Court Opinion

ID: 4451591
Source: CourtListenerOpinion
Date Created: 2019-10-30 19:02:27.829486+00
Date Added: 2024-06-11T08:48:10.939306
License: Public Domain

Filed 10/30/19

                            CERTIFIED FOR PUBLICATION

                 COURT OF APPEAL, FOURTH APPELLATE DISTRICT

                                     DIVISION ONE

                                STATE OF CALIFORNIA

CALIFORNIA INSURANCE GUARANTEE                  D074360
ASSOCIATION,

        Plaintiff, Cross-defendant and
        Appellant,                              (Super. Ct.
                                                No. 37-2016-00004801-CU-IC-CTL)
        v.

SAN DIEGO COUNTY SCHOOLS RISK
MANAGEMENT JOINT POWERS
AUTHORITY et al.,

        Defendants, Cross-complainants and
        Respondents.

        APPEAL from a judgment of the Superior Court of San Diego County,

Katherine A. Bacal, Judge. Reversed.

        Law Offices of Adrienne Dee Cohen, Adrienne D. Cohen and Julie R. Ursic for

Plaintiff, Cross-defendant and Appellant.

        TencerSherman, Sam G. Sherman and Jessica L. Mulvaney for Defendants, Cross-

complainants and Respondents.
       School bus driver Colleen Knowles sought workers' compensation from her

employer, Mountain Empire Unified School District (the District). The District is a self-

insured employer under the workers' compensation scheme, and its workers'

compensation claims are administered through the San Diego County Schools Risk

Management Joint Powers Authority (JPA). JPA purchased excess workers'

compensation insurance to cover claims exceeding a set retention. The District is an

additional insured under those policies.

       When a dispute over compensation arose, Knowles and the District sought

adjudication before the Workers' Compensation Appeals Board (WCAB). An

administrative law judge ultimately approved their stipulation that Knowles suffered a

"specific" injury on May 6, 2003. The distinction between a "cumulative" and a

"specific" injury matters for determining which of JPA's excess insurance policies was

triggered. As JPA's excess insurer during the stipulated injury date, Kemper Insurance

Company (Kemper) indemnified JPA until it went insolvent. JPA then approached

California Insurance Guarantee Association (CIGA), a statutorily created insolvency

insurer of last resort, to make up what Kemper had failed to pay.

       But CIGA is only obligated to pay "covered claims," defined to exclude claims for

which other insurance is available. (Ins. Code, § 1063.1, subd. (c)(9).) On this basis

CIGA denied coverage, asserting Knowles suffered a cumulative injury, which meant that

JPA might recover from a different excess insurer (other than Kemper). CIGA sued JPA

and the District (collectively, defendants) for declaratory relief, asserting that because

Knowles suffered a cumulative injury, JPA's claim was not a "covered claim." In their

                                              2
cross-complaint, defendants sought reimbursement from CIGA of benefit payments made

to Knowles after Kemper went insolvent.

       Defendants moved for summary judgment on the complaint and cross-complaint.

The trial court granted both motions and entered judgment in their favor, requiring CIGA

to reimburse $129,836.91 plus costs. Central to the court's ruling, and to CIGA's appeal,

is a jurisdictional question: Does the superior court have jurisdiction to find that

Knowles suffered a cumulative injury even if this conflicts with the stipulation before the

WCAB, or is injury characterization an issue within the WCAB's exclusive jurisdiction?

The court granted defendants' motions because it believed the WCAB had exclusive

jurisdiction to decide the nature of Knowles's injury.

       Although this issue appears to be one of first impression in California, federal

courts have rejected WCAB exclusivity in similar cases involving excess workers'

compensation insurance. (San Francisco BART Dist. v. General Reinsurance Corp.

(N.D.Cal. 2015) 111 F. Supp. 3d 1055, 1074 (BART I), affirmed (9th Cir. 2017) 726

F.App'x. 562 (BART II); San Diego Cty. Schs. Risk Mgmt. Joint Powers Auth. v. Liberty

Ins. Corp., et al. (2018) 339 F. Supp. 3d 1019, 1030 (Liberty).) For reasons we explain,

we agree with these authorities and conclude based on the purpose of excess insurance

that the superior court has jurisdiction to characterize Knowles's injury in this action

differently than was reflected in the WCAB stipulation. Accordingly, we reverse the

judgment and direct the court to enter a new order denying defendants' motions for

summary judgment.

                                              3
                  FACTUAL AND PROCEDURAL BACKGROUND

A.     Knowles Is Injured and Files a Workers' Compensation Action

       Knowles began working for the District as a substitute school bus driver in 1986

and became a permanent driver in 1993. She injured her elbow in 1995 and felt muscle

strain after bus accidents in 1998 and 2002. Her upper body pain seemed to worsen in

2002 and early 2003.

       On May 6, 2003, Knowles informed her supervisor that she was experiencing

pain. The supervisor told her to fill out a claim form for workers' compensation benefits.

She did so a week later, listing tendonitis in her right elbow from "repeated usage over a

long period of time [from] 1995 to 2003." Her supervisor filed a contemporaneous report

likewise attributing Knowles's injury to "repeated use over a long period of time."

Following a medical evaluation, Knowles was placed on a modified work schedule in

February 2004. She filled out an amended claim form in March listing tendonitis in her

right elbow and carpal tunnel syndrome in her right wrist, again from "repeated use over

a long period of time [from] 1995−2003."

       Knowles worked a modified schedule from February 2004 until her last day on

June 16, 2004. In September, she submitted a third claim form indicating she had

suffered an injury on May 6, 2003, in her "right upper extremity−neck" from driving a

bus. As Knowles would later explain, May 6 was simply the date she reported the pain to

her supervisor, not the date of any specific workplace injury. Medical reports

consistently stated Knowles had pain from "repetitive overuse."

                                             4
       On September 3, 2004, Knowles filed an Application for Adjudication before the

WCAB. In its July 2005 answer, the District accepted her right elbow injury but disputed

injuries to her neck and upper extremities. It also disagreed she was injured on May 6,

2003, stating Knowles had instead suffered "CT [cumulative trauma] ending on

05/06/03." Dr. Gregory Mack performed an Agreed Medical Evaluation in 2006 to

resolve disputed issues regarding Knowles's injuries. Knowles continued to seek

treatment over the next several years.

       In July 2011, Knowles and the District signed a Stipulation and Request for Award

in the WCAB action. Notwithstanding the District's prior objection, the parties stipulated

that Knowles suffered a "specific injury" on May 6, 2003, to her shoulder, wrist, upper

extremities, and neck. They further agreed on a payment schedule to cover Knowles's

temporary and permanent disabilities. A workers' compensation judge entered an Award

(hereafter Award) in August 2011, indicating by checking a box that he had approved the

parties' factual stipulations.

                                            5
B.      Kemper Provides Excess Coverage for JPA

        The District is a lawfully self-insured employer under the workers' compensation

scheme. (Lab. Code, § 3700.)1 It is a member of JPA, which administers a self-

insurance program for workers' compensation claims involving its members. JPA, in

turn, opted to purchase excess workers' compensation insurance. (§ 3702.8, subd. (c).)

The District is an additional insured on JPA's excess insurance policies.

        After the WCAB Award, JPA tendered compensation to Knowles and sought

reimbursement from its excess carrier, Kemper. Kemper's policy covered JPA from July

2002 to July 2003, meaning it was in effect on the May 6, 2003 stipulated specific injury

date. (JPA previously satisfied the self-insured retention of $100,000 on the Kemper

policy.) Kemper made payments totaling $207,908 until 2013, when it became insolvent.

C.      After Kemper's Insolvency, JPA Seeks Reimbursement from CIGA

        JPA then turned to insolvency insurer CIGA for reimbursement. CIGA denied

coverage in May 2014, explaining there was no evidence Knowles had suffered a specific

injury.2 If her injury was found to be cumulative, CIGA believed that JPA could pursue

other available insurance—namely, under the Swiss Re Group (Swiss Re) excess

workers' compensation insurance policy that covered JPA from July 2003 to June 30,

2004.

1       Further statutory references are to the Labor Code unless otherwise indicated.

2     The record indicates that even after stipulating to a specific injury before the
WCAB, JPA's claim specialist continued to describe Knowles's injury as "an accepted CT
[cumulative trauma] claim" despite the WCAB Award.

                                             6
       In November 2015, defendants filed a request for "Reimbursement by CIGA" in

the WCAB. The WCAB corrected the original Award in April 2016 to reflect that the

District was "Self-Insured," delete the erroneously named insurance carrier, and indicate

that the District would be the responsible party under the Award. The amendment did not

affect the parties' stipulation that the Award was for a "specific injury" occurring on May

6, 2003. CIGA was not joined as a party to the WCAB action until May 6, 2016.

       Meanwhile in February 2016, CIGA filed this action in superior court. It sought

declaratory relief that JPA's reimbursement request is not a covered claim because

Knowles suffered a cumulative injury for which other insurance is available. The parties

agreed in October 2016 to stay WCAB proceedings pending resolution of the superior

court action. Defendants answered the complaint and filed a cross-complaint for

reimbursement of funds paid to Knowles after Kemper went insolvent.

D.     The Motions for Summary Judgment

       Defendants filed motions for summary judgment on the complaint and cross-

complaint. They argued the court lacked jurisdiction to determine Knowles suffered a

cumulative injury, as this fact had already been settled before the WCAB. The court

agreed, distinguishing BART I, supra, 111 F. Supp. 3d 1055 and concluding injury

characterization was within the WCAB's exclusive jurisdiction.

       After defendants filed proposed judgments, CIGA promptly objected and sought

reconsideration or clarification, claiming the court's jurisdictional ruling did not resolve

CIGA's reimbursement obligation under the cross-complaint. Even if the WCAB had

exclusive jurisdiction over injury characterization, CIGA suggested the parties could

                                              7
litigate in that forum whether defendants' reimbursement request was a "covered claim."

The court denied CIGA's motion for reconsideration as untimely, but set a hearing to

determine "the form of judgment" to satisfy its request for clarification.

       At that hearing CIGA argued the court had simply ruled it lacked jurisdiction to

decide Knowles suffered a cumulative injury, which did not support a reimbursement

award on the cross-complaint. Defendants disagreed, noting they had clearly requested

summary judgment on the cross-complaint and included evidence supporting their

request for reimbursement. The court took the unusual step of allowing supplemental

briefing as to whether the proposed judgment awarding reimbursement reflected the

court's ruling. The court ultimately entered judgment in defendants' favor on their cross-

complaint, requiring CIGA to reimburse JPA $129,836.91 plus $3,335.87 in costs. It also

entered judgment in defendants' favor on CIGA's complaint, requiring CIGA to pay

$3,335.87 in costs.

                                       DISCUSSION

       Central to CIGA's appeal is whether the superior court has jurisdiction to

determine that Knowles suffered a cumulative injury after the WCAB approved a

stipulation that her injury was specific in nature. Concluding that the court has such

jurisdiction, we must reverse.

       Context matters. This action addresses whether CIGA must cover a claim for an

insolvent excess insurer. A court's resolution of a factual question underpinning excess

coverage has no bearing on Knowles's recovery under the WCAB Award, since the

District was a self-insured employer under the Workers' Compensation Act (WCA;

                                             8
§ 3200 et seq.). Knowles is entitled to compensation pursuant to the Award. CIGA's

action cannot change that; it will resolve only whether it must indemnify the District and

JPA for their benefit payments. Although "perhaps not optimal, and a situation to be

avoided if possible" (BART I, supra, 111 F.Supp.3d at p. 1065), the superior court has

jurisdiction in this context to characterize Knowles's injury, even if its finding conflicts

with the WCAB stipulation.

1.     Background Concepts

       This action involves an interplay between the workers' compensation scheme,

excess coverage for self-insured employers, CIGA's role as an insolvency insurer, and the

distinction between a specific and a cumulative injury for purposes of CIGA's liability.

We briefly discuss each concept before turning to the jurisdictional inquiry.

       a.     The Workers' Compensation Scheme and Excess Insurance

       Pursuant to its constitutional authority (Cal. Const., art. XIV, § 4), the Legislature

enacted the WCA as "a comprehensive statutory scheme governing compensation given

to California employees for injuries incurred in the course and scope of their

employment." (Charles J. Vacanti, M.D., Inc. v. State Comp. Ins. Fund (2001) 24
Cal. 4th 800, 810 (Vacanti).) This scheme rests on a presumed "compensation bargain":

an employer assumes no-fault liability for workplace injuries in exchange for limits on

recoverable compensation; employees gain swift and certain payment without proof of

fault but lose broader remedies in tort. (Id. at p. 811; see §§ 3600, subd. (a) [conditions

of compensation], 3602, subd. (a) [exclusive remedy].)

                                              9
       All employers except the state must "secure the payment of compensation" by

either carrying workers' compensation insurance or self-insuring. (§ 3700; La Jolla

Beach & Tennis Club, Inc. v. Indus. Indem. Co. (1994) 9 Cal. 4th 27, 36 (La Jolla).) Self-

insureds must demonstrate a financial ability to administer and pay potential workers'

compensation claims to their employees. (§ 3700, subd. (c).) The District is a self-

insured employer. Its workers' compensation claims are managed by JPA, a joint powers

authority created under Government Code section 6500 et seq. The WCA permits, but

does not require, self-insured employers to purchase excess workers' compensation

insurance to discharge their compensation obligation. (§ 3702.8, subd. (c).) In this case

JPA purchased an excess policy covering the July 2002 to July 2003 period from

Kemper; a subsequent excess policy covering the July 2003 to June 30, 2004 period was

obtained from Swiss Re.

       Workers' compensation benefits are automatically paid to an injured worker by a

workers' compensation insurer or self-insured employer. If a dispute arises, the parties

may litigate it before the WCAB. (Vacanti, supra, 24 Cal.4th at p. 811; see §§ 5501,

5501.5.) Applications for adjudication in the WCAB are decided by a workers'

compensation administrative law judge. Those decisions are subject to administrative

review before a three-member panel of the seven-member WCAB. (1 Cal. Workers'

Compensation Practice (Cont.Ed.Bar 4th ed. 2019) § 1.16, p. 1-10; see Lab. Code,

§§ 111, 112.) The WCA provides only narrow grounds for judicial review of WCAB

decisions. (§ 5952.)

                                            10
       b.     California Insurance Guarantee Association

       CIGA is a compulsory association of state-regulated insurance companies created

by statute. (Ins. Code, § 1063 et seq.) To insure against loss arising from an insolvent

insurer's failure to discharge its policy obligations, CIGA "collects premiums from its

member insurers to the extent necessary to pay statutorily defined 'covered claims' on

behalf of insolvent insurers. (Ins. Code, §§ 1063.1, 1063.2, 1063.5; [citations].) CIGA is

not an insurer which issues policies and assumes contractual obligations or collects

premiums and makes profits, and does not stand in the shoes of the insolvent insurer for

all purposes." (Fireman's Fund Ins. Co. v. Workers' Comp. Appeals Bd. (2010) 189
Cal. App. 4th 101, 111–112 (Fireman's Fund).) Nor is it a fund for insurance companies

or self-insureds. (Id. at p. 112.) Instead, it is an insolvency insurer of last resort created

to provide "limited financial protection for insureds and the public." (Ibid.)

       CIGA's powers, duties, and liabilities are strictly governed by statute, and its

coverage is not coextensive with an insolvent insurer's. (Denny's Inc. v. Worker's Comp.

Appeals Bd. (2003) 104 Cal. App. 4th 1433, 1438 (Denny's).) It is only obligated to pay

" 'covered claims' " (Ins. Code, § 1063.2, subd. (a)), as defined in Insurance Code

sections 1063.1, subdivision (c) and 1063.2, subdivisions (g) through (h). Among the

prerequisites for CIGA's coverage, the claim must fall "within the coverage of an

insurance policy of the insolvent insurer." (Ins. Code, § 1063.1, subd. (c)(1).)

       Two exclusions from statutorily defined "covered claims" are raised here. First,

CIGA "is not liable where a solvent insurer or self-insured employer is jointly and

severally liable for the claim under the Labor Code." (Fireman's Fund, supra, 189

                                              11
Cal.App.4th at p. 112; see Ins. Code, § 1063.1, subd. (c)(9).) "When two or more

insurers are jointly and severally liable for workers' compensation benefits and one of

them becomes insolvent, the policy issued by the solvent insurer constitutes 'other

insurance' for purposes of Insurance Code section 1063.1, subdivision (c)(9), which

excludes the benefits from coverage by CIGA." (California Ins. Guarantee Assn. v.

Workers' Comp. Appeals Bd. (2016) 245 Cal. App. 4th 1021, 1027.) Second, CIGA is not

bound by default judgments or stipulated judgments against an insolvent insurer. (Ins.

Code, § 1063.2, subd. (g).) This limitation protects CIGA from collusion by requiring

the validity of a claim to be determined in an adversarial proceeding before being reduced

to a judgment that CIGA must honor. (Aloha Pacific, Inc. v. California Ins. Guarantee

Assn. (2000) 79 Cal. App. 4th 297, 309.)

       c.     Cumulative Versus Specific Injuries

       Central to this coverage dispute is whether Knowles suffered a specific injury or a

cumulative one. The WCA defines a " 'specific' " injury as one caused by a single

incident or exposure. (§ 3208.1, subd (a).) By contrast, a " 'cumulative' " injury results

from repetitive trauma over a period of time. (§ 3208.1, subd. (b).) For liability

purposes, a specific injury happens on the date of the alleged incident or exposure

(§ 5411), meaning the workers' compensation policy or excess policy triggered is the one

in effect on that date. By contrast, a cumulative injury occurs when a worker becomes

disabled and should reasonably know the disability was job-related. (§ 5412.) Multiple

employers can be liable for a cumulative injury. The WCA extends liability to those

employers who employed the injured worker during the year preceding the earlier of:

                                             12
(1) her date of injury under section 5412, or (2) the last date the worker was employed in

an occupation exposing her to the hazard. (§ 5500.5, subd. (a).)

       Knowles filed her first claim for disability benefits on May 12, 2003, but

continued to work at full capacity until February 6, 2004. Kemper's excess worker's

compensation policy was in effect for the 12-month period beginning July 2002, and

Swiss Re's was in effect for the 12-month period beginning July 2003. If Knowles

suffered a specific injury on May 6, 2003, Kemper would bear sole responsibility for

providing excess insurance coverage to JPA. Once Kemper became insolvent in 2013,

insolvency insurer CIGA would be obligated to pay if the remaining statutory

requirements were met. (Ins. Code, §§ 1063.1, subd. (c)(1)−(13), 1063.2, subds. (g)−(h).)

However, if Knowles suffered a cumulative injury, CIGA suggests that the liability

period would cover the 12 months preceding February 6, 2004, when she could no longer

work at full capacity. In other words, a cumulative injury might trigger coverage under

the Swiss Re policy.

2.     The Superior Court Has Jurisdiction Over CIGA's Action.

       "As a creature of the Legislature, the [WCAB] has no powers beyond those

conferred on it." (Victor Valley Transit Auth. v. Workers' Comp. Appeals Bd. (2000) 83
Cal. App. 4th 1068, 1072 (Victor Valley).) The WCA gives the WCAB exclusive

jurisdiction over proceedings "[f]or the recovery of [workers'] compensation, or

concerning any right or liability arising out of or incidental thereto." (§ 5300, subd. (a).)

The superior court and WCAB do not have concurrent jurisdiction over any given

action—depending on the injuries claimed, one entity will lack jurisdiction to grant any

                                             13
relief whatsoever. (La Jolla, supra, 9 Cal.4th at p. 35.) "The only point of concurrent

jurisdiction of the two tribunals is jurisdiction to determine jurisdiction; jurisdiction once

determined is exclusive, not concurrent." (Ibid.) Relying on section 5300, the trial court

concluded the WCAB had exclusive jurisdiction to determine that Knowles suffered a

cumulative, rather than specific, injury. As we explain, this was incorrect.

       "It is by now well established that the WCA's exclusivity provisions preempt not

only those causes of action premised on a compensable workplace injury, but also those

causes of action premised on injuries ' "collateral to or derivative of" ' such an injury."

(King v. CompPartners, Inc. (2018) 5 Cal.5th 1039, 1051 (King); Vacanti, supra, 24

Cal.4th at p. 811.) Thus, our first step is to evaluate whether the alleged injury is

collateral to or derivative of an injury compensable exclusively under the WCA. If it is,

the cause of action may be barred; otherwise, it is not barred. (Vacanti, at p. 811.) Here,

there is no dispute that the characterization of Knowles's injury is collateral to or

derivative of injuries compensable under the WCA.

       We therefore proceed to the next step to evaluate "whether the alleged acts or

motives that establish the elements of the cause of action fall outside the risks

encompassed within the compensation bargain." (Vacanti, supra, 24 Cal.4th at

pp. 811−812.) "Where the acts are 'a "normal" part of the employment relationship'

[citation], or workers' compensation claims process [citation], or where the motive behind

these acts does not violate a 'fundamental policy of this state' [citation], then the cause of

action is barred." (Id. at p. 812.) By contrast, actions to recover economic or contract

damages incurred independent of a workplace injury are not barred. (Id. at p. 814.)

                                              14
       This second step is where the court erred. Although perhaps prompted by

Knowles's workplace injuries, CIGA's coverage dispute falls "outside the risks

encompassed within the compensation bargain." (Vacanti, supra, 24 Cal.4th at p. 812.)

The question of whether a workers' compensation claim against a self-insured employer

is covered by the employer's excess insurance policy is not a " ' "normal" part of

the . . . workers' compensation claims process.' " (Ibid.) CIGA's action can have no legal

effect on Knowles's ability to recover workers' compensation. As a self-insured

employer, the onus is on the District to provide "compensation" to Knowles. (§ 3700

[employers must "secure the payment of compensation" by purchasing workers'

compensation insurance or self-insuring].) " 'Compensation' . . . includes every benefit or

payment conferred by this division [Workers' Compensation and Insurance] upon an

injured employee . . . , without regard to negligence." (§ 3207, italics added.) As an

excess insurer, Kemper was not obligated to provide compensation to Knowles; it merely

had a contractual obligation to indemnify JPA for certain claims. CIGA's action only

determines who—as between the District/JPA, CIGA, and another excess insurer—bears

the ultimate cost of the District's compensation obligation. Accordingly, it does not fall

within the WCAB's exclusive jurisdiction.

       Although California courts have not decided this precise question, cases

addressing the scope of the WCAB's exclusive jurisdiction are instructive. Courts have

rejected exclusive WCAB jurisdiction where the action does not implicate the payment of

benefits to the injured worker. For instance in Victor Valley, supra, 83 Cal. App. 4th 1068,

the WCAB determined that a public transit employee of a joint powers authority was

                                            15
entitled to certain workers' compensation benefits. Afterwards, one city sought

contribution from another municipal member of the authority to recover some of the

benefits paid to the injured worker. The WCAB interpreted the cities' respective rights

and obligations pursuant to their joint powers agreement (id. at pp. 1070−1071), but the

appellate court reversed, concluding the WCAB lacked jurisdiction to do so. The cities'

dispute had no bearing on the worker's receipt of benefits, since the prior WCAB award

ensured that someone would pay. (Id. at pp. 1073, 1076.) Similarly in United States

Fidelity and Guaranty Co. v. Lee Investments, LLC (9th Cir. 2011) 641 F.3d 1126, the

Ninth Circuit applying California law determined that courts, not the WCAB, had

jurisdiction over an insurer's action against an employer to rescind its workers'

compensation insurance policy as void. (Id. at p. 1134.) While perhaps prompted by the

workplace accident, the action affected only who had to pay, not whether the employee

could recover workers' compensation. (Id. at pp. 1134−1135.)

       By contrast, where a dispute implicates a normal part of the workers'

compensation claims process, the WCAB—and not the court—has exclusive jurisdiction.

(See King, supra, 5 Cal.5th at p. 1053 [worker's action against employer for errors in

utilization review process required under the WCA]; Vacanti, supra, 24 Cal.4th at p. 820

[medical providers' action against insurer for mishandling workers' compensation lien

claims].) Taken together, the cases support a conclusion here that the superior court has

jurisdiction to make a factual finding necessary to determine excess insurance coverage.

       We find further support in a WCAB panel decision, which we consider for its

persuasive value. (See Cannon v. Industrial Acci. Comm. (1959) 53 Cal. 2d 17, 22.) In

                                             16
Millman v. Contra Costa County, the WCAB addressed the flip side of the jurisdictional

issue here. ((Dec. 5, 2013, WCK 0005092) 2013 Cal.Wrk.Comp. P.D. Lexis 615

(Millman).) A self-insured employer had asked the WCAB to decide whether certain

expenses were covered under its excess insurance policy. The WCAB concluded it

lacked jurisdiction because "this particular dispute is a contract dispute between an

insurer and insured rather than a workers' compensation insurance coverage dispute."

(Id. at p. *3.) As the panel explained, although many self-insured employers purchase

excess insurance, "excess insurance is not a method of securing compensation" pursuant

to section 3700. (Millman, at p. *4.) Excess insurers do not assume primary and direct

liability for the payment of compensation, whereas workers' compensation policies must

contain a clause to that effect. (Id. at pp. *5–*6; Ins. Code, § 11651.) Unlike workers'

compensation insurers, excess insurers "may not be substituted for the self-insured

employer as the sole entity that may be held liable under Labor Code section 3755."

(Millman, at p. *6.) Likewise, Department of Insurance "regulations affecting excess

insurance are much less extensive" than regulations for primary workers' compensation

insurance. (Ibid.) Although the panel concluded it lacked jurisdiction, it advised the

parties they could "seek declaratory relief in civil court." (Id. at p. *7.)

       Millman's conclusion makes sense. Under a primary workers' compensation

insurance policy, " 'the insurer agrees to pay all workers' compensation and other benefits

that the employer must legally provide to covered employees who are occupationally

injured or disabled.' " (La Jolla, supra, 9 Cal.4th at p. 36.) An employer who "secure[s]

the payment of compensation" (§ 3700) through workers' compensation insurance is

                                              17
relieved from liability and dismissed from WCAB proceedings once its workers'

compensation carrier assumes liability. (§§ 3755, 3757.)

       Excess insurance works differently. An excess workers' compensation policy

indemnifies a self-insured employer for claims exceeding a certain retention, thereby

limiting a self-insured's potential exposure. Policy limits to excess coverage do not

expose the injured worker to the risk of nonrecovery—"coverage is had through

[employer's] being self-insured. The only risk is to [the employer] as to how much it can

minimize its losses for benefits it is required to pay." (General Reinsurance Corp. v. St.

Jude Hospital (2003) 107 Cal. App. 4th 1097, 1109.) We agree with Millman that a

coverage dispute between a self-insured employer and its excess workers' compensation

carrier is essentially a contract dispute between insurer and insured. (Millman, supra,

2013 Cal.Wrk.Comp. P.D. Lexis 615 at p. *3.) Such an action falls outside the

compensation bargain and is not a part of the normal workers' compensation claims

process. Accordingly, CIGA's action does not trigger exclusive jurisdiction of the

WCAB pursuant to section 5300.3

       Consistent with Millman, federal courts applying California law have rejected

exclusive WCAB jurisdiction on similar facts. The BART cases are particularly helpful.

3      Defendants construe Millman as addressing a narrow question of whether the
WCAB had jurisdiction to decide whether certain utilization and bill review expenses
were covered by an excess insurance policy. As we read it, both Millman and this action
involve which forum has the power to consider an excess coverage dispute. Defendants
contend Millman involved a "coverage dispute" whereas CIGA attempts to recharacterize
Knowles's injury. But CIGA's action is a coverage dispute, irrespective of the factual
inquiry its resolution necessarily entails.
                                            18
A Bay Area Rapid Transit (BART) employee filed a multiple myeloma workers'

compensation claim before the WCAB. As a self-insured employer, BART had

purchased excess insurance from General Reinsurance Corporation (GRC) to cover

workers' compensation claims exceeding a retention limit. (BART I, supra, 111

F.Supp.3d at pp. 1059−1060.) The parties initially disputed the employee's injury date,

but ultimately signed a Compromise and Release stipulating to a cumulative injury

between 1990 and 1991. This injury period triggered coverage under GRC's policy. (Id.

at p. 1062.) GRC initially made payments but then stopped and sought reimbursement.

(Id. at p. 1063.) BART then sued GRC for breach of contract. In phase one of trial, the

court had to decide whether it had jurisdiction to make a factual finding as to the

employee's date of injury inconsistent with the WCAB and, if it did, whether GRC was

nevertheless bound by the WCAB's determination under principles of estoppel, waiver, or

laches. (Id. at p. 1064.)

       Citing Millman, the district court concluded it had jurisdiction to revisit the date-

of-injury determination. Section 5300's exclusivity bar was "limited to claims involving

compensation to the employee." (BART I, supra, 111 F.Supp.3d at p. 1065.) An excess

insurance policy was not a workers' compensation policy and therefore not subject to the

workers' compensation scheme. (Ibid.) The possibility that the court might make a

finding inconsistent with one already made by the WCAB did not deprive it of

jurisdiction. (Ibid.) It was not reviewing any decision of the WCAB, and its ruling

would not affect the WCAB's decision that BART, as a self-insured employer, owed

compensation to its employee. (Ibid.) "Put simply, regardless of the case's outcome,

                                             19
BART will remain liable to [its employee] as a self-insured employer even if it is

determined that General Reinsurance is not the proper excess carrier because the date of

injury fell outside of the Policy period." (Ibid.)

       Next, the district court concluded that GRC was not otherwise bound by the

WCAB's date of injury determination under principles of collateral estoppel, equitable

estoppel, waiver, or laches. (BART I, supra, 111 F.Supp.3d at p. 1067.) Collateral

estoppel might have applied had GRC been joined in the WCAB action, but absent

joinder it lacked privity with BART so as to be bound. (Id. at pp. 1068−1069, 1074.)

       The Ninth Circuit affirmed.4 As it explained, excess insurer GRC did not

challenge BART's liability as a self-insured employer to its injured worker. Nor did it

challenge the amount of the award against BART. "Instead, GRC seeks to litigate a

factual question that goes to coverage under its policy. It is not barred from doing so by

the stipulation between BART and its employee or by the WCAB's finding in approving

that agreement." (Bart II, supra, 726 F.App'x. at p. 564.) Moreover, GRC could not

otherwise be bound where it was not notified of the underlying proceeding until one week

after BART's compromise and release had been approved by the WCAB. (Ibid.)

       BART I and BART II stand for the notion that a trial court has jurisdiction to make

a factual finding underlying excess workers' compensation coverage even if that finding

is inconsistent with one made or approved by the WCAB. Central to this result is the

4      Although nonpublished and nonprecedential under Ninth Circuit rules (U.S. Cir.
Ct. Rules (9th Cir.), rule 36-3(a)), we may rely on BART II as persuasive authority. (See
Pacific Shore Funding v. Lozo (2006) 138 Cal. App. 4th 1342, 1352, fn. 6.)
                                              20
nature of excess workers' compensation insurance, compared to primary workers'

compensation insurance policies.

       Although the summary judgment motions in this case did not squarely address

collateral estoppel, the BART cases further stand for the notion that issue preclusion does

not apply where an excess insurer takes no part in WCAB proceedings. Defendants

repeatedly assert that Kemper "authorized" or "approved" their stipulation before the

WCAB. As support, they cite solely to paragraph No. 8 of the declaration of JPA claims

administrator Tammy Le: "On or about June 2, 2011, Kemper authorized settlement of

the Claim pursuant to the proposed stipulation and award for an injury occurring on May

6, 2003." But CIGA objected to this evidence on foundation and lack-of-personal-

knowledge grounds, the court sustained the objection, and defendants do not challenge

the court's evidentiary ruling. In short, here as in BART, there is no competent evidence

that the excess insurer participated in the WCAB action so as to be bound by stipulated

findings approved in an Award.

       We agree with BART I that successive litigation of foundational facts concerning a

worker's injury is "perhaps not optimal, and a situation to be avoided if possible." (BART

I, supra, 111 F.Supp.3d at p. 1065.) But under the present circumstances, the trial court

does not lack jurisdiction to decide the factual question underlying the excess coverage

                                            21
dispute, even if it reaches a finding contrary to the WCAB. (Ibid.)5 Contrary to

defendants' strenuous objection, CIGA's requested relief would not "modify the WCAB

award" even if the court finds that Knowles suffered a cumulative injury.

       Liberty, supra, 339 F. Supp. 3d 1019, a federal case involving respondent JPA, also

supports our jurisdictional conclusion. During a two-year span, JPA purchased excess

insurance first from Liberty Insurance Corporation and then from Wesco Insurance

Company. (Id. at p. 1024.) Two school district employees had cumulative injuries

spanning both coverage periods, each with their last date of exposure after Liberty's

policy ended. (Id. at pp. 1024−1025.) Liberty and Wesco initially agreed to allocate

costs. Then Liberty stopped paying, saying its insurance policy excluded coverage where

the workers' last exposure occurred outside the policy period. (Id. at pp. 1025−1026.) A

contract dispute ensued between JPA, Liberty, and Wesco. (Ibid.) At summary

judgment, Liberty pointed to its policy exclusion while Wesco argued Liberty's

interpretation of its policy conflicted with statutory liability for cumulative injury claims

under the WCA (§ 5500.5). (Liberty, at pp. 1026−1027.) The court held in Liberty's

favor. Citing BART I and Millman, it reasoned, "an excess policy is not a workers'

compensation policy and thus the provisions of Division Four [of the Labor Code]

5       CIGA argues the WCAB approved the parties' stipulation but "did not make a
factual determination based on the evidence that [Knowles] suffered a specific injury."
We assume without deciding that there is no meaningful difference between a factual
determination made by the WCAB and a WCAB Award based on the parties' stipulations
of fact.
                                             22
regulating workers' compensation policies—such as Section 5500.5—do not apply." (Id.

at p. 1029.)

       As Liberty and BART I explain, there is an important distinction between

employers who purchase primary workers' compensation insurance and self-insured

employers who purchase excess workers' compensation insurance. "As the self-insurer,

the JPA is the party required to 'place itself in the position of a private insurer.'

[Citation.] The excess insurer, on the other hand, does not pay any worker's

compensation benefits but rather reimburses the JPA after the JPA has paid those

benefits." (Liberty, supra, 339 F.Supp.3d at p. 1029.) Excess insurance is optional under

the workers' compensation scheme. (§ 3702.8, subd. (c).) Whether Kemper's policy

covers the claim does not affect the WCAB's determination that Knowles is entitled to

compensation from the District for workplace injury, or the amount awarded for her

permanent and temporary disabilities. Knowles will be compensated the same amount

even if the court finds in this action that she suffered a cumulative injury rather than a

specific one. (BART I, supra, 111 F.Supp.3d at p. 1065.)

       The trial court did not consider the nature of excess coverage when it reached a

contrary result. Citing Western Growers, Ins. Co. v. Workers' Comp. Appeals Bd. (1993)

16 Cal. App. 4th 227, 234, the court believed injury characterization fell squarely within

the WCAB's expertise. But the question of exclusive jurisdiction does not turn on the

extent to which a particular factual inquiry lies within or outside of the WCAB's

expertise. Instead it depends on whether the claim being asserted implicates "the risks

encompassed within the compensation bargain." (Vacanti, supra, 24 Cal.4th at p. 812.)

                                               23
Depending on the context, either the WCAB or the superior court is fully capable of

determining whether an injury is specific or cumulative. Thus, in reviewing by writ a

WCAB decision, it is hardly surprising that the court in Western Growers would explain

that the nature of an injury—whether it is specific or cumulative—was a question of fact

for the WCAB to resolve in a dispute between the employee and primary insurer.

(Western Growers, at pp. 234–235.) The case does not stand for the proposition that the

WCAB has exclusive jurisdiction to decide the nature of an injury in every conceivable

context in which that factual question may arise.

       The trial court further reasoned that BART I permitted litigation of the worker's

injury date, not injury type. But there is little distinction between the "date of injury"

determination in BART I and the "type of injury" determination here. If the court were to

decide that Knowles suffered a cumulative injury, that would determine the injury period

and, in turn, the applicable excess insurance policy for purposes of evaluating CIGA's

coverage obligation. Whereas in BART I the injury date directly determined which

excess policy applied, here the injury type determines the injury date, which in turn

determines which excess policy applies. The effect is the same.

       We likewise reject defendants' argument that the BART I court "was merely

completing the equation" by deciding a question left open by the WCAB. Both this

action and BART I address whether a court has the power to decide a factual issue

necessary to determine excess workers' compensation insurance coverage, even if its

finding differs from the WCAB's. During the WCAB proceedings in BART I, the parties

stipulated to an injury date that triggered GRC's excess coverage, but the court was not

                                              24
without jurisdiction to find an injury date different from that approved by the WCAB.

(BART I, supra, 111 F.Supp.3d at p. 1065.) A similar conclusion follows here.

       Nor are we persuaded by the trial court's reasoning that "BART was a coverage

dispute based on the terms of the policy" whereas "CIGA's obligations are based on

statute." A prerequisite for coverage under the CIGA statute is a determination that the

obligation is covered by the insolvent insurer's policy. (Ins. Code, § 1063.1, subd.

(c)(1)(A).) CIGA disputes the extent of Kemper's coverage obligation. It asserts that

Knowles suffered a cumulative injury, triggering coverage under Swiss Re's policy. The

factual prerequisite for excess coverage here is analogous to that in BART I.

       In short, CIGA's action for declaratory relief is not subject to the WCA's

exclusivity bar. The WCAB's exclusive jurisdiction over actions involving "the recovery

of compensation, or concerning any right or liability arising out of or incidental thereto"

(§ 5300, subd. (a)) does not extend to contract-based disputes between a self-insured

employer and its excess carrier (or that carrier's insolvency insurer). The court is not

without jurisdiction to make a factual determination that Knowles suffered a cumulative

injury, even if its finding contradicts a stipulated fact approved by the WCAB.

       Defendants' policy arguments do not compel a different result. First, they claim

that allowing CIGA to litigate Knowles's injury type would result in inconsistent rulings

between the WCAB and the superior court and interfere with Knowles's claim rights. But

as noted, Knowles is entitled to compensation from the District, a lawfully self-insured

employer, irrespective of defendants' indemnification rights. Second, they argue their

WCAB stipulation might prevent recovery from other excess insurers. Accepting this

                                             25
premise for the sake of argument, defendants brought this predicament on themselves by

stipulating to a specific injury before the WCAB. The possibility that their improvidence

might leave them without other excess insurance coverage does not change the legal

parameters of CIGA's statutory obligation. (See Parkwoods v. Community Assn. v. Cal.

Ins. Guarantee Assn. (2006) 141 Cal. App. 4th 1362, 1368 [insured could not "bootstrap

its claim against CIGA by releasing its right to recover under an available policy and

claiming that as a result there is no other coverage"]; Denny's, supra, 104 Cal.App.4th at

p. 1442 [CIGA was not created to protect self-insured employers].)

       Finally, defendants suggest that allowing CIGA to litigate whether Knowles

suffered a cumulative injury will "overrun" courts with coverage disputes by CIGA,

"even where coverage was never at issue and payments [by the insolvent insurer] had

previously been made on claims." Defendants overstate the risk—our ruling only

implicates CIGA's coverage as to excess workers' compensation carriers. And collateral

estoppel could apply where a self-insured employer joins its excess insurer or CIGA in

WCAB proceedings. (BART I, supra, 111 F.Supp.3d at p. 1074.) We share the BART I

court's view that although perhaps not optimal, the superior court is not without

jurisdiction to decide a factual issue underpinning CIGA's coverage obligation.

3.     Effect of Jurisdictional Ruling

       The trial court concluded it lacked jurisdiction to find Knowles suffered a

cumulative injury. Because it believed exclusive jurisdiction to make that determination

rested with the WCAB, it entered judgment in defendants' favor on the cross-complaint

and ordered CIGA to reimburse defendants $129,836.91 plus costs.

                                            26
       CIGA argues this was error. Even if the court lacked jurisdiction to find Knowles

suffered a cumulative injury, CIGA argues defendants' reimbursement request was not a

"covered claim" because: (1) it is not bound by a stipulated judgment against Kemper

(Ins. Code, § 1063.2, subd. (g)); (2) "other insurance" was available from excess insurer

Swiss Re (Ins. Code, § 1063.1, subd. (c)(9)); and (3) there has never been a determination

of coverage under Kemper's policy (Ins. Code, § 1063.1, subd. (c)(1)).

       Given our jurisdictional ruling, we do not reach these contentions.6 Defendants

moved for summary judgment; CIGA did not. Our conclusion that the court has

jurisdiction to make a factual determination regarding injury type leaves triable issues to

resolve. The parties may proceed to litigate whether Knowles suffered a specific or

cumulative injury, and the court may make a factual finding on this question to reach a

final coverage determination.

6      Nor do we reach CIGA's arguments that the superior court did not comply with
Code of Civil Procedure, section 437c, subdivision (g) or provide a sufficient statement
of reason when it entered judgment for defendants on their cross-complaint for
reimbursement.

                                             27
                                     DISPOSITION

       The judgment is reversed. The matter is remanded to the trial court with

directions to vacate its order granting summary judgment and enter a new order denying

defendants' motions on both the complaint and cross-complaint. CIGA is entitled to

recover its costs on appeal.

                                                                                  DATO, J.

WE CONCUR:

McCONNELL, P. J.

O'ROURKE, J.

                                           28