Penalty For Not Advancing P.D. With V.R.M.A Payments

This appellate court case deals with a penalty for not advancing permanent disability (PDA) while vocational rehabilitation maintenance allowance (VRMA) was being paid by the employer.

The facts of the case are convoluted.  For the purpose of this newsletter the pertinent facts are that the employer never paid the applicant PDA’s and VRMA at the same time.  The applicant claimed that a PDA supplement should have been paid while VRMA was being paid. The applicant claims that by not paying the PDA supplement the employer is subject to a 10% penalty pursuant to labor code section 5814.

The case went to trial and apparently this issue was not part of the trial. The Judge ruled that PDA’s were not raised at the trial. Petitions for reconsideration were filed. The Judge recommended denial of the petition and the Workers’ Compensation Appeals Board (WCAB) denied the petition.

The appellate court indicated that this was a due process issue. The reasoning was not that the Judge needed to develop the record, but rather needed to read the record.

The defendant in this case relied on the case of Tangye v. Henry Beck & Co. (1978) 43 CCC 3, for the proposition that defendant does not have to pay PDA’s and VRMA at the same time. The defendant argued that even if that argument was not accurate they should not be liable for a penalty under labor code section 5814 for having relied on Tangye.

The court refers to the specific language in Tangye. Tangye indicates that temporary disability and permanent disability cannot be paid at the same time. The Rucker case is differentiated by the appellate court. In Rucker the court is not talking about temporary disability but rather a vocational rehabilitation maintenance allowance which is different.

Labor Code section 139.5, subdivision (d) was amended in 1989. This had the effect of abrogating Tangye in cases where PDA’s had been requested. (Where the applicant makes no request for PDA supplements was not decided here.) The defendant offered no evidence at the trial to justify it’s reliance on Tangye.

The court of appeal indicated that for a defendant to make a determination as to a reasonable delay defense for Labor Code section 5814 the defendant must rely on facts. The court indicated that defendant’s mere reliance on Tangye, was not evidence of facts. Therefore, a penalty was appropriate for the nonpayment of PDA’s with VRMA when it had been requested by the applicant.

Case: Rucker V. WCAB (65 CCC 805)


Editor:
Harvey Brown
Address:
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Newport Beach, CA 92660
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