California Court of Appeals Holds Good Cause Existed to Reopen a Case Involving Disability Award Due to Change in Injured Employee’s Disability

A case before the California Court of Appeal addressed the circumstances in which a stipulated award could be rescinded or revised.  In this workers’ compensation lawsuit, the parties had entered a stipulation based on the evidence demonstrating the injured plaintiff’s temporary disability.  At the time, a test had been completed showing a different disability level, but the results of that test were not factored into the award. The employee petitioned to reopen, on the grounds that his condition had worsened.  On appeal, the court found the employee had shown that the award should have been revised because it was inequitable.

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Leopoldo Benavides, a roofer, fell off an angled roof in the course of his job, fracturing his ankle and injuring his back.   An agreed medical evaluator (AME) evaluated Mr. Benavides and found that his lumbar spine had a compression fracture, and he had residual weakness in his right ankle. He gave a 21 percent whole person impairment for Mr. Benavides’ spine.

Mr. Benavides underwent an abnormal electromyography (EMG) test, performed before the stipulated judgment was entered. Then, the parties entered a stipulated award, reflecting an agreement between the parties that Mr. Benavides’ injury left him 51 percent permanently disabled.  A few years later, Mr. Benavides filed a petition to reopen, on the grounds that his condition had worsened, and his disability exceeded the earlier rating.  The Workers’ Compensation Judge granted his petition.

Mr. Benavides was evaluated again by the AME, and in this report, the doctor stated that Mr. Benavides’ condition had not changed since his earlier injury.  Mr. Benavides had undergone an EMG evaluation, and the doctor noted the finding that he had nerve pain and spine weakness, but the doctor did not attach significance to the findings. The doctor modified his opinion of Mr. Benavides’ whole person impairment rating to 30 percent for the spine.  The doctor acknowledged that the decline in Mr. Benavides’ condition took place before the stipulated award had been entered.

The case went to trial, and the judge found that Mr. Benavides had not sustained a new disability. Mr. Benavides then filed for reconsideration, and the Workers’ Compensation Judge vacated his initial decision and found that Mr. Benavides should be rated as 72 percent permanently disabled.

The appeals board disagreed.  The majority held that the decline in Mr. Benavides’ condition took place before the award was entered.  There was not a showing of “good cause” to reopen the case, and there was no showing that the new evidence could not have been presented before the hearing for the award.

The dissent noted that in fact the doctor had given his award report without making a request for an EMG. The Workers’ Compensation Judge had approved the parties’ settlement because they did not know that an EMG existed that showed the worsened nature of Mr. Benavides’ spinal cord. The dissent stated there was good cause to reopen the case because this mistake made the parties’ settlement agreement inequitable.

On appeal, the Second District Court stated that Section 5803 governs the jurisdiction of the board to revise awards upon a showing of good cause. This “good cause” includes fresh evidence previously undiscovered, as well as other factors not known at the time of the original award.  When an award is based on a stipulation, that stipulation may be rescinded or reopened if it was entered through a mistake of law or fact. Here, the parties held the right to reopen the case if there was a change in disability.

Decisions by an appeals board or a workers’ compensation judge must be supported by substantial evidence in light of the record.  Here, Dr. Sohn failed to request an EMG. Later, he stated his opinion on the EMG’s impact on Mr. Benavides’ permanent disability rating. The appellate court stated that substantial evidence failed to support the appeals board’s decision denying the petition to reopen.

The Workers’ Compensation Appeals Board’s decision was annulled. The court remanded the case with directions to reinstate the workers’ compensation award entered on April 19, 2013.

At Sharifi Firm, our injury attorneys help employees who have suffered injuries from workplace accidents assert their claims for compensation. We provide a free, confidential consultation and can be reached by calling 866-422-7222.

More Blog Posts:

California Court Provides Leave to Amend Complaint When Plaintiff Potentially Alleged Non-Preempted Claim Under Workers Compensation Act, Southern California Injury Lawyer Blog, January 7, 2016

California Court Holds State Workers’ Compensation System Provides Injured Employees Ample Opportunity for Review and Does Not Violate State Constitution, Southern California Injury Lawyer Blog, November 17, 2015

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