Summary
In Costa, the vocational rehabilitation consultant's report was excluded from evidence because it was based on incorrect assumptions, inappropriately considered nonindustrial factors, and incorrectly calculated preinjury earnings capacity.
Summary of this case from Barr v. Workers' Compensation Appeals BoardOpinion
OPINION AND DECISION AFTER RECONSIDERATION (EN BANC)
JOSEPH M. MILLER, CHAIRMAN.
On February 26, 2007, the Appeals Board granted reconsideration of the en banc decision issued in this matter on December 7, 2006, to further study the factual and legal issues in this case. The following is our Decision After Reconsideration.
In the decision issued on December 7, 2006, the Appeals Board held that "on the record before us, the applicant had not met his burden of proving the new PDRS [permanent disability rating schedule] invalid." We also held that, as under former Labor Code section 4660,] current section 4660, as amended by Senate Bill (SB) 899, continues to allow the parties to present rebuttal evidence to a permanent disability rating under the new PDRS, and that the costs of such rebuttal evidence may be allowable. With respect to the rebuttal evidence here, the testimony and report of Ann Wallace, Ph.D., a vocational rehabilitation consultant, and the costs therefor, we rescinded the determination of the workers' compensation administrative law judge (WCJ) denying reimbursement for such costs, and allowed the parties to adjust them, with jurisdiction reserved at the trial level in event of dispute. More specifically, we stated that Ms. Wallace was entitled to be reimbursed by defendant for the reasonable costs associated with her testimony under section 5811. With respect to her report, although finding that it had been properly excluded from evidence, we concluded that Ms. Wallace was entitled to reimbursement by defendant to the extent that "some of her work in preparing that report may have provided a foundation for her testimony."
Unless otherwise noted, all further statutory references are to the Labor Code.
Defendant filed a timely petition for reconsideration from our decision of December 7, 2006, contending that (1) "[i]t was error for the Appeals Board to make the general holding that [section] 4660 allows the parties to present rebuttal evidence to a permanent disability rating, when defendant's objections to said testimony were overruled and the (worthless) testimony was admitted into evidence, as the applicant cannot appeal that favorable decision of the [WCJ]; therefore, it was not ripe for appeal and there was no jurisdiction for the Appeals Board to decide the issue without prior notice to the parties;" (2) we erred in basing our decision on liability for Ms. Wallace's testimony on the mistaken belief that no objection was made to her testimony; (3) considering our determination regarding the deficiencies in Ms. Wallace's testimony, it was inappropriate to find defendant liable for the costs of such testimony; (4) we erred in failing to give great weight to the WCJ's conclusions regarding Ms. Wallace's testimony; (5) a vocational rehabilitation counselor such as Ms. Wallace "is not qualified, nor an appropriate witness to testify in an effort to rebut the [PDRS];" (6) "[t]he awarding of fees for a witness testifying guts the impact of the exclusion from evidence of their report, encourages the late filing of reports, and encourages live testimony in court instead of the filing of reports;" and (7) the costs of this expert witness are not costs that are allowed by section 5811.
For the reasons discussed below, as well as the reasons stated in our prior decision, we hold that section 4660 continues to allow the parties to present evidence on and/or in rebuttal to a permanent disability rating under the new PDRS, and that the costs of such evidence may be allowable. In addition, the standards for allowing such costs will be by analogy to medical-legal costs, that is, whether they are reasonable and necessary at the time they are incurred. Therefore, we will affirm our prior decision, but will amend it to defer the issue of costs under section 5811 for Ms. Wallace's testimony and report, and return this matter to the trial level for the WCJ to determine the issue in accordance with the standards set forth in this opinion.
A. The Costs Of Evidence On And/Or In Rebuttal To A Permanent Disability Rating Are Properly Allowable Under Section 5811
As stated by the California Supreme Court in Johnson v. Workers' Comp. Appeals Bd. (1984) 37 Cal.3d 235, 238 [49 Cal.Comp.Cases 716, 718]: "As a general rule, the WCAB is authorized to award costs. Section 5811 provides in pertinent part: 'In all proceedings under this division before the appeals board, costs as between the parties may be allowed by the appeals board.' "
In Johnson, the Supreme Court determined that the WCAB could award appellate costs under section 5811 where a petition for writ of review had been summarily denied by the Court of Appeal. Then, more broadly addressing the issue of section 5811 costs, the Supreme Court went on to state:
"Article XIV, section 4 of the California Constitution provides, in part: 'The Legislature is hereby expressly vested with plenary power, unlimited by any provision of this Constitution, to create, and enforce a complete system of workers' compensation ... [which] includes ... full provision for vesting power, authority and jurisdiction in an administrative body with all the requisite governmental functions to determine any dispute or matter arising under such legislation, to the end that the administration of such legislation shall accomplish substantial justice in all cases expeditiously, inexpensively, and without incumbrance of any character; all of which matters are expressly declared to be the social public policy of this State, binding upon all departments of the State government.' (Italics added.) [Court's italics.]
"This constitutional provision supports petitioner's contention that the WCAB should have the authority to award appellate costs. If injured workers were not permitted to recover costs incurred in successfully answering a petition for writ of review, the constitutional policy to ensure substantial justice 'without incumbrance of any character' would be frustrated. Forcing employees to absorb such costs would diminish the minimal awards obtained under the Workers' Compensation Act (§ 3200 et seq.) …
"This court must construe section 5811 liberally, 'with the purpose of extending [its] benefits for the protection of persons injured in the course of their employment.' ([Lab. Code,] § 3202.) As Justice Matthew O. Tobriner stated for the court in Quinn v. State of California (1975) 15 Cal.3d 162 [124 Cal.Rptr. 1, 539 P.2d 761], section 3202 'requires the courts to view the [Workers' Compensation Act] from the standpoint of the injured worker, with the objective of securing for him the maximum benefits to which he is entitled.' (15 Cal.3d at p. 170.) …"
(Johnson v. Workers' Comp. Appeals Bd., supra, 37 Cal.3d at pp. 240-241 [49 Cal.Comp.Cases at pp. 720-721)
Therefore, as recognized by the Supreme Court, the WCAB's authority to award section 5811 costs to an injured employee furthers the constitutionally declared "social public policy" of California and it helps ensure that the "minimal awards" employees receive are not "diminished" by "[f]orcing employees to absorb such costs."
Furthermore, under LeBoeuf v. Workers' Comp. Appeals Bd. (1983) 34 Cal.3d 234, 242-243 [48 Cal.Comp.Cases 587, 594] and Gill v. Workers' Comp. Appeals Bd. (1985) 167 Cal.App.3d 306, 307 [50 Cal.Comp.Cases 258, 260], in assessing permanent disability, evidence must be considered regarding the preclusion of an employee from participating in vocational rehabilitation, including testimony and reports of rehabilitation counselors. (See also Grupe Co. v. Workers' Comp. Appeals Bd. (Ridgeway) (2005) 132 Cal.App.4th 977 [70 Cal.Comp.Cases 1232] [vocational rehabilitation expert witness should have been permitted to testify on injured employee's behalf at trial because the employee disclosed the vocational rehabilitation expert's name at the mandatory settlement conference, even though she had not further disclosed the substance or content of the expert's proposed testimony].) Moreover, notwithstanding defendant's assertion to the contrary, the reasonable costs of non-medical expert witness fees under section 5811 have been awarded in workers' compensation proceedings. (See Zenith National Insurance Co. v. Workers' Comp. Appeals Bd. (Smith) (1978) 43 Cal.Comp.Cases 254 (writ den.) [costs assessed against defendant for the reasonable fee of vocational rehabilitation expert's testimony]; Los Angeles Unified School District v. Workers' Comp. Appeals Bd. (Kilgore) (1984) 49 Cal.Comp.Cases 631 (writ den.) [applicant's attorney awarded costs for fee paid to former disability evaluator called as expert witness to rebut testimony of permanent disability rating specialist]; Whitley v. Diamond Int. Corp. (1985) 13 Cal.Workers'Comp.Rptr. 97 [defendant liable for costs of testimony and report of vocational rehabilitation counselor].) In addition, subsequent to the enactment of SB 899, the Courts of Appeal have denied writs challenging the allowance of reasonable costs under section 5811 for the testimony of vocational rehabilitation experts on the issue of permanent disability. (See Rea v. Workers' Comp. Appeals Bd. (Dabanian) (2007) 72 Cal.Comp.Cases 497 (writ den.); Rea v. Workers' Comp. Appeals Bd. (Dias) (2007) 72 Cal.Comp.Cases 705 (writ den.); Rea v. Workers' Comp. Appeals Bd. (Barr) (2007) 72 Cal.Comp.Cases 762 (writ den.); Rea v. Workers' Comp. Appeals Bd. (Rasmussen) (2007) 72 Cal.Comp.Cases 1035 (writ den.).)]
For example, in Rasmussen, the WCAB held that defendant, Subsequent Injuries Benefit Trust Fund (SIBTF), was liable for the cost of applicant's vocational rehabilitation expert witness fees under section 5811, as such testimony was necessary to show whether applicant's amputation was labor disabling prior to his industrial injuries and to rebut SIBTF's contention that applicant was not entitled to SIBTF benefits.
The continued allowance of reasonable expert witness fees under Labor Code section 5811 for the presentation of evidence on and/or in rebuttal to a permanent disability rating under the new PDRS, is not inconsistent with SB 899. As stated in our prior decision, while SB 899 made sweeping changes to Labor Code section 4660, including a wholly new PDRS, one of the few things it left intact was that the PDRS "shall be prima facie evidence of the percentage of permanent disability to be attributed to each injury covered by the schedule." (Former subdivision (b), now subdivision (c).) This language historically allowed the introduction of evidence on and/or in rebuttal to the PDRS (see, e.g, Liberty Mutual Ins. Co. v. Industrial Acc. Com (Serafin) (1948) 33 Cal.2d 89, 93 [13 Cal.Comp.Cases 267, 270]; Universal Studios, Inc. v. Workers' Comp. Appeals Bd. (Lewis) (1979) 99 Cal.App.3d 647, 662-663 [44 Cal.Comp.Cases 1133, 1143]; Glass v. Workers' Comp. Appeals Bd. (1980) 105 Cal.App.3d 297, 307 [45 Cal.Comp.Cases 441, 449]), including evidence the testimony and reports of vocational rehabilitation counselors. (LeBoeuf, supra, 34 Cal.3d at pp. 242-243 [48 Cal.Comp.Cases at p. 594]; Gill, supra, 167 Cal.App.3d at p. 307 [50 Cal.Comp.Cases at p. 260].)
Thus, in continuing to permit evidence on and/or in rebuttal to a permanent disability rating under Labor Code section 4660, the WCAB's discretion to allow the reasonable costs of such evidence under Labor Code section 5811 remains intact. While it is undisputed that one of the purposes of SB 899 was an overall reduction in workers' compensation costs (see e.g., Brodie v. Workers' Comp. Appeals Bd. (2007) 40 Cal.4th 1313, 1329 [72 Cal.Comp.Cases 578], this does not mean that discretionary costs under section 5811, on which SB 899 is silent, should be proscribed by that legislation. ]
There are, however, limitations on the costs that may be reimbursed under section 5811. In addition to the fact that such costs are discretionary (Sims v. Workers' Comp. Appeals Bd. (1995) 60 Cal.Comp.Cases 1126 (writ den.), attorney's fees, for example, which are awarded under conditions specified in the Labor Code (see Lab. Code, §§ 4903, 5710, 5801, 5813, 5814, 5814.5), are not available as "costs" under section 5811. (Holzer-Reyes v. Workers' Comp. Appeals Bd. (1998) 63 Cal.Comp.Cases 84 (writ den.); Santa Maria High School District v. Workers' Comp. Appeals Bd. (1995) 60 Cal.Comp.Cases 649 (writ den.).)
B. The Standards For Allowing Section 5811 Costs For Evidence On And/Or In Rebuttal To A Permanent Disability Rating
We first observe that before costs may be allowed for testimony and/or reports of an expert witness, that person must, of course, qualify as an expert. With respect to qualification as an expert witness, Evidence Code] section 720 provides as follows:
While under section 5708, the Appeals Board and WCJs are not "bound by the common law or statutory rules of evidence and procedure," as stated in Martinez v. Associated Engineering & Construction Co. (1979) 44 Cal.Comp.Cases 1012, 1018 (Appeals Board en banc), "[t]here are many provisions of the Evidence Code which are followed routinely in workers' compensation cases. For example, various privileges (Evid. Code §§ 900-1070) may be a matter of substantive law rather than merely procedural. Other provisions aid the carrying of the constitutional mandate such as those sections dealing with the proper procedures to be followed during the course of a trial. (See e.g., §§ 700-791.)
"(a) A person is qualified to testify as an expert if he has special knowledge, skill, experience, training or education sufficient to qualify him as an expert on the subject to which his testimony relates. Against the objection of a party, such special knowledge, skill, experience, training or education must be shown before the witness may testify as an expert.
"(b) A witness' special knowledge, skill, experience, training or education may be shown by any otherwise admissible evidence, including his own testimony."
With respect to opinion testimony by an expert witness, Evidence Code section 801 provides as follows:
"If a witness is testifying as an expert, his testimony in the form of an opinion is limited to such an opinion as is:
(a)Related to a subject that is sufficiently beyond common experience that the opinion of an expert would assist the trier of fact; and
(b) Based on matter (including his special knowledge, skill, experience, training, and education) perceived by or personally known to the witness or made known to him at or before the hearing, whether or not admissible, that is of a type that reasonably may be relied upon by an expert in forming an opinion upon the subject to which his testimony relates, unless an expert is precluded by law from using such matter as a basis for his opinion."
While vocational rehabilitation counselors would appear, in general, to be qualified with respect to diminished future earning capacity (DFEC) issues under the new PDRS, the qualifications of each purported expert must, of course, be determined on a case by case basis. Once a person has qualified as an expert, the costs of the expert's testimony and/or his or her reports may be allowable under section 5811, as discussed below, similar to the standards for allowing medical-legal costs under section 4621(a).
Section 4621(a) provides, in pertinent part:
"[T]he employee … shall be reimbursed for his or her medical-legal expenses reasonably, actually and necessarily incurred … . The reasonableness of, and necessity for, incurring these expenses shall be determined with respect to the time when the expenses were actually incurred."
Thus, the costs of evidence on and/or in rebuttal to a permanent disability rating must be reasonable and necessary at the time they were incurred,] and such determination will also be made on a case by case basis. We further note that as with medical-legal costs, which may be reimbursable even though the applicant is unsuccessful in his or her claim (see, e.g., Subsequent Injuries Fund v. Industrial Acc. Com. (Roberson) (1963) 59 Cal.2d 842, 844 [28 Cal.Comp.Cases 139, 140]; Beverly Hills Multispecialty Group, Inc. v. Workers' Comp. Appeals Bd. (Pinkney) (1994) 26 Cal.App.4th 789, 802 [59 Cal.Comp.Cases 461, 471]), the expert evidence offered by an applicant does not necessarily have to successfully affect the permanent disability rating to be reimbursable. At the same time, however, the WCAB has the discretion to balance the amount of such costs against the benefit obtained. (See Jimenez v. San Joaquin Valley Labor (2002) 67 Cal.Comp.Cases 74, 84-85, fn. 18 (Appeals Board en banc).) Moreover, as with medical-legal costs, reimbursement will not be allowed if the report and/or testimony is premised on facts or assumptions so false as to render it worthless. (See Penny v. Workers' Comp. Appeals Bd. (1983) 48 Cal.Comp.Cases 468 (writ den.); Pacific Medical Associates, Inc. v. Workers' Comp. Appeals Bd. (Rodarte) (1995) 60 Cal.Comp.Cases 526 (writ den.).) Furthermore, as medical-legal costs are not recoverable with respect to reports, for example, that are incapable of proving or disproving a disputed fact, or whose conclusions are totally lacking in credibility (see Cal. Workers' Comp. Practice (Cont. Ed. Bar, 4th ed., June 2007 Update) § 3.52, pp. 232-233), reports and testimony of a vocational rehabilitation expert must at least have the potential to affect a permanent disability rating in order for their costs to be recoverable.
While in Gill, supra, 167 Cal.App.3d 306 [50 Cal.Comp.Cases 258], such evidence was presented as part of the applicant's case in chief and not in rebuttal, as here, the same standards would, of course, apply. However, where such evidence is merely cumulative of medical evidence already in existence, or not relevant, the costs therefor would not be reasonable and necessary, and thus, not allowable.
Accordingly, to allow the parties and the WCJ to address these issues in light of the principles set forth in this opinion, we will amend our prior decision to defer reimbursement for Ms. Wallace's testimony and report, and return this matter to the trial level for further proceedings and decision. It therefore appears that defendant's contentions are now moot in light of this disposition and/or have been addressed by the foregoing, i.e., the costs at issue here may be allowable under section 5811 and vocational rehabilitation counselors, such as Ms. Wallace, may be appropriate expert witnesses to present evidence on and/or in rebuttal to a permanent disability rating under the new PDRS. We wish to note, however, that defendant is correct that contrary to our prior opinion, it did object to Ms. Wallace's testimony. Thus, failure to object may not be a basis for allowing the costs of such testimony in this case.
For the foregoing reasons,
IT IS ORDERED as the Decision After Reconsideration of the Workers' Compensation Appeals Board (en banc) that the Decision issued on December 7, 2006, is AFFIRMED, EXCEPT that paragraph (c) of the Award is deleted and Finding of Fact No. 9 is AMENDED as set forth below, after which this matter is RETURNED to the trial level for further proceedings and decision consistent with this opinion.
"9. The issue of reimbursement for the costs for the testimony and report of Ann Wallace, Ph.D., under Labor Code section 5811 is deferred."
WILLIAM K. O'BRIEN, Commissioner, JAMES C. CUNEO, Commissioner, JANICE J. MURRAY, Commissioner, FRANK M. BRASS, Commissioner,RONNIE G. CAPLANE, Commissioner, ALFONSO J. MORESI, Commissioner
In Barr, not only did the Court of Appeal deny defendant's petition for writ of review contesting the WCAB's reimbursement of costs for vocational rehabilitation expert's preparation for testimony under section 5811, which was found relevant on the issue of applicant's permanent disability, it also granted review with respect to the applicant's petition from the WCAB's denial of reimbursement for the costs of the vocational rehabilitation expert's report, which matter is still pending (Jim Barr v. Workers' Comp. Appeals Bd., 3rd Civ. No. C054907).