Filed 7 / 15 / 24
CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION SIX

SUBSEQUENT INJURIES BENEFITS TRUST FUND

,

P etitioner

,

v.

WORKERS’ COMPENSATION APPEALS BOARD et al.

,
Respondents. 2d Civ. No. B 333633 ( W.C.A.B. No. ADJ11362885 ) (Santa Barbara District Office)

Petitioner Subsequent Injuries Benefits Trust Fund (Fund) pays additional compensation to workers who suffer an industrial injury that, when combined with pre

- existing disabilities, causes permanent disability equal to 70 percent or more. (Labor Code, § 4751. 1 ) Section 4753 requires th is additional compensation to

“ be reduced to the extent of any monetary payments received by
the employee, from any source whatsoever, for or on account of such preexisting disability or impairment

. ” This reduction or
“credit” preserves state resources by ensuring applicants receive

1 All statutory references are to the Labor Code unless stated otherwise.2 benefits commensurate with their combined disabilities

— no more, no less. Respondent Nancy Vargas applied for subsequent injury
benefits when she injured her foot at work . The Fund acknowledged Vargas qualified for benefits but claimed section
4753 credit for a significant p ortion of the Social Se curity Disability Insurance ( SSDI ) payments she began receiv ing after
her latest injury

. R espondent Workers’ Compensation Appeals Board (Board) determined the Fund was not entitled to credit, concluding the Fund had not prove n Vargas’s SSDI payments

were awarded “for or on account of” her pre

- existing disabilities. This petition for review challenges the Board ’s decision

. The Fund contends the Board erred by placing the burden of proof on the Fund to show Vargas received SSDI benefits “for or

on account of” her pre

- existing disabilities. We affirm

. FACTUAL AND PROCEDURAL BACKGROUND Respondent Nancy Vargas drove a bus for the Santa Barbara Metropolitan Transit District (district) for 25 years

. She injur ed her foot in March of 2018 while stepping off the driver’s pedestal

. Vargas settled her claim against the district in December of 2020. They stipulated the injury caused permanent disability of 26 percent and agreed on the amount of her weekly
indemnit y payment s going forward

. Vargas applied for subsequent injury benefits from the
Fund while her workers’ compensation case was pending

. She
listed pre

- existing disabilities to her back, upper extremities, left knee, and right ankle . She disclosed filing one prior workers’ compensation case . Vargas confirmed she had applied for SSDI in January of 2018 and was currently receiv ing monthly SSDI payments of $940. The Board granted Vargas’s motion to join the3 Fund as a defendant in her worker’s compensation c ase in July of
2021. The Fund agreed Vargas was eligible for benefits. The parties stipulated : (1) that Vargas had a “preexisting labor

disabling disability”; (2) her subsequent injury, i.e., the March 2018 foot injury, caused permanent disability of 26 percent; and (3) her combined disabilities meant she was now 100 percent totally disabled. They also agreed Vargas met the “opposite member” eligibility threshold for subsequent injury benefits because she suffered injuries to both feet. T h e parties disputed

, however, the Fund’s right to section 4753 credit for Vargas ’s
SSDI payments

. 2 The issue went to trial in May of 2023. The workers’ compensation judge (WCJ) admitted the parties’ stipulated facts and exhibits as evidence but heard no live testimony

. Vargas introduced three medical reports as exhibits : (1) one from an agreed medical examine r (AME) evaluating her
March 2018 foot injury; (2) one from a qualified medical examiner (QME) “assess[ing] her nonindustrial internal medicine disabilities, ” both current and pre

- existing ; and (3) one from a second QME evaluat ing her combined disabilities to determine eligibility for subsequent injury benefits. The AME report rated the March 2018 injury as causing whole person impairment (WPI) of 15 percent

. The first QME report rated internal
conditions such as liver disease, varicose veins, and COPD (chronic obstructive pulmonary disease) as causing 51 percent

2 The parties’ pre

- trial conference statement indicates the Fund initially sought credit for both “SSDI and [disability retirement] monies received by applicant.” The Fund’s petition and supplemental briefs , however, refer only to credit for SSDI payments.4 WPI. The second QME report rated her pre

- existing impairments at 160 percent WPI . It concluded “t he overall combined effects of the previous pre

- existing disability/impairment and th e subsequent impairment/disability

. . . is greater than that which would have resulted from the subsequent injury alone and, goes well beyond the 70 [ percent ] disability threshold pursuant [to] Labor Code [section] 4751.”
The Fund introduced an award let ter from the Social Security
Administration (SSA) as an exhibit along with 1099 forms reflecting the SSDI paid to date

. The letter stat ed SSA
considered Vargas disabled as of April 18, 2018 and eligible to
receive payments starting in October of 2018. Varga s’s pre

- trial brief argued the Fund bore the burden to prove what amount or percentage of the SSDI award was attributable to her pre

- existing disabili ties. T he Fund rebutted the argument in a post

- trial brief. “[ I ] n the absence of contrary evidence, ” the Fund wrote , “the Board should simply deduct the permanent disability percentage attributed to the subsequent compensable injury from the 100 percent permanent disability found [by SSA].” T he Fund thus proposed a 74 percent reduction
of benefits: her stipulated 26 percent subsequent injury rating
subtracted from her 100 percent SSDI disability award

. The WCJ found the Fund “ ha [d] not met their burden to show an entitlement to credit for social security disability award nor any other disability retirement benefit.” The Board denied
the Fund’s petition for reconsideration

, finding “section [4753]
does not state that credit is absolute. [The Fun d] would need to show that the monetary payment received is for or on account of such pre

- existing disability or impairment. [ It ] did not show that
in this case.” The Board noted Vargas’s award letter and subsequent SSDI statements “did not describe the basis of the5 benefit.” It concluded “[w]hat is before the court without assumptions does not establish credit and therefore no credit was
awarded.” We granted t he Fund ’s petition for a writ of review. (§ 5950.)
DISCUSSION
The Fund contends the Board mi sinterpreted section 4753 by placing the burden on the Fund to prove its right to credit for Vargas’s SSDI payments

. “‘In reviewing an award or decision made by the [Board], we are governed by familiar principles. The [Board]’s factual findings, when su pported by substantial evidence, are binding on

us. [Citations.]’ [Citation.] ‘“‘“Questions of statutory interpretation are, of course, for [a] court to decide. [Citations.]”’”’ [Citation.] ‘However, although the [Board’s] conclusions on questions of law are not binding on this court [citation], and the interpretation of a labor statute is a legal question subject to our independent review [citation], we nevertheless “generally defer to the [Board’s] interpretation of labor statutes unless clearly erroneous” [citation].’ [Citation.]” ( Meadowbrook Ins. Co. v. Workers’ Comp. Appeals Bd. (2019) 42 Cal.App.5th 432, 436.) The provisions of the Worker’s Compensation Act “ shall be liberally construed by the courts with the purpose of extending their benefits for the protection of persons injured in the course of their employment.” ( § 3202 .) “This command governs all aspects of workers’ compensation; it applies to factual as we ll as statutory construction.” ( Arriaga v. County of Alameda (1995)
9 Cal.4th 1055, 1065 .)6 Burden of Proof
The Fund “ is funded and administered by the state for the purpose of compensating workers with prior disabilities who suffer subsequent industrial injuries. ” ( Baker v. Workers ’ Comp. Appeals Bd. (2011) 52 Cal.4th 434, 439 .) Section 4751 states such workers “shall be paid” additional compensation when their
combined disabilities meet certain criteria . Section 4753 provides
that Fund benefits “shall be reduced to the extent of any monetary payments received by the employee, from any source whatsoever, for or an account of such preexisting disability or impairment.” (§ 4753.) 3 This includes SSDI payments based on a prior i njury. ( Subsequent Injuries Fund v. I ndustrial A cc

. C om

. (Hanson) (1963) 217 Cal.App.2d 322, 328.) S ection 4753 “was enacted to avoid depletion of the funds in order to encourage the employment of physically handicapped pe rsons and to prevent double recovery for the same disabilities.” ( Ibid .) We agree with the Board that the Fund must prov e its
entitlement to a credit for SSDI and other “monetary payments” received by applicants

. T he burden of proof in workers’ compensation proceedings “ rests upon the party

. . . holding the
affirmative of the issue. ” (§ 5705.) Applicant s must initially show they are entitled to sub sequent injury benefits under section 4751 by proving: (1) they were “permanently partially disabled” and (2) they “receive[d] a subsequent compensable injury resulting in additional permanent partial disability

. ” 4 The

3 Section 4753 includes several exceptions to mandatory reduction, including payments received for disabilities incurred in the armed forces. These exceptions are not at issue.

4 Section 4751 states in relevant part: “ If an employee who is permanently pa rtially disabled receives a subsequent7 Fund must then show it is entitled to reduce the applicant’s subsequent injury benefit under section 4753 , and, if so, the “extent” it may reduce those payments. Both sides must meet their burden by a preponderance of the evidence. (See § 3202.5 [“ All parties and lien claimants shall meet the evidentiary burden of proof on all issues by a preponderance of the evidence in order that all parties are considered equal before the law ”].) Section
4753 ’s mandate that compensation “shall be reduced” does not, as the Fund contends, relie ve the Fund of this burden. Nor does
section 4751’s similar language relieve applicants of their burden to prove eligibility for benefits

. The Fund argues public policy justifies placing the burden of proof on applicants. It first cites applicants’ grea ter access to information about the basis of their disability payments. We are not persuaded. The Fund may conduct discovery before trial into

compensable injury resulting in additional permanent partial disability so that the degree of disability caused by the combination of both disabilities is greater than that which would have resulted from the subsequen t injury alone, and the combined effect of the last injury and the previous disability or impairment is a permanent disability equal to 70 percent or more of total, he shall be paid in addition to the compensation due under this code for the permanent part ial disability caused by the last injury compensation for the remainder of the combined permanent disability existing after the last injury as provided in this article;

. . . ” The subsequent injury must meet one of two disability rating thresholds: (1) 5 percent for “opposite member” injuries, i.e., when an applicant has an existing injury to “ a hand, an arm, a foot, a leg, or an eye, and the permanent disability resulting from the subsequent injury affects the opposite and corresponding member ”

, or (2) 3 5 percent “ when considered alone and without regard to or adjustment for the occupation or the age of the employee

, . . . ”8 the basis of any source of paymen ts subject to credit. (See § 5502, subd. (c) [“ The case shall be set for tria l when discovery is complete, or when the

. . . j udge determines that the parties have had sufficient time in which to complete reasonable discovery ”].)
This includes SSDI benefits

. ( See Angell v. Subsequent Injuries Benefits Trust Fund (2021) 86 Cal.Comp.Cases 419 ( Angell ) [ WCJ properly ordered a pplicant t o disclose information about SSDI payments when Fund sought credit under section 4753] .)
The Fund next cites the Legislature’s aim o f conserving government resources as supporting its position . This aim is balanced, if not outweighed, by section 3202’s mandate that workers’ compensation “ shall be liberally construed by the courts with the purpose of extending their benefits for the pr otection of persons injured in the course of their employment. ” The Fund
should direct its concerns about the administration of section
4753 to the Legislature or the appropriate rulemaking body
instead of the judiciary.
The Fund cites Hanson to argue t he Board must reduce
benefits unless an applicant can prove an SSDI award is based

s olely on a subsequent injury. We read the case differently

. In
Hanson , t he hearing officer attributed 68 percent of an applicant’s SSDI payments to “pre

- existing disability or impairment” after taking evidence on the issue. The Board
vacated the hearing officer’s decision. The appellate court in
Hanson reinstated that decision , holding the Fund was entitled to reduce subsequent injury b enefits by that portion of SSDI the hearing officer found attributable to pre

- existing disabilities. ( See Hanson

, supra , 217 Cal.App.2d at p. 329 [ “ if it can reasonably be said that the social security disability payments are in some part accountable to the preexisting liability

. . . then
some credit should be allowed ” ] .) While Hanson confirmed the9 Fund’s right to seek credit for SSDI payments received by applicants, it did not hold the Fund was presumptively entitled to
credit unless the applicant could prove otherwise

. Finally, the Fund contends the 26 percent permanent disability rating in the stipulated award creates an inference that
74 percent of her SSDI benefits are att ributable to pre

- existing disabilities. This is not so. “[T] he Fund is not bound by the prior adjudication of the employer ’s liability relative to the determination of its own obligation to make life pension benefit payments when it has not been joined. ” ( Subsequent Injuries Fund v. Workmen’s Comp. Appeals Bd. (Royster) (1974) 40 Cal.App.3d 403, 408 , italics omitted .) “[W] hile the Fund may not relitigate the issue of the employer ’ s liability in an attempt to
increase [the employer’s] obligation, it may litigate the question of the employer ’ s liability so as to properly determine the extent of its obligation to the applicant. ” ( Id. at p. 409.) The Fund w as joined as a defendant six months after Vargas and her employer
settled her work er’s compensation case. We decline to read
section 4753 as entitling the Fund to a presumptive SSDI credit based on a rating negotiated in a different context with a different party. The Board’s Findings on Section 4753 Reductions
The Fund notes that Vargas had many pre

- existing medical conditions and applied for SSDI benefits several months before injuring her foot in March of 2018. These facts do not establish
she received SSDI benefits primarily “for or on account of” her

pre

- existing di sabilities. The awa rd letter Vargas received from
SSA in December of 2018 said she “became disabled under our
rules on April 18, 2018 .” This date fell less than three weeks after her March 2018 injury. The evidence at trial about Vargas’s

pre

- existing d isabilities c a me from medical reports prepared long10 after she received her SSDI award letter. Neither th is letter nor any other exhibit state s the basis of the award. The Fund joined th is case almost two years before trial and
five months after the Board decided A n gell

. In A n gell , the applicant contended a discovery order directing her to obtain
additional information from the SSA shifted the burden of proof
to establish whether the Fund was entitled to a credit pursuant
to 4753 . The Board disagreed. It stated: “[The Fund] is simply seeking discovery of information and documentary evidence related to applicant's admitted receipt of SSD benefits in order to

meet its burden of proof regarding the section 4753 credit. ” ( Angell

, supra , 86 Cal. Comp. Cases at p. 428 .) T he re is no record
here of the Fund depos ing Vargas or seeking her SSDI application materials

. The Fund declared ready for trial in
March of 2023 , received Vargas’s pre

- trial brief in April of 2023

, and agreed to proceed with out live testimony in May of 2023

. It s post

- trial brief did not request additional discovery in the event
the WCJ found the Fund bore the burden of pro ving section 4753
credit

. Having assumed it need not carry the issue, it did not shepherd the evidence required to prevail on the merits

. DISPOSITION
We affirm the Board ’ s order of October 20, 2023, denying
the Fund ’s petition for reconsideration. Vargas is awarded costs

. CERTIFIED FOR PUBLICATION.

CODY, J. We concur:

GILBERT, P. J. BALTODANO , J.11 Deborah Rothschuller
Santa Barbara District Office

______________________________

Department of Industrial Relations, Ken Lau, Chief Counsel, Steven A. McGinty, Assistant Chief Counsel, and Thomas G. Routson, Staff Counsel, for Petitioner. Ghitterman, Ghitterman & Feld, Russell R. Ghitterman and Benjamin P. Feld, for Respondent Nancy Vargas. Allison J. Fairchild and Eric D. Ledger for Respondent Workers’ Compensation Appeals Board.