A superior court could decide a factual issue necessary to determine coverage under an excess workers’ compensation insurance policy, even if the superior court’s finding might contradict a stipulated fact in an earlier workers’ compensation proceeding. (California Insurance Guarantee Association v. San Diego County School Risk Management Joint Powers Authority (2019) — Cal.App.5th —)
Facts
The Mountain Empire Unified School District (the District) is a lawfully self-insured employer under the workers’ compensation statutes. For workers’ compensation liabilities above $100,000, the District procured excess workers’ compensation policies, including a Kemper Insurance Company (Kemper) excess policy that was in effect from July 2002 to July 2003 and a Swiss Re Group (Swiss Re) excess policy that was in effect from July 2003 to July 2004.
Colleen Knowles worked as bus driver for the District. Between 1995 and 2002, Knowles suffered various work-related injuries. In May 2003, Knowles submitted a claim for workers’ compensation benefits to the District. In the claim form, Knowles listed tendonitis in her right arm and carpal tunnel syndrome in her right wrist from “repeated usage over a long period of time from 1995 to 2003.” Doctors who examined Knowles issued reports stating that Knowles was suffering pain from “repetitive overuse.” In February 2004, Knowles was placed on a modified work schedule, and in June 2004, Knowles ceased working for the District.
Knowles filed an application for adjudication before the Workers’ Compensation Appeals Board (WCAB). Initially, the District asserted that Knowles suffered from a “cumulative injury.” However, later, Knowles and the District stipulated that Knowles had suffered a “specific injury” in May 2003 (a date encompassed only by the Kemper excess policy). A workers’ compensation judge approved the parties’ stipulation and entered an award in favor of Knowles.
Thereafter, the District started paying workers’ compensation benefits to Knowles. Once the District had paid $100,000 to Knowles, the District sought reimbursement under the Kemper excess policy. Kemper reimbursed the District $207,908 until 2013, when Kemper was declared insolvent.
At that point, the District submitted a claim to the California Insurance Guarantee Association (CIGA) for the amount the insolvent Kemper owed. However, CIGA denied the District’s claim on the ground that it was not a “covered claim” under the CIGA statutes. Specifically, CIGA asserted that Knowles had not actually suffered a “specific” injury only during the Kemper policy period, but rather had suffered a “cumulative” injury during both the Kemper and Swiss Re policy periods. CIGA thus asserted that the District could pursue other available insurance – namely, coverage under the Swiss Re policy.
CIGA filed a declaratory relief action against the District, seeking a determination that the District’s reimbursement claim was not a covered claim because Knowles suffered a cumulative injury for which other insurance is available. The District cross-complained against CIGA, seeking reimbursement of funds paid to Knowles after Kemper went insolvent.
The District moved for summary judgment, arguing that the superior court lacked jurisdiction to determine that Knowles suffered a cumulative injury, as this fact had already been settled before the WCAB. The superior court granted the District’s motion. CIGA appealed.
Holding
The Court of Appeal reversed. According to the appellate court, the WCAB had jurisdiction to determine the threshold question of whether Knowles was entitled to compensation from the District. However, the superior court had jurisdiction to determine the separate question of whether the District was entitled to indemnity under the excess policy issued by Kemper and/or the excess policy issued by Swiss Re.
Here, the WCAB had approved a stipulation that Knowles had suffered a specific injury (which if true meant that the District was entitled to indemnity only under the Kemper policy). Nevertheless, under these circumstances, the superior court had jurisdiction to determine that Knowles had actually suffered a cumulative injury (such that the District would potentially be entitled to indemnity under both the Kemper policy and the Swiss Re policy). If both policies were triggered, then the District’s claim would not be a “covered claim” under the CIGA statutory scheme, because a “covered claim” does not include a claim that is covered by other insurance.
Comment
Courts have rejected exclusive WCAB jurisdiction in actions that do not implicate the payment of benefits to the injured worker. Here, the District’s obligation to pay benefits to Knowles would remain the same even if the superior found that Knowles suffered a cumulative injury rather than a specific injury. CIGA’s action only concerned who – as between the District, CIGA, and Swiss Re – would bear the ultimate cost of the District’s compensation obligation. Accordingly, CIGA’s action did not fall within the WCAB’s exclusive jurisdiction.