Opinion
F043384.
10-30-2003
JOHN MASTRANGELO, Petitioner, v. WORKERS COMPENSATION APPEALS BOARD and PACIFIC BELL TELEPHONE COMPANY, Respondents.
William M. Morris, for Petitioner. Pacific Telesis Legal Group and J. Michael Nave, for Respondent Pacific Bell Telephone Company.
THE COURT
Before Vartabedian, Acting P.J., Cornell, J., and Gomes, J.
John Mastrangelo (Mastrangelo) petitions for a writ of review (Lab. Code, § 5950; Cal. Rules of Court, rule 57) to determine the lawfulness of the decision of the Workers Compensation Appeals Board (WCAB) allowing respondent Pacific Bell Telephone Company (PacBell) a credit against its workers compensation liability for disability benefit plan payments made under the Employee Retirement Income Security Act (29 U.S.C. § 101 et seq.) (ERISA). We will deny the petition.
Further statutory references are to the Labor Code.
BACKGROUND
In June 1999, Mastrangelo filed a workers compensation claim alleging he injured his hip and spine while working as a splicing technician for PacBell in January 1999. At a September 2002 mandatory settlement conference (MSC), PacBell agreed to provide Mastrangelo with temporary disability benefits between March 8, 1999, and September 30, 1999, and accepted that Mastrangelo sustained an eight percent level of permanent disability beginning October 1, 1999. PacBell also requested credit of $11,817.50 for amounts previously paid under its ERISA employee benefit plan; however, when the parties failed to reach agreement, the parties stipulated that PacBell would defer permanent disability payments "until ERISA issue is resolved." The WCJ granted the parties leave to present additional briefing and documentary exhibits to address the credit issue.
PacBells credit claim proceeded to a workers compensation hearing in December 2002. The workers compensation judge (WCJ) admitted into evidence a copy of the Pacific Telesis Group Comprehensive Disability Benefits Plan (Disability Plan), PacBells computation of $11,817.50 in excess Disability Plan payments, and a January 13, 1999, letter from the Disability Plans third party administrator notifying Mastrangelo that PacBell would seek credit for any future workers compensation liability. Mastrangelo testified that he did not recall receiving a letter warning him he could not receive both Disability Plan and workers compensation benefits.
On March 29, 2003, the WCJ found PacBell entitled to a credit against its permanent disability liability. On May 23, 2003, the WCAB denied Mastrangelos timely petition for reconsideration and adopted the reasoning of the WCJs report and recommendation.
DISCUSSION
Mastrangelo claims the WCAB erroneously concluded PacBell was entitled to a credit for Disability Plan payments in excess of its workers compensation liability. Specifically, Mastrangelo contends the WCAB: (1) misinterpreted directly applicable caselaw in finding PacBell was entitled to the Disability Plan credit, (2) improperly held discovery open past the MSC, and (3) lacked jurisdiction under ERISA to interpret the Disability Plan. We review the WCABs interpretations of law de novo and ensure substantial evidence supports any factual determinations. (Cedillo v. Workers Comp. Appeals Bd. (2003) 106 Cal.App.4th 227, 232.)
I. PacBell Disability Plan Caselaw
Appellate courts have twice addressed the issue of whether PacBell may claim a credit against its workers compensation liability for benefits paid under its employee benefit plans. In Ott v. Workers Comp. Appeals Bd. (1981) 118 Cal.App.3d 912, this court held that "[a]n employer is entitled to credit against [its] workers compensation liability for any wages or irregular payments in excess of compensation liability which are clearly intended by both employer and employee as an advance on [workers] compensation to become due." (Id. at p. 920.) We found PacBell would have been entitled to a credit for payments made under its disability plan had the plans governing committee designated the benefits as the "same general character" or the "functional equivalent" of workers compensation benefits. (Id. at p. 920.) Because there had been no such designation, we presumed the plan benefits were not intended to replace workers compensation benefits and concluded PacBell was not entitled to the credit. (Ibid.) We also considered whether the WCAB could have provided the credit to PacBell on alternative grounds for having made a voluntary payment under section 4909. We concluded, however, that PacBell failed to prove whether plan benefits were voluntary and therefore was not entitled to the credit. (Id. at p. 922.)
At the time of Ott, supra, PacBell was known as Pacific Telephone and Telegraph Company.
Section 4909 provides: "Any payment, allowance, or benefit received by the injured employee during the period of his incapacity, or by his dependents in the event of his death, which by the terms of this division was not then due and payable or when there is any dispute or question concerning the right to compensation, shall not, in the absence of any agreement, be an admission of liability for compensation on the part of the employer, but any such payment, allowance, or benefit may be taken into account by the appeals board in fixing the amount of the compensation to be paid. The acceptance of any such payment, allowance, or benefit shall not operate as a waiver of any right or claim which the employee or his dependents has against the employer."
The Second Appellate District addressed the same issue in Appleby v. Workers Comp. Appeals Bd. (1994) 27 Cal.App.4th 184. Unlike in Ott, however, PacBells plan committee had passed a resolution on August 5, 1987, declaring plan payments to be of the "same general character" as workers compensation benefits. (Id. at pp. 188-189.) Further, PacBell sent a letter to the employee "shortly after his injury, clearly advising him that Pacific Bell intended to recover Plan benefits paid to him from workers compensation benefits." (Id. at p. 189.) The Appleby court concluded PacBell was entitled to the credit because the ERISA plans benefits "were intended to be of the same general character and the `functional equivalent of benefits provided by the California workers compensation system." (Id. at pp. 192-193.)
The Appleby court also noted that under Ott, an employer may receive credit for voluntary benefit payments in excess of its workers compensation liability under section 4909. (Appleby, supra, at p. 193.) In dicta, the Appleby court disagreed with Ott by reasoning that employee benefits not mandated by law, including those negotiated by union agreement, constitute voluntary benefits for purposes of applying the credit. Appleby thus reasoned that because the disability plan benefits were voluntary, the WCAB was free to exercise its discretion under section 4909 to apply the credit against PacBells workers compensation liability. (Ibid.)
Mastrangelo contends the WCAB, by adopting the findings of the WCJ, improperly applied the facts of Appleby instead of those in the present case. Mastrangelo appears correct. The WCAB here expressly relied upon the August 5, 1987, resolution in Appleby that payments under the ERISA plan were intended to be of the same general character as workers compensation benefits. In so doing, the WCAB presumed PacBell has utilized a single ERISA plan over the years. However, the WCAB points to no evidence that the employee benefit plan in Appleby was the same plan from which Mastrangelo received benefits. To the contrary, the plan in Appleby was titled "Plan For Employees Pensions, Disability Benefits and Death Benefits," while Mastrangelo received benefits under a plan titled "Pacific Telesis Group Comprehensive Disability Benefits Plan," as restated February 1, 1995. (Appleby, supra, at p. 195.)
Nevertheless, we agree with the WCABs conclusion that the benefits paid Mastrangelo under the current Disability Plan were intended to be of the same general character and functional equivalent of workers compensation benefits, based on a de novo review of the Disability Plan itself. (Sierra Vista Regional Medical Center v. Bonta (2003) 107 Cal.App.4th 237, 245 ["The interpretation of a contract is a question of law unless the interpretation turns on the credibility of extrinsic evidence."] The Disability Plan provided at sections 4.2.2. and 5.2.1:
"It is the intent of the Plan that a Participant shall not receive duplicate benefits from the Plan and from sources paying Integrated Benefits. Thus, Integrated Benefits shall reduce ... Disability Benefits payable from the Plan, and vice-versa, in a manner provided herein .... The following amounts shall be treated as `Integrated Benefits: [¶] ... [¶]
"(b) Workerss Compensation Benefits; [¶] ... [¶]
"Integrated Benefits ... shall only reduce ... Disability Benefits, and vice-versa, if such Integrated Benefits relate to or are payable for the same injuries, illnesses, conditions, or disabilities for which the ... Disability Benefits are payable."
The Disability Plan thus expressly provided that any benefits paid under the plan were intended to offset workers compensation benefits. The testimony of PacBells workers compensation manager and the third party administrators January 13, 1999, letter further confirmed PacBell intended to seek contribution for any Disability Plan benefits paid in excess of its workers compensation liability. Under both Ott and Appleby, sufficient evidence supports the finding Disability Plan benefits were of the same general character and the functional equivalent of workers compensation benefits; accordingly, PacBell was entitled to the credit regardless whether the Disability Plan benefits are deemed voluntary.
II. Discovery
Mastrangelo further contends the WCAB violated section 5502, subdivision (d)(3), by permitting PacBell to submit additional evidence, including the Disability Plan document, after the MSC. At the time of the MSC, that section provided:
Section 5502, subdivision (d)(3), was renumbered section 5502, subdivision (e)(3) effective January 1, 2003. (Stats. 2002, ch. 6, § 80 (A.B. 749); Stats. 2002, ch. 866, § 14 (A.B. 486).)
"If [a workers compensation] claim is not resolved at the mandatory settlement conference, the parties shall file a pretrial conference statement noting the specific issues in dispute, each partys proposed permanent disability rating, and listing the exhibits, and disclosing witnesses. Discovery shall close on the date of the mandatory settlement conference. Evidence not disclosed or obtained thereafter shall not be admissible unless the proponent of the evidence can demonstrate that it was not available or could not have been discovered by the exercise of due diligence prior to the settlement conference."
The Legislature enacted the early discovery closure provision "`to minimize delays and efficiently expedite case resolution by making sure parties are prepared for hearing" and to ensure a productive dialogue in framing the stipulations and issues for hearing. (Telles Transport v. Workers Comp. Appeals Bd. (2001) 92 Cal.App.4th 1159, 1164.) However, it is also "`well established that the WCJ or the Board may not leave undeveloped matters which its acquired specialized knowledge should identify as requiring further evidence." (Ibid.) In Telles, this court noted the tension between closing discovery at the time of MSC and the WCABs constitutional and statutory duty to develop an adequate record. (Id. at pp. 1163-1165.) The WCAB nevertheless always may expand the record after the close of discovery to address unanticipated issues. (Id. at p. 1165, citing Kuykendall v. Workers Comp. Appeals Bd. (2000) 79 Cal.App.4th 396, 406.)
Mastrangelo contends PacBell should have been ready and willing to address the Disability Plan credit issue at the time of MSC and offered any documentary evidence at that time. Mastrangelo claims PacBell violated 5502, subdivision (d)(3) by declaring under perjury it was ready to proceed, but was not able to support its claim for credit.
Although PacBell raised the credit issue, there is no indication from the record that Mastrangelo intended to refute its application under Ott and Appleby until the MSC. As the trial WCJ reported to the WCAB, Mastrangelos credit dispute was an unanticipated workers compensation issue:
"[W]as it an abuse of discretion to allow a briefing schedule which included an opportunity to identify specific evidence and witnesses subsequent to the Mandatory Settlement Conference (MSC)? I answered no. Applicants argument, presented at trial (I was not the MSC Judge) was very difficult to understand. In fact, it is still some what [sic] difficult to grasp in this current petition. With that said, allowing applicant attorney 30 days subsequent to the MSC to file its brief and defendant 21 days to respond, with exhibits to be attached to each brief is not an abuse of discretion. This in no way delayed trial, in no way prejudiced the parties and finally allowed a concise presentation of exhibits and witnesses, thereby aiding the court. It is not everyday an issue which has been answered years ago is raised for the sole purpose of obtaining something one is not entitled to."
Given the ambiguity and novelty of Mastrangelos claim that was apparently raised for the first time at the MSC, the WCJ acted within its discretion in holding discovery open to allow the parties to support the arguments raised in their pre-trial briefing.
III. Interpretation of the ERISA Disability Plan
Mastrangelo lastly contends the WCAB invaded federal jurisdiction by interpreting the Disability Plan and finding its benefits of the same general character as workers compensation benefits. Presumably, Mastrangelo would similarly question this courts review of the Disability Plan.
Citing Navarro v. Workers Comp. Appeals Bd. (2002) 67 Cal.Comp.Cases 145, 150-151, Mastrangelo contends the WCAB "determined that it was pre-empted from enforcing any state law wherein the `existence of, the implementation of, or the specific terms of an employers ERISA plan are central to ... that claim." More accurately, however, Navarro determined ERISA preempts discrimination claims in which the ERISA plan is central to the claim. (Ibid.) Mastrangelo fails to point to any federal provision that prohibits the WCAB or state court from reviewing the terms of an ERISA plan in determining whether to credit an employers workers compensation liability. Indeed, neither Ott nor Appleby found such a limitation.
DISPOSITION
The petition for writ of review is denied. This opinion is final forthwith as to this court.