When Is The Proper Time To File A Petition To Terminate?

This case evolved after a penalty was assessed against all temporary disability paid, following a petition to terminate temporary disability benefits.

The applicant suffered an industrial injury. At a hearing the Workers’ Compensation Judge (WCJ) Robert Kutz found the applicant temporarily disabled and ordered temporary disability benefits to be continued.  The WCJ ordered the employer to report cessation of benefits pursuant to Rules of Practice and Procedure, Sections 10462 and 10464.

The employer received a medical report dated September 17, 1996. The employer paid temporary disability through September 27. 1996. The employer filed a petition to terminate benefits October 4, 1996, and also sent a letter to the applicant informing the applicant that temporary disability was ending. On October 10, 1996 the WCJ filed and served a notice of intention to terminate liability for temporary disability. The applicant objected and eventually a 10 % penalty was imposed. The WCJ relied on Labor Code section 4661.5 and Rule 10462 to assess the penalty. The WCJ believed these sections inherently in conflict but still assessed the penalty.

The Court of Appeal interpreted the two sections and indicated mere was no conflict between the two sections.  “Thus, the two provisions should be read together and harmonized as follows: An employer who reasonably believes an employee has become permanent and stationary (and therefore the employee’s temporary disability has ended) on a particular date may terminate payments as of that date and then must file a petition to terminate within 10 days. However, when the Board considers the petition to terminate, there will be a rebuttable presumption that the employee’s temporary disability should continue for one more week following the filing, and payment of temporary disability should be made for that week.”

In this case the court indicated that the employer tried to comply with the applicable sections. Section 5814 deals with unreasonable delays. The court indicated that in this instance there was no delay, unreasonable or otherwise. Therefore, even though the statute may not have been complied with correctly no 10% penalty should accrue.

The lesson to be learned is to file and serve the petition to terminate with the medical upon receipt of the medical.  Payment of temporary disability should continue for one week after the permanent and stationary date.

Case: Cascade Forest Products V. W.C.A.B. (Hines)

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

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