Penalty Must Be Assessed On Entire Class Of Benefits

The Court of Appeal in a case not certified for publication has reviewed a principle that keeps confusing practitioners in regards to payment of penalties. This case deals with the calculation of a penalty on attorney’s fees.

A Workers’ Compensation Judge (WCJ) determined that the applicant in this case was entitled to temporary disability, permanent disability, and future medical care treatment. The WCJ also determined that the County unreasonably delayed both temporary and permanent disability. A 10% penalty was assessed against the entire specie of benefit unreasonably refused or delayed. The attorneys were awarded $8,696 plus 15% of the total amount of penalties awarded.

There was then a subsequent hearing alleging the county unreasonably delayed medical treatment The parties entered into a stipulation with request for reward, settling this penalty issue.  This stipulation called for an attorney fee of $900.00. On the same date the judge approved a settlement of $2850.00 for the prior attorney fees on the prior penalty. The settlement indicated there would be no penalty or interest if paid within 30 days.

The check for attorney’s fees was not paid within 30 days. The WCJ imposed a penalty on the amount of ail medical treatment. The County’s petition for reconsideration was denied and the Workers’ Compensation Appeals Board (WCAB) also awarded reasonable attorney fees under Labor Code section 5814.5. This amount was $1000.00 plus 2% of medical treatment expense.

The issue presented to the appellate court was the correct computation of the payment for the penalty on the attorney’s fee award. The court analyzed the major cases, Gallamore v. WCAB (1979), 23 Cal. 3d 81$, Miner v. WCAB (1993) 4 Cal. 4th 1213. The court also looked at Avalon Bay Foods V. WCAB (1998) 18 Ca. 4th 1165.

The court determined that under Labor Code section 5814 a penalty is not a separate class of benefits. A penalty related to medical treatment goes against all of the medical treatment and is increased by any prior penalty awards. However, the award of attorney’s fees is a separate class of benefits for calculation of penalty purposes.

The court determined that the County must be assessed a penalty on the entire attorney’s fees awarded not just the portion delayed. Thus, the penalty ‘was awarded on (1) $2850.00 plus 15% of the total amount of penalties; (2) award of $900.00; (3) award of $2,850.00; and the (4) award of $1000.00

Case: County of L.A. V. WCAB (Jones)


Editor:
Harvey Brown
Address:
3501 Jamboree Rd. Suite 602
Newport Beach, CA 92660
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