ADJ9114534 — California WCAB decision

What the panel ordered

Amended Joint Findings of Fact and Order of September 30, 2019 rescinded; matter returned to trial level for further proceedings and decision consistent with opinion.

Petition for Reconsideration granted to study factual and legal issues regarding Labor Code section 5814 penalties and section 5814.5 attorneys' fees; original Amended Joint Findings of Fact and Order of September 30, 2019 rescinded and matter returned to trial level for reanalysis and decision.

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What was disputed, and how it came out

Each issue the panel decided, with the reasoning it gave. An outcome is what this panel did on this record — not a rule, and not a prediction.

Penalties under Labor Code §5814Remanded

The WCJ's imposition of penalties and attorneys' fees was found unclear and required a full reanalysis and explanation of the basis for any penalties or fees imposed, including exact amounts and reasons, consistent with legal standards and principles outlined in Ramirez and Labor Code sections 5814 and 5814.5.

From the decision · page 1In order to further study the factual and legal issues in this case, we granted defendant's Petition for Reconsideration of a workers' compensation administrative law judge's (WCJ) Amended Joint Findings of Fact and Order of September 30, 2019, wherein it was found that defendant was liable for multiple Labor Code section 5814 penalties for unreasonably delaying the payment of compensation to the applicant, and liable for 5814.5 attorney's fees for enforcing payment of the award. In this matter, in an Amended Joint Findings and Award of November 5, 2018, it was found that while employed on February 22, 2013 (ADJ9104277), and during a cumulative period from November 1989 to February 22, 2013 (ADJ9114534), applicant sustained industrial injury to her tooth, mouth, face, neck, knees, cervical, lumbar and thoracic spine, wrists, shoulders, hips, right ankle, gastrointestinal system, and in the forms of headaches, hypertension, and constipation. It was found that the injuries combined to cause permanent total (100%) disability.

The rules the panel named

Authorities as the decision cited them, with how this panel applied each one.

Labor Code section 5814

Mandates penalties for unreasonably delayed or refused compensation prior to or subsequent to an award.

From the decision · page 5First, Labor Code section 5814 mandates penalties when compensation has been "unreasonably delayed or refused, either prior to or subsequent to the issuance of an award...." (Lab. Code, § 5814, subd. (a) [emphasis added].) Thus, for each benefit applicant alleges has been delayed, there must be an analysis of whether the compensation was unreasonably delayed in light of the timelines outlined above and the wording of the Amended Findings and Award.

Labor Code section 5814

Penalties imposed only on the amount unreasonably delayed; multiple penalties require a second unreasonable delay after a legally significant event.

From the decision · page 6Third, as of amendments effective over 17 years ago, Labor Code section 5814 penalties are imposed only on the amount unreasonably delayed. Thus, while before June 1, 2004, a penalty was calculated on the entire amount of a specie of benefit due to the applicant, even if only a small portion was delayed or refused, now a penalty is calculated only on the amounts unreasonably delayed. Only by way of example, if interest was unreasonably delayed, the section 5814 penalty is calculated only on the interest unreasonably delayed, and not on all of the interest due to the applicant, and not on all the interest and the principal. The cases cited by applicant to the contrary in her Answer all predated the amendment of section 5814, effective June 1, 2004.

Ramirez v. Drive Financial Services (2008) 73 Cal.Comp.Cases 1324 (Appeals Board en banc)

Provides factors for assessing Labor Code section 5814 penalties, emphasizing discretion and goals of prompt payment and ameliorating delay effects.

From the decision · page 7Ramirez v. Drive Financial Services (2008) 73 Cal.Comp.Cases 1324 (Appeals Board en banc) regarding the amount of penalties awarded. The WCJ did not explain the basis of his imposition of a full 25 percent penalty. Labor Code section 5814(a) permits a penalty of "up to 25 percent." (Emphasis added.) The amount of the penalty is discretionary, and the full 25 percent penalty should be reserved for the most culpable conduct on the part of a defendant. In Ramirez, we emphasized that Labor Code section 5814 affords a WCJ discretion in determining the penalty which should be assessed, with a primary view towards the goals of encouraging the prompt payment of benefits by making delays costly on defendants, and of ameliorating the effects of any delays on the injured worker. To that end, in Ramirez, we listed several factors to be considered by the WCJ in assessing a Labor Code section 5814 penalty.

Labor Code section 5814.5

Attorneys' fees apply only to compensation included in an award and for enforcing unreasonably delayed awards.

From the decision · page 8Sixth, while Labor Code section 5814 applies to compensation that has been unreasonably delayed or refused either prior or subsequent to an award (Lab. Code, § 5814, subd. (a)), section 5814.5 attorneys' fees apply only to compensation included in an award, and fees may only be awarded for enforcing the unreasonably delayed award. (Lab. Code, § 5814.5; Ramirez, supra, 73 Cal.Comp.Cases at p. 1336.) Here, the Amended Findings and Award included only permanent total disability indemnity commencing on November 15, 2018 and attorneys' fees. Thus section 5814.5 attorneys' fees are available if they were incurred for the enforcement of that compensation. Thus, in order to award section 5814.5 attorneys' fees, it must be determined that these benefits were unreasonably refused, and that attorneys' fees were incurred in enforcing these benefits.

ADJ9114534 · January 5, 2022

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