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,

Petitioner,

v.

WORKERS’ COMPENSATION 

APPEALS BOARD et al.,

Respondents.

2d Civ. No. B333633

(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 this 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 portion of the Social Security 

Disability Insurance (SSDI) payments she began receiving after 

her latest injury. Respondent Workers’ Compensation Appeals 

Board (Board) determined the Fund was not entitled to credit, 

concluding the Fund had not proven 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 

injured 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 

indemnity payments 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 receiving monthly SSDI 

payments of $940. The Board granted Vargas’s motion to join the 
3

Fund as a defendant in her worker’s compensation case in July of 

2021. 

The Fund agreed Vargas was eligible for benefits. The 

parties stipulated: (1) that Vargas had a “preexisting labordisabling 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. The 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 examiner (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 evaluating 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 “the overall 

combined effects of the previous pre-existing 

disability/impairment and the 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 letter from the Social Security 

Administration (SSA) as an exhibit along with 1099 forms 

reflecting the SSDI paid to date. The letter stated SSA 

considered Vargas disabled as of April 18, 2018 and eligible to 

receive payments starting in October of 2018. 

Vargas’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 disabilities. The 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].” The 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 Fund] 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 the 
5

benefit.” It concluded “[w]hat is before the court without 

assumptions does not establish credit and therefore no credit was 

awarded.” 

We granted the Fund’s petition for a writ of review. 

(§ 5950.)

DISCUSSION

The Fund contends the Board misinterpreted 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 supported 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 well 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 injury. (Subsequent Injuries Fund v. Industrial Acc. Com. 

(Hanson) (1963) 217 Cal.App.2d 322, 328.) Section 4753 “was 

enacted to avoid depletion of the funds in order to encourage the 

employment of physically handicapped persons and to prevent 

double recovery for the same disabilities.” (Ibid.) 

We agree with the Board that the Fund must prove its 

entitlement to a credit for SSDI and other “monetary payments” 

received by applicants. The burden of proof in workers’ 

compensation proceedings “rests upon the party . . . holding the 

affirmative of the issue.” (§ 5705.) Applicants must initially 

show they are entitled to subsequent 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 partially disabled receives a subsequent 
7

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, relieve 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’ greater 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 subsequent 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 partial 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) 35 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 payments subject to credit. (See § 5502, 

subd. (c) [“The case shall be set for trial when discovery is 

complete, or when the . . . judge 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 applicant to disclose information about SSDI 

payments when Fund sought credit under section 4753].)

The Fund next cites the Legislature’s aim of 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 protection 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 the Board must reduce 

benefits unless an applicant can prove an SSDI award is based 

solely on a subsequent injury. We read the case differently. In 

Hanson, the 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 benefits 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 the 
9

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 attributable 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 was 

joined as a defendant six months after Vargas and her employer 

settled her worker’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 disabilities. The award 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 disabilities came from medical reports prepared long 
10

after she received her SSDI award letter. Neither this letter nor 

any other exhibit states the basis of the award.

The Fund joined this case almost two years before trial and 

five months after the Board decided Angell. In Angell, 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.) There is no record 

here of the Fund deposing 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 without live testimony in May of 2023. Its 

post-trial brief did not request additional discovery in the event 

the WCJ found the Fund bore the burden of proving 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.
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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.