City & County of San Francisco v. Workmen's Comp. Appeals Bd.

269 Cal. App. 2d 382, 74 Cal. Rptr. 810, 34 Cal. Comp. Cases 97, 1969 Cal. App. LEXIS 1658

• Court: California Court of Appeal
• Decided: February 4, 1969
• Docket: Civ. 25592; 25593; 25594
• Status: Published

Opinions

ELKINGTON, J.

These three proceedings for review of Workmen’s Compensation Appeals Board awards have been consolidated for the purpose of hearing and disposition by this court.

City and County of San Francisco Police Officers Thomas J. Guzzetti (1 Civ. 25592), Frank E. Swall (1 Civ. 25593) and Robert J. Morey (1 Civ. 25594) died as a result of injuries received during the course and scope of their employment. Each officer left surviving him a wife and two or more children under the age of 18 years. Pursuant to the city’s charter each widow for more than 10 years has been receiving a monthly allowance because of the circumstances of her husband’s death. Within the past two years each of the officers’ widows and children has applied for workmen’s compensation benefits based on the officers’ injuries and deaths.

In the proceedings below, the appeals board concluded that by virtue of Labor Code section 5406¹ the widows and all of the then adult children against whom the one year statute of .limitations had run were barred from any award. However, in each ease, the entire maximum allowable statutory death benefit was-awarded to the surviving child or children as to. whom the statute of limitations had not run.

San Francisco’s charter, section 168.1.6, provides that the - portion of any allowance which is paid to or on account of a “person” because of a policeman’s death resulting from ’ injury received in the performance of duty, ‘1 shall be considered as in lieu of any benefits . . . payable to or on account of such persons [sic] under the [Workmen’s Compensation Law] -of the State of California, and shall be in satisfaction and discharge of the obligation of the city and county to pay such benefits.”²,³

In the hearings before the appeals board, San Francisco contended that by virtue of section 168.1.6 of its charter, it .-was entitled to credit the widows’ monthly death allowances heretofore, and currently being paid, against the workmen-’s compensation awards it was required to pay to the respective -minor children. The appeals board denied such credit.

In proceedings 1 Civil 25592 (Guzzetti) and 1 Civil 25594 (Morey) San Francisco seeks review of the described awards . to--.the minor • children which include orders of the appeals board denying any credit therefor under the city’s charter. In proceeding 1 Civil 25593 (Swall) review is sought only of the order denying the city such credit; the award there is now :. final and is not before us for consideration.

San; Francisco’s first .contention here is that the appeals board acted in excess of its powers and abused its discretion in denying credit for death allowances' paid ánd. payable to the police officers’ widows against the minor childrén’s workmen’s compensation awards.

There seems to be little question of the right of a, municipality, under an appropriate charter provision, to take credit for death allowances paid or payable to the same pefson who is the beneficiary of a workmen’s compensation award against the city resulting from the same death. (See City of Los Angeles v. Industrial Acc. Com. (Morse) 63 Cal.2d 263 [46 Cal.Rptr. 110, 404 P.2d 814]; City of Los Angeles v. Industrial Acc. Com. (Fraide) 63 Cal.2d 242 [46 Cal.Rptr. 97, 404 P.2d 801]; Stafford v. Los Angeles etc. Retirement Board, 42 Cal.2d 795 [270 P.2d 12]; Lyons v. Hoover, 41 Cal.2d 145 [258 P.2d 4]; Healy v. Industrial Acc. Com., 41 Cal.2d 118 [258 P.2d 1] ; City of Oakland v. Workmen’s Comp. App. Bd., 259 Cal.App.2d 163, 166-167 [66 Cal.Rptr. 283].) But here we are dealing with a different matter—an attempt to take credit for death allowances payable to a person'-other than the recipient of the workmen’s compensation award.

We are required to liberally construe San Francisco’s charter in order to carry out the beneficial purposes of its pension provisions. (Lyons v. Hoover, supra, 41 Cal.2d 145, 149; McKeag v. Board of Pension Comrs., 21 Cal.2d 386, 390 [132 P.2d 198].)

As we have previously noted, San Francisco’s charter section 168.1.6 provides that the portion of any death allowance paid “to or on account of” a “person . . . shall be considered as in lieu of any [workmen’s compensation] benefits . . . payable to or on account of such persons [sic].” (Italics added.) It seems to us that the more probable and reasonable meaning to be gleaned from this language is that credit against death allowances is permissible only for payments on a workmen’s compensation award to the samé person who receives the death allowances.

The obvious purpose of San Francisco’s charter is to provide a monthly living allowance to the widow of a police officer who dies in the line of duty. If we accept the instant contention of the city we must infer an intent to deprive the widow of this living allowance until such time as the payments she would otherwise have received equal the amount of a workmen’s compensation award paid to third persons.⁴ This period could cover months and even years. Such a construction is unreasonable and unacceptable.

Lyons v. Hoover, supra, 41 Cal.2d 145, 148, concerned a charter provision of the City of Sacramento substantially comparable to that of San Francisco. It provided: “ ‘That portion of any allowance payable because of the death ... of [an] employee . . . shall be reduced ... by the amount of any [workmen’s compensation] benefits payable to or on account of such person, . . .’⁵ An effort was made to credit the portion of a workmen’s compensation award paid to a child against his mother’s pension allowance. The court stated (pp. 148-149) : “It is clear that if a widow receives all of a compensation award, the portion of her pension allowances provided by the city’s contributions can be reduced until the sums withheld equal the total amount of the award. Where, however, a widow receives only part of the award, the critical question is whether the city may take from her pension the amount of compensation payments made to third persons. The charter provides that a pension may be reduced by the amount of any compensation benefits payable on account of the death of an employee and declares that it is the intent that payments under the workmen’s compensation law shall be a deductible credit against any allowance under the retirement system. This provision might be construed as contemplating a deduction from a widow’s pension of the total amount of an award made to her and third persons, but it also may reasonably be construed as authorizing a deduction from her pension of only such compensation payments as she is entitled to receive. The further statement that double payments shall not be permitted may likewise be reasonably construed as prohibiting duplicate payment of a pension allowanee and compensation benefits to the same person, but not as requiring deduction from one person's pension of compensation benefits awarded to others. ’ ’ Giving to the charter provision a construction that the widow’s pension allowances may be offset only against workmen’s compensation payments that she was entitled to receive, the court refused to allow the demanded credit. (See also Barnett v. Brizee, 258 Cal.App. 2d 97 [65 Cal.Rptr. 493].)

We believe the rationale of Lyons v. Hoover, supra, to be controlling and applicable here. Accordingly, we hold in the instant case that the appeals board did not act in excess of its powers, or abuse its discretion, in denying credit for death allowances paid or payable to the police officers’ widows against the workmen’s compensation awards to their children.

The remaining contentions of San Francisco relate only to Guzzetti (1 Civ. 25592) and Morey (1 Civ. 25594). They do not apply to the now final award in Swall (1 Civ. 25593).

The first of these contentions is based on the provision of Labor Code section 5406 which, as previously indicated, provides: “No such proceedings [for workmen’s compensation death benefits] may be commenced more than one year after the date of death, nor more than 240 weeks from the date of injury.” Each of the instant proceedings was commenced more than one year after the officer’s death and more than 240 weeks from the date of his injuries. Therefore, insists the city, the claims here at issue are barred by the applicable statute of limitations section 5406.

This argument ignores the provisions of Labor Code section 5408. The section recites as relevant: “If an injured employee or, in the ease of his death, any of his dependents, is under twenty-one years of age or incompetent at any time when any right or privilege accrues to such employee or dependent under this division, a general guardian, appointed by the court, or a guardian ad litem or trustee appointed by the commission or a commissioner may, on behalf of the employee or dependent, claim and exercise any right or privilege with the same force and effect as if no disability existed. [¶] No limitation of time provided by this division shall run against any person under twenty-one years of age or any incompetent unless and until a guardian or trustee is appointed. . . Here the respective proceedings were commenced contemporaneously with the appointment of guardians ad litem, and during the minority of the recipients of the awards. The claims are therefore not barred.

We shall now consider San Francisco’s contention that the appeals board acted in excess of its powers and abused its discretion in awarding the entire allowable death benefit to the Guzzetti minor child ($8,750) and the Morey minor child ($15,000).

The question of dependency under the workmen’s compensation law is ‘1 determined in accordance with the facts as they exist at the time of the injury of the employee.” (Lab. Code, §3502; Granell v. Industrial Acc. Com., 25 Cal.2d 209, 214 [153 P.2d 358].) At the time of his death Police Officer Guzzetti left surviving him his wife and two children under the age of 18 years. Officer Morey was survived by his wife and three minor children. By virtue of Labor Code section 3501 each of these survivors was “conclusively presumed to be 'wholly dependent for support upon [the deceased police officer]. ’ ’

• Labor Code section 4703 provides, as applicable here: “Subject to the provisions of section 4704, this section shall determine the right to a death benefit. ... If there is more than one person wholly dependent for support upon a deceased employee, the death benefit shall be divided equally among them.” (Italics added.) Section 4704 provides, as relevant: “The commission may set apart or reassign the death benefit to any one or more of the dependents in accordance with their respective needs and in a just and equitable manner, and may order payment to a dependent subsequent in right, or not otherwise entitled thereto, upon good cause being shown therefor.” (Italics added.)

The parties concede that no showing was made below that the' needs of the youngest child in either of the instant cases was any greater than the needs of the other surviving dependents.

It is the clear intent of the statute that wholly dependent survivors shall share equally unless the appeals board in its discretion shall determine that their respective needs differ. Upon such a determination the apportionment must be made “in a just and equitable manner.” Speaking of the parent statute to section 4704 (with substantially the same language), the court in Pacific Gas & Elec. Co. v. Industrial Acc. Com., 124 Cal.App. 303, 307 [12 P.2d 647], stated, “ [W]e think it is beyond debate that it designated prima facie who should receive benefits, but that it also vested in the Commission a discretion to change or vary from the statutory rule as the circumstances might demand.” Referring to the same earlier statute the court in Perry v. Industrial Acc. Com., 176 Cal. 706, 710 [169 P. 353], stated: “The question [of] what disposition in any particular case is in proportion to the respective needs of the dependents and just and equitable is, of course, one of fact, the determination of which is committed to the commission, and in its determination the commission is necessarily invested with a large discretion. ’ ’

The wide discretion exercised by the appeals board is nevertheless a “judicial discretion” to b.e exercised according to the fixed principles applying to courts generally. (See Martin v. Alcoholic Beverage etc. Appeals Board, 55 Cal.2d 867, 875 [13 Cal.Rptr. 513, 362 P.2d 337].) Martin, iterating principles earlier announced by the court, stated (p. 875): “ ‘The mere fact that a court may have jurisdiction to make an order does not equip it to exercise judicial discretion. Its acts must not only be confined within the field of discretion but must also be of a character within the bounds of the limiting adjective “judicial.” To exercise that power all the material facts in evidence must he hoth known and considered, together also with the legal principles essential to an informed, intelligent, and just decision. . . .’ ” (Italics of preceding sentence supplied.)

By virtue of section 4703, such facts as were in evidence before the appeals board, indicate equal entitlement of all dependents, widows and children, as of the dates of the police officers’ injuries and deaths, to the death benefit awards. Section 4704 allows setting aside or reassignment- of such death benefits, to any one or more of the dependents in accordance with their respective needs and in a just and equitable manner. It does not appear that the appeals board’s decisions were reached in the informed, intelligent and just manner, after consideration of all material facts, as required by Martin v. Alcoholic Beverage etc. Appeals Board, supra. Nor can it be said that the setting aside or reassignment was made to the dependents in accordance with their respective needs or in a just and equitable manner as required by Labor Code section 4704. Instead the entire awards seem to have been made to the respective minor children in order to deny to San Francisco the benefit of the statute of limitations (Lab. Code, § 5406) which could have been asserted against other dependents who, under the law and the evidence, were equally-entitled to share the awards.⁶

We must and do conclude, under the facts and circumstances of the two cases immediately before us, that the awards therein were unreasonable, an abuse of discretion and in excess of the power of the appeals board. This conclusion in no way abridges the power of the appeals board, here, or in any other case, in its discretion and on a proper record to set apart or reassign a death benefit award as permitted by section 4704.

We have been asked to consider the power of the appeals board, in proceedings subsequent to its awards, to “set apart and reassign” under section 4704 such portions of the death benefits in 1 Civil 25592 (Guzzetti) and 1 Civil 25594 (Morey) which, but for the statute of limitations (§ 5406), would already have been paid to the widows and other dependents.

It is urged that later reassignments of such portions to a dependent against whom the statute of limitations has not run would operate to deny to San Francisco the benefit of the statute of limitations. Further it is insisted that a reassignment of benefits which would previously have been paid to the widows had the statute not run, and against which the city could have taken credit on its pension allowances, would frustrate the double recovery provisions of the city’s charter.

It appears to us that this question should be resolved; otherwise in these as well as in other eases, future litigation probably will result. (See Lowe v. Ruhlman, 67 Cal.App.2d 828, 833-834 [155 P.2d 671].)

It has been held that statutes of limitations “are vital to the welfare of society and are favored by the law ... to be viewed as statutes of repose, and as such constitute meritorious defenses.” (Fontana Land Co. v. Laughlin, 199 Cal. 625, 636 [250 P.2d 669, 48 A.L.R 1308]; Scheas v. Robertson, 38 Cal.2d 119, 125-126 [238 P.2d 982].) The right of a person to defeat the assertion of a stale claim against which the statute has run, is in the nature of a “vested right.” (Security First Nat. Bank v. Sartori, 34 Cal.App.2d 408, 414 [93 P.2d 863]; Hendershott v. Shipman, 124 Cal.App.2d 561, 564 [269 P.2d 113].)

Labor Code section 5409 provides that the statute of limitations prescribed by section 5406 “operates to bar the remedy and not to extinguish the right. ’ ’ (Italics added.)

The right of each dependent, whether or not as to him or her the statute of limitations has run, is the right to an equal portion of the death benefit as provided by section 4703, unless the appeals board for good cause sets apart or reassigns as permitted by section 4704.⁷

Labor Code section 4702 provides that “The death benefit in all cases shall be paid in installments in the same manner and amounts as temporary disability indemnity, payments to be made at least twice each calendar month, unless the appeals board otherwise orders.” Sections 4650-4653 relate to the “manner and amounts” of temporary disability indemnity payments. Generally they provide that the amount of such payments is 65 percent of the average weekly earnings of the employee (§ 4653), that payments shall be made for the period commencing on the eighth day after the injury becomes permanent (§4650), and not less frequently than twice in each calendar month (§ 4651).

It thus appears that while by virtue of section 4704 the dependents have no right to fixed and certain future payments, they do have a right, as they become due, to the amounts fixed by sections 4650-4653, or as otherwise ordered by the appeals board under section 4702.

Each dependent having a right to such amounts as they become due, it follows that it is beyond the power of the appeals board to thereafter set apart or reassign the sum of the past due amounts. The fact that any dependent has lost the remedy to compel payment by the city cannot reasonably enlarge the power of the appeals board.

Upon further proceedings the appeals board, in its awards, will apportion the shares of all dependents in the manner provided by sections 4703-4704. Thereafter, in its discretion, as permitted by law and section 4704, the appeals board may set apart or reassign the share of any dependent ; provided, however, that as to any dependent whose remedy is barred by the statute of limitations, the amount then subject to such setting apart or reassignment shall be no more than the fund which would have remained had death benefit payments in fact been made to such barred dependent from the date of the award.

Our resolution of this point gives full effect to the right of the. appeals board to set apart or reassign under section 4704. It also renders San Francisco not liable for compensation payments to which the barred widow and children have acquired a “right,” thus giving effect to the “double recovery” provisions of the city’s charter.

The awards of the Workmen’s Compensation Appeals Board in 1 Civil 25592 (Guzzetti) and 1 Civil 25594 (Morey) are annulled; the appeals board will take further proceedings therein not inconsistent with the views herein expressed. The order in 1 Civil 25593 (Swall) denying credit for death allowances paid or payable to Phyllis C. Swall, against workmen's compensation benefits payable to, or for the benefit of, certain children of Frank E. Swall, is affirmed.

Molinari, P. J., concurred.

1 Labor Code section 5406, as applicable here, provides that a workmen’s compensation proceeding may not "be commenced “more than one year after the date of death, nor more than 240 weeks from the date of injury. ’ ’

3 The so-called ‘ ‘ Fraide formula ’ ’ devised by the court in City of Los Angeles v. Industrial Acc. Com. (Fraide) 63 Cal.2d 242 [46 Cal.Rptr. 97, 404 P.2d 801], to cover situations where death allowances result in part from contributions made by the police officer, concededly does not- here apply.

4 Since a “dependent” need not be a member of the decedent’s immediate household (see 55 Cal.Jur.2d 86, 92), such a construction could result in the tolling of a widow’s death allowance until the withheld payments equal a compensation award to a non-family dependent.

5 The full text of Sacramento’s charter section 173, subsection (j) (see Lyons v. Hoover, supra, 41 Cal.2d 145, 148) follows: “ ‘That portion of any allowance payable because of the death or retirement of any such employee which is provided by contributions of the City shall be reduced, in the manner fixed by the City Council, by the amount of any benefits payable to or on account of such person, under the Workmen’s Compensation, Insurance and Safety Law of the State of California. It is the express intent that payments under said Workmen’s Compensation, Insurance and Safety Law shall be a deductible credit against any allowance under the Retirement System which is provided by contributions of the City payable to or on account of the death of any such person; that double payments, in whole or in part, at the expense of the taxpayers, shall not be permitted. ’ ’ ’

6 We note that in the Swall proceedings (1 Civ. 25593) discussed ante, that the entire maximum allowable award also was made to the only-dependents against whom the statute of limitations had not run at the time of the commencement of the proceedings.

7 If the benefits are in fact set apart or reassigned under section 4704, the respective rights of the dependents would, of course, be determined by that order.