Opinion
NOT TO BE PUBLISHED
Super. Ct. No. SAC 275704
CANTIL-SAKAUYE, J.
Petitioner Sutter Memorial Hospital (Sutter) seeks reversal of a Workers’ Compensation Appeals Board (WCAB) order denying reconsideration and restitution of attorney fees paid to respondent Green & Azevedo for its legal representation of the applicant Lucy Chaidez. The WCAB earlier reduced the applicant’s permanent disability from 100 percent to 41 percent and ordered her to pay restitution to Sutter. In this proceeding, Sutter argues that the WCAB exceeded its powers in refusing to order Green & Azevedo to return $69,135 in attorney fees. It also contends the WCAB’s order was unreasonable and unsupported by the evidence. We issued a writ of review and shall affirm the WCAB order.
FACTUAL AND PROCEDURAL BACKGROUND
The applicant injured her back on November 9, 1998, in the course of her employment as an occupational therapist at Sutter. On April 21, 2003, the parties stipulated that she had 100 percent permanent disability. They also agreed to reduce the applicant’s award by the $69,134 paid to Green & Azevedo “as the reasonable value of services rendered . . . .”
On October 22, 2003, Sutter petitioned to reopen in the case and reduce the permanent disability award. In October 2006, the WCAB reduced the applicant’s permanent disability from 100 percent to 41 percent based on the report of Bart Kornblatt, M.D., the agreed medical evaluator (AME). Dr. Kornblatt had reviewed sub-rosa films taken of the applicant over several months and concluded that she “had over-represented her level of pain and disability while simultaneously under-representing her physical abilities and capacities.”
Sutter also sought restitution “from applicant for overpayment of permanent disability, and from the Law Firm of Green & Azevedo, applicant’s attorney at the time of the Award . . . .” Sutter served Green & Azevedo with the petition for restitution on March 14, 2006, but did not seek an order joining them as “parties in interest” until June 15, 2007. A month later, following the July 18, 2007 status conference, Sutter’s counsel stated in a letter to Green & Azevedo: “At the Conference you indicated that there was no fraud or misrepresentation by Green & Azevedo, or its attorney of record, Dan Abramson. [¶] Please note that I agree with you in that regard. I am not claiming any fraud or misrepresentation on behalf of Green & Azevedo. [¶] However, I am claiming that applicant misrepresented the level of her disabilities to the court and physicians in this case, including the AME. Since there was good cause to reopen and reduce the permanent disability from 100% down to 41%, there is also good cause to reopen the Award of attorneys fee [sic]. Equity does not suggest that a windfall of attorneys fees should be kept by Green & Azevedo.”
The administrative law judge (ALJ) ordered the applicant to pay Sutter restitution in the amount of $60,092.45. She denied restitution against Green & Azevedo, specifically finding that Green & Azevedo did not participate in the misrepresentation which led to overpayment of the applicant.
Sutter petitioned for reconsideration. The ALJ stated in her report and recommendation that “[a]pplicant’s attorney, Green and Azevedo, did not participate in the misrepresentation and received attorney fees in good faith. Although the amount of attorney fees received exceed fees for those granted from an award of 41%, they had no control over the misrepresentations made by applicant and should not be required to repay fees they earned and received in good faith.” The WCAB denied reconsideration for the reasons stated in the ALJ’s report.
DISCUSSION
I.
Standard of Review
Labor Code section 5952 provides: “The review by the court shall not be extended further than to determine, based upon the entire record which shall be certified by the appeals board, whether:
Hereafter, undesignated statutory references are to the Labor Code.
“(a) The appeals board acted without or in excess of its powers.
“(b) The order, decision, or award was procured by fraud.
“(c) The order, decision, or award was unreasonable.
“(d) The order, decision, or award was not supported by substantial evidence.
“(e) If findings of fact are made, such findings of fact support the order, decision, or award under review.
“Nothing in this section shall permit the court to hold a trial de novo, to take evidence, or to exercise its independent judgment on the evidence.”
Thus, under section 5952, “‘[j]udicial review of decisions of the WCAB on factual matters is limited to determining whether the decision, based on the entire record, is supported by substantial evidence [citations].’ [Citation.] We are not bound, however, by the WCAB’s conclusions of law; and, where the pertinent facts are not in dispute, we deal only with a question of law. [Citations.]” (Baroid v. Workers’ Comp. Appeals Bd. (1981) 121 Cal.App.3d 558, 566.)
II.
The Five-Year Statute of Limitations
Section 5804 reads in part: “No award of compensation shall be rescinded, altered, or amended after five years from the date of the injury except upon a petition by a party in interest filed within such five years . . . .” In its answer to Sutter’s petition for writ of review, Green & Azevedo contend that Sutter’s claim against them is barred because it failed to seek restitution from them within five years of the applicant’s injury. The ALJ and WCAB impliedly rejected this argument below and addressed the merits of Sutter’s claim for restitution. We conclude the WCAB was correct that Sutter’s claim is not barred by the five-year statute of limitations.
The WCAB’s jurisdiction to enforce an award extends beyond section 5804’s five-year limitations period because an order ascertaining and fixing the exact amount of liability does not rescind, alter or amend any prior award in violation of section 5804. (Barnes v. Workers’ Comp. Appeals Bd. (2000) 23 Cal.4th 679 [WCAB’s jurisdiction continues beyond five years from the date of injury when it enforces a prior award of medical benefits]; Holtzman v. Workers’ Comp. Appeals Bd. (2005) 70 Cal.Comp.Cases 779, 781-782 [WCAB had jurisdiction to enforce award in favor of Uninsured Employers Fund against an uninsured employer more than five years after the employee’s injury].) Sutter filed its petition to reopen to reduce permanent disability pursuant to sections 5803 and 5804 on October 22, 2003, within the five-year limitations period. In its petition for restitution Sutter asked the ALJ not only to enforce the reduction of permanent disability (now 41 percent) through restitution of the alleged overpayment to the applicant but also as to the alleged overpayment of attorney fees to Green & Azevedo. This is so because an attorney fee award is calculated in part on the amount of the permanent disability award. The WCAB’s order denying Sutter’s petition for reconsideration and restitution of the attorney fees was part of the enforcement process.
III.
Denial of Restitution
Sutter offers several arguments in support of the claim that it is entitled to reversal of the WCAB order denying restitution. First, Sutter contends the WCAB exceeded its powers in not reducing Green & Azevedo’s attorney fees based on the reduction of the applicant’s permanent disability award. Second, Sutter argues it would be unjust and unfair to allow Green & Azevedo to retain more than 200 percent of what the applicant ultimately recovered in workers’ compensation. Third, it maintains that the WCAB’s decision is not supported by substantial evidence. Finally, Sutter suggested at oral argument that restitution in the workers’ compensation context is not restitution in the common law sense. Green & Azevedo assert that the WCAB lacks jurisdictional authority to reduce the attorney fee award in the circumstances of this case. We need not address this assertion because Sutter has failed to show the WCAB abused its discretion in denying reimbursement of attorney fees.
“The California Constitution vests plenary power over workers’ compensation in the Legislature. (Cal. Const., art. XIV, § 4; [citations].) The workers’ compensation system enacted by the Legislature ‘is exclusive of all other statutory and common law remedies, and substitutes a new system of rights and obligations for the common law rules governing liability of employers for injuries to their employees.’ [Citation.] ‘The right to receive attorney fee awards for securing compensation on behalf of workers is also within the broad authority vested in the Legislature over the complete workers’ compensation system by article [XIV], section 4 of the California Constitution.’ [Citation.]” (Vierra v. Workers’ Comp. Appeals Bd. (2007) 154 Cal.App.4th 1142, 1147 (Vierra).)
Section 4906 governs the award of attorney fees in connection with legal services provided to applicants for workers’ compensation. Such fees are ordinarily allowed as liens against any sum to be paid as compensation. (§ 4903.) Section 4906 emphasizes that attorney fees must be reasonable: “(a) No charge, claim, or agreement for the legal services or disbursements mentioned in subdivision (a) of Section 4903, . . . is enforceable, valid, or binding in excess of a reasonable amount. The appeals board may determine what constitutes a reasonable amount. [¶] . . . [¶] (d) In establishing a reasonable attorney’s fee, consideration shall be given to the responsibility assumed by the attorney, the care exercised in representing the applicant, the time involved, and the results obtained.” (See also, Cal. Code Regs., tit. 8, § 10775.)
Sutter stipulated, as part of the original workers’ compensation proceedings, that the $69,134 awarded to Green & Azevedo was the reasonable value of legal services rendered to the applicant. Sutter now contends that Green & Azevedo were allowed to retain an unreasonable amount of attorney fees under the WCAB order denying restitution and reconsideration. Citing Vierra, it points out that the WCAB’s Policy and Procedural Manual states that “cases of average complexity generally result in approval of fees between 9 and 12 percent of the indemnity.” (154 Cal.App.4th at p. 1148, fn. 2.) Here, the attorney fee award to Green & Azevedo was more than double what their client eventually received.
The problem with Sutter’s argument is that a different standard applies in the procedural setting of this case. The parties had earlier stipulated to an initial award of 100 percent permanent disability to the applicant and reasonable attorney fees in the amount of $69,134. Sutter successfully petitioned to reduce the applicant’s permanent disability to 41 percent based on sub-rosa photographs which revealed that the applicant misrepresented the extent of her disability to Dr. Kornblatt and the WCAB. Because Sutter sought the remedy of restitution against Green & Azevedo, the WCAB properly measured its entitlement to that recovery on an unjust enrichment basis, not a reasonableness basis.
“Restitution is an equitable remedy which has primarily been utilized by courts to prevent unjust enrichment. (Dobbs, Law of Remedies (1973) § 4.1, p. 224.) Under certain circumstances it has been held that administrative tribunals such as the [WCAB] may appropriately employ equitable remedies. [Citation.] Such use by the Board would seem particularly justified, for example, when fraud has been charged and proven. (Ins. Code, § 1871.4, subd. (b); [citation].)” (American Psychometric Consultants, Inc. v. Workers’ Comp. Appeals Bd. (1995) 36 Cal.App.4th 1626, 1645-1646 (American Psychometric).)
In American Psychometric, the court annulled WCAB orders which awarded restitution of medical-legal fees paid by employers and insurance carriers to medical lien claimants two years earlier. After stating that the WCAB was authorized to employ equitable remedies such as restitution, the court observed: “Equity often leaves parties similarly innocent, similarly confused or similarly knowledgeable about the law in the positions in which they find themselves. Confusion or mistake about the law offers no comfort to either side in these disputes before the court. ‘[I]t is generally well settled that where a person with full knowledge of the facts voluntarily pays money under a mistake of law on a demand not legally enforceable against him, he cannot recover it in the absence of unjust enrichment, fraud, duress, or improper conduct of the payee.’ [Citations.]” (36 Cal.App.4th at pp. 1646-1647.) The court continued: “More modern doctrine is that mistakes of law and mistakes of fact (where restitution is often ordered) should be treated alike, and it emphasizes the importance of other factors in determining whether restitution should be granted. [Citation.] Such factors as detrimental change of position, hardship, the implementation of some important public policy or transactional stability are considered. (Dobbs, Law of Remedies, supra, § 11.9, pp. 767-772.)” (Id. at p. 1647.) In American Psychometric, the court acknowledged competing policy concerns -- the need to eliminate fraudulent claims versus the need to foster transactional stability. (Id. at p. 1647.) The court annulled the WCAB orders, concluding that “[a]pproving restitution in [the medical lien] cases would set a precedent which would have unfortunate consequences for the workers’ compensation system. It would introduce the possibility of continued transactional instability so negative it would impact the number of medical providers willing any longer to participate in the system by evaluating workers with industrial injuries. No one can operate a business on receipts only conditionally possessed . . . .” (Ibid.)
Insurance Code section 1871.4, subdivision (b) expressly provides for restitution where a person knowingly presents a false or fraudulent statement in support of a claim for workers’ compensation. In addition to imprisonment or fine, “[r]estitution shall be ordered, including restitution for any medical evaluation or treatment services obtained or provided. The court shall determine the amount of restitution and the person or persons to whom the restitution shall be paid. A person convicted under this section may be charged the costs of investigation at the discretion of the court.” (Ins. Code, § 1871.4, subd. (b).)
In this case, the WCAB ordered the applicant to pay Sutter restitution in the sum of $60,092.45 based on her misrepresentations to Dr. Kornblatt and the WCAB. It properly denied Sutter restitution from Green & Azevedo because Green & Azevedo did not participate in the misrepresentation and received attorney fees in good faith. Thus, although Green & Azevedo were “enriched” by the payment of attorney fees, they were not “unjustly enriched” and were therefore entitled to keep what they earned in representing the applicant. Here, as in American Psychometric, ordering restitution would have a detrimental impact on the workers’ compensation system. Attorneys who represent applicants in good faith would be discouraged from taking on workers’ compensation cases due to the uncertainty about attorney fee awards. (See American Psychometric, supra, 36 Cal.App.4th at p. 1647.)
The record supports the WCAB’s finding that Green & Azevedo did not participate in the applicant’s fraud. Sutter does not dispute that Green & Azevedo provided legal services to the applicant and the fees were reasonable at the time of the initial award. Moreover, Sutter conceded that they were “not claiming any fraud or misrepresentation on behalf of Green & Azevedo.”
Based on the foregoing, we conclude that the WCAB did not exceed its powers or rule unjustly in denying Sutter’s request for restitution. The factual record also supports the WCAB order.
DISPOSITION
The order is affirmed. Green & Azevedo shall recover costs as the prevailing party in this proceeding.
We concur: RAYE, Acting P. J., HULL, J.