gravamen of the Second Amended

Complaint remains the allegation that Applicants and proposed class members pursued admitted

claims for workers ' compensation benefits 2 but did not receive all of the benefits , penalties and

interest to which they were entitled.

The Second Amended Complaint purports to be a representative action brought on

behalf of a class consisting of all:

California employees that have sustained an admitted compensablework related injury between January 1 , 1990 and the presentwhether represented by counselor not and who were not properlypaid workers ' compensation indemnity benefits including but notlimited to Total Temporary Disability (TTD), Permanent PartialDisability (PPD), Vocational Rehabilitation Maintenance Allowance(VRMA), interest or self-imposed penalties pursuant to and accordance with Labor Code sections 4650 , 139. 4642 and 5800.

2 Each Applicant "either currently has pending, or has had pending admitted industrialclaims for injury... for which indemnity benefits have been paid" and "has caused to be filed anApplication for Adjudication of Claim" with the WCAB. (SAC at 2 and 9.


547779841-007

LA WORD/69840v8

(SAC at ~~ 1 and 4.) Included within the proposed class are injured workers who pursued claims

at the WCAB while being represented by diferent counsel than the attorneys who have fied the

Second Amended Complaint in this proceeding. (SAC at ~~ 2 9 and 19.

The Second Amended Complaint seeks "to recover only those indemnity benefits

and/or remedies over which the WCAB maintains jurisdiction, to wit, the recovery of those

traditional indemnity benefits including Total Temporary Disability, Permanent Partial Disability,

Vocational Rehabilitation Maintenance Allowance, self-imposed penalties and interest." (SAC at

~ 1.) Applicants ask the WCAB for an "order of restitution" of benefits that allegedly should have

been, but were not, paid to them. However, Applicants simultaneously aver that by fiing the

Second Amended Complaint they "do not waive their individual rights to such redress in the

Workers ' Compensation Appeal Board forum." (SAC at ~ 22.) Thus , Applicants ask this Court

to award them via a class action, the very same workers ' compensation benefits which they

reserve "their individual rights" to seek in their previously fied claims for benefits.

III. ARGUMENT

The WCAB Currently Does Not Have The Authodty Or Rules And

Procedures Necessary To Hear Class Actions.

Applicants have asked the WCAB to do what it currently is not authorized or

equipped to do -- adjudicate a class action claim for benefits that allegedly were not paid, or not

paid timely, in their individual claims. The entire workers ' compensation statutory scheme is

based upon adjudication of individual claims brought by injured employees and their dependents.

The Legislature has never authorized one injured employee to bring a "representative" claim on

behalf of other injured employees , nor has the WCAB itself promulgated any rules or procedures

to govern class actions. For these reasons , the Court should decline to entertain Applicants ' class

action claim, and should instead dismiss the Second Amended Complaint with prejudice.


5477/9841-007LA WORD/69840v8

The Leeislature Has Not Authorized the WCAB to Hear Class Actions

The WCAB "is a tribunal of limited jurisdiction, with no powers beyond those

conferred upon it by (Aricle 14) of the state Constitution and the provisions of... the Labor Code.

State Compo Ins. Fund V. Industrial Accident Com. , 20 Cal. 2d 264 266 (1942); see also Cal. Lab.

Code 9 111(a) (the WCAB "shall exercise all judicial powers vested in it under (the Labor) code

Because the Legislature has exercised the power conferred upon it by the California Constitution

Aricle XIV in providing for WCJ's and the Board, constitutional provisions governing the state

judicial system contained in Aricle VI have no application in the workers ' compensation system

and the jurisdictional provisions of the workers' compensation law are of 'limited scope.

American Psychometric Consultants, Inc. V. Workers ' Compo Appeals Bd. , 36 Cal. App. 4th 1626

1638 (1995), rehearing denied (1995), review denied (1995).

Under the jurisdictional provisions of the Labor Code, the WCAB has the authority

to hear proceedings "for the recovery of compensation, or any right or liability 'arising out of or

incidental thereto. . . , '" except as otherwise provided by division 4 of the Act. Cal. Lab. Code

9 5300; Greener v. Workers ' Compo Appeals Bd. , 6 Cal. 4th 1028 , 1038-39 (1993). However, that

grant of authority to the WCAB does not extend to class action claims for at least two reasons.

First, the Act does not contain any provision that refers to, or even hints at, class

actions. Instead, the entire statutory scheme contemplates individual actions by employees (and

their dependents) for each separate injury sustained by those employees. Labor Code section

3602(a) provides that " (w)here the conditions of compensation set forth in Section 3600 concur

the right to recover

. ..

compensation is , except as specifically provided in this section and

Section 3706 and 4558 , the sole and exclusive remedy of the employee or his or her dependents

against the employer

. . ..

Cal. Lab. Code 9 3602(a) (emphasis added). Labor Code section

3753 also speaks in terms of individual actions for compensation by injured employees and others

entitled to "compensation" under division 4:

The person entitled to compensation may, irrespective of anyinsurance or other contract, except as otherwise provided in thisdivision, recover such compensation directly from the employer. addition thereto he may enforce in his own name in the mannerprovided by this division, the liability of an insurer either by making

- 6-DEFENDANTS' JOINT PETITION TO DISMISS APPLICANTS' SECOND AMENDED COMPLAINT

5477/9841-007LA WORD/69840v8

the insurer a part to the original application or by fiing a separateapplication for any portion of such compensation.

Cal. Lab. Code 9 3753 (emphasis added).

Section 5303 further provides that " (t)here is but one cause of action for each

injury coming within the provisions of (division 4)." Cal. Lab. Code 95303 (emphasis added);

see also Cal. Lab. Code 9 3208.2 (" (A)ll questions of fact and law shall be separately determined

with respect to each injur" suffered by an employee), and 10 Cal. Code of Regs. 9 10401 ("

separate Application for Adjudication shall be filed for each separate injur for which benefits are

claimed even though the employer is the same in each case. "

Read together, these provisions clearly establish that the only claim allowed at the

WCAB is an individual claim for compensation benefits brought by the injured worker or his or

her dependents. Graczvk v. Workers ' Compo Appeals Bd. , 184 Cal. App. 3d 997 , 1003 (1986).

Once the injured employee fies a claim, the Labor Code allows the joinder of all

parties with an interest in that claim.3 But it does not authorize representative actions by one

injured worker on behalf of another. For example , Labor Code section 5303 provides , in part, that

(a)ll claims brought for medical expense, disability payments, death benefits , burial expense

liens , or any other matter arising out of such injury may, in the discretion of the appeals board, be

joined in the same proceeding at any time." Cal. Lab. Code 9 5303. Likewise, Section 5307.5(b)

authorizes the WCAB to " (p )rovide for the joinder in the same proceeding of all persons interested

therein, whether as employer, insurer, employee, dependent, creditor, or otherwise. Cal. Lab.

Code 95307.5(b). Pursuant to those provisions, the WCAB has promulgated its own rule

requiring that " (a)ll claims of all persons arising out of the same injury to the same employee shall

be fied in the same proceeding. " 10 Cal. Code of Regs. 9 10401 (emphasis added).

3 For example , medical providers and other third parties who provide goods or services toan injured worker are considered "parties in interest" and have the right to seek payment from theemployer by filing a " lien claim" against any compensation due to the injured employee. Cal.Lab. Code 94903; Charles J. Vacanti, M.D., Inc. V. State Compo Ins. Fund 24 Cal. 4th 800 , 811(2000).


5477/79841-007LA WORD/69840v8

By requiring that all interested parties be joined in the same proceeding, these

joinder rules negate any authorization to hear class actions. The courts have long recognized that

class actions constitute an exception to the general rule of compulsory joinder of all interested

parties. See Bernard v. Wall, 184 Cal. 612, 629 (1921) (" (P)rior to the enactment of (Code of

Civil Procedure (" e.P") section 382 , which authorizes the Superior Court to hear class actions),

general rules of compulsory joinder prohibited a part from representing interested parties who

had not joined in the action

);

Weaver v. Pasadena Tournament of Roses Assn. , 32 Cal. 2d 833

837 (1948) (holding that C. P. section 382 "is based upon the doctrine of virtal representation

and is an exception to the general rule of compulsory joinder ). The Labor Code does not

however, include any such exception to its joinder rules for class or representative actions.

Indeed, the only "representative" action permitted at the WCAB is an action by "

trustee or guardian ad litem" appointed "to appear for and represent any minor or incompetent

upon the terms and conditions which (the WCAB) deems proper. Cal. Lab. Code 95307.5(a).

The Labor Code does not authorize any other type of representative action.

The second reason why the WCAB is not authorized to hear class actions is that the

Legislature has never incorporated into the Labor Code the civil class action provisions of C.

section 382 or the California Rules of Court.6 The Labor Code is replete with provisions that

incorporate other sections of the C. e.P. See , Cal. Lab. Code 99 5308 (incorporating C.e.P.

section 1280 and vesting the WCAB with jurisdiction over arbitrations of insurance controversies

4 The WCAB does have a procedural mechanism for deciding common issues of fact or

law affecting different applicants , but it is not by way of a representative action. Instead, in 1991the WCAB promulgated rules for consolidation of separate, but related, workers ' compensationclaims for the purpose of receiving evidence and adjudicating common issues. lOCal. Code ofRegs. 99 10590, 10591. However, the consolidation procedure in no way impacts the applicantsunderlying individual claims, which continue to exist during the consolidation and proceedseparately once the common issues are determined. The consolidation regulations also do notallow one injured worker to represent the interests of any other injured worker.

5 e.C.P section 382 provides , in relevant part, that "when the question is one of a commonor general interest, of many persons , or when the parties are numerous , and it is impracticable tobring them all before the court, one or more may sue or defend for the benefit of all. Cal. Civ.

Proc. Code 9 382.6 Rules 1850-

1861 of the California Rules of Court set forth the case managementprocedures for class actions filed in the Superior Courts.


5477/9841-007LA WORD/69840v8

involving self-insured persons); Cal. Lab. Code 95311 (authorizing any par to object to aparticular WCJ on the same grounds specified in C.e.P. section 641); Cal. Lab. Code 95316

(providing that service of documents in proceedings before the WCAB may be accomplished in

the manner provided in the C. ); Cal. Lab. Code 9 5601 (incorporating the provisions ofC.e.P.

section 481.010 for attachment proceedings at the WCAB); Cal. Lab. Code 95710 (allowing the

deposition of a witness to be taken in the manner proscribed by laws for the taking of depositions

in civil actions under C. P. section 2016 et seq.

incorporate, or even mention, C.e.P. section 382.

However, the Labor Code does not

The Labor Code s incorporation of certain other provisions of the C. P. indicates

that the Legislature knows how to incorporate such provisions when it wants to. Thus, the

Legislature failure to incorporate C. P. section 382 into the Labor Code must have been

intentional. Cf. Ogden v. WCAB , 11 Cal. 3d 192 , 198 (1974) (interpreting Labor Code section

4903 , the court holds that " (u)nder the well-known rule of statutory interpretation expressio unius

est exclusio alterius in view of the inclusion by the Legislature of specific provisions applicable

to unemployment benefit liens, the Legislature s failure to enact similar provisions for other liens

seems intentional"). Labor Code section 5708 makes this point explicit:

All hearings and investigations before the appeals board or aworkers ' compensation judge are governed by the (division 4) andby the rules of practice and procedures adopted by the appealsboard. In the conduct thereof they shall not be bound by thecommon law or statutory rules of evidence and procedure.

. . .

Cal. Lab. Code 9 5708 (emphasis added).

The inescapable conclusion to be drawn from these authorities is that the

Legislature did not intend to authorize class actions at the WCAB. Indeed, the California Supreme

Court has often admonished that "an administrative agency cannot create a remedy the Legislature

has withheld. Currie v. Workers ' Compo Appeals Bd. , 24 Cal. 4th 1109 , 1117 (2001), citing

Dyna-Med, Inc. V. Fair Emplyment & Housing Com. , 43 Cal. 3d 1379 , 1387 (1987). For example

7 The Labor Code also does not incorporate Rule 23 of the Federal Rules of CivilProcedure , which the WCAB cited in its prior opinion in this case as authority to guide the Courtin ruling on a motion for class certification. (See May 22 , 2003 Opinion at p. II).


5477/9841-007LA WORD/69840v8

in Dyna-Med, the California Supreme Court concluded that the Fair Employment and Housing

Commission ("FEHC") did not have the authority to award punitive damages, even though the

Legislature delegated broad authority to the FEHC to fashion appropriate remedies for

discriminatory employment practices under the Fair Employment and Housing Act. As the

Supreme Court explained:

(T)he Legislature s objective in providing for an administrativerather than a judicial resolution of discrimination complaints was toprovide a 'speedy and informal' process unburdened by 'proceduraltecl1icalities. ' (Cite omitted).. ..The award of punitive damages -traditionally.. . limited to the judicial forum with its more extensiveprocedural protection ... -- has no place in this scheme... .. We are ofthe view that the statutory language, given its ordinary import andconstrued in context of the purposes and objectives of the lawtogether with the Legislature s silence on the issue of punitivedamages , compels the conclusion that the Legislature did not intendto grant the (FEHC) authority to award punitive damages.

Dyna-Med, 43 Cal. 3d at 1393.

The same is true here. There are compelling practical and public policy reasons

why the Legislature did not authorize class actions at the WCAB. The class action mechanism

involving as it would here, tens of thousands of putative class members (SAC at ~3), as well as

lengthy and complex class certification proceedings , is antithetical to the speedy and infonnal

resolution of claims , which is the hallmark of proceedings before the WCAB. See , Cal. Const.

Art. 14 , 9 4 (the administration of workers ' compensation disputes shall be done " expeditiously,

inexpensively, and without incumbrance of any character

);

Beaida v. Workers ' Compo Appeals

Bd. , 263 Cal. App. 2d 204 209 (1968) (holding that although the WCAB functions as a court, its

proceedings are intended to be simple , informal and speedy). In addition, without the "extensive

procedural protections" afforded to class action litigants in the civil courts, the WCAB'

adjudication of class actions may well raise due process concerns. See Rose v. City of Havward

126 Cal. App. 3d 926, 936 (1981) (Court holding that class actions are not authorized by the

Administrative Procedures Act, in part, because the administrative hearing process lacks rules and

procedures that "are constitutionally required as a matter of due process.. 00

Nonetheless , in Addington v. Cavey, 35 Cal. Compo Cas. 39 42 (1970), the WCAB

concluded that it could "entertain() litigation in the nature of a class suit, similar to that authorized

- 10 -


5477/9841-007LAWORD/69840v8

by California Code of Civil Procedure section 382. Defendants respectfully submit that the

WCAB erred in Addington for at least two principal reasons.

First, as explained above, the Labor Code does not incorporate e.C.P. section 382

or otherwise authorize class actions at the WCAB.

Second, the only legal authorities relied upon by the WCAB in Addington - Labor

Code section 5300 and the decision in Hartford Accident & Indem. Co. v. Industrial Accident

Com. , 216 Cal. 40 (1932) ("Hartford ) - do not support the conclusion reached in Addington

While Labor Code section 5300 confers on the WCAB the authority to hear all proceedings

concerning any right or liability arising out of or incidental" to the recovery of compensation, that

provision does not explicitly or implicitly authorize class actions. Instead, Section 5300 must be

read in conjunction with the other Labor Code provisions cited above 8 which make it clear that

proceedings "for the recovery of compensation" are individual claims instituted by an injured

worker or his or her dependents under division 4 of the Act, and not representative class action

claims.

Hartford also does not support the holding in Addington , since it did not involve a

class action at all. Instead Hartford dealt with an order by the WCAB requiring Hartford to pay

17 final awards previously obtained by fort injured workers in proceedings filed against their self-

insured employer, Pick ring Lumber Company ("Pickering

).

Hartford 216 Cal. at 43. Those

applicants then joined together in an action at the WCAB to enforce their awards against Hartford

which had issued a surety bond to Pickering. . at 44. The court in Hartford had no occasion to

rule , or even to comment upon, the WCAB' s authority to entertain class actions.

In sum, the WCAB does not have the express or implied authority to hear the

Hablian Applicants ' class action claim for benefits allegedly owed to tens of thousands of injured

workers who are not joined as parties to this action. Applicants ' claim should , therefore, be

dismissed in its entirety.

8 "The words of (a) statute must be constred in context, keeping in mind the statutorypurpose , and statutes or statutory sections relating to the same subject matter must be harmonizedboth internally and with each other, to the extent possible. Dyna-Med , 43 Cal. 3d at 1387.

- 11 -


547779841-007LA WORD/69840v8

Even if the WCAB Had the Authority to Hear Class Actions. It Lacks

the ReQuisite Rules and Procedures to Do So

Even if the WCAB did have the authority to hear class actions (which it clearly

does not), it could not do so unless and until the "cour administrator" adopts appropriate rules of

practice and procedure pursuant to Labor Code section 5307( c) and the AP A. Hilton Hotels Corp.

v. Workers ' Compo Appeals Bd. , 60 Cal. Compo Cas. 1112 (1995), writ denied (1995); Masco

Building Products, Inc. V. Workers ' Compo Appeals Bd. , 60 Cal. Compo Cas. 348 (1995), writ

denied (1995), review denied (1995); Moran V. Bradford Building, Inc. , 57 Cal. Compo Cas. 273

(1992).

In Moran, the WCAB considered whether it had the authority to dismiss an

applicant' s claim for failure to prosecute or to cooperate with discovery. Moran, 57 Cal. Compo

Cas. at 274. The WCAB held that, while it had "both inherent and statutory authority to provide

for dismissal" of claims

, "

until such a time that rules of practice and procedure on dismissal of

claim forms are adopted by the Appeals Board, such dismissal is neither authorized nor

appropriate. . at275 , 282-83. The WCAB further held that dismissal for failure to cooperate

with discovery was not appropriate, because, while such dismissal was authorized by the e.C.

the Labor Code did not incorporate those e.C. P. provisions. . at 286. Ifthe WCAB intended to

provide for the dismissal of a claim for failure to prosecute or cooperate with discovery, "the

specific adoption of these procedures should be by the Appeals Board's rules of practice and

procedure " as set forth in Labor Code section 5307 and the AP A.

Similarly, in Hilton Hotels and Masco Building Products, the WCAB followed

Moran in holding that, absent the enactment of rules and procedures allowing for the imposition of

monetary and other discovery sanctions , the WCAB lacked the authority to impose such sanctions.

The WCAB in Moran refused to allow the dismissal of claims without appropriate rule-making, even though Labor Code section 133 provides that the "appeals board shall have powerand jurisdiction to do all things necessary or convenient in the exercise of any power orjurisdiction conferred upon it" under the Labor Code. As the WCAB explained

, "

(h)istorically,the Appeals Board has exercised th(is) power and authority...by the adoption of rules of practiceand procedure. Moran, 57 Cal. Compo Cas. at 280. Likewise , Section 133 provides no basis forthe WCAB to entertain class actions absent properly adopted rules of practice and procedure.

- 12 -


5477/9841-007LAWORD/69840v8

Hilton Hotels , 60 Cal. Compo Cas. at 1114; Masco Building Products , 60 Cal. Compo Cas. at 350.

More recently, the Court of Appeal for the Second Appellate District strck down

rules announced by the WCAB in a case involving the Uninsured Employers Fund ("UEF"

because the WCAB did not follow the rule-making procedures required by Section 5307 and the

APA. Rea V. Workers ' Compo Appeals Bd. , 127 Cal. App. 4th 625 , 644-45 (2005). In Rea, the

WCAB reconsidered en banc a WCJ's decision concerning the identity of an applicant' s uninsured

employer and an award of benefits based thereon. . at 625-26. The WCAB affrmed the award

against the uninsured employer, and in the process, announced procedures to be applied in future

cases involving the UEF, including the requirement that the UEF appear at priority conferences

under Section 5502 and assist with the discovery of the proper employer. . at 629-30. Citing

Tidewater Marine Western, Inc. v. Bradshaw, 14 Cal. 4th 557 , 569-72 (1996), 10 the Rea court

found that the rules announced by the WCAB were intended to "govern its procedure" and apply

generally to other cases. As a result, the Court of Appeal held that, in adopting those rules without

complying with Section 5307 and the APA, the WCAB had "overstepped its authority. . at

625 647-48.

The decisions in Rea Moran Hilton Hotels and Masco Building Products all

compel the same result here - the WCAB cannot entertain Applicants ' class action claim unless

and until the Legislature authorizes the WCAB to hear class actions and the court administrator

adopts appropriate rules of practice and procedure for class actions pursuant to Section 5307(

and the AP A. If Applicants ' purported class action were allowed to proceed , this Court and/or the

WCAB would have no choice but to adopt on an ad hoc basis rules and procedures to govern the

adjudication of Applicant's class action claim, including class certification. In fact, the WCAB has

already suggested that this Court should follow FRCP 23 , while this Court has indicated that the

decision in Addington wil control (which decision cites C.e.P section 382). (See April 4 , 2005

Opinion on Decision, pp. 2-3). No matter what rules this Court or the WCAB ultimately purports

10 In Tidewater Marine Western, Inc. V. Bradshaw, 14 Cal. 4th at 568- , the CaliforniaSupreme Court held that a written enforcement policy promulgated by the Division of LaborStandards Enforcement was void because the Division had failed to follow the AP

- 13 -


5477/9841-007LA WORD/69840v8

to adopt in this case, those rules would run afoul of Section 5307 and the AP

Section 5307(c) provides that n(t)he court administrator shall adopt reasonable

proper, and uniform rules for distrct offce procedure regarding trial level proceedings of the

workers ' compensation appeals board. " CaL Lab. Code 9 5307( c). That statute also mandates that

(a)ll rules and regulations adopted by the court administrator pursuant to this subdivision shall

subject to the requirements of the rulemaking provisions of the Administrative Procedure Act.

CaL Lab. Code 9 5307( c) (emphasis added). Under the AP A, the court administrator must provide

notice of any proposed regulations, hold public hearings, and then publish final regulations with

the Secretary of State and Office of Administrative Law. CaL Lab. Code 99 5307(b) and 5307.4;

Cal. Gov. Code 99 11343, 11344, 11346.4(b), 11346.8. Rules and procedures adopted without

compliance with the requirements of Section 5307 and the AP A are considered "underground

regulations " and are per se invalid. Rea, 127 Cal. App. 4th at 644-47; Tidewater Marine, 14 CaL

4th at 569- 72; see also Moran, 57 CaL Compo Cas. at 282 (recognizing that " (p )ublic hearings

attendant to the rule making process assure that the impact of such procedures on the workers

compensation adjudications system are fully considered in both fashioning an appropriate rule or

rules and determining their scope

The message of these authorities is clear: Before the WCAB can hear any class

action, the court administrator must announce proposed class action rules , allow public comment

and hearings , and then adopt those rules in accordance with the AP A. Any "underground" rules

adopted or employed by the WCJ or WCAB to adjudicate Applicants ' class action claim here

would be per se invalid under the reasoning of Rea Moran and the other authorities cited above.

Unless and until the Legislature authorizes the WCAB to hear class actions and the

court administrator adopts proper rules governing class action proceedings under Section 5307(

and the AP A, 11 Applicants ' class action complaint must be dismissed.

11 Legislative authorization for class actions at the WCAB is a necessary pre-requisite toany rulemaking efforts by the court administrator, since " (a)dministrative regulations that alter oramend (a) statute or enlarge.. .its scope are void.... Dyna-Med 43 Cal.3d at 1389 citing Morrisv. Williams 67 CaL 2d 733 , 748 (1967).

- 14 -

DEFENDANTS' JOINT PETITION TO DISMISS APPLICANTS' SE OND AMENDED COMPLAINT

547779841-007LA WORD/69840v8

The Second Amended Complaint Violates Labor Code Section 5303 And The

Rule Against Splitting A Cause of Action

As discussed above, Labor Code section 5303 provides that "(t)here is but one

cause of action for each injury coming within the provisions of (division 4)." When read together

with the exclusive remedy provisions of Labor Code sections 3600 and 3602, Section 5303

establishes that the only cause of action allowed at the WCAB is a claim for compensation

benefits under division 4. Graczyk, 184 Cal. App. 3d 997 at 1003.

Section 5303' s requirement that an applicant assert in a single cause of action all of

his or her claims for benefits arising out of an injury is the workers ' compensation version of the

common law rule against "splitting a cause of action" applied in civil courts. Like the common

law rule, Section 5303 serves to prevent applicants from bringing multiple applications for

compensation that arise out of the same injury, and thereby avoid the waste of judicial resources

and expense that such multiple actions would cause. Glavitch v. Industrial Accident Coru , 44

Cal. App. 2d 517 523 (1944), disapproved on other grounds in Cross v. Pacific, Gas & Electric

, 60 Cal. 2d 690 , 694 (1964) ("Section 5303 is intended to prevent the splitting of causes of

action necessarily involved in the same transaction, to save the obligor the costs and vexation of

different suits

Applicants brazenly violate Section 5303 by asking this Court to award them and

proposed class members "traditional indemnity benefits" that purportedly should have been paid

in their individual claims, while simultaneously asserting that they and the proposed class

members do not waive their individual rights to such redress in the Workers ' Compensation

Appeals Board forum. (SAC at 22.) (Emphasis added. Clearly, the Second Amended

Complaint attempts to do what is expressly prohibited by Section 5303 and the rule against

splitting a cause of action -- have two bites at the same apple.

12 Section 5303 and the rule against splitting a cause of action are supported by policyconsiderations similar to those cited in Addington v. Cavey supra, 35 Cal. Compo Cases 39.Allowing multiple actions to be asserted based upon a common set of facts necessarily wouldcreate a risk of inconsistent findings and results , and have a "disruptive effect" on existingattorney-client relationships between the thousands of applicant-members-of-the-classes and their

attorneys of record in each of the many thousands of cases. Id. at 45.

- 15 -


5477/9841-007LAWORD/69840v8

Indeed, for at least some Applicants , the Second Amended Complaint represents

their "second bite" as they already have settled by compromise and release the very same claims

for indemnity benefits, penalties and interest that they seek to litigate here. By way of example

only, attached and marked as Exhibit 1 is a tre and correct copy of the June 1 , 1999 Opinion and

Order Approving Compromise and Release in the individual claim of one named Applicant

Timothy Taylor, against his employer and defendant Zenith Insurance Company. In paragraph

lO(i) of the Compromise and Release, Mr. Taylor, represented by one of the same counsel who

represents Applicants in this proceeding, expressly waived and released" all issues pertaining to

, TD , retro TD , future medical , mileage and penalties & interest with regard to all of the above

class of benefits." Having already litigated, settled and released all claims for benefits arising

from his purported injur, Mr. Taylor may not seek to recover more money via a class action.

Section 5303 prohibits Applicants from bringing individual claims for

compensation benefits , and then pursuing a second claim to recover benefits that Applicants

contend should have been, but were not, paid in the original claim. Similarly, Section 5303 bars

Applicants from bringing a second action to recover penalties and interest for purported

underpayment of benefits in their original claims. Accordingly, Applicants ' Second Amended

Complaint should be dismissed in its entirety and with prejudice.

Applicants ' Restitution Claim Is Neither Needed Nor Proper Since The Labor

Code Provides Applicants ' Exclusive Remedies

In their Second Amended Complaint, Applicants again seek to augment the express

remedies provided by division 4 with equitable remedies. This they may not legally do. The

remedies provided in division 4 of the Labor Code remain Applicants exclusive relief and bar the

equitable remedy of "restitution.

Throughout this litigation, Applicants have argued that, even if they do seek

remedies beyond those expressly set forth in division 4, the workers ' compensation system

13 Zenith and each of the other defendants reserves the right to seek dismissal of the

Second Amended Complaint, by individual petition to dismiss or other vehicle, based upon theexecution of a compromise and release in the applicant's individual claim.

- 16 -


54 7779841-007

LAWORD/69840v8

nonetheless provides equitable authority suffcient to craft such relief. In so arguing, Applicants

fail to recognize that equity may not extend the scope of relief already expressly provided by the

Labor Code. Nor may Applicants invoke the WCAB' s equitable powers to circumvent the Labor

Code s exclusive remedy provisions. Hughes v. Argonaut Insurance Company, 88 Cal. App. 4th

517 , 531 (2001) (there is no "equitable claim" exception to the exclusive remedy doctrine).

The Labor Code expressly "limit( s) the remedies available for injuries covered by

the (Act). Vacanti v. State Compensation Ins. Fund, 24 Cal. 4th at 811. Labor Code section

3600 provides that an employer s liability for compensation benefits is in lieu of any other

liabilty whatsoever to any person except as otherwise specifically provided in (Labor Code)

sections 3602 , 3706 , and 4558.,,15 "Compensation" includes "every benefit or payment conferred

by (division 4 of the Labor Code) upon an injured employee" -- and nothing more. Cal. Lab. Code

9 3207. "Together, these provisions establish that the liability of employers and insurers for

industrial injury which results in occupational disability or death' is limited to workers

compensation remedies. Vacanti, 24 Cal. 4th at 813 (quotation marks and citation omitted and

emphasis added).

The Labor Code defines the types of benefits available to employees for workplace

InJunes. It also defines the exclusive remedies for any alleged failure to pay such benefis. For

example , Labor Code section 4650 requires a ten percent penalty on any temporary or permanent

disability benefit payment that is late, regardless of the reason for delay. Similar penalties are

available for a delay or refusal to provide, or pay for, vocational rehabilitation benefits. Cal. Lab.

Code 99 139.5 and 4642. These statutes define the exclusive remedies available for Defendants

14 Division 4 reflects the Legislature s provision of comprehensive benefits and remediesto California s injured workers. It is inappropriate for the WCAB to substitute its judgment as tothe appropriate remedies for the alleged harm where the Legislature has already analyzedappropriate remedies and voted to put specific remedies into the Labor Code.

See Gold v.Los Angeles Democratic League , 49 Cal. App. 3d 365 , 373 (1975) (court may not substitute itsown judgment as to remedy where statute created by Legislature provides remedy for breach ofobligation).

15 The Legislature extended the exclusive remedy provisions to include insurers bydefining "employer" as including "insurer. " Vacanti , 24 Cal. 4th at 813.

- 17 -


5477/9841-007LA WORD/69840v8

alleged failure properly to administer workers ' compensation claims. Applicants cannot seek the

equitable remedy of restitution in addition to or as an alternative to those statutory remedies.

Applicants may argue that they are entitled to restitution here because the WCAB

has acknowledged that it has the power to grant equitable relief. Simply because restitution may,

in certain specified circumstances, be within the WCAB' s authority, however, does not mean that

it can be applied as a remedy in every instance. Indeed, under California law, the WCAB cannot

provide restitution where there are other available statutory remedies. Ramona Manor

Convalescent Hospital v. Care Enterprises , 177 Cal. App. 3d 1120, 1140 (1986) (Holding that

restitution is not available where there is an adequate remedy at law. See also Taliaferro v.

Taliaferro , 144 Cal. App. 2d 109, 113 (1956); and 11 Witkin Summary ofCal. Law (9th ed. 2004)

Equity, 9 3.

As the WCAB recognized, there are instances where the WCAB has "exercised its

equitable powers to order restitution under specifed circumstances. (May 22 , 2003 Opinion at

9: 5 (emphasis added).) In each of the "specified circumstances" cited by the WCAB , the parties

seeking restitution would have had no other remedy if the WCAB had not provided restitution.

(Id. at 9:5- 8 (citing Bell v. Industrial Accident Com., 18 Cal. Compo Cas. 243 (1953) (ordering

restitution to carrier who overpaid benefits due to clerical error by the Permanent Disability Rating

Bureau); Hargrove V. Permanente Metals Corp , 16 Cal. Compo Cas. 30 (1949) (ordering

restitution to carrier, where claimant had lied about her inability to work); Robles v. Workers

Compo Appeals Bd , 60 Cal. Compo Cas. 536 (1995) (ordering restitution to carrer where claimant

had concealed medical records demonstrating a non-industrial history and treatment prior to the

time of claimed history

);

House V. Workers ' Compo Appeals Bd , 58 Cal. Compo Cas. 354 (1993),

writ denied (1995), review denied (1995) (insurance carrier that furnished benefits because of

24. applicant's misrepresentation as to cause of injury was entitled to restitution).

Common to each of these cases is the lack of any statutory remedy to correct the

carrier s overpayment. 16 In other words, unless the WCAB exercised its equitable powers, the

16 These cases do not address the separate issue of whether the Act' s exclusive remedyprovisions apply, or do not apply, to insurer claims. That issue is likewise not presented here.

- 18 -


5477/9841-007LAWORD/69840v8

insurers would have had no means by which to recover benefits incorrectly paid: They would

have been left without a remedy. Here, on the other hand, the Labor Code provisions that

Applicants cite expressly define the remedies avail ble for Defendants ' alleged misconduct. To

seek equitable remedies in addition, or as an alternative, to such express statutory relief is directly

contrary to well-established California law governing the application of equitable remedies and the

exclusive remedy provisions of the Labor Code. 17 See American Psychometric Consultants , 36

Cal. App. 4th at 1645 (entertaining claims for restitution in cases where statutory remedies "do not

apply

Finally, Applicants may also argue that the WCAB's decision created a general

rightto restitution here. To the contrary, in discussing the allegations asserted by Applicants in a

prior pleading, the WCAB merely observed that restitution might be appropriate in a very specific

circumstance, after an uncontested or adjudicated audit determination by the Division of Workers

Compensation ("DWC") under Labor Code section 129. Not only do Applicants fail to allege any

known uncontested or adjudicated DWC audit determination, they also fail to allege that the DWC

audited their specific workers ' compensation claims and made an individual determination that

compensation is owed under Section 129(c). 18 As explained by the WCAB , without such a

determination, there could be no "property right" which arguably might give rise to "restitution

and, instead

, "

each case must be decided on its own merits regarding entitlement to temporary and

permanent disability alleged due and owing. " (May 22 2003 Opinion at 10:24-27.

Applicants ' demand for " restitution" is nothing more than a device by which they

seek to obtain remedies that, under specific provisions of the Labor Code, already are available to

any eligible proposed class member in his or her individual claim. Regardless of whether it may

17 Indeed, our research yielded no reported authority where an insurer was required to payrestitution to an applicant as a result of an order from the WCAB. This is not surprising given thebroad remedies found in Division 4.

18 In the May 22, 2003 Opinion, the WCAB determined that Labor Code section 129empowers the WCAB to order "restitution." However footnote 10 made clear that there is no rightto benefits or penalties where the DWC has not made a prior undisputed determination that suchbenefits or penalties are owed pursuant to an audit conducted under Labor Code section 129.There is nothing in Section 129 that empowers Applicants to seek restitution in a representativecapacity or to seek benefits absent an uncontested audit detennination by the DWe.

- 19 -


have jursdiction to do so, the WCAB may not grant restitution where express division 4 remedies

already exist. As a result, Applicants ' request for restitution should be strcken from the Second

Amended Complaint.

IV. CONCLUSION

For all of the foregoing reasons, Defendants respectfully request that the Court

dismiss Applicants ' Second Amended Complaint with prejudice.

Dated: June 9, 2005 SHEPPAR, MULIN, R1CHTER & HAPTON LLP

SATIONINSURNCE FUN

Dated: June 9, 2005

Dated: June 9 , 2005


STATE COMPENSATION INSURNCE FUN

BETTY R. QUARLESAttorneys for Defendant STATE COMPENSATIONINSURNCE FUN

PROSKAUER ROSE LLP

LARY ALAN RAPPAPORTAttorneys for Defendant ZENITH INSURCECOMPANY

SONNENSCHEIN NA TH & ROSENTHAL LLP

PAUL E.B. GLADAttorneys for Defendant FIREMAN' S FUNDINSURNCE COMPANY

'54 77179841-QC 7

LA WORD/69840v8


have jurisdiction to do so, the WCAB may not grant restitution where express division 4 remedies

already exist. As a result, Applicants' request for restitution should be stricken from the Second

Amended Complaint.

IV. CONCLUSION

For all of the foregoing reasons , Defendants respectfully request that the Cour

dismiss Applicants ' Second Amended Complaint with prejudice.


Dated: June 9, 2005

Dated: June 9, 2005

Dated: June 9, 2005

SHEPPAR, MULLIN, RICHTER & HAPTON LLP

FRANK FALZETTAAttorneys for Defendant STATE COMPENSATIONINSURANCE FUN

STATE COMPENSA nON INSURCE FUN

/) . / . . ..

BETT R. QUARAttorneys for Defendant STATE COMPENSATIONINSURNCE FUN

SONNENSCHII

::rL E.B. GL

Attorneys for Defendant FIREMAN' S FUNINSURNCE COMPANY

54 7719841-C 7LlIWORD/69840vB

- 20-DEFENDANTS' JOINT PETITION TO DISMISS APPLICANTS' SECOND AMNDED COMPLAINT

Dated: June 9 2005

Dated: June 9, 2005

12 OTHR DEFENSE COUNSEL

13 Donald P. Tobin, Esq.Edwin J. Lucks, Esq.

14 TOBIN LUCKS, LLP21300 Victory Blvd. , 3rd Floor15 Woodland Hils, CA 91367Telephone: (818) 226-340016 Facsimile: (818) 226-3401

17 e. Duke Mash, Esq.LAW OFFICES OF ROBERT

18 WHATLEY550 No. Golden Circle Drive

19 Santa Ana, CA 92705Telephone: (714) 560-019920 Facsimile: (714) 560-0188

2 I Laurence 1. Hutt, Esq.Amy B. Levin, Esq.

22 AROLD & PORTER LLP777 South Figueroa Street, 44th Floor23 Los Angeles, CA 90017Telephone: (213) 243-4100

24 Facsimile: (213) 243-4199

25 Jerilyn Cohen, Esq.LAUGHLIN, FALBO, LEVY

26 & MORESI, LLP200 South Los Robles Ave. , Suite 50027 Pasadena, CA 91101Telephone: (626) 568-970028 Facsimile: (626) 568-3906

AK, GUM, STRAUSS, HAUER & FELD, LLP

Attorneys for efendants LIBE UALINSURCE COMPAN, LIBERTY MUAL FIREINSURCE COMPAN, LIBERTY MUUALINSURCE GROUP, and HELMSMAMAAGEMENT SERVICES, INC.

MIAM & LARSEN LLP

PAUL A. LARSENAttorneys for Defendant REPUBLIC INEMNITYCOMPAN OF CALIFORNA

PARTY REPRESENTING

Attorneys for DefendantsFARRS INSURCE EXCHAGEMI-CENTY INSURCE COMPANand FREMONT COMPENSATION INSURCECOMPAN

Attorneys for DefendantsNATIONAL UNON FIR INSURCECOMPAN, INSURCE COMPANOF THE STATE OF PENNSYLVANIAAMRICAN HOME ASSURCE andAIG CLAIS SERVICES, INe.

Attorneys for DefendantsCONTThNTAL CASUALTY COMPANand RSKCO. CLAIMS SERVICES, INC.

Attorneys for DefendantRAPHS GROCERY COMPAN

547719841-007LAWORD/69840v8

- 21 -DEFENDANTS' JOINT PETITION TO DISMISS APPLICANTS' SECOND AMENDED COMPLAIT

. 05/1 /2005 09: 27 5255851885

Dated: June 9, 2005

Dated: June 9, 2005

12 OTHR DEFENSE COUNSEL

13 Donald P. Tobin, Esq.Edwin J. Lucks, Esq.

14 TOBIN LUCKS , LLP21300 Victory Blvd., 3rd Floor

15 Woodland Hils, CA 91367Telephone: (818) 226-3400

16 Facsioi1e: (818) 226-3401

17 C. Duke Marsh, Esq.LAW OFFICES OF ROBERT18 WHEATLEY550 No. Golden Circle Drive

19 Santa Ana, CA 92705Tdephone; (714) 560-0199

20 Facsimile: (714) 560-0188

21 Laurence J. Hutt, Esq.Amy B. Levin, Esq.

22 AROLD & PORTER LLP777 South Figueroa Street, 44th Floor

23 Los Angeles, CA 90017Telephone: (213) 243-4100

24 Facsimile: (213) 243-4199

25 Jerilyn Cohen, Esq.LAUGHLIN, FALBO, LEVY

26 & MORESI, LLP200 South Los Robles Ave. , Suite 50027 Pasad , CA 91101Telephone: (626) 568-970028 Facsimile: (626) 568-3906

MILAM AND LARSEN PAGE 02

AKIN, GUMP, STRAUSS , HAUER & FELO, LLP

JOHN A. KARACZYNSKIAttorneys for Defendants LIBERTY MUTUALINSURANCE COMPANY, LIBERTY MUTUAL FIREINSURNCE COMPANY, LIBERTY MUTUALINSURACE GROUP, and HELMSMANMAAGEMENT SERVICES , INC.

MILAM & LARSEN LLP

11t t--PAUL A. LARSEN

Attomt;ys fot Defendant REPUBLIC fNE:MNITYCOW ANY OF CALIFORNIA

PARTY REPRESENTING

Attorneys for DefendantsFARMERS INSURACE EXCHANGEMID-CENTURY INSURACE COWAN,and FREMONT COl'ENSATION INSURANCECOMPANY

Attorneys for DefendantsNATIONAL UNION FIRE INSURANCECOMPANY, INSURCE COMPANYOF THE STATE OF PENNSYL VANIA,AJ.RlCAN HOME ASSURANCE andAIG CLAIMS SERVICES , INC.

Attorneys for DefendantsCONTThNTAL CASUALTY CONWANYand RSKCO. CLAIMS SERVICES , INC.

Attorneys for DdendantRALPHS GROCERY COMPANY

5477/79841-007LAWORD/69840v8

- 21 -DEfENDANS' JOJN :fE'fTION TO DlSMJSS AfPLJCANS' SECOND AMENO.W COM.PMNT

Rebecca R. Weinreich, Esq.LEWIS BRISBOIS BISGAA& SMTIH LLP

221 North Figueroa StreetLos Angeles, CA 90012Telephone: (213) 250- 1800Facsimile: (213) 481-0621

James P. Diwik, Esq.Mar C. Richardson, Esq.SEDGWICK, DETERT, MORAN& AROLD LLP

One Embarcadero Center, 16th FloorSan Francisco , CA 94111-3628Telephone: (415) 781-7900Facsimile: (415) 781-2635

Rockard J. Delgadillo , Esq.City AttorneyValentine F. Dinu, Esq.Assistant City AttorneyRobert M. Unruh, Esq.Deputy City Attorney700 East Temple Street, Room 220Los Angeles , CA 90012Telephone: (213) 847-9822Facsimile: (213) 243-4199

Lloyd W. Pellman, Esq.County CounselPatrick A. Wu, Esq.Assistant County CounselJames 1. Castranova, Esq.Principal Deputy County CounselWorkers ' Compensation Division500 W. Temple Street, #648Los Angeles , CA 90012Telephone: (213) 974- 1919Facsimile: (213) 687-4745

David e. Capell , Esq.Elizabeth B. Vanalek, Esq.GORDON & REES275 Battery Street, Suite 2000San Francisco, CA 94111Telephone: (415) 986-5900Facsimile: (415) 986-8054

Craig S. Simon, Esq.Teresa R. Ponder, Esq.BURGER KAHN, a Law Corporation2 Park Plaza, Suite 650Irvine , CA 92614Telephone: (949) 474- 1880Facsimile: (949) 474-7265

Attorneys for DefendantsAMERICAN GUARNTEE LIABILITYINSURCE COMPANY, ZURCHAMERICAN INSURANCE CO. (assuccessor in interest to Zurich InsuranceCo. , U. S. Branch) and AMERICANZURICH INSURNCE COMPANY

Attorneys for DefendantCRAWFORD & COMPANY

Attorneys for DefendantCITY OF LOS ANGELES

Attorneys for DefendantCOUNTY OF LOS ANGELES

Attorneys for DefendantCONSTITUTION STATE SERVICE COMPANY

Attorneys for DefendantsTHE HARTFORD INSURANCE COMPANYCOMPANY and SPECIALTY RISK SERVICES

5477/9841-007LA WORD/69840v8


5477/9841-007LA WORD/69840v8

Jason B. Schlossberg, Esq.

SCHLOSSBERG & ASSOCIATES5200 W. Centu Blvd. , Suite 380Los Angeles, CA 90045Telephone: (310) 568-8460Facsimile: (310) 568-0274

Attorneys for DefendantKEENAN & ASSOCIATES

Steven M. Sion, Esq.Sun Y. Park, Esq.LAW OFFICES OF STEVEN M.

SION, INC.555 W. 5th Street, 31st FloorLos Angeles , CA 90013Telephone: (213) 996-8333Facsimile: (213) 996-8345

Attorneys for Defendant BROAD SPIRE LLCformerly Kemper Insurance Company

Steven H. Wax, Esq.PEARMAN BORSKA & WAX15910 Ventua Blvd. , 18th FloorEncino , CA 91436 .Telephone: (818) 501-4343Facsimile: (818) 386-5700

Attorneys for DefendantREPUBLIC INEMNITY COMPANYOF CALIFORNA

Robert A. Lewis , Esq.Christine Banks , Esq.BINGHAM McCUTCHEN, LLPThree Embarcadero CenterSan Francisco , CA 94111-4067Telephone: (415) 393-2000Facsimile: (415) 393-2286

Attorneys for DefendantSEDGWICK CLAIMS MANAGEMENTSERVICES , INC.

James R. Ross , Esq.ROSS & EAK

O. Box 7008Pasadena, CA 91109Telephone: (626) 356- 1700Facsimile: (626) 356- 1717

Attorneys for DefendantCYPRESS INSURNCE COMPANY

Virgil L. Roth, Esq. Attorneys for DefendantShannon M. Benbow, Esq. KAISER PERMANENTELAW OFFICES OF VIRGIL L. ROTH, P.625 Fair Oaks Avenue, Suite 255South Pasadena, California 91030Telephone: (626) 441- 1165Fax: (626) 441- 1166

Robert A. Lewis , Esq.Christine Hoverman, Esq.BINGHAM McCUTCHEN LLPThree Embarcadero CenterSan Francisco , California 94111-4067Telephone: (415) 393 2000Facsimile: (415) 393 2286

Attorneys for DefendantSEDGWICK CLAIMS MANAGEMENTSERVICES , INC. (FORMERLY KNOWNAS SEDGWICK JAMES)


547779841-007LA WORD/69840v8

Rex Altman, Esq.ALTMAN, HAMBLETON & LUNCHE16255 Ventura BoulevardSuite 1110Encino , California 91436Telephone: (818) 995-0080Facsimile: (818) 995-3419

Attorneys for DefendantAON/CAMBRIDGE INTEGRA TED SERVICES


EXHIBIT 1

STATE OF CALIFORNIA

WORKERS' COMPENSATION APPEALS BOARD

Case No. lI,vo s(,Y 311I 'P1J.rl-l '1

Lvt"

Applicant, OPINION ANDOrder Approving

Compromise & Release

VS.

IPItTi,.

&,

l:.c", 171 Co .

In detenning the adequacy of the Agreement,The undersigned has considered and approved:

Defendants.

1. Applicant' s release of potential death benefits under the JOHNSON

and SUMNER cases;) 2. The release of rehabiltation benefits under the THOMAS case in light

of the good faith liability issue wh ch if decided adversely to applicant would defeatall bene as recited in the Compromise and Release Agreement:

( - J 3. The proposed settlement under the RODGERS case of any and allinjuries which might occur in the course of any rehabiltation program;

) In the absence of a THOMAS FINDING this Compromise and Releasedoes not settle rehabiltation benefits.

Liens and fees are allowed as set fort below, others have been paid.The parties to the above-entitled action having filed a Compromise and

Release herein on,

(,

II 17/settling this case for $ 1 OO() in addition to all

sums which may have been paid previously, and requesting that it be approved;and this Board having considered the entie record, including said Compromiseand Release, now finds that it should be approved.

IT IS ORDERED that said Compromise and Release be appraved. Award ismade in favor of the above-named applicant against the above-named defendant(s)payable as follows:

1) The following lien claims are to be deducted from the settlement: none2) Net to applicant before deduction of attorney s fees $

/ zu, () v':

3) (a) Less requested attorney s fees of.....................

...........

OGJ":

(b) Leaving a balance payable to applicant of......

::' ........

. o

less credit for permanent disability or settlement advances ade.

Dated:

THE BOAR REAIS JUDICTON OF AL LIENS OF RERD.

C(tl

WORKRS' COMPENSATION JUDGE

\) \ ~~~

A-tJ;- is/are hereby ord red to serve thisOrder on all p aimants fortwith and shall prepare and retan

STATE OF CALIFORNIA

DEPARTMENT OF INDUSTRIAL RELATIONS

DIVISION OF WORKERS' COMPENSATION

WORKERS' COMPENSATION APPEALS BCIAL SECURllY No5 -&

,-

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:NT LOYEE) ADDRESS

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dv LR Go 5'. 'l iv-- )--trfLCORRECT NAME OF INSURANCE CARIER

DRESS /36:

1. The injured employee claims that while employedas a

c.. LQ C-'(OCCUPATION AT TIME OF INJURY)

on II / JC;5 at I.A by the employer

(OATE OF INJURY) . (CITY

( -

(STATE

(s)he sustained injury arising out of and in the course of employment to C-

r: 1: o-

2. The parties hereby agree to settle any and all claims on account of said injury by the payment of the sum of $ f3'

in addition to any sums heretofore paid by the employer or the insurer to the employee, less amounts set forth in Paragraph NO. 6.

COMPROMISE AND RELEASEPLEAE SEE INSTRUCTIONS ONREVERSE OF PAGE 2 BEFORE

COMPLETING FORM

CASE NO.rJ r: 36 4- 3

3. Upon approval of this compromise agreement by the Workers ' Compensation Appeals Board ora workers ' compensation judge and payment

in accordance with the provisions hereof, said employee releases and forever discharges said employer and insurance carrier from all

claims and causes of action, whether now known or ascertained, or which may hereafter arise or develop as a result of said injury,

including any and all liability of said employer and said insurance carrier and each of them to the dependents, heirs, executors

representatives, administrat6fs or assigns of said employee.

4. UnlesS otherwise expressly provided herein, approval of this agreement RELEAsES ANY AND ALL CLAIMS OF APPLICANT'S DEPENDENTS Te

DEATH BENEFITS RELATING TO INJURY OR INJURIES COVERED BY THIS COMPROMISE AGREEMENT. The parties have considered the

release of these benefits in arriving at the sum in Paragraph NO.

5. Unless otherwise expressly ordered by a workers' compensation judge , approval of this agreement DOES NOT RELEASE ANY CLAIM APPLI.

CANT MAY NOW OR HEREAFTER HAVE FOR REHABILITATION OR BENEFITS IN CONNECTION. WITH REHABILITATION.

6. The parties represent that the following facts are true: (If facts are disputed, state what each party contends under Paragraph 10.

Ii ' J.S

DATE OF BIRTH ACTUAL EANINGS AT TIME OF INJURYlA DAY OFF WORK DUE TO THIS INJURY

PAYMENTS MADE BY EMPLOYER OR INSURANCE CARRIERtf TEMPORAY DISABILITY INDEMNITY WEEKLY RATE PERIODS COVEREp

/' . .

iY '3Q) 3tn, I:2JB/

0/5 V( /c;i /17C uY\f-'f (-C

. PERMANENT DISABILITY INDEMNITY TOTAL MEDICA AND HOSPITAL BILLS C)

. --:

1' 1-) o J- Cfh ",lM

't C/ if 6 /

BENEFITS CLAIMED BY INJURED EMPLOYEEMEDICAL AND H9S 1TAL B LS PAID BY EMPLOYEE

THE FOJ.LO G AMOUN S ARE T9.BE DEDUCTED FROM THE SE:r ENT AMOUNT:

/; b- oJ /o /A'

/(//

'J/$ t.,hPAYABLE TO

PAYABLE TOPAYABLE TO

PAYABLE TOPAYABLE TO

LEAVING A BALANCE OF /r2/ less approved attorney fee (See Paragraph No. 9), payable to applicant. (If payment is t

be other than in a lump sum, or there is addi tional information , specify on separate page(s) .

) - /) ./

/3

CL PDIl!.

. ...- --.

fOil 9295082

7. liens not mentioned in ppragraph No.

IV

.. .

" be disposed of as follows:

8. For the purpose of determining the lien claim(s) filed for benefits paid pursuant to the Unemployment Insurance Code ortor benefits

furnished by lien claimants defined In Labor Code Sec. 490. 1, the parties propose reduction of the lien claim(s) In accorr;ance with

formulae attached.

9. Applicant's (employee s) attorney requests a fee of $ 18r()() . P' Amount of attorney fee previously paid, if any, $

10. Reason for compromise, special provisions regarding rehabiltation and death benefit claims, and additional information:

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11. It is agreed by all parties hereto that the fiing of this document is the filing of an application on behalf of the employee, and that the

WCAB may in its discretion set the matter for hearing as a regular application, reserving to the parties the right to put In issue any of

the facts dmitted herein, and that if hearing is held with this document used as an application the defendants shall have available to

them all d fenses that were available as of the date of filing of this document, and that the WCAB may thereafter either approve said

Comprom' e Agreement and Release or disapprove the same and issue Findings and Award after hearing has been held and the matter

reg tar submitted for decision.

Witn, 19 at Ve-

THE APPLICANT'S (EMPLOYEE' S) SIGNATURE MUST BE ATTESTED BY TWO DISINTERESTED

PERSONS OR ACKNOWLEDGED BEFORE A NOTARY PUBLIC,

C 1/7(DATE)

STATE OF CALIFORNIA

I\u(DATE)

' 1-7(DATE)

County of .

on this day of AD., 19 , before me

Notary Public in and for the said County and State, residing therein, duly commissioned and swrn, personally appeared

known to me to be the person whose name

subscribed to the within Instrment and acknowedged to me that executd the same.

IN wrNESS WHEREOF, I have hereunto set my hand and affxed my offcial seal the day and year in this Certicate first abovewritten.

CASE NAME:WCAB NO.

ADDENDUM "

REASON FOR COMPROMISE

10. There is a bonafide dispute as to the nature, extent and duration oftemporardisabilty and permanent disabilty, eargs , apportionment, liability for self-

procured medical treatment, need for continuing and/or fuher medical treatment

and medical-legal costs.

The parie this agreement, intend to s Ie and forever discharg y and all

aims the app . t may have for industral 1 . or injures hereinw in the

em ee of defendant er and durng the c ra defendant, Ze .Insuranc 0. , whether occurng 0 specific date or s or over a period of

time, and whet not specifically recited herein above.

The p ies wish to resolve all issues and to avoid the delays, hazds and

uncertinty of litigation. The defendants wish to buy their peace and the applicantdesires to settle for a lump sum certin. That the applicant is represented by

competent legal counel and that this Compromise & Release agreement and theterms and provisions herein, are intended to settle and release the employer and

;ie.h n)Bp5 Zenith Insuran e Co. from all claims arsi g fr m o tll-.h'O

-employment VYith Jefendaa:.JTr tm-im.

lOa, fuher consideration of t e payment in accordanc erewith, applicant agrees

tha ' s release ll apply to a unkown and unanticipate ' njuries and damagesresultin om such accident, casu , event, trauma, and/or em oyment as well

as all those disclosed, not disclosed iscovered or otherwise ticipatedpursuant to Sect1 1542 of the ivil e o Cali rnia are hereby expr waived. That Sectio 542 oftpe Civil Code reads as follows:

A ge al release does not ex d to claims whic e creditor does t know orsuspect to . st in his favor at the tJ e of executing the ease which i ownby him must ha materially affected Ii' in his settlement wIth the debtor.'

In further consideration of the payment of the aforestated sums , applicant agrees

that this release extends to and covers the executor, administrators , heirs

representatives , successors , assigns , officers , directors , agents , servants , and

employees of the defendants , and each of them , whether acting individually or onbehalf of them, or either of them.

ADDENDUM "A" (Page I)

2addfin,doc

. .

CASE NAME:WCAB NO.

lOb.

10c.

ADDENDUM "


The paries to ths Compromise & Release agreement do hereby settle any and allclaims the applicant may have if any regarding any of the following issues:

Employment, occupation, earings, injur arising out of an occurng in the

course of employment, pars of body claimed or sustained, if any, liabilty for

self-procured medical treatment, need for fuer medical treatment, responsibilty

for medical-legal costs , claims for reimbursement for mileage and/or out-of-pocket expenses pursuat to Labor Code Section 4600, any and all periods of

temporar disabilty, whether temporar total or temporar parial , extent of

permanent disabilty, apportionment, potential liabilty for new and fuerdisabili, penalty claims to date, prejudice to defendant for applicant' s lack of

notice to defend of claied injur and the Statute of Limitations. zt. II

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3/1:S

This agreement shall include twenty-five (25) days of interest from the date ofreceipt of the Order Approving Compromise & Release on all moneys paidhereunder pursuant to Labor Code Section 5800.

The applicant understads and has been fully advised by counsel that thissettlement forever releases the employer and Zenith Insurance Co. named hereinfrom any and all claims for death benefits. That pursuant to

Labor Code Section

5000(b), the applicant specifically, knowingly, and knowledgeably intends toCompromise and Release thi case, including any potential death benefits on thepar of any defendants , whether they be blood relatives of the applicant orotherwise. That said applicant's counsel explained both the purpose and the effect

of this provision and that the applicant fully understands that (s)he is furtherreleasing the defendants herein from any and all liability whatsoever rising fromany claims made herein, including death benefits pursued by any potential

. dependent or dependents as well as on behalf of any executor, administrator, heir

representative , successor, assign, offcer, director, agent, servant or employee of

defendant whatsoever herein. That these provisions are specifically contingentupon the Workers ' Compensation Judge issuing a finding pursuant to the case

Sumner v. WCAB (33 CAL 3rd 965 , 48 CCC 369(1983)) in which all claims ofdeath benefits are hereby released by the Order Approving this Compromise &Release agreement.

cC;: J/ /1'?/95

ADDENDUM A" (Page 2)

CASE NAME:WCAB NO.

10d.

10e.

1Of.

109.

lOh.

ADDENDUM "


less specifi ally stated 0 . se within this CompromIse Release

agre ent, the applicant does here dismiss with prejudice, any all claims of

serious an ilful misconduct against employer as well as any clai , if any,

pursuant to L Section 132(a) or tl egations thereof against sa d

employer.

Applicant has sole and exclusive responsibility for providing his or her ownmedical treatment in the future, if any, even if such treatment is needed in order toparicipate in any vocational rehabiltation program, if any. Applicant agrees thata demand in wrting must be served upon the defendant as a condition precedentto applicant being entitled to any vocational rehabiltation temporar disabilityindenrty (VRM) here'in whatsoever.

Applicant's attorney agrees that defendant's have no liabilty to pay any attorneysfees whatsoever to applicant's attorney (including, but not limited to Labor Code

Section 5710 fees and fees for services provided in connection with vocationalrehabilitation except as specifically set forth in the Order Approving thisCompromise andRelease agreement.

T e employer/defendant herein r serves all rights to claim or maintain action

eithe t law or before the Appeals oard for any claim or en ' ement to cre 'and/or reI ursement pursuant to the and including ut not limiteSections 3852, 4 3856 3858 3859 and 3861 respectively. That saidemployer/defendant re s its rights to maintal ' y action to recover c stsor benefits paid pursuant to this claim arising from the injuries herein.

This agreement encompasses all attached addenda and waivers herein. That thisagreement and the terms and provisions set forth herein constitute the entirety the agreement. There are no representations or oral statements made contrarwhatsoever.

ADDENDUM "A" (Page 3) JO. (i) fCvJ- Yt\

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CASE NAME:WCAB NOS.

ADDENDUM "

DISPOSITION OF SELF-PROCURED EXPENSES AND/ORMEDICAL-LEGAL LIENS

The following charges and/or liens of record for self-procured medical treatment

and/or medical-legal charges have been paid by the defendants, or will be paid fortwith

without reduction, or for which agreement has already been achieved with said lienclaimant(s), in which case the amount shown reflects that sum, said lien claimant(s) have

agreed to accept in full and final satisfaction of the lien amount (original lien amount inparentheses): defendants tae credit for any and all sums paid under ths paragraph, if

any:

The following are either self-procured charges and/or medical-legal liens to which

the defendant object. That defendants agreeto settle , adjust, litigate or render payment of

these charges. In the event hat either settlement or adjustment is not accomplished, then

with respect to any such item, the WCAB shall retain full , complete and exclusive

jurisdiction, wherein the defendants further reserve the right to raise and assert any and alldefenses , including, but not limited to , injur AOE/COE and the statute of limitations

with respect to any unadjusted item herein. (Defendants take credit for any and all sumspayable or previously p yabl hereunder.)

~~~

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The EDD lien shall be adjusted by the defendants outside of this agreement, from

which the applicant shall be held harless. In the event such adjustment is not

accomplished , then the WCAB shall retain jurisdiction.

(X)

Amount of EDD lien:

The EDD shall accept the sum of $its lien claim in the sum of $

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in full and final satisfaction of

ADDENDUM "

DECLAR nON OF NON-INTENT TOSEEK REHABILITATION BENEFITS

UNDER LABOR CODE SECTION 139.

My attorneys of record have disclosed to me that a real and substantial possibilty exists

that I may be eligible to seek and attin certain benefits provided under Labor Code

Section 139.5 and that such benefits concern vocational rehabiltation.

That I am fully aware of the natue and extent of such benefits, the relationship to my

claimed injures pertining to my employment with the defendant , and that I am hereby

electing not to seek any of these benefits provided under Labor Code Section 139. , up

until the time that an Order is made approving this Compromise and Release. That by

makng this election, I am doing so without - coercion, fraud, duress, or undue infuenceand upon my own free wil and choice, and that such election is made knowigly andwilingly. .Furher, that I hereby waive any accrued benefits under Labor Code Section 139. , up to

and including the date that an Order is made on this Compromise and Release.

Finally, I understand that if the claim for vocational rehabilitation is not made one yearfrom the date of the Order Approving Compromise and Release or five years from thedate 0 injur, whichever occurs last, all rights to vocational rehabilitation are therebyterminated. (Labor Code Section 5405.5 and 5410.

M. PPLICA

G/f/7JDATE

C/rI'lDATE

ADDENDUM "CASE NAME:

?acicifin.doc

WCAB NO.

It is the specific intention of the P erein for which a porti?n of the consideration

has been paid, to also settle by vi . of ths Compromise and Release agreement, any

and all claims whatsoever for any penalties relating to any untimely or uneasonablydelayed payment or non-payment of any and all of the following:

Temporar disabilty, permanent disabilty, vocational rehabiltation temporar disabilty

(VRMA), permanent disabilty advances, medical treatment, pursuant to Labor Code

Section 4600, including but not limited to medical care, surgical, chiopractic treatment

hospital care, hospital treatment, nursing, medicines, medications, surgical supplies

crutches, apparatu, prosthetic devices and services and any other medical services

reasonably necessar to cure or otherwise relieve the effects of the indusal injur orinjuries herein whatsoever.

This settlement also resolves any and all disputes concernng mileage reimbursement

claims or unpaid doctors and/or .pharaceutical bils and any potential penaltiesrelating to same. (-f.. (i-""/lf-,h' 1.1 1,(

Pl.N' v". v' w.e . h'.

APPLICANT' ORNEY

Ufl'??DATE

((Ir"DATE

ADDENDUM "

2addfin.doc

. .

CASE NAME:WCAB NO.

ADDENDUM "

RELEASE OF ALL CLAIMS ARISING UNDER A REHABILITATIONPLAN WHICH OCCURS AS A SECONDARY CONSEQUENCE OF

THE INDUSTRIAL INJURY (RODGERS v. WCAB , 50 CCC 299: CARTER

v. COUNTY OF LOS ANGELES. ET AL , 51 CCC 255:

AGUIRR v. WCAB. 56 CCC 420)

It is the specific intention of the paries , for which a portion of this considerationhas been paid; to also settle by virte of this Compromise and Release agreementany and all claims of injur or injures, which could occur or arse durng the

course and scope of a rehabiltation plan or program. Such injures may include

but are not limited to:

(1)

(a)

(b)

(c)

(2)

hrlrHin rlC\('

injures arsing in the travefto or from a rehabilitation program.

Injures occurg while in the course and scope of a work evaluationprogram, work tolerance program , formal or informal conference, or

durng on-the-job training, to the extent that this settling defendant(s)would be liable , if at all.

Injures occurrng as a secondar consequence of the industrial injur,including an aggravation or exacerbation thereof.

(d) Injures occurng while engaged in job placement or job placementcounseling.

(e) Injuries which occur during a rehabilitation program, and which relate

either in whole or in par, to a weakess , disability, physical and/oremotional limitation, condition or disability, or frailty, arsing from theoriginal industrial injur or injuries.

This express waiver is made knowingly, expressly and with full knowledge ofthe

potential rights the applicant may have, if any, in the absence of this waiver and

release , made a par of the within Compromise and Release agreement.

ADDENDUM "E" (Page I)

CASE NAME:WCAB NO.

ADDENDUM "

RELEASE OF ALL CLAIMS ARISING UNDER A REHABILITATIONPLAN WHICH OVVURS AS A SECONDARY CONSEQUENCE OF

THE INDUSTRIAL INJURY (RODGERS v. WCAB , 50ccc 299: CARTER

v. COUNTY OF LOS ANGELES. ET AL, 51 CCC 255:

AGUIRR v. WCAB , 56 CCC 420)

(3) This express waiver and release shall apply to any potential injur or injures

which occur durng the course and scope of the pendency of a rehabiltationprogram, and shall be consistent with the provisions set forth in Rodgers vs.

WCAB. Therefore, ths waiver and release shall apply only to those injuresoccuring durng a rehabiltation program or plan, which are the compensable

consequence of the prim injur and for which ths settling defendant(s) would

be liable in whole or in par.

L.L

APPLICAN RN .

/d

DATE

G( ( (97DATE

ADDENDUM "E" (Page 2)

. .

PROOF OF SERVICE

STATE OF CALIFORNIA, COUNTY OF LOS ANGELES

I am employed in the County of Los Angeles , State of California. I am over the

age of eighteen years and not a party to the within action; my business address is 21255

Califa Street, Woodland Hils , California 91367-5021.

On June 9 , 1999 I served the foregoing document described as COMPROMISE& RELEASE; ORDER APPROVIG on each interested party in this action by

placing _the original a true copy thereof enclosed in a sealed envelope addressed

as stated on the attached mailng list.

(Ordinary Course of Business) I placed each such sealed envelope for collectionand mailng at Ingber , Chernow & Lieb , Woodland Hils , Californa on the date

hereof following ordinary business practices. I am readily familar with the finnbusiness practice for collection and processing correspondence for mailing withthe U. S. Postal Service. Under that practice , correspondence is deposited with

the U. S. Postal Service in the ordinary course of business on that same day withpostage thereon fully prepaid.

(Personally Mailed) I deposited each such envelope with postage thereon fullyprepaid in the United States mail at Woodland Hils , California.

(By FAX) I caused the foregoing document to be served by facsimiletransmission at the time shown on each attached transmission report from sendingfacsimile machine telephone number (818) to each interested party at the

facsimile machine telephone number shown on the attached list. Each transmission was

reported as complete and without error. A transmission report was properly issued bythe sending facsimile machine for each interested party served. A true copy of each

such transmission report is attached hereto.

Executed on June 9 , 1999 at Woodland Hils , California.

I declare , under penalty of perjury, under the laws of the State of California that

the foregoing is true and correct.

SA. Y PALO AREZ McGILL

j "

I 20

ATTACHMENT TO MAILING LIST

RE: WCAB Case No. VNO 0364371Timothy Taylor vs. Martin Engineering Company;Zenith Insurance Company IZenith Claim No: 10225

Nick Kasandjieff, Esq. Law Offices of Shelley & Graff301 East Colorado Blvd. , Suite 210Pasadena , California 91101-1960

, 8

Jim VikupitzZenith Ins.(via interoffce mail)

West Coast Spine Restoration6177 River Crest Dr. , Ste..Riverside , CA 92507

Warren Jones , M.301 E. Colorado BI. , #628

. Pasadena , CA 91101

Marvin Piper, M.O. Box 999

Altadena , CA 91001

PROOF OF SERVICE

I declare that: I am employed in the County of Los Angeles, Californa. I am over the ageof eighteen years and not a pary to the within cause; my business address is 2049 Centu ParkEast, Suite 3200 , Los Angeles , Californa 90067-3206.

On June 10 2005 , I served the foregoing document described as:

DEFENDANTS' JOINT PETITION TO DISMISS APPLICANTS' SECONDAMNDED COMPLAINT

by placing the original tre copies thereof enclosed in a sealed envelope addressedas follows:

See attached Service List

(By Fax) By transmitting a true and correct copy thereof via facsimile transmission.

(By U.S. Mail) I am "readily familiar" with the firm s practice of collection andprocessing correspondence for mailing. Under that practice, it would be deposited withU.S. postal service on that same day with postage thereon fully prepaid at Los AngelesCalifornia, in the ordinary course of business. I am aware that on motion of the paryserved, service is presumed invalid if postal cancellation date or postage meter date is morethan one day after date of deposit for mailing in affdavit.

(By Personal Service)By personally delivering such envelope to the addressee.By causing such envelope to be delivered by messenger to the offce oftheaddressee.

(By Next-Day Delivery Service) By causing such envelope to be delivered to the office ofthe addressee by overnight delivery via FedEx or by other similar overnight deliveryservIce.

(State) I declare under penalty of peIjury under the laws of the State of Californa that theabove is tre and correct.

(Federal) I declare that I am employed in the office of a member of the bar of this cour atwhose direction the service was made.

Executed on June 10 2005 , at Los Angeles, California.

S. MICHIKO KONDOType or Print Name

SERVICE LIST

lllian. et al. v. Zurich U.S.. et al.

Nick 1. Kazandjieff, EsquireBruce Traney, EsquireKazandjieff & Traney15216 Burbank Boulevard, Suite 103Sherman Oaks , CA 91411

Patrck DeBIase, EsquireKiesel, Boucher & Larson LLP8648 Wilshire BoulevardBeverly Hils, CA 90211

Paul E. B. Glad, EsquireSean McEneany, EsquireSonneschein, Nath & Rosenthal685 Market Street, 6th FloorSan Francisco, CA 94105

David C. Capell , EsquireElizabeth Vanalek, EsquireGordon & Rees , LLP275 Battery Street, 20th FloorSan Francisco , CA 94111

Frank Falzetta, EsquireSheppard, Mulln Richter & Hampton LLP333 South Hope Street, 48

tli FloorLos Angeles , CA 90071- 1448

Craig S. Simon , EsquireTeresa R. Ponder, EsquireBerger, Kahn, Shafton, Moss , FiglerSimon & Gladstone2 Park Plaza, Suite 650Irvine, CA 92614

Attorneys for ApplicantsTel: (818) 373-4500Fax: (818) 373-4501

Attorneys for ApplicantsTel: (310) 854-4444Fax: (310) 854-0812

Attorneys for DefendantFireman s Fund Insurance CompanyTel: (415) 882-5001Fax: (415) 543-5472

Attorneys for DefendantConstitution State ServiceCompanyTel: (415) 986-5900Fax: (415) 986-8054

Attorneys for DefendantState Compensation Insurance FundTel: (213) 620- 1780Fax: (213) 620- 1398

Attorneys for DefendantThe Hartford Insurance Companyand Specialty Risk ServicesTel: (949) 474- 1880Fax: (949) 474-7265

Rebecca R. Weinreich, Esquire Attorneys for DefendantsLewis Brisbois Bisgaard & Smith American Guarantee and Liability221 North Figueroa Street, Suite 1100 Insurance Company, ZurichLos Angeles, CA 90012 American InsuranceCompan

h (assuccessor-in- interestto ZuricInsurance Co. , U.S. Branch),American Zurich InsuranceCompanyTel: 213) 250- 1800Fax: 213) 250-7900

Edwin 1. Lucks , Esquire Attorneys for Defendants FarmersTobin Lucks LLP Insurance Exchange , Mid-Century21300 Victory Boulevard, Third Floor Insurance Company and FremontWoodland Hils, CA 91367 Compensation Insurance Company

Tel: (818 226-3400Fax: (818 226-3401

Laurence 1. Hutt, Esguire Attorneys for DefendantsAmy B. Levin, EsqUire Continental Casualty Company andArold & Porter LLP RSKCo Claims Services , Inc.777 South Figueroa Street, 44th Floor Tel: 213 243-4100Los Angeles , CA 90017 Fax: 213 243-4199

John A. Karaczynski , Esquire Attorneys for Defendants LibertyJonathan Gottlieb, Esquire Mutual Insurance Company,Akin, Gump, Strauss , Hauer & Feld Liberty Mutual Fire Insurance2029 Century Park East, Suite 2600 Company and Liberty MutualLos Angeles, CA 90067 Insurance Group

Tel: 31 0) 229- 1000Fax: 310) 229- 1001

Steven H. Wax, Esquire Attorneys for DefendantPearlman, Borska & Wax

Eublic Indemnity Company of15910 Ventura Boulevard, 18th Floor Ca iforniaEncino , CA 91436-2819 Tel: 818 501-4343

Fax: 818 386-5700

Paul A. Larsen, Esquire Attorneys for DefendantMilam & Larsen

Eublic Indemnity Company of234 East Colorado Boulevard, Suite 620 Ca iforniaPasadena, CA 91105 Tel: 626) 585- 1888

Fax: 626) 585- 1886

Steven M. Sion, Esquire Attorneys for Defendant BroadspireSun Park, Esquire LLC , formerly Kemper NationalLaw Offices of Steven M. Sion, Inc. Insurance Company555 West Fifth Street, 31st Floor Tel: 213) 996-8333Los Angeles , CA 90013 Fax: 213) 996-8345

Bett R. Quarles , Esquire Attorneys for DefendantState Compensation Insurance Fund State Compensation Insurance Fund900 Corporate Center Drive Tel: 323 526-2141Monterey Park, CA 91754 Fax: 323 526-2012

Arletta Shirinian, Esquire Attorney for DefendantLaw Offices of Arletta Shirinian Gates McDonald1027 S. Central Ave. , Suite 200 Tel: 818 546-8811Glendale , CA 91204 Fax: 818 546-2288

Jerilyn Cohen, Esquire Attorneys for DefendantLaughlin, Falbo , Levy & Moresi LLP Ralphs Grocery Company200 S. Los Robles Avenue , Suite 500 Tel: 626 568-9700Pasadena, CA 91101 Fax: 626 568-3905

Wiliam Tappin, Esquire Attorneys for DefendantRandall K. L. Kam, Esquire Gallagher Bassett Services , Inc.Tappin & Norton Tel: 626) 585-653570 South Lake Avenue, Suite 950 Fax: 626) 585-9870Pasadena, CA 91101-4707

James P. Diwik, Esquire Attorneys for DefendantMary C. Richardson, Esquire Crawford & CompanySedgwick, Detert, Moran & Arnold Tel: 415 781-7900One Embarcadero Center, 16 FIr. Fax: 415 781-2635San Francisco, CA 94111-3628

Jason B. Schlossberg, Esquire Attorneys for DefendantsSchlossberg & Associates Keenan & Associates5200 West Century Boulevard Tel: (31 o 568-8460Suite 380 Fax: (310 568-0274Los Angeles , CA 90045

James Napier, Esquire Attorney for DefendantDeputy CIty Attorney City of Los Angeles700 East Temple Street, Room 220 Tel: 213 847-9822Los Angeles , CA 90012 Fax: 213 847-9274

Ms. Rhoda Quirit DefendantsRecon Administrative Services Recon Administrative ServicesPost Office Box 368 Tel: 909 922-2828Banning, CA 92220 Fax: 909

Leah D. Davis , Esquire Attorney for DefendantSenior D uty County Counsel County of Los AngelesCounty 0 Los Angeles Tel: (213) 974- 1864500 West Temple Street, Suite 648 Fax: (213) 687-4745Los Angeles , CA 90012

James R. Ross, Esquire Attorneys for DefendantRoss & Sarret ress Insurance465 North Halstead Street, Suite 104 Te: 626 351- 1180Pasadena, CA 91107 Fax: 626 351- 1622Mail: P. BOX7008pasadena CA 91109

Steven V. Fabiano, Esquire Attorneys for DefendantTaylor, Fabiano, Gilmore & Sullivan

fonaut Insurance Company28118 Agoura Road, Suite 201 Te : 818 591-3970Agoura Hi1 , CA 91301-2423 Fax: 818 591-3980

Robert Wheatley, Esquire Attorneys for DefendantsYvette A. Boehnke, Esquire National Union Fire InsuranceLaw Offices of Robert Wheatley Company, Insurance Company of550 North Golden Circle Drive the State of PennsylvaniaSanta Ana, CA 92705-3906 American Home Assurance and

AIG Claims Services , Inc.Tel: (714 560-0199Fax: (714 560-0188

Virgil L. Roth, Esquire Attorneys for DefendantShannon M. Benbow, Esquire Kaiser Foundation HospitalLaw Offices of Virgil L. Roth Tel: (626 441- 1165625 Fair Oaks Avenue, Suite 255 Fax: (626 441- 1166South Pasadena, CA 91030

Robert A. Lewis , Esquire Attorneys for DefendantChrstine Hoverman, Esquire Sedwick Claims ManagementBingham McCutchen LLP Services (formerly known asThree Embarcadero Center Sedgwick James)San Francisco, CA 94111-4067 Tel: 415) 393-2000

Fax: 415) 393-2266

Rex Altman, Esquire Attorneys for DefendantElliot Kushner, Esquire Cambridge Integrated ServicesAltman, Hambleton & Lunche Group, Inc.lPresidium16255 Ventura Boulevard, Suite 1110 Tel: 818 995-0080Encino , California 91436 Fax: 818 995-3419

Documents

CPY Document - WorkCompCentral