*1 June [No. S018824. 1993.] DuBOIS, Petitioner,
SCOTT RUSSELL BOARD, WORKERS’ COMPENSATION APPEALS ROBERT A. al., ROHRER et Respondents.
Counsel
William A. Herreras for Petitioner. N. Bruce as
Phillip Amicus Curiae on behalf of Petitioner. Rea, Holton, John M. Leland D. Vanessa L. Starkey, Raoul Thorboume and Sue Tuskes for Respondents.
Opinion
GEORGE, J. we this case must determine whether the State of Cali fornia Uninsured Fund Employers (UEF), whose function is to work pay ers’ compensation in the benefits event the an employer of worker is not insured for workers’ compensation of a liability, subject penalty to Labor pursuant Code section 58141 for the UEF’s own unreason able delay payment of benefits to the injured worker.
The UEF asserts that section 3716.2 it from exempts unreasonable delay payment of benefits pursuant to section whether the entity responsible for the delay is the or the UEF. DuBois, Scott Russell whose were employee benefits asserts that delayed, section 3716.2 exempts those paying penalties otherwise would be due from an unreasonable or other delay misconduct on the part of the but not employer, from the UEF’s own unreasonable delay paying benefits. We conclude that sections 3716 and 3716.2, defining UEF, the obligations and limiting liability of the do not permit imposition of any UEF, penalty mandated section against even for its own unreasonable delay valid claims paying for workers’ compensation. we Accordingly, reverse the judgment of the Court of Appeal and order it to reinstate the decision of the Workers’ Compensation Appeals Board (WCAB), which had determined UEF is not liable for the payment of a penalty pursuant to section 5814.
I 24, 1988, On June DuBois applicant sustained an to his neck while injury Rohrer, employed by Robert doing business as Rohrer which Trucking, 1All further statutory references are to the Labor Code otherwise indicated. unless WCAB to be uninsured willfully was determined entity subsequently The Rehabilitation Bureau compensation. for its Bureau) determined (Rehabilitation Division of Industrial Accidents indemnity during eligible disability payments DuBois was for temporary 139.5, and, 20, 1989, awarded (§§ 3207) April vocational rehabilitation on (VRTD) him benefits from vocational rehabilitation temporary disability forward, 13, 1988, and subsequently date of October its decision order final did not becoming object appeal. Despite when Rohrer Trucking insurance, of DuBois’s Trucking paid lack of Rohrer until mid-1989 most VRTD after August medical bills and On benefits. provided (WCJ) “findings a made conducting hearing, judge workers’ compensation VRTD award” for the Trucking Rohrer against [an] benefits DuBois. requested
When Rohrer failed to make such DuBois Trucking payments, WCAB, to section seeking, pursuant before supplemental hearing (a), had received subdivision to collect from UEF the award DuBois 5814, an addi- Rohrer to section Trucking, seeking, pursuant Rohrer amount on the part tional 14, 1989, Director On defendant Trucking paying the benefits. December Relations, 3710), stipu- Industrial the UEF Fund administrator of had had injury temporary disability lated with DuBois that his caused his *5 14, 25, 1988, created the need VRTD benefits June to December would and for medical treatment. The UEF further stipulated that were owed pay administer the balance VRTD benefits unpaid 14, 1989, VRTD through pursu- DuBois December continue to benefits pay ant Bureau’s and order April Rehabilitation decision lien received satisfy for rehabilitation services outstanding previously DuBois, and “pay, litigate medical” adjust unpaid self-procured expenses. date, same was WCJ in favor On the this entered as an award stipulation of DuBois UEF. Neither nor the included against the award stipulation for any provision penalties. UEF, having February
Not received from the DuBois on any payment WCAB, that, filed a petition with the to section requesting pursuant 5814, a of 10 the UEF for its own penalty percent against assessed unreasonable On delay stipulated benefits. paying May had WCJ conducted to determine whether the UEF hearing unreasonably At he had delayed making the that DuBois stated payments. proceeding, 14, 1989, award, received no under the and a UEF payments December unable to whether stated that the had been determine representative made. and received written DuBois had been payments Having requested on the whether the assessment of briefing question section precluded 3716.2 UEF, 14, 1990, penalties against findings WCJ on June issued and an determining unreasonably that the UEF had delayed payment of the stipulated and that the UEF was not section exempted by 3716.2 from for its own the award. delay unreasonable paying The WCJ ordered the UEF to well benefits as as a of 10 14, 1989, percent benefits awarded on December to section pursuant 5814.
The UEF the WCAB petitioned for reconsideration. After granting WCJ, the WCAB petition, reversed decision of the concluding section 3716.2 the UEF exempted from payment any penalties for its own Thereafter, failure to pay benefits a timely manner. the Court of Appeal review, denied summarily DuBois’s for a writ petition and DuBois petitioned for our review. granted We review and ordered the case trans- ferred to the Court of Appeal, that it issue the writ directing requested review the case.
The Court of over the Appeal, dissent of one determined justice, and, language section 3716.2 is ambiguous, relying upon legislative statute, that, of that history construed it to provide the UEF although may not be held liable for penalties assessed uninsured it is not employer, from the exempt payment of penalties for its own unreasonable paying workers’ compensation benefits. The dissent concluded that section 3716.2 precludes the imposition of any penalties against for its own We delay. granted review.
II parties the Court of have Appeal focussed upon *6 sentence, meaning 3716.2, of the contained in section “The provides: Uninsured Employers Fund shall not be liable for any penalties or for payment of interest on any awards.” The that we determine parties request whether that directive exempts from the penalties for unreasonable delay that may be imposed upon employers or their insurance in carriers workers’ compensation cases.
A fundamental rule of statutory construction is that a court should ascertain the intent of the Legislature so as to effectuate the of the purpose law. (Nickelsberg v. 288, Workers’ Comp. Appeals (1991) Bd. 54 Cal.3d 294 86, 1328]; Cal.Rptr. [285 814 P.2d Moyer v. Workmen’s Comp. Appeals Bd. (1973) 222, 144, 10 Cal.3d 230 514 Cal.Rptr. 1224].) [110 P.2d constru statute, a ing our first task is to look to the of the language statute itself. (Ibid.) When the is clear language and there is no uncertainty to
388 intent, accord- further enforce the statute simply we look no legislative (1988) (Hutnick Fidelity Guaranty & Co. 47 its terms. v. United States to ing 236, 456, 1326]; Co. Atlantic v. 763 P.2d Cal.Rptr. Cal.3d [253 Richfield 715, 778, (1982) Cal.Rptr. Comp. Appeals 31 Cal.3d Workers’ [182 Proc., 1858, 1257]; 644 P.2d see Code Civ. §§ however, sentence Additionally, we consider above quoted must (§ 3716.2) scheme statutory the context the entire statute ‘according to to “We are effect statutes part. required give which to usual, framing them.’ ordinary of the import language employed Bd., 10 Cal.3d (Moyer Comp.Appeals supra, v. Workmen’s [Citations.]” 230; (1987) 43 Dyna-Med, Housing Inc. Fair & Com. Employment see also v. “ 1323].) ‘If possible, P.2d Cal.3d 1386-1387 word, sentence and every part should be significance given phrase, used . . .‘When legislative purpose.’ act pursuance [Citation.]. context, in mind the nature construed in keeping statute must be [words] More they appear.’ and obvious of the statute where purpose [Citations.] over, must the various of a enactment be harmonized parts statutory the statutory clause or section the context of considering particular (Moyer framework as a v. Workmen’s whole. [Citations.]” Bd., 222, 230-231; Nickelsberg Workers’ supra, 10 Cal.3d see also 298; Nunn v. State of California Therefore, 846].) P.2d 624-625 liable, determine whether the intended to render the Legislature to section its own pursuant paying language legislative we review not of section 3716.2 but which enactments of it is a part.
Ill Pursuant to the granted the Constitution has “plenary power” create, compen “to and enforce a workers’ Legislature complete system XIV, Const., (Cal. 4), the has created a Legislature sation” art. compen scheme all to secure the requiring employers workers, their coverage either insurance by obtaining sation issued a certificate of consent to self-insure obtaining right the Director of Industrial Relations. et seq.) *7 statutory is and is not derived compensation workers’ benefits wholly (1986) 184 (Graczyk Comp. Appeals common v. Bd. from law. Workers’ 997, 494, 1245].) 1002-1003 58 A.L.R.4th Cal.App.3d Cal.Rptr. [229 1971, the the UEF in order to a Legislature provide California created of funds for failed or refused injured source workers have employers whose or to coverage qualify either obtain workers’ insurance compensation to 3716, (§ (b); Flores v. subd. see employers’ liability. self-insurers (1974) Bd. Workmen’s 1033]; Comp. P.2d Jenkins Workmen’s 130].) “designed was to be program The
Cal.App.3d against uninsured may financed from various which be assessed an Herlick, (1 as well as state revenues. Cal. Workers’ employer,” tax 3.20, 3-18; also, id., 11.9, (4th 1990) 11-8.) Law ed. see p. p. § The the nature of the intended the UEF upon restrictions is and defining obligations. reflected the statutes that fund creating we the Initially, Legislature’s consider statement of its intent. Sec express (b), tion that provides subdivision the was pertinent part created “to ensure that to be employed by illegally workers who happen uninsured deprived are employers compensation not workers’ carriers, and is not created as a source of contribution to insurance or self-insured, (Italics added.) or insured legally employers.” language this subdivision indicates the Legislature concern of the was to primary create a source of the no benefits to who otherwise would receive employee benefits because the failure or refusal of his or her to obtain employer compensation liability coverage. provision This does express not legislative concern for the timeliness to be provided by benefits UEF. The clause specifying that the UEF is to be a not source of contribution for the benefit of or employers carriers intent emphasizes Legislature’s to limit the purposes which UEF’s funds are applied, impose only derivative liability upon UEF. scheme,
Under section 3715 em- requires injured who ployee seeks payment and whose is unin- employer WCAB, sured apply which must make an award the employer ifas had employer complied with mandate that it secure the of workers’ If uninsured compensation. fails to employer com- pay pensation furnish bond within 10 days after receiving notice of the award entered against the employer, then employee may apply obtain from the UEF. (a).2) subd.
Pursuant (a), to section subdivision failure of the the award days within 10 of notification is made thereof a condition (a), 2Section provides subdivision pertinent part: “If the to pay fails thereto, required by person Section 3715 to the entitled or fails to furnish the required by award, bond period Section 3715 within a days of 10 after notification of the thereto, upon application by person entitled be paid shall the director from the Fund, Employers Uninsured fund which created in the hereby Treasury.” State *8 390 (Ortiz the UEF. employee upon to a demand for payment by
precedent 392, 4 (1992) Bd. 396-397 Comp. Appeals Cal.App.4th v. Workers’ [5 484]; (1984) Comp. Appeals Bd. 156 Sobiniak v. Workers’ Cal.Rptr.2d 448, 789]; Symmar, Inc. v. Workers’ 451-452 Cal.App.3d Cal.Rptr. [202 67]; (1982) 135 70-71 see Comp. Appeals Cal.App.3d Bd. Bd., Comp. Appeals supra, Workmen’s 263 Cal.App.3d Jenkins v. UEF) (to is based fact of upon created of benefits [right payment i.e., the award of obligation, compensation]; of the nonpayment preexisting Cal.App.3d cf. Germann v. Workers’ Thus, 868].) Legislature fn. apparent of an award intended to define the of the UEF for the vicarious, re rather than render the employer primarily derivative to in which the UEF has of the award even a case sponsible Nothing to the award. ultimately may pay be participated required amount intended the UEF to suggests Legislature pay these sections of, from, awarded the uninsured against excess or different the amount employer. (a),
We requires also observe that section subdivision although UEF in the event the fails to do so to benefits demand pay upon employer employer, within 10 after notified of an award days being UEF making statute does not set a deadline which the must commence (Contrast, tempo- time of commencement of payments. e.g., [fixing §§ insurer], and 4650.5 rary permanent disability by employer payments injury by time [fixing disability payments arising of commencement of act].) criminal of the intent to ensure basic to light legislative apparent
all nature otherwise the derivative employees deprived UEF’s and the failure of the to statutory liability, Legislature expressly a deadline within which the UEF must benefits after provide pay entry award and failure we uninsured believe there is no basis to assertion of DuBois and support underlying amicus curiae that the UEF for its own may subject penalty benefits. paying UEF add
Subsequent pertaining enactments no support assertion DuBois and amicus curiae. the creation of foregoing Following UEF, this court Flores Workmen’s Comp. Appeals “award” for which the was liable interpreted 3716) to include a increment (pursuant representing percent in the basic amount of the award wilfully imposed against (§ 4554), to secure the failing payment of and to *9 awarded the failure attorney by employer’s include additional fees reason of (§ 4555). secure of (whether payment compensation wilful or negligent) Flores, re- In in we (11 175-178.) reaching this conclusion Cal.3d that, the a matter of policy, made UEF “as argument sponded of payment limited to the Fund should be reserved for the money available ” observing: than basic awards rather ‘penalties,’ A. dictate. As P. Herbert present statutory is not what the provisions “[T]hat ‘If it must says Parliament does not mean what it unforgettably so quipped: 1948) 313.)” (11 (Herbert, (6th so.’ ed. Cal.3d p. Uncommon Law say 171, 177.) Flores,
It is in UEF its recognize liability that of the for important and, fact, we own or for other misconduct was not question, UEF our decision that the was not at fault. expressly acknowledged (Flores Bd., Comp. supra, 177-178.) v. Workmen’s Appeals Thus, (as below) although that decision briefly provided authority explained for the UEF could that be liable for the entire amount an proposition of award an against (in assessed excess of basic employer, including compen- sation payments) amounts failure to representing employer’s penalties secure the did an payment compensation, the decision not introduce interpretation language basic of section 3716 or related sections permit would to be held liable for similar based penalties upon own misconduct. apparently to our response decision Flores v. Workmen’s
Comp. Herlick, supra, 11 (see Cal. Workers’ Law, 3.20, 3-18, id., 3-19; 11.9, 11-10), pp. p. Legis- § § lature enacted section 3716.2.3 The first sentence of that statute resolves the issue raised in Flores—whether the UEF liable ought to be (and fees) an attorney has imposed upon who failed to secure the payment workers’ compensation—by providing director explicitly shall pay only such benefits as would accrue an against employer properly insured for workers’ compensation liability. More significant case, however, to the issue in the presented present is the intent,
Legislature’s 3716.2, manifested in section limit the enacted, 3As originally provided: section “Notwithstanding 3716.2 precise elements award an notwithstanding claim demand for being Relations, director, made therefor to the Director of Industrial as administrator of Fund, allowed, the Uninsured Employers pay shall claimant recogniz such benefits thereon, ing proper liens that would have accrued an properly insured for However, workers’ compensation liability. civil suits the director to enforce award, including procedures award, pursuant the total Section amount of the interest, including other penalties and attorney granted by the sought. fees shall be director, suit, Recovery, means, by the ain civil or of awarded other benefits in excess of paid Fund, amounts the claimant Employers paid Uninsured shall over to the injured employee, representative (Stats. his the case ch. may p. be.” due from the employer. benefits it must with those by equating *10 the UEF for its own unreasonable The of a imposition penalty upon liability by upon with the limitation express placed would be inconsistent underscores the “employer” The next sentence of the statute this provision. UEF, that authorizing entity pursue, the liability by limitation the of upon of the entire the enforcement of employer, payment in a civil action against interest, award, the award and fees attorney granted including penalties, interest) and and UEF’s own from (notwithstanding immunity penalties the that exceed from the any employer the amounts collected employee pay which the UEF was liable. those for 3716.2, 1980, the also Legislature enactment of section following the whose has failed to secure that an injured employee employer
provided exclusive of remedy is not limited to the compensation of workers’ payment the the UEF. The employee possesses benefits from seeking compensation courts, in a civil initiating right to proceed 3706), (§ proceed- action as well as to seek damages for 3715.)4 rights The of these dual before the WCAB. ing provision UEF the limited resources of the consistent with legislative recognition coextensive, with render legislative entirely and with a related intent not to UEF for penalties. of an liability employer, liability reinforces the amendment of section 3716.2 subsequent only never intended the UEF should be liable for Legislature conclusion the further the scope for its own fact intended to narrow delay, penalties the UEF’s This amendment that the UEF “shall not be liability. provides for or for the of interest on awards.” any penalties payment any liable 1981, (Assem. (1981-1982 Sess.), Bill enacted Stats. ch. Reg. No. 1529 894, 4, 3409-3410.)5 pp. § 1971, 4Prior to the creation of the uninsured was not employee UEF in
required bring damages against employer, to elect remedies and could as civil action for (Jenkins proceeding compensation. well as initiate an administrative to collect v. Workmen’s UEF, 262-263.) supra, Cal.App.3d At the time it created the however, Legislature amended section 3715 to afford alternative remedies to the employee employer, providing any proceeding compensa of an uninsured thus to obtain ultimately culminating liability payment part tion for of the UEF would be on (Ibid.) Subsequent prior exclusive. to the enactment of section 3716.2 in to its absolving amendment in the UEF of on an liability penalties for and interest Legislature amending reinstated cumulative remedies to allow the section 3715 (Stats. injured employee proceeding. both a civil action and an ch. administrative 3503; Note, p. (1989 ed.) see Historical 44A West’s Code p. Ann. Lab. § amended, 5As provides: “Notwithstanding precise section 3716.2 elements of an award notwithstanding being demand for made payment the claim and director, director, Fund, therefor to the shall Employers administrator of the Uninsured thereon, allowed, the claimant such benefits recognizing proper liens that would legislative demonstrates a intent simply amendment suggests DuBois of an the UEF because exempt penalties accruing from In view of the failure to secure employer’s compensation. statute, however, this which we take into development may historical v. Fair Inc. (Dyna-Med, account intent ascertaining Legislature’s Com., & 1387), Employment Housing it is manifest that the was not language affording exemption any penalties added be liable to section 3716.2 to establish that the would not merely from the failure to secure arising employer’s *11 4554; 4555), of workers’ the Legislature see because § had in the wake already accomplished goal by enacting, 1976 simply Flores, form, of our decision the original limiting section 3716.2 UEF’s liability only against of those benefits that would accrue payment a In properly insured the between the of employer. period 1976 enactment section 3716.2 and its amendment or deci no additional statutory sional to furnish for that the authority emerged concluding Legis basis lature the perceived need to make more the intent of explicit section 3716.2 Flores that the UEF could effectively to the abrogate liable holding be for penalties and fees for attorney imposed employer its failure to upon secure the payment of workers’ compensation. and
DuBois amicus curiae offer the suggestion alternative that the provi- sion the UEF from exempting the payment refers any penalties merely to the the potential liability of UEF to amounts representing penalties imposed upon the employer for the employer’s paying (§ 5814) benefits or for some other form (see of misconduct the by 4553 [employee’s injury § caused by serious and wilful employer’s miscon- duct]; [injured is employee a minor illegally employed]), but does not exempt for its own liability delay.
In of this support interpretation, DuBois to various points reports, made by legislative committees and commissions during legislative process, which come within the material we category may consider when a (Hutnick meaning of v. United statute uncertain. Fidelity States & Co., Guaranty 456, 465, 7; Dyna-Med, 47 Cal.3d Inc. v. Fair fn. Com., Employment & Housing supra, 1387; see Napa Valley have against accrued an employer properly insured for liability. The Uninsured Employers Fund not any penalties shall be liable payment interest for However, on any awards. award, in civil suits director to enforce of an including procedures pursuant award, to Section the total amount of the including interest, penalties other attorney granted fees sought. shall Recovery, director, suit, means, in a civil or other of awarded benefits in paid excess amounts Fund, claimant the Uninsured Employers paid shall be over employee, or his representative (Italics as the case may added.) be.” 370, 382, Train, fn. 19 (1990) 50 Cal.3d Inc. v. Public Utilities Com. Wine 976]; Utilities Cal. Gas Co. v. Public 787 P.2d Southern 1149].) P.2d (1979) 24 Com. of the amendment to consideration Legislature’s the course interest, the UEF from liability section 3716.2 exempting Finance, Insurance, and Commerce issued Committee on Assembly 4 is as follows: “Section of the amendment purpose report explaining or for any penalties the Fund from liable for being amended to preclude nature the Uninsured awards. Because of the of interest on Fund, proceed until after formal it has no for benefits Employers applied not be has failed to act. Sanctions should ing (Italics wrong, according employer’s proponents.” the Fund for added.) Bill No. analysis Assembly also received an Legislature Relations, in most which noted that of Industrial
provided by Department *12 the in made a was party, penalty imposed cases which the UEF was the employer’s to section 5814 because of employer pursuant uninsured penalties in After that the of such delay paying observing benefits. UEF, “The the the stated: department was a substantial fiscal drain on the U.E.F. The the does not to justification apply for imposing penalty benefits. delaying deter carriers and from designed employers to penalty until after are demanded they Since the U.E.F. has no for benefits liability award, the U.E.F. for the employer’s after a formal the on imposing penalty penalized not be will not hasten the U.E.F.’s The State should delay payment. delay." (Italics added.) employer’s the hand, the Bill Assembly prepared On the other No. 1529 description amended, Legislative simply the after the bill twice had been Analyst, in that the UEF from “a of 10% cases where provides is exempt delayed.” of workers’ benefits to workers are payments latter the of the bill thus did not serve to limit the nature of description in which such granted from to those situations exemption (See the & Fidelity is attributable to Hutnick v. United States employer. Co., 456, 465, Guaranty supra, 47 Cal.3d fn. 7 materials some provide [such it]; indication of how a measure was understood those who voted to enact Train, Com., 370, Napa Valley Wine Inc. v. Public Utilities 382, [same].) fn. 19
Even if we were the amendment to DuBois’s accept interpretation statements, bill, (based section 3716.2 the the upon accompanying reports that the amendment was intended the UEF from liability to exempt employer), such a construction would not other misconduct delay or intended UEF to be Legislature alter never our conclusion in the or an Construed delay. liable—like an insurer—for own manner, an additional limitation on merely latter the amendment provides as a might pay of the UEF for liability any penalties required The amendment does not result on the of the part employer. of misconduct or in related statute alter the circumstance that section 3716.2 nothing amount any obligation employee any UEF has suggests or her uninsured employee excess of amount recoverable his employer.6
IV contends, nonetheless, DuBois section 5814 penalty prescribed 5814, (Stats. was intended first apply to the UEF. Section enacted 1965, 1497), (Stats. ch. and last ch. p. amended § 3599), timely was intended to p. encourage (Jensen v. Workers’ benefits by rendering costly any delay payment. Bd. 33]; (1985) 170 Cal.App.3d Jardine Workers’ Cal.App.3d enacted, 139].)7 When section 5814 was the UEF was originally established, not yet thus it is obvious did not have the Legislature UEF in mind in creating penalty provision. that, 6We take Legislature also note of the language circumstance at time the added exempting any penalites UEF from added to an interest it also UEF, amended various other related statutes so as to the liability enhancing limit while *13 3716, the ability entity of that to paid (b), recover amounts that it had out. Section subdivision was legislative added to declare that purpose the in creating the UEF was to the ensure
payment of funds employees to rather than to afford contribution to or employers, carriers and (c) subdivision was added exempt to the UEF the requirement reimbursing from of the State Department of Health provided by department Services treatment injured to workers. provide Section 3717 was amended right to the to obtain reimbursement owning percent individual 15 outstanding or more of the a corporation stock in that bad failed coverage 1981, 894, to 2, 3408; secure for its compensation liability. (Stats. workers’ p. ch. § id., 5, 3410.) p. § added, Most significantly, (in section 5814.1 was providing language similar to section 5814) that when the compensation delayed of unreasonably prior has been or refused award, to the issuance of an and the director has provided discretionary compensation, the WCAB shall award the a penalty director to paid by employer be in the amount of 10 percent director, of the compensation provided by penalty “such to be in to addition penalty imposed 1981, 894, 10, by (Stats. Section 5814.” p. 3413.) provision ch. The of 5814.1, penalty pursuant to section in favor of against the director and latter’s delay, legislative is inconsistent with any permit intent to imposition of a penalty in employee favor of the and pursuant director to section 5814. 7Section 5814 provides; “When of compensation has been unreasonably delayed refused, or award, either prior subsequent to or to the issuance of an the full of amount order, decision or award be by percent. shall increased question 10 delay reasonableness of the cause therefor shall appeals determined board accordance with the facts. Such good refusal shall constitute cause under Section 5803 to 396 observes, however, 5814, in a
DuBois that section contained division with the liberally the Labor Code mandated to “be construed courts of persons benefits for the purpose extending protection [that division’s] 3202; in the see also course of their employment” LeBoeuf 547, 234, (1983) 241 Comp. Appeals Cal.Rptr. Workers’ Bd. 34 Cal.3d [193 989]; Comp. Appeals (1980) P.2d v. Workers’ Bd. 28 Cal.3d 666 Webb 618]; Comp. Appeals Bd. 626 620 P.2d Klee v. Workers’ Cal.Rptr. [170 not, terms, 217]), 211 (1989) 1524 Cal.App.3d Cal.Rptr. [260 token, limited to or their insurers. the same specifically employers By in the extend nothing language suggests of section 5814 was intended to entity such or insurers to a such as beyond employers governmental UEF.
Consistent with the other of the workers’ provisions compensation scheme, the assessment imposed by designed compel section 5814 is of the or the workers’ injured employee, employer’s compensation carrier, insurance to make a reasonable and payments compensation (Adams (1976) Comp.Appeals fashion v. Workers’ Bd. timely 303]; 555 Comp. Appeals P.2d Carver v. Workers’ Cal.Rptr. [133 (1990) 718]), Bd. and to effect Cal.App.3d “equally important purpose” encourage scheme—“to timely payments injured working promptly people ameliorate their economic hardship [resulting interruption from] (Consani employment concomitant loss of income.” v. Workers’ 619]; see also Cal.App.3d Adams v. Workers’ “The supra, 18 Cal.3d at p. has been all penalty applied virtually types of benefits provided laws, including temporary disability permanent indemnity, interest on an . . . amounts awarded as reimbursement (Adams, medical self-procured costs” and costs. medical-legal 226, 229.) statute, Although section 5814 is denominated a it is considered to *14 Bd., (Carver be both remedial and penal. Comp. Appeals supra, v. Workers’ 1539, 1547-1548; 217 (1966) Davison v. Cal.App.3d Industrial Acc. Com. 241 Cal.App.2d 18 remedial is to facilitate Cal.Rptr. aspect [50 76] [the return to work of the injured employee as quickly possible; penal aspect to with the compel comply fully law prompt- ly].) 10 increase percent “has been characterized as an increase awarded (Carver to the worker” v. Comp. Workers’ 1539, 1547, supra, 217 Anderson v. Workers’ Cal.App.3d citing rescind, order, alter or amend the decision making or award the increase purpose provided for herein.” 398]), (1981) 116 Cal.App.3d Cal.Rptr. [172 that the amended to include the and the statute itself award be requires Com., Acc. (E.g., amount of the Davison v. Industrial penalty imposed. 15, 16.) supra, Cal.App.2d
It an inducement prompt is clear that section 5814 was enacted as insurers, on their which otherwise payment part private employers have of workers’ deny would an economic incentive to or delay contrast, benefits. In not this economic does possess (1988) incentive. Our Ins. Assn. decision Isaacson v. Guarantee California 750 44 Cal.3d P.2d of this is illustrative 297] Isaacson, In were similar distinction. we confronted with somewhat ques tion of whether the of the Unfair Prac interpretation: provisions Act, tices an insurer imposing liability unreasonably refusing upon case, settle a should be California Insurance Guarantee applied (CIGA), Association a governmental provide created to an insured entity with coverage claims the event his her insurer insolvent. or becomes rejecting insured’s attempt to CIGA for its impose liability upon case, own conduct in unreasonably to settle a we relied refusing part upon the circumstance that CIGA did not share the economic motives of the private insurer. protective function served the Unfair Act “[T]he Practices is less necessary with CIGA with an than insurer. CIGA is ordinary Because not a private, profit-oriented enterprise, gain it does not financially to defend refusing or settle claims. It therefore lacks economic incentive to Assn., deal with unfairly (Isaacson insureds.” Ins. Guarantee California supra, it Similarly, case is clear the present protective function of section 5814 would not be served by application that statute to the UEF in cases which entity delays that paying because the UEF does not profit by such delay. the UEF
Additionally, advises have no may alternative but to defer benefits whenever it full funding lacks due to budgetary state limitations, a recurring Herlick, since the problem inception (1 of the UEF. Law, 11.9, Cal. Workers’ 11-8; see, p. e.g., County Morris v. 901, 905-906, Marin 1fn. P.2d 606].) The UEF also points out that it does not enjoy the same immediate access to its funds carrier, and, therefore, possessed by private the threat of penalties for would not have the same deterrent practical effect. Checks for UEF, disbursements are drawn on the a ftmd created in the State Treasury (a)), subd. necessitating apply *15 State Controller Code, for the of issuance (Gov. 12440), warrants a process that may be slowed or halted during in which periods the state’s budget has yet not been enacted. however, in on the of delay part which that case suggests, DuBois limitations, such budgetary is attributable UEF benefits paying meaning within the not be found and would could
delay therefore, and, the penalty provided UEF would not incur section delay recognized authority, existing Under that statute. law, exonerating purpose as a matter of reasonable delay by section imposed carrier from the penalty the insurance as to the medical of doubt legal a genuine the existence of caused (Kerley v. Work- benefits. for workers’ employer’s 481 P.2d Comp. App. Bd. men’s Bd., 200]; supra, Cal.App.3d Comp. Appeals Workers’ Jensen v. (or multiple-step shortfalls 247.) budgetary state caused Delay (delay category delay within either does not fall disbursement process) law, and under doubt) present deemed acceptable medical or legal caused by delay” for “reasonable definitions special the creation of would necessitate (under theory) DuBois’s UEF. This need to the exclusively applicable in- that the Legislature DuBois’s assertion definitions contradicts separate who fashion as an treated the same tended the UEF to be payments. benefit unreasonably delays concerns, matter the as a practical definitional foregoing from the
Apart was its delay demonstrate that the UEF be permitted that proposal hin- reasonable, procedural shortfalls or budgetary necessitated by because establish, drances, evidentiary hearing, at an the UEF to require would the Legislature We do not believe was reasonable each case. its delay in this manner its resources expend intended that the be required in which has occurred. each case rule, that, statutory general it must observed as a
Finally, Government Code section not entities. apply public do provisions law, is not entity a public other “Notwithstanding any provision provides: Civil Code or other under of the liable for awarded section 3294 damages by way punishing for the sake of damages example imposed primarily 5814, we of section nature light partially penal the defendant.” UEF is not of the statutory penalty provision believe application authorization. express legislative absent permitted, construed, earlier, liberally is to be Although, as noted section 5814 stated we have that “the rule of liberal construction previously commented framework statutory section 3202 should not be used to defeat the overall (Nickelsberg v. Workers’ construction.” fundamental rules A number of addi considered, any express the absence of including tional factors must be *16 UEF liable for its own the delay) the language (rendering (§§ UEF and defining obligations liability the the statutes 3716.2; (b) (Self-Insurers’ Fund) Security subd. shall contrast § [“the any not liable for the act or payment penalties be assessed fund,” including on other than the the part any person omission the in 5814]), the absence of an time limit within penalties provided express which the UEF is to an award following nonpayment by and the demand for the UEF subd. employee’s (a)), limiting the sections 3716 and 3716.2 of the presence language UEF the of those benefits that would accrue insured the UEF properly exempting awards, payment of and interest on penalties language the absence of express statute, indicating section 5814 that under may be liable that statute, protective served view purpose WCAB’s is not liable for (see Nickelsberg penalties pursuant section 5814 v. Workers’ 299-300; Corp. Judson Steel Workmen’s (1978) 22 668-669 [150 P.2d [agency interpretation significant 564] entitled to respect upon review]), judicial and the general governmental afforded immunity entities (such UEF) by Government Our Code section 818. examination of all of these factors leads us to conclude that the Legislature did not intend that liable, the UEF be pursuant to section premised upon own delay, even where delay engaged entity may be properly characterized as unreasonable.
We greatly sympathize with plight obtain employees who UEF, right from the to face delays recovering believe, however, to which are amounts they legally entitled. We that the examination and resolution of this recurring apparently problem is most left appropriately to the Legislature, which will able to address enacting legislation tailored (and limited) unique statutory role UEF.
V The judgment of the Court of Appeal reversed and the case is remanded to that court with directions to reinstate decision of WCAB annulling the penalties for unreasonable delay imposed against the UEF.
Lucas, J., Panelli, J., Kennard, J., Arabian, J., J., C. Baxter, concurred. MOSK, I dissent. government J. insurance fund responsible for sup plying DuBois with compensation benefits while he was disabled acted with *17 stipulated his claim. handling Though incompetence
complete award, him, for request payment, failed to to his respond it failed to pay whether it had paid unable to say at the hearing regarding payment appeared made, not, for a the award was asked him six months after finally, or and him if it had or not. paid to check its records to see continuance a worker such unreason- injures A insurance fund that so government award workers’ compensation of a delay stipulated able against private to the worker that is assessed should the same penalty for unreasonable insurance or company workers’ compensation in this case that the Appeal I with the of the Court of agree majority delay. prompt support workers’ goal compensation system provide of our workers, with a liberally this scheme duty interpret statutory our injured of history and the compensation, legislative view to of promoting goal statute at issue this outcome. support the particular compensa- of the workers’ underlying policy We have observed that “ decisions appellate ‘as well as the recurrent theme of countless tion statutes and solicitude for abiding on the matter has been one of a pervasive ” (Webb Comp. Appeals (1980) v. Workers’ Bd. 28 Cal.3d work[er].’ 618], Workmen’s Moyer 620 P.2d quoting 1224].) 514 P.2d laws for relief from provides Our state’s of workers’ body compensation encourage and order to worker’s injury support industrial financial (Moyer ultimate return to the work force. v. Workmen’s supra, 10 Cal.3d at p. benefits—here,
The vocational rehabilitation statutory of prompt payment crucial to the statutory compensation plan benefits—is of operation central industrial injury encouraging of treatment of purpose prompt Therefore, return to labor. since Labor Code early workers’ productive section 58141 has for a for unreasonable delay payment.2 provided “Section 5814 is the goad securing timely payment compensation men and women without One of its injured working delay. [Citation.] 1All references are to the Labor Code unless otherwise indicated. provides: compensation unreasonably delayed 2Section 5814 “When has been refused, prior subsequent either to or to the issuance the full amount of the of an order, percent. question delay decision or award shall be increased and the reasonableness of the cause therefor shall be determined board in accordance appeals Section 5803 to good with the facts. Such or refusal shall constitute cause under rescind, order, making the alter or amend the decision or award increase purpose provided for herein.” or their encourage employers is to principal purposes a reasonable payments insurance carriers to make and return timely recovery to work of speed employees fashion *18 An of rapidly as section possible. equally important purpose [Citation.] timely to injured working 5814 is to of encourage payments compensation promptly of the interruption ameliorate economic because people hardship (Consani of their of v. Workers’ employment concomitant loss income.” 12, 619], (1991) Comp.Appeals Bd. 227 23 italics Cal.App.3d Cal.Rptr. [277 added.)
The scheme workers’ con- compensation “liberally of is to strued by the courts with the . benefits extending of . . for purpose protection persons 3202.) course their employment.” We have frequently rule of liberal to all applied aspects construction Bd., workers’ (Webb compensation Comp. Appeals supra, law. v. Workers’ 626, 28 Cal.3d p. cited.) at and cases 5814,
The case law establishes as to section for providing for payment of the rule of liberal construction favor of employee particularly necessary. (Kerley Comp. v. Workmen’s App. Bd. 223, (1971) 192, 4 200]; Cal.3d 227 P.2d Cal.Rptr. 481 Klee Workers’ [93 Comp. Appeals 1519, (1989) 217]; Bd. 211 Cal.App.3d Cal.Rptr. [260 146, Pascoe v. Appeals Workmen’s (1975) Bd. 46 Cal.App.3d 199]; see also Gallamore v. Workers’ Comp. Appeals Bd. 815, 590, 1242].) 591 P.2d The majority the view that the express (Fund) Uninsured Fund Employers should be exempt section 5814. Section 5814 no provides exemp- tion; the rule of liberal construction favor of the worker not us permit does to read such an exemption into the statute.
The majority claim that section 3716.2 provides the that is exemption missing from section 5814. statutory history persuades provision otherwise, me as does our duty to in favor interpret any ambiguity injured worker.
Until injured workers of who employers had failed to procure workers’ compensation insurance had difficulty obtaining prompt payment Fund, benefits. For this reason the Legislature created the obliged Workers’ Compensation Board (Board) to make awards for such and, if employees, payment was not order the forthcoming, payment of award to the injured out employee Fund of treasury. state (§§ 3716.) Soon thereafter we held that the Fund not is liable only on em imposed but also for penalties compensation the underlying (Flores Comp. Appeals 4555. v. Workmen’s 4554 and under sections ployers 1033].) P.2d Cal. Rptr (1974) 11 Cal.3d 176-178 [113 concede, decision to our Legislature responded majority As the in 1976 Flores v. Workmen’s which, enacted, 3716.2, part pertinent when provided section adding bene- an award of elements of “[notwithstanding precise allowed such benefits shall the claimant . . the . . . Fund fits . [ ] insured for employer properly have accrued . . that would . 1036, 7, (Stats. p. ch. liability.” *19 that establishing clearly view this as language who majority, Unlike from the arising and not for penalties the Fund was liable for benefits only ante, 391), view is p. my (maj. opn., failure to pay compensation employer’s fact, unless vague. intent precise that left the Legislature’s this enactment decision, its face the statute on knew of the Flores the reader of the statute of subject penalties. at all about the nothing relates to says in add file provi- 1981 to necessary Legislature was Accordingly, of for the payment for or any penalties sion that the Fund “shall not be liable 3409-3410.) But this (Stats. ch. pp. interest on awards.” any whole, which is in the statute as a must be read the context of language the misconduct the Fund for liability aimed at the vicarious of limiting of its own liability the Fund It at all about employer. says nothing for of all, misconduct, is, Fund After the misconduct delay. that Flores, for in which was the apparent impetus an issue certainly had not been rule as to the to seek a 3716.2. Thus it is anomalous the enactment of section in that section. liability penalties Fund’s for or proponent letter from The to no committee majority point report, exempting was concerned with Legislature evidence that the other direct 3716.2. when it enacted section for its own misconduct Fund from penalties evidence, in the of the em- right The to circumstantial majority point a claim maintain a civil action as well as an uninsured to ployee 3706, 3715), in the lack of a (§§ for workers’ benefits of; easily benefits. The latter is disposed deadline for the Fund’s meet and not for to delay,” failing is for “unreasonable penalty imposed (§ 5814.) Thus the exact deadline for payment deadline. whether the in the of a penalty, benefits is not determinative imposition availability to the Fund or to an As for delay employer. is attributable action, intent I in any legislative a civil see no which this reflects again way misconduct to be the Fund for imposed upon with to respect claim for in which the has chosen to maintain a employee cases benefits. of section 5814 should not argue provision The majority fund, as, no for Fund insurance it has incentive unlike apply private its delay, shortage and is often slow simply response perpetual smokescreen; whatever to money. argument applicability The is a it has no was the the facts of this case. There is no evidence that lack of cause money case, fact, and, in the the Fund offered no delay explanation for instant Board, ultimately at the justification delay hearing or its before I that its had been unreasonable. As demonstrate detail delay conceded below, the Fund acted gross incompetence handling with simply event, claim. In in a of budget case which issue applicant’s I find to the extent that is actually shortfall was would presented, delay lack attributable of funds it is in the terms not “unreasonable” statute, and The authority should not citation to penalized. majority’s limiting medical entitlement to legal excused doubt of benefits these inapposite; cases did not consider the of the Fund’s question (See, own institutional e.g., Kerley misconduct. v. Workmen’s App. at p. motive profit not cause Fund may delay, but it is clear from the
record case this that some other is improper cause of at work and needs to be There addressed. is evidence in record disturbing this that the chronic, Fund is with operating delays inexcusable is so slow and it unresponsive that has caused attorneys refuse take cases which the Fund will That is be involved. there chaos the administration of the is Fund demonstrated the evidence the by represen- tative of the Fund at the on this hearing long matter after the award was he stipulated that still could not the say whether Fund had made any fact, to the payments applicant or not! In counsel for the Fund conceded at argument oral that the Fund did not determine it ultimately what had done with respect payment for more than a year after award. stipulated Board,
The Fund, the body that originally assessed the penalty against evidently found the I following chronology of incompetence striking as 12/14/89, “On do: hearing was held .... The Applicant, his attorney, a representative for the Uninsured Employers signed Fund and submitted Stipulations With for . Request Award . . . The With Stipulations [f] Request for Award were reviewed and approved Workers’ by Compensation Judge M. James Bass on 12/14/89. of the Copies Award . . . served [were] hand on . . .the of the representative Uninsured Fund Employers at the [j[] 1/24/90, hearing. On 1/2/90 and wrote Applicant’s Counsel to the Uninsured Employers Fund requesting with the Award compliance .... 2/15/90, On filed Applicant a . . . Petition Penalty alleging for that the Uninsured Fund had Employers not made in accordance with payment Award. There or other objection . . . was no filed the Unin- response Fund, 5/24/90, a sured On hearing was held . . . Employers [ft] [before Board], The made an offer that he had received Applicant proof no Fund from the Uninsured The payments Employers .... representative Uninsured Fund noted for record that he Employers say could not one or the other whether the Uninsured Fund way Employers any had made The were allowed 15 payments. parties days to submit written arguments issue, 5/31/90, On regarding submitted penalty Applicant his [ft] 6/6/90, written argument issue. On the Uninsured regarding penalty Fund filed a motion Employers requesting that submission of this matter be so it delayed could what have investigate payments might been made to the filed Applicant, motion the Uninsured Fund Employers request- [ft] ing additional time to investigate what have made to the payments might Applicant More than 5 months improper untimely. between elapsed the time Award and the hearing. More than months elapsed between the first demand Applicant’s for Award and the penalty More than 3 hearing. months between the of the elapsed filing Applicant’s DOR/Petition Penalty and the There is penalty hearing. no indication record, and there was no representation made representative Uninsured Fund at the Employers hearing, trial that the Uninsured Employ- ers Fund had taken make or to steps Applicant what investigate . . . have payments might been made.” hesitation My only about that a urging penalty should be assessed against the Fund is that the 10 percent penalty for have little effect on delay may such a torpid agency. Certainly majority will not be opinion helpful. Hercules’s method at the Augean stables be more to the may point. *21 reasons,
For the I foregoing would hold mandate of section 5814 relating to benefits to the injured worker must to aid whose apply employees payments should come promptly, subject to the reasonableness of the efforts of the Fund. I would affirm the decision of the Court of Appeal.