Filed 7/1/13 State Farm Gen. Ins. Co. v. WCAB CA2/6

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for 

publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or 

ordered published for purposes of rule 8.1115. 

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION SIX

STATE FARM GENERAL INSURANCE 

COMPANY,

 Petitioner,

v.

WORKERS' COMPENSATION 

APPEALS BOARD, CALIFORNIA 

INSURANCE GUARANTEE 

ASSOCIATION et al., 

 Respondents.

2d Civil No. B240742

(W.C.A.B. Nos. ADJ4684775, 

ADJ4381820, ADJ7684775)

Proceeding to review a decision of the Workers' Compensation Appeals 

Board. Annulled and remanded with directions.

Finnegan, Marks, Theofel & Desmond, Ellen Sims Langille, for petitioner 

State Farm General Insurance Company.

Guilford Steiner Sarvas & Carbonara, Richard E. Guilford; Floyd, Skeren & 

Kelly, James K. Lowery, for respondent California Insurance Guarantee Association.

No appearance for respondent Workers' Compensation Appeals Board.
2

Labor Code section 5950 provides that any person aggrieved by a final order, 

decision, or award of the Workers' Compensation Appeals Board (WCAB) may, within the 

prescribed time limit, apply to the Court of Appeal for a writ of review. Appellate review is 

limited to final orders that affect a substantial right or liability of a party. (Duncan v. 

Workers' Comp. Appeals Bd. (2008) 166 Cal.App.4th 294, 299.) The failure of an aggrieved 

party to seek judicial review of a final order of the WCAB bars later challenge to the 

propriety of the order or decision before either the WCAB or the court. (Maranian v. 

Workers' Comp. Appeals Bd. (2000) 81 Cal.App.4th 1068, 1075-1076 (Maranian); see also 

Safeway Stores, Inc. v. Workers' Comp. Appeals Bd. (1980) 104 Cal.App.3d 528, 532-535.) 

This petition for writ of review challenges the WCAB's decision allowing 

California Insurance Guarantee Association (CIGA) to pursue a claim for reimbursement 

against State Farm General Insurance Company (State Farm), after the WCAB had 

previously rejected the claim and CIGA had failed to timely seek judicial review. We 

conclude that CIGA's claim is barred by principles of res judicata. We annul the WCAB's 

decision and remand for further proceedings. 

FACTUAL AND PROCEDURAL BACKGROUND

On June 8, 1999, and January 20, 2000, Joanne Lutz (applicant) was injured 

while working as a personal assistant to Linda McDonald, President of Roto Rooter (aka 

Russell Warner, Inc.). The applicant was on Roto Rooter's payroll at the time. During 

1999 and 2000, Roto Rooter was insured for workers' compensation by Fremont 

Compensation Insurance Company and Paula Insurance Company, respectively. Linda 

McDonald and her homeowner's insurance carrier, State Farm, were joined as additional 

parties to the applicant's claim.

In February of 2002, at a mandatory settlement conference, the parties 

disputed the issues of employment and which insurance carrier should be responsible for 

coverage of the applicant's claim, i.e., whether the applicant was working as a domestic 

employee of McDonald at the time of her injuries such that State Farm should provide 

coverage for her claim, or whether she was employed by Roto Rooter. 
3

On March 15, 2002, in lieu of trial, the parties entered into "Joint Stipulations 

With Request for Award." The parties stipulated that the applicant was employed by Roto 

Rooter and Linda McDonald, and "sustained injury arising out of and in the course of 

employment." Paula Insurance Company agreed to administer all benefits under the award, 

and under any future award. State Farm agreed to "indemnify and/or contribute 25% of all 

incurred benefits paid to or on behalf of applicant (including, but not limited to TD 

[temporary disability], PD [permanent disability], medical treatment, and vocational 

rehabilitation), as to injuries of 6/8/99 and 1/20/00. [¶] Paula Ins. reserves its right to seek 

contribution from Fremont Compensation Ins. Co." That same day, Workers' Compensation 

Judge (WCJ) William Carero approved the award allocating liability between the parties. 

No party sought reconsideration of the award and, consequently, it became final between 

these parties. 

In June of 2002 and July of 2003, Paula Insurance Company and Fremont 

Insurance Company, respectively, were liquidated. CIGA assumed administration of the 

claim. Since then, State Farm has been reimbursing CIGA for 25 percent of all benefits paid 

to the applicant.

In September of 2003, CIGA filed a petition for dismissal, arguing it should 

be dismissed because Paula Insurance Company had not provided workers' compensation 

coverage for residential or domestic employees. State Farm opposed the petition, 

contending the evidence supported a finding of employment by Roto Rooter and coverage, 

and that the March 15, 2002, stipulated award was final and binding on CIGA. The record 

before us discloses no action on this petition.

In February of 2008, five years later, CIGA sought to be relieved as 

administrator of the applicant's claim. CIGA filed a declaration of readiness with the 

WCAB, stating that the parties were unable to "resolve the dispute concerning employment 

as a domestic employee versus employment with Roto Rooter." CIGA requested resolution 

of the questions (1) "whether State Farm homeowner's insurance qualifies as 'other 

insurance' to make the claim against CIGA a non-covered claim per Insurance Code section 
4

1063.1"; and (2) whether the applicant qualifies as a domestic employee under Labor Code 

section 3351, subdivision (d). 

On April 4, 2008, the WCJ ruled that the WCAB was without jurisdiction to 

rescind or alter the March 15, 2002, stipulated award, and that CIGA was bound by the 

stipulation. The WCJ reasoned: "Labor Code section 5804 confers limited power upon the 

Board to rescind, alter or amend its Awards. That power is limited by the statutory language 

as to time and as to content. Specifically, that Section states 'that after an award has been 

made finding that there was employment and the time to petition for a rehearing or 

reconsideration or review has expired . . . , the appeals board upon a petition to reopen shall 

not have the power to find that there was no employment.' This includes determination of 

the identity of the employer previously determined by the Award. [¶] Neither does the 

subsequent liquidation of the Paula Insurance Company and Fremont Indemnity . . . permit 

CIGA to upset the final legal determination as to employment. . . . [¶] In essence, CIGA 

avers that it is not bound by the Award entered against the then-solvent carriers for which 

CIGA is now responsible to the extent the Insurance Code requires. [¶] No determination is 

made as to the extent of CIGA's ultimate liability under the March 15, 2002 Award. It is 

found nevertheless that the Award binds CIGA." CIGA did not seek reconsideration of the 

WCJ's order before the WCAB. (Lab. Code, § 5900.)

Two months later, on June 9, 2008, CIGA filed a petition for reimbursement 

and for a change of administrator, renewing its claim that it should be relieved of 

responsibility to pay benefits because of the presence of other insurance. (Ins. Code, 

§ 1063.1, subd. (c)(9).) 1 CIGA argued that State Farm was jointly and severally liable for 

the benefits paid by CIGA, and as solvent "other insurance" must reimburse CIGA in full 

for all temporary disability benefits, medical treatment, and medical-related expenses. 

CIGA requested that State Farm reimburse it $382,833, less credit for payments made by 

State Farm. 

 

1 Insurance Code section 1063.2, subdivision (a) limits CIGA's liability to 

paying for "covered claims." Insurance Code section 1063.1, subdivision (c)(9) provides 

that "covered claims" do not include "a claim to the extent it is covered by any other 

insurance of a class covered by this article available to the claimant or insured." 
5

State Farm opposed the petition, arguing that (1) CIGA's failure to seek 

reconsideration of the WCJ's decision on April 4, 2008, precluded it from relitigating its 

reimbursement claim (Lab. Code, § 5804); (2) State Farm's homeowner's insurance policy 

does not constitute "other insurance" as defined by the Insurance Code because its policy 

was not "available to the claimant or insured" (Ins. Code, § 1063.1, subd. (c)(9)); and (3) 

CIGA's claims were barred by the equitable doctrine of laches.

In May of 2009, CIGA filed a declaration of readiness (presumably for its 

June 2008 petition), seeking dismissal as a party-defendant on the ground that "'other 

solvent insurance' is available" pursuant to Insurance Code section 1063.1, subdivision 

(c)(9). According to the pretrial conference statement, the parties proceeded to trial on 

issues including: (1) whether CIGA should be dismissed pursuant to Insurance Code 

section 1063.1, subdivision (c)(9), because "other solvent insurance" is available; (2) joint 

and several liability/reimbursement from State Farm; (3) Insurance Code section 11590 

provides that domestic workers are covered under homeowner's insurance policy for 

workers' compensation; and (4) petition to change administrator. 

On June 25, 2009, the WCJ conducted a hearing on CIGA's petition. The 

minutes of the hearing specify that the issue of whether there was "good cause to dismiss 

CIGA due to the presence of other insurance" was "raised and accepted to be heard" as part 

of the trial. With respect to this issue, the WCJ ruled: "The presence of other insurance in 

this case does not support good cause to dismiss CIGA. [CIGA] has already been 

determined [to be] bound by the [Stipulated Award of March 15, 2002]; and that 

determination having been made on April 8th, 2008, without any appellate response, 

remains the law of this case, and the motion of CIGA to be dismissed is therefore denied." 

CIGA then sought reconsideration by the WCAB, contending that CIGA is 

statutorily prohibited from making payments to the applicant and must be dismissed 

pursuant to Insurance Code section 1063.1, subdivision (c)(9) because other solvent 
6

insurance is available. CIGA argued that our decisions in Weitzman and Hooten entitle it 

"to shift the entire amount of joint and several liability onto the still-solvent carrier."2 

On July 28, 2009, the WCJ recommended the WCAB deny reconsideration, 

reasoning that "[r]ight or wrong, the 2008 decision on jurisdiction to rescind, alter or amend 

the 2002 stipulated award is the law of this case. [¶] [CIGA] seeks to distinguish the issue 

here presented from that presented in 2008. However, both efforts boil down to an effort to 

impose the liability in this case solely on State Farm." The WCJ explained that CIGA 

"remains liable because the 2002 stipulation and award was a finding of employment which 

was not the subject of a petition for reconsideration and was followed by a decision six 

years later that jurisdiction to change the terms of the 25%/75% deal was lacking. The 2008 

decision in turn became final." The WCJ also observed that CIGA was barred by laches 

from attempting to avoid the stipulated award "where five to six years elapse with the 

injured worker and the homeowner carrier relying upon the deal they struck." On October 

15, 2009, the WCAB adopted WCJ Carero's recommendation and denied CIGA's petition 

for reconsideration. CIGA did not file a petition for writ of review in the Court of Appeal. 

In January of 2010, CIGA proceeded to trial on the applicant's claim of 

permanent disability, future medical treatment, a lien claim by the Employment 

Development Department (EDD), and other related issues. On April 27, 2010, the WCJ 

issued his decision granting the applicant permanent disability of 39 percent and awarding 

benefits against CIGA for future medical treatment. The WCJ ordered CIGA to reimburse 

the EDD for disability benefits provided to the applicant. 

In May of 2010, CIGA sought reconsideration of the WCJ's decision, 

contending that the WCJ should have found that the applicant was jointly employed by Roto 

Rooter and Linda McDonald on the date of injury, and the award should have identified 

State Farm as jointly liable for all benefits due the applicant. 

 

2 See California Ins. Guarantee Assn. v. Workers' Comp. Appeals Bd. (2005) 

128 Cal.App.4th 307, 320 (Weitzman) ["covered claims" under Ins. Code section 1063.1, 

subdivision (c)(9), do not include claims covered by other solvent insurers in situations of 

joint and several liability]; CIGA v. Workers' Comp. Appeals Bd. (2005) 128 Cal.App.4th 

569, 573 (Hooten) [even in absence of joint and several liability, "covered claims" under 

section 1063.1, subdivision (c)(5) do not include claims by other insurers].) 
7

The WCJ recommended that reconsideration be granted in part to correct 

certain miscalculations he had made in the amount of permanent disability and to eliminate 

CIGA's obligation to reimburse the EDD. The WCJ also clarified that CIGA is the party 

liable for the benefits due the applicant, and that "State Farm remains obligated to its codefendant(s), but not to the applicant." The WCJ recommended denial of CIGA's 

reconsideration petition in all other respects. 

On January 18, 2011, the WCAB adopted the WCJ's recommendations in all 

respects and modified the WCJ's award accordingly. The WCAB amended the award to 

conform to the 2002 stipulation by identifying Linda McDonald as an additional employer 

on the date of injury. The WCAB rejected CIGA's contention that the award should be 

amended to reallocate liability for the applicant's claim to State Farm by finding it jointly 

and severally liable. The WCAB reasoned that CIGA's contentions were rejected by the 

WCJ in his decisions of April 4, 2008, and July 13, 2009, and by the WCAB when it denied 

reconsideration on September 1, 2009. Because CIGA did not appeal those decisions, the 

WCAB concluded they "are now final and the law of the case." 

The WCAB stated: "We recognize that several appellate cases describe limits 

of CIGA's liabilities in cases where solvent insurers are 'available' to provide an injured 

worker with benefits within the meaning of Insurance Code section 1063.1(c)(9), 

notwithstanding that the insolvent insurer would be liable for those benefits but for the 

insolvency. [Fn. and citations omitted.] However, those cases did not involve a request by 

CIGA to amend an award made more than five years earlier by stipulation of all the solvent 

insurers. In this situation, Labor Code section 5804 precludes CIGA's request to re-allocate 

liability by amending the 2002 stipulated award."3 Once again, CIGA elected not to petition 

for a writ of review in the Court of Appeal. 

On April 18, 2011, CIGA filed another declaration of readiness, renewing the 

issue of reimbursement. CIGA stated that "[t]he parties require the intervention of the 

WCAB to resolve the dispute between CIGA and State Farm concerning 

 

3 Labor Code section 5804 provides 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 . . . ." 
8

contribution/reimbursement." On June 2, 2011, the WCJ conducted a hearing on: (1) 

whether res judicata bars further proceedings on reimbursement; and (2) whether good cause 

exists to refer the matter to arbitration. On July 29, 2011, the WCJ denied CIGA's request 

for trial of its claim for reimbursement and/or contribution. He found that the respective 

liabilities of the parties had previously been finally determined and could not be "relitigated 

by way of seeking contribution or reimbursement." 

CIGA then petitioned the WCAB for reconsideration, contending that it may 

proceed with its reimbursement claim against State Farm because (1) CIGA and State Farm 

are jointly and severally liable under the 2002 stipulated award; and (2) it is not precluded 

from seeking reimbursement by either res judicata or Labor Code section 5804. CIGA 

pointed to the wording of the WCJ's April 2008 decision, stating that "[n]o determination is 

made as to the extent of CIGA's ultimate liability under the March 15, 2002 Award." 

CIGA argued that it relied on this language in not appealing or seeking reconsideration 

earlier, believing that it meant that Insurance Code section 1063.1 might still shift all 

liability to State Farm. CIGA argued that the issue of CIGA's right to reimbursement 

against State Farm was raised for the first time in CIGA's declaration of readiness filed on 

April 18, 2011, and the issue was not "identical" to the issues previously decided. 

On August 25, 2011, the WCJ disagreed with CIGA, concluding its 

reimbursement claim was not made in good faith and was not supported by the cases cited. 

The WCJ stated that no determination as to the ultimate liability of any party was possible in 

2008 because the extent of the applicant's permanent disability was still being evaluated. 

The WCJ noted this did not prevent CIGA from appealing or seeking reconsideration of the 

2008 determination that it was bound by the 2002 stipulated agreement. The WCJ 

concluded that "[r]egardless of the semantics employed," CIGA's renewed effort to "reallocate liability by amending the 2002 stipulated award" was barred by "the component of 

res judicata known as issue preclusion." 

On December 19, 2011, the WCAB granted reconsideration, notwithstanding 

its contrary decision 11 months earlier (on January 18, 2011), ruling against CIGA on the 

question of whether it could pursue a reimbursement claim under Insurance Code section 
9

1063.1, subdivision (c)(9). The WCAB noted that CIGA was not a party to the 2002 

stipulation and was not seeking to amend the earlier 2002 award. Instead, it reasoned, 

CIGA was seeking to enforce its statutory right under Insurance Code section 1063.1 to 

obtain reimbursement from a solvent insurer that is "available" to provide benefits to the 

applicant within the meaning of the statute. The WCAB reasoned that the 2002 stipulated 

award and the five-year limitations period of Labor Code section 5804 were not dispositive 

of CIGA's petition for reimbursement. The applicant was jointly employed by Linda 

McDonald and Roto Rooter when she was injured. "Because applicant had two employers 

. . . each employer and their respective insurers on those dates of injury are as a matter of 

law jointly and severally liable for workers' compensation benefits that are due." 

The WCAB went on to reason that the 2002 stipulation did not change State 

Farm's joint and several liability to the applicant. "This is because agreements between 

employers and/or their insurers cannot diminish or eliminate an applicant's right to recover 

benefits from the employers and insurers that are jointly and severally liable for the injury. 

. . . When Freemont and Paula became insolvent, State Farm became 'available' to applicant 

as 'other insurance' under Insurance Code section 1063.1(c)(9) because McDonald is jointly 

and severally liable for applicant's injuries. [¶] Because State Farm appears to be 'other 

insurance' that is 'available' . . . within the meaning of Insurance Code section 1063.1(c)(9), 

it appears to be responsible for the provision of workers' compensation benefits that are due 

because of her injuries." 

The WCAB concluded "[t]here has been no earlier final decision on CIGA's 

petition to obtain reimbursement from State Farm. Thus, there is no basis for denying the 

petition for reimbursement on the grounds of res judicata or collateral estoppel as concluded 

by the WCJ in his August 25, 2011 Report." Accordingly, the WCAB rescinded the WCJ's 

decision and returned the case to the trial level for further proceedings on CIGA's petition 

for reimbursement. 

Thereafter, State Farm petitioned the WCAB for reconsideration. State Farm 

argued that the question whether homeowner's insurance qualifies as "other insurance" 

under Insurance Code section 1063.1 was expressly raised by CIGA and decided against it 
10

by the WCJ in April of 2008, and by the WCAB in September of 2009. State Farm 

contended these decisions were final and entitled to res judicata effect. Alternatively, State 

Farm contended that CIGA's request for reimbursement was barred by the doctrine of 

laches. State Farm pointed out that it will suffer irreparable harm and prejudice should 

CIGA be allowed to re-litigate its request for reimbursement. State Farm pointed out that if 

CIGA is allowed to seek reimbursement in an amount greater than 25 percent, it will have 

been denied due process by being precluded from litigating the issue of employment. State 

Farm abided by the terms of the stipulated award and detrimentally relied on it by 

withdrawing its challenge to the employment issue in 2002.

 On March 14, 2012, the WCAB denied State Farm's petition for 

reconsideration. State Farm's petition for writ of review followed.

DISCUSSION

The dispositive question before us is whether CIGA's reimbursement claim is 

barred by res judicata or laches.4 It is well settled that these doctrines apply in workers' 

compensation litigation. (Azadigian v. Workers' Comp. Appeals Bd. (1992) 7 Cal.App.4th 

372, 379-380; United Dredging Co. v. Industrial Acc. Com. (1930) 208 Cal. 705, 713-714.) 

Labor Code section 5950 provides that a party "affected by an order, decision, 

or award" of the WCAB may, within the prescribed time period, apply to the Court of 

Appeal for a writ of review "for the purpose of inquiring into and determining the 

lawfulness" of the order, decision, or award. "[A]ppellate review . . . is limited to 'final' 

orders that determine a substantial right or liability of a party." (Duncan v. Workers' Comp. 

Appeals Bd., supra, 166 Cal.App.4th at p. 299.) An order of the WCAB is final for the 

purpose of seeking judicial review when it "settles, for purposes of the compensation 

proceeding, an issue critical to the claim for benefits, whether or not it resolves all the issues 

in the proceeding or represents a decision on the right to benefits." (Maranian, supra, 81 

Cal.App.4th at pp. 1075, 1078; Wal-Mart Stores, Inc. v. Workers' Comp. Appeals Bd. (2003) 

 

4 We reject CIGA's contention that State Farm's petition for writ of review 

should be dismissed as premature. We also reject CIGA's contention that our standard of 

review is abuse of discretion. The application of the doctrine of res judicata is a question 

of law we review de novo. There are no factual issues involved in this determination. 
11

112 Cal.App.4th 1435, 1438, fn. 3; Safeway Stores, Inc. v. Workers' Comp. Appeals Bd., 

supra, 104 Cal.App.3d at pp. 534-535.) Such final orders include, for example, threshold 

orders dismissing a party, rejecting an affirmative defense, terminating liability, or 

determining whether the employer has provided compensation coverage. (Maranian, at pp. 

1075, 1078.) 

The characterization of an order or decision as final and susceptible to judicial 

review has critical consequences. The failure of an aggrieved party to seek judicial review 

of a final order of the WCAB bars later challenge to the propriety of the order or decision 

before either the WCAB or the court. (Maranian, supra, 81 Cal.App.4th at p.1076; see also 

Rymer v. Hagler (1989) 211 Cal.App.3d 1171, 1182.) The purpose of this rule is to 

facilitate early disposition of core questions, and promote the public policy favoring 

expeditious and inexpensive resolution of workers' compensation claims. (Maranian, at p. 

1078.) 

CIGA contends that State Farm cannot point to any place in the record where 

CIGA's right to reimbursement was consciously raised and litigated prior to the WCAB's 

decision on December 19, 2011. CIGA denies that its right to reimbursement was litigated 

in April of 2008, June of 2009, or January of 2011. We disagree. 

In 2008, CIGA filed a formal "Petition for Reimbursement," requesting 

resolution of the question whether the homeowner's insurance policy qualified as "other 

insurance" to make the claim against CIGA a non-covered claim under Insurance Code 

section 1063.1. The WCJ found the WCAB lacked jurisdiction to rescind or alter the 2002 

stipulated settlement agreement and that CIGA was bound by it. In 2009, CIGA again 

asked the WCJ to resolve the questions whether it should be dismissed pursuant to Insurance 

Code section 1063.1 because "other solvent insurance" was available, whether joint and 

several liability existed for State Farm, and whether administration of the claim should be 

changed. On October 15, 2009, the WCAB adopted the WCJ's findings that CIGA was 

bound by the 2002 stipulated settlement and barred by laches from attempting to avoid it. 

Finally, on January 18, 2011, the WCAB rejected CIGA's contention that liability should be 

re-allocated to State Farm because State Farm was jointly and severally liable for the 
12

applicant's injuries. Contrary to CIGA's contention, its entitlement to reimbursement was 

expressly raised in these proceedings in 2008, 2009, and 2011, and determined adversely to 

it. CIGA did not seek judicial review of any of these decisions. Consequently, these 

decisions have become final and conclusive. CIGA is barred by res judicata from 

relitigating its right to reimbursement. 

Next, CIGA contends that State Farm misapprehends the obligations created 

by the 2002 stipulated settlement agreement. It argues that, in the agreement, both Roto 

Rooter and Linda McDonald admitted concurrent employment. Dual employers are jointly 

and severally liable for payment of all compensation due the injury of the shared employee. 

(McFarland v. Voorheis-Trindle Co. (1959) 52 Cal.2d 698 [where relationship of general 

and special employment exists, injured worker can look to both employers for compensation 

benefits].)

CIGA adds that its right to reimbursement is statutory and it has no statutory 

liability for claims covered by other available solvent insurance. (Ins. Code, § 1063.1, subd. 

(c)(9).) CIGA argues that State Farm's agreement to pay 25 percent of the applicant's 

benefits does not "trump" CIGA's statutory obligations. 

We need not address the ultimate question of whether State Farm is jointly 

and severally liable for 100 percent of the applicant's claim, or whether its homeowner's 

insurance policy is "other insurance" under Insurance Code section 1063.1, subdivision 

(c)(9), because CIGA did not preserve its right to pursue these issues.5 Right or wrong, the 

WCJ's decision in 2008, and the WCAB's 2009 and 2011 decisions are final, and CIGA may 

not invoke the jurisdiction of the WCAB or this court to review the lawfulness of those 

decisions.

The cases cited by CIGA regarding its statutory right to reimbursement are 

distinguishable. In each of the cases CIGA cites, unlike the facts of this case, CIGA's 

request for reimbursement due to the presence of other solvent insurance was timely brought 

 

5 We question whether homeowner's insurance qualifies as "other insurance" under 

section 1063.1, subdivision (c)(9), because it is not "available to the claimant." The parties 

have not briefed whether CIGA is relieved from liability under Insurance Code section 

1063.1, subdivision (c)(5) [covered claims do not include obligations to insurers nor their 

claims for contribution or indemnity].
13

before the WCAB or the Court of Appeal. (E.g., Sherman Loehr Custom Tile Works v. 

Workers' Compensation Appeals Board (2003) 68 Cal.Comp.Cases 1262 [two carriers 

stipulated to percentage of liability before one carrier liquidated; WCAB granted CIGA's 

timely petition for a change of administrators because other solvent insurance available].)

We recognize that the Legislature has limited CIGA's liability to "covered 

claims." (Ins. Code, § 1063.1.) CIGA's "powers, duties and responsibilities are strictly 

defined and circumscribed by statute; they are not co-extensive with the duties owed by the 

insolvent insurer." (California Ins. Guarantee Assn. v. Workers' Comp. Appeals Bd. (2007) 

153 Cal.App.4th 524, 532.) Nevertheless, this statutory policy limiting CIGA's liability to 

covered claims must be weighed against the strong "public policy interests in an expeditious 

and inexpensive system of workers' compensation, the encouragement of settlements of 

workers' compensation proceedings to further that system, the justified expectations of 

parties dealing with CIGA, the importance of there being an end to litigation, the resulting 

finality of judgments, and CIGA's role in obtaining the order at issue." (Fireman's Fund 

Ins. Co. v. Workers' Compensation Appeals Bd. (2010) 181 Cal.App.4th 752, 770.) 

Here, the applicant was 61 years old on the date of her first injury in 1999. 

She is now 75 years old and the issue of liability for her claim continues to be litigated 

despite CIGA's failure to seek judicial review of adverse decisions in 2008, 2009, and 2011, 

and the stipulated settlement over a decade ago. In these circumstances, the strong public 

policy in favor of CIGA's paying only covered claims does not outweigh the policy interests 

enumerated above. (See Fireman's Fund Ins. Co. v. Workers' Compensation Appeals Bd., 

supra, 181 Cal.App.4th at p. 770.)

In light of our determination that CIGA's reimbursement claim is barred by 

principles of res judicata, we need not address State Farm's alternative contentions that it 

would be deprived of due process if CIGA is allowed to pursue its reimbursement claim, or 
14

that CIGA's claim is barred by laches. Contrary to CIGA's contention, these issues were 

preserved for review and raise substantial concerns.6 

We annul the WCAB's order of March 14, 2012, denying State Farm's petition 

for reconsideration. We remand the matter to the WCAB for further proceedings consistent 

with this opinion. Costs are awarded to State Farm. 

NOT TO BE PUBLISHED.

PERREN, J.

We concur:

GILBERT, P. J.

YEGAN, J.

 

6 State Farm argues that CIGA has not diligently pursued its reimbursement claim 

since it took over administrating the claim in 2003 and that it will suffer prejudice from 

CIGA's delay, including loss of control over supervision of the medical treatment, 

deterioration of evidence, diminishment of witness memory, and its withdrawal of a defense 

to the issue of employment. (See, e.g., ICW Group v. Workers' Compensation Appeals 

Board (Fieldhouse) (2003) 68 Cal.Comp.Cases 1217 [writ denied; president of company has 

wide discretion to place domestic employees on corporate payroll; liability for employee's 

injury rests solely with corporation's carrier].)