Opinion
The question presented by this appeal is whether appellant’s complaint against the Great American Insurance Company (Great American), the workers’ compensation carrier for his employer, based upon an alleged wilful delay in payment of benefits, states facts sufficient to remove the cause from the exclusive jurisdiction of the Workers’ Compensation Appeals Board. We hold that it does not.
In May 1980, plaintiff, Jesus Cervantes, sustained an injury to his back in the course of his employment by Great American’s insured. Although the injury required medical care, including surgery, Great American refused to pay or extend Cervantes any benefits. Otherwise, Great American neither requested to *766 have Cervantes examined by a physician of its choice nor contacted Cervantes’ treating physician.
As a result, within 30 days or so of his injury, Cervantes filed an application to adjust his claim with Workers’ Compensation Appeals Board (Board). After a hearing in July 1981, the Board issued its findings in September. The Board found that Cervantes’ injury was work-related, and awarded medical costs and temporary and permanent disability benefits. Shortly after the award, Great American attempted to settle with Cervantes for less than the amount awarded in exchange for its agreement not to appeal the Board’s decision. When Cervantes refused to settle, Great American then paid the award in full.
Cervantes, aggrieved by this handling of his claim, commenced this civil action in superior court against Great American, alleging that the latter had; (1) breached a duty of good faith owed to him; (2) violated certain provisions of Insurance Code section 790.03; 1 and (3) intentionally caused him to suffer severe emotional distress. In the key charging allegations, the complaint alleged Great American “refused at all times before trial to pay temporary disability, medical bills, or permanent disability to the plaintiff’ and failed to have plaintiff “examined by a doctor,” all of which Great American allegedly knew “was creating financial hardship and emotional upset to the plaintiff.” The complaint further alleged that Great American’s “threat of appeal was a sham.” All of the above activities were alleged to have been done by Great American “intentionally and in bad faith,” and with “wanton” and “reckless” disregard of the consequences to plaintiff.
*767 The trial court sustained Great American’s demurrer 2 on the ground that the action was barred because of the exclusive remedies prescribed for employees under the California Workers’ Compensation Act. This appeal followed.
The California Workers’ Compensation Act provides an elaborate scheme for adjudication of claims by employees against employers for injuries “arising out of and in the course of’ their employment. (Lab. Code, § 3600.) Although the employee’s right to compensation under section 3600 is generally his exclusive remedy (Lab. Code, § 3601), he may sue “any person other than the employer” for damages proximately resulting from such an injury (Lab. Code, § 3852). Labor Code section 3850 protects workers’ compensation insurance carriers from third party liability by defining the term “employer” to include insurers.
When an insurer refuses to pay compensation benefits the employee may seek a remedy under Labor Code section 5814, which provides: “When payment of compensation has been unreasonably delayed or refused, either prior to or subsequent to the issuance of an award, the full amount of the order, decision or award shall be increased by 10 percent. The question of delay and the reasonableness of the cause therefor shall be determined by the appeals board in accordance with the facts. Such delay or refusal shall constitute good cause under Section 5803 to rescind, alter or amend the order, decision or award for the purpose of making the increase provided for herein.”
In
Unruh
v.
Truck Insurance Exchange
(1972)
*768
In
Duprey,
the court held that a nurse could sue her physician-employer for malpractice on the ground that the doctor had stepped outside of his role as employer when he rendered medical aid. By analogy, the court in
Unruh
held that the investigator’s conduct was so unique and outrageous as to fall well outside the normal scope of the customary insurance investigation, and therefore that the insurer could be sued at law for intentional infliction of emotional distress. “[W]e are unable to conclude that a compensation insurer remains within its proper role as such, when, as in the instant case, through its agents or others employed by it, such insurer intentionally embarks upon a deceitful course of conduct . . . which causes injury to the subject of the investigation. . . . Our condemnation in
Redner [Redner v. Workmen’s Comp. Appeals Bd.
(1971)
In Unruh, what the carrier did constituted affirmative acts actually designed to influence if not distort the outcome of the Board hearing. Such conduct could not possibly be characterized as coming within the ambit of section 5814.
Here, plaintiff argues that the actions of Great American constituted precisely the sort of intentional torts recognized by Unruh. Such contention is specious. Unruh clearly created an exception only for behavior which was so extreme and outrageous that it fell well outside the scope of behavior that could reasonably be expected of insurers. Moreover, it was directed at influencing the outcome of the hearing and was not essentially a delay or refusal to pay benefits. Our conclusion is reinforced by six recent appellate decisions which have considered and rejected similar claims.
In
Everfield
v.
State Comp. Ins. Fund
(1981)
In
Fremont Indemnity Co.
v.
Superior Court
(1982)
Similarly, in
Ricard
v.
Pacific Indemnity Co.
(1982)
In
Depew
v.
Hartford Acc. & Indem. Co.
(1982)
In the recent case of
Droz
v.
Pacific National Insurance Co.
(1982)
Finally, in
Denning
v.
Esis Corporation
(1983)
Prior case law notwithstanding, plaintiff further argues that Labor Code section 5814, providing for a 10 percent penalty for unreasonable delay of payment, was not intended to provide the exclusive remedy for intentional torts of the kind he attributes here to Great American. Because section 5814 has been held applicable to delays attributable to mere negligence or inadvertence, he argues that it cannot logically be deemed to be the exclusive remedy for delays of a wilful and intentional nature. The argument is meritless. The reports of the California Compensation Cases, not to mention the California appellate reports, are filled with decisions applying section 5814 to insurers who wilfully and deliberately refused to make timely payments. (See, e.g.
Berry
v.
Workmen’s Comp. App. Bd.
(1969)
Great American’s alleged failure to undertake reasonable investigation procedures by having its own physician examine Cervantes or contacting Cervantes’ doctor, does not remove the matter from the exclusive jurisdiction of the Board, and the remedy of section 5814. Quite the contrary. In
Kerley
v.
Workmen’s Comp. App. Bd.
(1971)
Otherwise, as the courts in
Depew
and
Everfield
clearly held, the exclusivity of the workers’ compensation system takes precedence over the provisions of Insurance Code section 790.03 which prescribes reasonable investigation standards, and does not provide the predicate for an exception for civil actions based upon breach of good faith.
(Everfield
v.
State Comp. Ins. Fund, supra,
Cervantes also contends that Great American’s threat to appeal the Board’s decision was a sham, as evidenced by its failure to appeal when Cervantes refused to settle. This gambit, he contends, was done with “wanton” and “reckless” disregard of the consequences to himself, and, in fact, caused him severe emotional distress and aggravated his work-related injuries.
Great American, in response, argues that it was doing no more than it was lawfully entitled to do under Labor Code sections 5000, 5810 and 5950. We conclude, however, that whether or not Great American’s effort to settle was sincere, and whether or not it resulted in psychiatric and physical injury to Cervantes, are issues within the exclusive jurisdiction of the Board. Following the rule enunciated in Unruh and its progeny, we are not persuaded that Great American’s behavior was of such an “extreme and outrageous” nature as to lie beyond the bounds of normal insurer behavior and thus transform the insurer into a third party subject to civil suit. Indeed, the very fact that Insurance Code section 790.03, subdivision (h)(10) contemplates and prohibits precisely this sort of abuse, underscores this conclusion. No matter how reprehensible we may find this sort of behavior, it does not remove the cause from the Board’s jurisdiction.
As compared to Denning, we have perhaps belabored the matter, because counsel for both plaintiff and an amicus curiae at oral argument relied heavily on a policy position. They urged that we should decide this case on the basis of what would better serve the goals and purposes of the Workers’ Compensation Act. More particularly, they argued that affording this kind of civil remedy to applicants is necessary to deter insurance carriers from dragging their feet because the prospect of paying a 10 percent penalty does not now operate as a deterrent where the carriers can invest their reserves at a higher rate in the money markets during any period of delay.
The answer to this contention is two-fold. First, we would have been inclined to entertain such an argument more favorably had counsel provided us with a workable distinction between section 5814 cases and those where they contend *773 regular civil remedies should apply. With that the state of the debate, we can only refer them to the Legislature.
Second, the general problem of abuse by insurance carriers was both recognized and answered by Justices Tobriner and Grodin (both of whom were then sitting on the Court of Appeal).
As Justice Grodin, in
Ricard
v.
Pacific Indemnity Co., supra,
Otherwise, plaintiff relies heavily on two recent cases,
Renteria
v.
County of Orange
(1978)
In
Bell
v.
Industrial Vangas, Inc., supra,
As the court in
Depew
v.
Hartford Acc. & Indem. Co., supra,
In sum, because of the many times which section 5814 has been utilized and applied in identical cases, we conclude that the complaint fails to state a cause of action because the subject matter thereof is within the exclusive jurisdiction of the Workers’ Compensation Appeals Board. The trial court therefore properly sustained the demurrer without leave to amend.
*775 Disposition
The judgment is affirmed.
Morris, P. J., and Kaufman, J., concurred.
A petition for a rehearing was denied March 29, 1983, and appellant’s petition for a hearing by the Supreme Court was denied May 18, 1983.
Notes
Cervantes contends that Great American violated Insurance Code section 790.03, subdivisions (h) (3), (5), (6), (10) and (13), which prohibit:
“(h) Knowingly committing or performing with such frequency as to indicate a general business practice any of the following unfair claims settlement practices: . . .
“(3) Failing to adopt and implement reasonable standards for the prompt investigation and processing of claims arising under insurance policies. . . .
“(5) Not attempting in good faith to effectuate prompt, fair, and equitable settlements of claims in which liability has become reasonably clear.
“(6) Compelling insureds to institute litigation to recover amounts due under an insurance policy by offering substantially less than the amounts ultimately recovered in actions brought by such insureds, when such insureds have made claims for amounts reasonably similar to the amounts ultimately recovered. . . .
“(10) Making known to insureds or claimants a practice of the insurer of appealing from arbitration awards in favor of insureds or claimants for the purpose of compelling them to accept settlements or compromises less than the amount awarded in arbitration. . . .
“(13) Failing to provide promptly a reasonable explanation of the basis relied on in the insurance policy, in relation to the facts or applicable law, for the denial of a claim or for the offer of a compromise settlement. ”
Third party claimants may sue insurance companies for bad faith under this section
(Royal Globe Ins. Co.
v.
Superior Court
(1979)
On appeal, we deem Great American’s demurrer to have admitted all well-pleaded material facts.
(Thompson
v.
County of Alameda
(1980)
The Unruh court also held that mere negligent performance by the carrier’s agent did not constitute actions beyond the carrier’s normal sphere of activity. “We can find no justification either in statutory or policy considerations for treating the negligent carrier as no longer acting as a carrier but as a third party.” (Unruh v. Truck Insurance Exhange, supra, 1 Cal.3d 616, 628.) The court’s reasoning in Unruh has been criticized. Larson, Nonphysical Torts and Workmen’s Compensation (1975) 12 Cal. Western L.Rev., 1, confesses some puzzlement over why “an insurer ceases to be an insurer when it does its job tortiously.”
A further answer to the point here raised by plaintiff is that he is not necessarily limited to the 10 percent remedy of section 5814. To the extent that Great American aggravated a work-related injury by the manner in which it handled his claim, he may have a compensable claim for psychiatric injury which he can bring before the Board. (See
Droz
v.
Pacific National Insurance Co., supra,
Moreover, in recent decisions upholding civil actions against employers for intentional torts, the courts have shown an inclination to treat section 4553 as a remedy for employers’ misbehavior falling somewhere between mere negligence, and intentional torts of an extreme nature. (See
Magliulo
v.
Superior Court
(1975)
Great American contends, because Cervantes alleged physical as well as mental and emotional injuries, that his suit for intentional infliction of emotional distress is barred. (See
Ankeny
v.
Lockheed Missiles & Space Co.
(1979)
