Court Opinion

ID: 9631837
Source: CourtListenerOpinion
Date Created: 2023-08-22 10:51:54.603868+00
Date Added: 2024-06-11T18:08:02.165625
License: Public Domain

CARTER, J.
I dissent.
I reaffirm the views expressed in my dissent in Bryant v. Industrial Acc. Com., 37 Cal.2d 215, 223 [231 P.2d 32], There are features about this case, however, which necessitate additional discussion.
The majority holds that a lien for unemployment disability payments made to an applicant for workmen’s compensation must be allowed against a lump sum award made as the result of a compromise.
The Unemployment Insurance Act (Stats. 1935, p. 1226, as amended, § 207) provides that a person shall be entitled to *606disability payments thereunder unless he has received or is entitled to receive compensation under the workmen’s compensation laws. In the instant case there has never been a showing that Nowak, the employe, was entitled to compensation. He received a lump sum by way of a compromise agreement between him and his employer's insurance carrier. To reach the result that such sum is compensation, and thus subject to a lien for disability payments, the majority reasons that if the lien is not allowed, the insurer covering the liability for disability payments will not make them promptly but will withhold them to see if workmen’s compensation is awarded, and, therefore, the liberal application of the workmen’s compensation laws would thus be thwarted. There can be no doubt that petitioner was required by law to make the disability payments whether or not an award of workmen’s compensation was made in the applicant’s favor. It is strange reasoning indeed which supposes a “probable” failure to comply with the law as a reason for interpreting a statute favorable to the prospective law violator. The presumption is to the contrary. A person is presumed to be innocent of wrong and that the law has been and will be obeyed. (Code Civ. Proc., § 1963 [1, 33].) Hence, we will not suppose that the requirement that disability payments be made will be wilfully disobeyed.
This is the first case which has come to my attention in which the author of the majority opinion has relied upon section 3202 of the Labor Code as a basis for the interpretation of the provisions of that code or the workmen’s compensation law, and then such reliance is for the purpose of denying the benefits of the law to persons injured in the course of their employment. This is indeed using the mandate of liberal construction for its own destruction. A definition of liberal construction may be found in my dissenting opinion in California Shipbuilding Corp. v. Industrial Acc. Com., 31 Cal.2d 270, 288, 289 [188 P.2d 27].
There is another factor of compelling importance. The effect of the majority’s interpretation is that there must be a determination of whether compensation is payable in every case, and, therefore, the provision for compromising compensation claims becomes ineffective, and might just as well be stricken from the statute. There can be no compromise, because, if it must be decided whether the injury is compensable in all cases, and hence a lien attaches, there is nothing to compromise. The statute says that nothing therein (and *607that includes the allowance of a lien for disability payments) shall prevent a compromise. It reads: “No contract, rule, or regulation shall exempt the employer from liability for the compensation fixed by this division, but nothing in this division shall: (a) ... Impair the right of the parties interested to compromise, subject to the provisions herein contained, any liability which is claimed to exist under this division on account of injury or death.” (Italics added.) (Lab. Code, § 5000.) “Compensation is the measure of the responsibility which the employer has assumed for injuries or deaths which occur to employees in his employment when subject to this division. No release of liability or compromise agreement is valid unless it provides for the payment of full compensation in accordance with this division or unless approved by the commission.” (Lab. Code, § 5001.) If when a lien is filed against a compromise award the commission must decide whether the injury is compensable, the extent of the disability and the amount of compensation, the compromise is nullified because it is based on a dispute as to those factors. It is clear, therefore, that the right to compromise is not only impaired in direct violation by section 5000, it is completely destroyed.
Even conceding the soundness of the majority holding in the Bryant case, which I do not, it should not be extended to a case such as this where the only award made in favor of the injured employee is by way of a compromise on the issue of liability. This should be apparent when we consider the desirability from the standpoint of the injured employee of compromising cases of doubtful liability. Such eases, if not compromised, are generally taken into court which results in delay and expense to both parties, and often the defeat of applicant’s claim. The Legislature, therefore, wisely provided for a compromise, believing it to be to the best interests of the applicant in doubtful cases of liability. In fact a compromise is often reached where the agreement expressly provides that it does not constitute an admission of liability by the defendant-employer. Generally, in such cases the applicant agrees to accept much less than the amount of his claim. Such being the case it is apparent that if a lien is permitted for unemployment disability payments against the amount agreed upon by way of compromise, the incentive to compromise will be greatly minimized and many injured employees will be deprived of the benefits of this remedial statute enacted for their protection. If, as the majority says, *608the Unemployment Insurance Act and the Workmen’s Compensation Act should be construed together as remedial statutes, and as such, must be liberally construed for the purpose of accomplishing their objects, it seems clear that such a construction of the two acts would lead to a holding that the lien provision of the former act would not apply to an award based upon a compromise of liability for the injury for which disability payments were made. Considerations of public policy should dictate that it is of far greater importance, particularly in advancing the social and economic welfare of injured workingmen, to compromise and settle disputed claims for workmen’s compensation, than to permit a few carriers of unemployment disability insurance to recoup their unemployment disability payments from the amount of an award based upon a compromise and thus destroy the incentive to compromise such claims.
Finally, it should be pointed out that even if the majority’s interpretation is correct, the claimant of the lien for disability payments had the burden of establishing the validity of its lien which necessarily required it to establish that Nowak’s injury was compensable, the extent of the disability and the amount of compensation payable. That is true because it is not entitled to the lien unless the award was payable under the workmen’s compensation laws. It has failed to meet this burden, as it offered no evidence on the subject.
I would, therefore, affirm the order of the commission denying petitioner’s lien.
Respondent’s (I.A.C.) petition for a rehearing was denied April 14, 1952. Carter, J., was of the opinion that the petition should be granted.