EPS Case Law Update:

County of Santa Clara v. WCAB & Justice

No. H046562, 2020 Cal. App. LEXIS 461 (Ct. App. May 27, 2020) (Justice).

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By Stephen M. Wicks

Below is a sample of some of the firm’s (ENGLAND PONTICELLO & ST.CLAIR) (www.eps-law.com) publications. Information contained in these articles may not reflect the ever changing state of the law and should not be relied upon without first seeking legal advice.

On May 27, 2020, the Sixth District of the California Court of Appeals issued a published opinion in Cty. of Santa Clara v. Workers’ Comp. Appeals Bd. & Justice, No. H046562, 2020 Cal. App. LEXIS 461 (Ct. App. May 27, 2020) (Justice).  This ruling has direct and binding consequences on the application of apportionment of permanent impairment in California workers’ compensation cases.

In particular, this recently issued case addresses and clarifies the apportionment finding in Hikida v Workers’ Comp. Appeals Bd., (2017) 12 Cal.App.5th 1249 (Hikida).  In Hikida, the worker underwent carpal tunnel surgery, which was unsuccessful and resulted in Chronic Regional Pain Syndrome (CPRS).  The CRPS lead to a medical finding of total disability.  Of the overall impairment, 10% was apportioned by the relied upon doctor to non-industrial sources.   The issue in dispute was whether apportionment applied to the final disability, where the disability resulted from adverse industrial medical care.

The Second District of the California Court of Appeals held in Hikida that the final impairment was not subject to apportionment.  In so doing, the Court framed the issue as “whether an employer is responsible for both the medical treatment and any disability arising directly from unsuccessful medical intervention, without apportionment.” Hikida at 1260.  The Court concluded that an employer was indeed responsible, without apportionment.

The Hikida holding has spawned much litigation as to the applicability of apportionment, in matters where permanent disability exists post medical treatment. Counsel for injured workers have contended that any disability that exists subsequent to medical treatment should not be subject to apportionment.  As can be seen from the Trial result in Justice, Trial findings have issued in accord with this argument.

The Justice published appellate opinion has now clarified any purported expanded scope of Hikida.  It has done so in a manner consistent with how we have contended apportionment should be applied post Hikida, in cases where the ultimate impairment is not the product of industrial medical treatment.

In Justice, the worker’s compensation claims adjuster employee suffered a slip and fall knee injury.  This injury eventually required bilateral knee replacement.  In assessing disability, the AME found significant evidence of prior knee conditions, including degeneration, tears, and surgical tissue from prior surgeries.  Although the disability rating per the AMA Guides was based on the post knee replacement surgical status, the AME concluded that 50% of the applicant’s disability was a result of the nonindustrial, pre-existing degeneration of the knees.  The Trial Judge however, in addressing disability that existed following knee surgeries, found no legal apportionment, based upon Hikida.

This issue before the appellate court in Justice was thus the applicability of apportionment in post medical treatment cases, where the disability is not solely due to the industrial medical care.  The Sixth District Court of Appeal in Justice held that while it is true that employers are responsible for consequential injuries stemming from industrial medical treatment without apportionment, and while it is also true that such injuries are within the ambit of the workers’ compensation system, “it does not follow that an employer is responsible for the consequences of medical treatment without apportionment, when that consequence is permanent disability.”  Justice, at 18.

The Court in Justice specifically addressed the arguments based upon Hikida, that there should be no apportionment where medical treatment precedes permanent disability.  The Court specifically rejected this reading, and stated instead that the rule in Hikida precludes apportionment “only where the industrial medical treatment is the sole cause of the permanent disability.”  Supra at 19.

Justice is thus not in conflict with the Hikida rule.  In Hikida, recall that it was not contested by the defense that the CRPS itself was entirely the result of the failed industrial surgery.  This differs from Justice, where the ultimate impairment was due to a variety of causes, including prior degenerative conditions.

The result of Justice is that the Hikida rule applies to a distinct scenario that is in no way at odds with the long standing concept of apportionment, or the findings of Justice.   The rule that medical treatment which caused injury and disability is the responsibility of the employer is longstanding. (Fitzpatrick v. Fidelity & Casualty Co. (1936) 7 Cal.2d 230, 232 [60 P.2d 276]; accord, Nelson v. Associated Indem. Corp. (1937) 19 Cal.App.2d 564, 566 [66 P.2d 184].)(“ the aggravation of an industrial injury or the infliction of a new injury resulting from its treatment or examination are compensable under the provisions of the Workmen’s Compensation Act and, therefore, within the exclusive cognizance of the Industrial Accident Commission.”)

Justice therefore addresses the attempts to extend the scope of Hikida, and rejects any such attemptsDespite the language of Hikida specifically referencing unsuccessful medical intervention, the rule has been argued to apply to the results of all surgery, no matter whether the disability was due to the surgery, or due to the injury and/or prior conditions.  In light of Justice, the situations post-surgery where apportionment should not apply are thus factually distinct.

Moving forward, it appears we will have both legal and factual issues to consider in addressing post-treatment apportionment disputes.  From the legal end, as Justice is not a Supreme Court case, it is expected that cases may be brought as to the scope of post-treatment apportionment, until we have such a California Supreme Court determination.  That being said, Justice governs and remains the authority unless contrary District Court of Appeal (DCA) or Supreme Court opinions issue.

From a factual scenario, practitioners and claims handlers should always be mindful to make sure the record is appropriately developed, as arguments that the ultimate disability was caused by the industrial medical care will likely increase, to put the matter squarely within Hikida.   Although these will be fact and case specific as to the causation of impairment, it would not surprise to see AME/QMEs being questioned more often as to whether impairment arises from industrial medical care.  Therefore, after this decision in Justice, we will likely see increased factual issues that arise in apportionment disputes, as well as possible further appellate pursuits.