LEFIELL MANUFACTURING v. S.C. (WATROUS)

Petitioner’s Opening Brief on the Merits

Cal.July 19, 2011

COPY No. B226240 IN THE SUPREME COURT OF THE STATE OF CALIFORNIA No. 8192759 Petitioner, Vv. SUPERIOR COURT OF THE STATE OF CALIFORNIA, FOR THE COUNTY OF LOS ANGELES, SOUTHEASTDISTRICT, NORWALK COURTHOUSE, | Respondent. O’NEIL WATROWUSand NIDIA WATROUS, Real Parties-in-Interest. OPENING BRIEF ON THE MERITS Sandra L. Malek (State Bar No. 90447) smalek@maleklaw.com Jeffrey L. Malek (State Bar No. 94080) jmalek@maleklaw.com MALEK & MALEK 3625 Del Amo Boulevard, Suite 350 Torrance, CA 90503 Telephone: (310) 540-5100 Attorneysfor Petitioner LeFIELL MANUFACTURING COMPANY LeFIELL MANUFACTURING COMPANY, Supreme Court No. B226240 IN THE SUPREME COURT OF THE STATE OF CALIFORNIA LeFIELL MANUFACTURING COMPANY, Supreme Court No. 8192759 Petitioner, V. SUPERIOR COURT OF THE STATE OF CALIFORNIA, FOR THE COUNTY OF LOS ANGELES, SOUTHEASTDISTRICT, NORWALK COURTHOUSE, Respondent. O’NEIL WATROUSand NIDIA WATROUS, Real Parties-in-Interest. OPENING BRIEF ON THE MERITS Sandra L. Malek (State Bar No. 90447) smalek@maleklaw.com Jeffrey L. Malek (State Bar No. 94080) jmalek@maleklaw.com MALEK & MALEK 3625 Del Amo Boulevard, Suite 350 Torrance, CA 90503 Telephone: (310) 540-5100 Attorneys for Petitioner LeFIELL MANUFACTURING COMPANY TABLE OF CONTENTS ISSUE PRESENTED FOR REVIEW. .vvsssssesssssssssessssseesssvecssesesesssssensssesssess 1 INTRODUCTION...sssssssssssssscsssssssssesessevssssseesessneveseeseesesesesssuuesssssssaneseses 1 STATEMENTOF THE CASEvecescssssssssssssseesesssesssssssssesassnsesssssesssssssnsnsseesess 3 STATEMENTOF FACTS.iseessecssssssscsssssssssueeseecssssssvsssvesssnvenseseessesssssasnenscess 4 ARGUMENTocecscssssssecssssssssssseeseeesesessnnnnssesenesessssssssessesenscesasenssecssceesenseeses 5 I. UNTIL PUBLICATION OF THIS CASE, THERE HAS BEEN NO AUTHORITY TO PERMIT THE RECOVERY OF GENERAL DAMAGESAT LAW BY THE SPOUSE OF AN INJURED WORKERwoo.eeeceececseeessecenerseeesaceeseeeessessessenasesaeenseeaseetsneeeeneseats 5 IL. A SPOUSE’S CAUSE OF ACTION FOR LOSS OF CONSORTIUM DERIVING FROM A WORK-CONNECTED INJURY TO AN EMPLOYEE SPOUSEIS BARRED BY THE EXCLUSIVE REMEDY DOCTRINE 00...ceseeeseeeeeeeseeseneeers 8 Il. THE COURT OF APPEAL HAS BROADENED THE STATUTORY EXCEPTION TO THE EXCLUSIVE REMEDY RULE AND HAS MADE THE EMPLOYER SUBJECT TO LIABILITY FOR DAMAGES TO THE THIRD PARTY SPOUSE seseesaeeeseeeeesaeeeseeceaaeeessseeeseseeesuescaasesasessaceceessenscessaeseeeesaeeneseneeenteeeteasars 10 TV. CONCLUSION 2.0eeesceeeeeeseeeseeeeseeesneeseesaessetseeeseterseasenseeseneeeaes 14 CERTIFICATE OF COMPLIANCEocceseeeseeesecneeseteneeeeesanenseeseneenes 16 TABLE OF AUTHORITIES Page Cases Danek v. Hommer (1952) 9 N.J. 56 [87 A.2d 5] woe. eeseeeseeceeeceseceseeeeaeceeeeaneeeeerees 7 Gillespie v. Northridge Hospital Foundation (1971) 20 Cal. App. 3d 867, 98 Cal. Rptr. 134ooeeeecenseeeeeeseneeteessseeeeeee 7 Schifando v. City ofLos Angeles (2003) 31 Cal. 4th 1074, 1081...eee 13 Williams v. Schwartz (1976) 61 Cal. App. 3d 628, 131 Cal. Rptr. 200cccccscssccsseenecseseecesseeeseneeeseeceneecsaaseaeeeeeseseeescesatessneeenaes 5 Statutes Labor Code 3600 .0....ecccccesceessessesessceeeeessceceseeeeesceesseceeesaeeesseseseseeaeceaeeeas 2,3, 4, 8,9 Labor Code 3601 wi...ceccccccccccccccccccccccsccccceccceeeceeeceeuscesececeuseeeeseceseeeceesssenssesstsceeeaes 7,9 Labor Code 3602 oo...cee eecesseecessceeeeeosseeesseeseseaeessauacesesesaeesssseaasessaseasesssseseeseanesees 9 Labor Code 4558 ooi..eececececssccessceeeeesceeececneeecesaneesceseecanerseeeereeeerees 3, 4, 8, 10, 11, 12 Labor Code 4558(b) 0... cceeccccsssssstecesseecessecceccssneeeeseseseeesneeeeseeeseeeaneeaneteaes 3,4,5,9 Gov. Code section 12900 oo... esssccesseceseeceenaceeeaceesaeessneeeseceeneeesaeesaeeresereeeneatens 12 il No. B226240 IN THE SUPREME COURT OF THE STATE OF CALIFORNIA LeFIELL MANUFACTURING COMPANY, Petitioner, V. SUPERIOR COURT OF THE STATE OF CALIFORNIA, FOR THE COUNTY OF LOS ANGELES, SOUTHEASTDISTRICT, NORWALK COURTHOUSE, Respondent. O’NEIL WATROUSand NIDIA WATROUS, Real Parties-in-Interest. Supreme Court No. S$192759 OPENING BRIEF ON THE MERITS ISSUE PRESENTED FOR REVIEW Whether the spouse of an injured worker may claim damages for loss of consortium in an action at law brought by the injured worker under Labor Code section 4558(b). INTRODUCTION LeFiell Manufacturing Company, defendantandpetitioner, petitions this Court to reverse that portion of the published opinion and order of the Court of Appeal, Second Appellate District, Division Three, filed on March30, 2011, denying the petition for writ of mandate to orderthetrial court to sustain the demurrerto Real Party-in-Interest Nadia Watrous’ claim for loss of consortium damages without leave to amend. This is a matter of first impression. There is no case law on the issue of whether the spouse of an injured worker may assert a claim for damages in a court of law, where the injured worker’s action is brought under Labor Code section 4558(b). The precedential valueis great, asit is likely that a majority of such injured workers have spouses who would beableto assert claims for loss of consortium, as opposed to being limited to the remedies, if any, provided bythe Workers’ Compensation Act. This published decision to permit a tort claim by the spouse of an injured worker to be brought in a court of law becauseit is stated to be “excluded” from Workers’ Compensation has precedential value if allowed to stand, and presents an issue of law that will arise frequently. The ruling to permit the spouseof an injured workerto prosecute claims in a court of law is an expansionofthe jurisdiction ofLabor Code section 3600, without legislative authority for such an expansion. STATEMENT OF THE CASE Real Party-in-Interest O’Neil Watrous (the “worker’’) sustained a workplace injury. Real Party-in-Interest Nidia Watrous (the “spouse’’) is the spouse of the injured worker, whofiled an action at law for loss of consortium. _ The workerandhis spouse togetherfiled an action for damages. The workeralleged a claim under Labor Code section 4558(b), the exception to Labor Code section 3600 which permits a civil action in certain narrow circumstances,in this case, involving an injury on an alleged powerpress. The injured worker’s spouse alleged a cause of action for loss of consortium. Petitioner LeFiell Manufacturing Company (“LeFiell’’) is the special employer. LeFiell brought a demurrer to the Complaint. As to the injured worker, the demurrer raised the issues that the Worker wasnotentitled to allege tort actions against the employer because the injury was subject to the exclusive remedy doctrine of the Workers’ Compensation Act. The demurrer was deniedbythetrial court. LeFiell petitioned the Court of Appeal for a writ of mandate, which, as to the worker, was granted. Asto the injured worker’s spouse, LeFiell’s demurrer asserted that the spouse wasbarred by the provisions ofLabor Code sections 3600 et seq. and 4558(b) from bringing an action at law for damagesfor loss of consortium. Thetrial court denied this demurrer. The Court ofAppeal denied the petition for writ of mandate as to the legal claims for loss of consortium brought by the spouse, and permitted the spouseto assert claims in a court of law for loss of consortium. STATEMENT OF FACTS This action arises from injuries allegedly suffered by Real Party-in- Interest O’Neil Watrousarising out of an industrial accident that occurred in the course of his employment with Petitioner LeFiell Manufacturing Company. The only claim by O’Neil Watrous is pursuant to the Labor Code section 4558(b) exception to the exclusive remedy doctrine in Labor Code section 3600 et seq. The remaining claim of Real Party-in-Interest Nidia Watrous is for damagesfor loss of consortium arising from the claim by her spouse under Labor Code section 4558. ARGUMENT 1. UNTIL PUBLICATION OF THIS CASE, THERE HAS BEEN NO AUTHORITY TO PERMIT THE RECOVERY OF GENERAL DAMAGESAT LAW BY THE SPOUSE OF AN INJURED WORKER Certain Labor Code’ provisions make Workers’ Compensation the exclusive remedy for workplace injuries. “Labor Code section 3600 provides that liability thereunderis ‘in lieu of any other liability whatsoeverto any person’ (...). Section 3601, subdivision (a), provides that ‘Where the conditions of compensation exist, the right to recover such compensation, pursuant to the provisions ofthis division is ... the exclusive remedy for injury ...of an employee against the employer ...’ Section 5300, subdivision (a), declares that proceedings ‘For the recovery of compensation, or concerning anyrightorliability arising out of or incidental thereto’ shall be instituted before the Workers’ Compensation Appeals Board and not elsewhere.” Williams v. Schwartz (1976) 61 Cal. App. 3d 628, 131 Cal. Rptr. 200 There are several very limited exceptions to the exclusive remedy doctrine, one of which, at 4558(b), is at issue herein. Labor Code section 4558(b) provides as follows: ' All section references are to the Labor Code unless otherwise noted. “An employee, or his or her dependents in the eventofthe employee’s death, may bring an action at law for damages against the employer where the employee’s injury or death is proximately caused by the employer’s knowing removalof, or knowingfailureto install, a point of operation guard on a powerpress, and this removalorfailure to install is specifically authorized by the employer under conditions known by the employerto create a probability of serious injury or death.” [Emphasis added.] The legislature protected the right to damages that might be awarded to the marital community by permitting a widowedspouseto stand in the shoes of a deceased employee spouse. By precluding dependants of injured (but not deceased) employees from the right to bring actionsat law, the | legislature effectively acted to preclude increased awards rather than awards of compensation. In the opinion of the Court ofAppealin this matter, the Court of Appeal expanded the exception set forth in section 4558(b) to permit a spouse of an injured workerto state a claim for loss of consortium in the trial court. In a different matter not involving section 4558, the Court held as follows on the rights of the spouse of an injured worker: “The whole scheme of workmen’s compensation contemplates that, in exchange for imposing on the employera liability without fault and denying to him the common law defenses of contributory negligence and the fellow servantrule, he is assured ofa single liability, limited by a statutory scheme, which provides for medical expenses and whichallots a scheduled sum in lieu of both lost earings and general damages. We can see no reason why the employer should also be held liable for collateral damagesto third persons whoserights, at common law, were derivative from those of the employee. Gillespie v. Northridge Hospital Foundation (1971) 20 Cal. App. 3d 867, 98 Cal. Rptr. 134 The Gillespie court agreed with the holding in the New Jersey case ofDanek v. Hommer(1952) 9 N.J. 56 [87 A.2d 5] that where the employer becomes immunefromliability in tort in consideration of the payment of compensationat a fixed rate irrespective of fault, then any actionin tort that the spouseofthe injured worker had by virtue of the marital status of the injured worker spousein tort falls as well. Thelegislature clearly had the opportunity to, and declined to, expand the exception to the exclusive remedy of Workers’ Compensation to a dependent of the employeein the case of injury. Section 4558 provides a remedyto the spouse of an injured workeronly in the case of death of the injured worker, not in the case of injury not resulting in death. There was no death of the injured workerin this case. Il. A SPOUSE’S CAUSE OF ACTION FOR LOSS OF CONSORTIUM DERIVING FROM A WORK-CONNECTED INJURY TO AN EMPLOYEE SPOUSE IS BARRED BY THE EXCLUSIVE REMEDY DOCTRINE Labor Code Sections 3600, 3601 and 3602 provide that where conditions warranting compensation exist, the sole remedy of the employee or his dependants is to recover such compensation, and the employer’s liability to pay is in lieu of any otherliability to any person. The Court of Appeal in this matter correctly opined that the “plain language of section 4558 does not permit Watrous’ spouseto seek loss of consortium damages.” (Opinion, page 10) - The Court ofAppeal then continued as follows: “Wherethe exclusivity rule of section 3600 applies, that rule encompasses not only any cause of action asserted by the injured employee but also loss of consortium causes ofaction that are deemed collateral or derivative of the employee’s injuries. [Citations omitted.] This is so because claims for loss of consortium by a nonemployee spouse are dependent upon the employee injury, and the claim could not exist without an injury to the employee spouse. [Citations omitted]” (Opinion, page 11) - The Court of Appeal further stated that “Watrous’s spouse’s claim for loss of consortium is legally and causally dependent upon Watrous’s powerpress injury.” [Citation omitted] (Opinion, page 12) Thereafter, the Court takes a wrongheadedleap into unsupported conclusions, and in so doing, is led to a misinformedandentirely incorrect holding: The Court of Appeal stated that “Watrous’s injury is excluded [sic] from the exclusive remedyrule in section 3600. Since Watrous’sinjury is outside the workers’ compensation bargain, his spouse’s dependentclaim also falls outside the workers’ compensation bargain of section 3600.” There is absolutely nothing in the record to support the conclusion that the injured employee’s injury is any way “excluded” from the exclusive remedy rule. It appears that the Court may have inadvertently confused the word “exception,” which is what section 4558(b) is, with the word “exclusion.” Thaterror has tainted the decision, and led the court to the wrong conclusion. In fact, Watrous’ injury was fully subject to Workers’ Compensation. The “exception” provided by section 4558(b) does not preclude or exclude the remedy provided by sections 3600, 3601 and 3602. As an exception to the exclusive remedy rule, 4558(b) provides an additional remedy to the injured worker, namely, that the worker may also bring a claim in civil court, and accordingly, may also seek damagesin addition to those within the jurisdiction of the Workers’ Compensation Appeals Board. Indeed, here the injured workerfiled both a Workers’ Compensation action and an action at law. There is no requirementthat all such claims be broughtin civil court. Nor, most importantly, is the injured worker excluded, by any statutory or case law, from Workers’ Compensation. As provided in section 3602(a), where the “conditions of compensation” concur, as they do here, the “right to recover such compensation is, except as specifically provided in this section and Section[...] ...4558, the sole and exclusive remedy of the employee or his ... dependents against the employer...” Thus, the injured workeris fully entitled to proceed in the Workers’ Compensation Appeals Board and ALSOproceedin civil court under section 4558. The injured workeris in no way EXCLUDEDfrom proceeding in both the Workers’ Compensation Appeals Board and in civil court under the exception provided in section 4558. III. THE COURT OF APPEAL HAS BROADENED THE STATUTORY EXCEPTION TO THE EXCLUSIVE REMEDY RULE AND HAS MADE THE EMPLOYER SUBJECT TO LIABILITY FOR DAMAGES TO THE THIRD PARTYSPOUSE The Court of Appeals states that: “Our holding in this case does not broaden the exception, but rather permits the recovery offull relief to those injured employees who plead and prove a powerpress injury. This result does not further expose the employertotort liability. Nor does this result expose the employerto third-party 10 liability; the statute protects the employer from liability from indemnity.” [Opinion, page 12] The Court ofAppeal also mischaracterized section 4558 at page 2 of its Opinion as an “exclusion”rather than as an “exception.” Section 4558 is not an EXCLUSION from Workers’ Compensation. It is a statutory exception to the exclusive remedy doctrine, which, if an injured employee can plead the statutory requirements, permits the employee to pursuea civil action which might include remedies whichare notpart of Workers? Compensation. It appears that the Court of Appeal mischaracterized the statute and its remedies because of a confusion of the terms “exclusion” and “exception.” Unfortunately, this error in a published opinion, changes the well-established law regarding the 4558 exception to the exclusive remedy provided by the Workers’ Compensation Act, Sections 3600, 3601 and 3602. The Court of Appeal is wrong on all counts. The Court of Appeal has exceededthe statutory language by permitting the spouse ofthe injured workerto bring an action for loss of consortium in the.civil court. Any statutory remedies for a spouse occur when death has occurred to the injured worker, and the spouse essentially stands in the shoes ofthe deceased spouse, so that the compensation due is not lost to the marital community. 11 The Court of Appeal here holds that section 4558 does not permit the spouse of the injured worker to bring a loss of consortium action except in the case of death of the injured worker, yet it concludes that the spouse can bring the action at law because the workeris “excluded” from Workers’ Compensation. This is the plain confusion and wrong holding. There is no exclusion; indeed, in the instant matter the workerfiled a Workers’ Compensation action in addition to an action at law. Section 4558 allows an additional remedy. If there is no exclusion, then the spouseis limited to her remedies in the Workers’ Compensation Appeals Board,justas is the worker. The only difference is that the worker has additional remedies by statute (section 4558(b)), which the Court of Appeal correctly holds does not extend to the spouse. The legislature specifically omitted the spouse of an injured, but not deceased, worker from the coverage of section 4558. The instant Court of Appealhas takenit uponitself to supplant the legislature and increase the statutory benefits, as well as to increase the liabilities of the employer This Court’s ruling specifically exposes the employerto third party liability to the spouse for loss of consortium, contrary to the plain language of the statute, by holding that “Watrous’s spouse hasalleged a loss of consortium cause ofaction that does not fall within the exclusive remedy rule of the workers’ compensation laws.” (Opinion, page 12) 12 Additionally, and perhaps most importantly, the court of appeals mistakenly holds that this holding does not expandtort liability to the employer. Indeed, absentthis ruling, employers would not be faced with third party tort claims by spouses of injured workers outside of the Workers’ Compensation Appeals Board. This holding allows for such additional claims that have heretofore been limited to remedies in the WCAB.Ifthe factors which give rise to a claim at law under section 4558 are nevertheless limited, as the Court of Appeals correctly held, the injured workeris not suddenly free from the entire exclusive remedy process. Rather, he or she may claim additional damagesif certain facts are proved. The injured worker maynot allege general negligence, as the Court of Appealhas correctly held. So, too, the spouse ofthe injured workeris not now suddenly free to bring claimsat law that the spouse is otherwise barred from bringing, merely because the injured worker comes within a limited expansion of remedies as provided by section 4558. The injured worker and the spousearestill covered by the exclusive remedy provisions of the WCAB,andstill enjoy remedies in that forum. Nothingin the statute negates those protections, nor are there enhanced remedies for anyone other than the injured worker, and then only uponthe limited theory ofliability . prescribed by 4558. The Court of Appeal cites Schifandov. City ofLos Angeles (2003) 31 Cal. 4th 1074, 1081 as the sole legal authority in support of its holding 13 that Watrous’s spouse’s loss of consortium causeofaction doesnotfall within the exclusive remedy rule of the workers’ compensation laws. Schifando is a case involving employment discrimination involving physical disability and whether certain administrative remedies must be exhausted before filing a claim under the California Fair Employment and Housing Act (Gov. Code §12900 et seq.). There is absolutely nothing in Schifando that addresses Workers’ Compensation, or the exclusive remedy doctrine, or any exception to the exclusive remedy doctrine, let alone section 4558. Schifando has no applicability to the case at issue, and is misleading at best. It is not authority for any holding in this matter. IV. CONCLUSION The Court of Appeal in this matter has madea seriouserrorin interpreting the exclusive remedy doctrine and the scope of the exception to it set forth in Section 4558(b). There is no other California case that can be found specifically addressing the right of the spouse of an injured workerto bring a cause ofaction in civil court for loss of consortium. Publication of this mistaken opinion will open the proverbial floodgates to such claims. If that is to happen,it must be by the legislative process, and not by judicial edict. For the reasonsstated herein, Petitioner requests that this Court reverse the ruling of the Court ofAppealas to the cause of action for loss of 14 consortium and deny the spouseof an injured workerthe right to seek damagesfor loss of consortium in an action at law under Labor Code Section 4558(b). Dated: July18, 2011 Respectfylly submitted, Jeffrey L. Malek Sandra L. Malek Attorneys for Petitioner LeFiell Manufacturing Company 15 CERTIFICATE OF COMPLIANCE Counsel of Record herebycertifies that pursuant to Rule 8.204(c)(1) or 8.360(b)(1) of the California Rules of Court, the enclosed brief of Petitioner is produced using 13-point Roman type including footnotes and contains approximately3,270 words, whichis less than the total words permitted by the Rules of Court. Counsel relies on the word countof the computer program usedto preparethis brief. Dated: July 18, 2011 Loads ¥ SandraL. Malek 16 PROOF OF SERVICE LeFiell Manufacturing Company, Petitioner v. The Superior Court ofCalifornia, For the County ofLos Angeles, Southeast District, Norwalk Courthouse, Respondent. O'Neil Watrous and Nidia Watrous, Real Parties-in-Interest. I am employed in the County of Los Angeles, State of California. I am over the age of 18 and not a party to the within action; my business address is 3625 Del AmoBoulevard, Suite 350, Torrance, California 90503. On July 18, 2011, I served the following document OPENING BRIEF ON THE MERITS,on the interested parties in this action by placing a true copy thereof enclosed in a sealed envelope o r package, addressed as follows: CALIFORNIA SUPREME COURT 350 McAllister Street Room 1295 San Francisco, CA 94102-4797 COURT OF APPEAL Second Appellate District Division 3 300 South Spring Street 2™ Floor Los Angeles, CA 90013 Hon. Yvonne T. Sanchez Judge ofthe Superior Court Los COUNTY SUPERIOR COURT Southeast District, Norwalk Courthouse 12720 Norwalk Blvd. Norwalk, CA 90650 Hon. Raul A. Sahagun Judge of the Superior Court LOS COUNTY SUPERIOR COURT Southeast District, Norwalk Courthouse Department SE-F 12720 Norwalk Blvd. Norwalk, CA 90650 (Original + 13 copies) (1 copy) (1 copy) (1 copy) Christopher E. Purcell, Esq. Christina D. Bennett, Esq. LAW OFFICES OF CHRISTOPHER E. PURCELL 77 Irvine Center Drive Suite 200 Irvine, CA 92618 Telephone: (949) 861-2300 Facsimile: (949) 861-2301 Nicholas C. Rowley, Esq. Tiffany Chun, Esq. CARPENTER, ZUCKERMAN & ROWLEY 8827 West Olympic Boulevard Beverly Hills, CA 90211 Telephone: (310) 273-1230 Facsimile: (310) 858-1063 Timothy J. Watson, Esq. LEWIS, BRISBOIS, BISGAARD & SMITH, LLP 701 B Street Suite 1900 San Diego, CA 92101 Telephone: (619) 233-1006 Facsimile: (619) 233-8627 Attorneysfor Plaintiffs O’NEIL WATROUS AND NIDIA WATROUS Attorneys for Plaintiffs O’NEIL WATROUS AND NIDIA WATROUS Attorneys for Defendant SPX CORPORATION _X_ BY OVERNIGHT DELIVERY: I enclosed the documents in an envelope or package provided by an overnight delivery carrier and addressed to the personsat the addresseslisted above. I placed the envelope or package for collection and overnight delivery at an office or a regularly utilized drop box ofthe overnight delivery carrier. I declare under penalty ofperjury under the laws ofthe State of California that the foregoing is true and correct. Executed on July 18, 2011, at Torrance, California. Patricia Gardner