Penalty On Living Expenses Is A Separate Class Of Benefits Under Section 5814

This is an unpublished appellate court decision that proves insightful in determining a penalty and in commutations.

The applicant filed a claim for workers’ compensation benefits. The parties stipulated that the applicant had a 100 per cent permanent disability. The permanent disability compensation rate was $406.00 per week. The applicant’s attorney requested an attorney’s fee. The present value of the attorney’s fee was calculated and given to the applicant’s attorney from the far end of the award. This reduced the weekly amount paid to the applicant to $354.54.

Thereafter, the applicant petitioned for a commutation of $331,200., which represented the present value of nearly the entire remaining award. The applicant wished to pay off the home mortgage, credit card debt and a $90,900 loan from the applicant’s in-laws. The in-laws obtained the money to loan the applicant from a business line of credit,

The applicant’s income was revealed in testimony. The in-laws needed to have the loan repaid by the applicant to keep there business a float.

The Workers’ Compensation Judge (WCJ) ordered the payment of a lump sum of $115,000. The County petitioned for reconsideration. The WCJ reconsidered and ordered $90,000 commuted for the loan to the in-laws, $25,000 commuted for repaying credit card debt and $1000 attorney fees.

The County again petitioned for reconsideration. The Workers’ Compensation Appeals Board (WCAB) reduced the commutation to $90,900 for the in-laws and $1000 attorney fees.

The payment was late and a penalty was pursued. After trial and another petition for reconsideration the WCAB awarded a penalty on the entire permanent disability indemnity.

This court determined that the delayed payment was a particular class of compensation apart from the entire permanent disability award and therefore, only awarded a penalty on the delayed portion. They indicated it should have been viewed as a lien instead of a permanent disability award delay by the County.


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

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