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State Farm General Insurance Co. v. Workers' Compensation Appeals Board

California Court of Appeals, Second District, Sixth Division

July 1, 2013



Proceeding to review a decision of the Workers' Compensation Appeals Board, Nos. ADJ4684775, ADJ4381820, ADJ7684775.

Finnegan, Marks, Theofel & Desmond, Ellen Sims Langille, for petitioner State Farm General Insurance Company.

Guilford Steiner Sarvas & Carbonara, Richard E. Guilford; Floyd, Skeren & Kelly, James K. Lowery, for respondent California Insurance Guarantee Association.

No appearance for respondent Workers' Compensation Appeals Board.


Labor Code section 5950 provides that any person aggrieved by a final order, decision, or award of the Workers' Compensation Appeals Board (WCAB) may, within the prescribed time limit, apply to the Court of Appeal for a writ of review. Appellate review is limited to final orders that affect a substantial right or liability of a party. (Duncan v. Workers' Comp. Appeals Bd. (2008) 166 Cal.App.4th 294, 299.) The failure of an aggrieved party to seek judicial review of a final order of the WCAB bars later challenge to the propriety of the order or decision before either the WCAB or the court. (Maranian v. Workers' Comp. Appeals Bd. (2000) 81 Cal.App.4th 1068, 1075-1076 (Maranian); see also Safeway Stores, Inc. v. Workers' Comp. Appeals Bd. (1980) 104 Cal.App.3d 528, 532-535.)

This petition for writ of review challenges the WCAB's decision allowing California Insurance Guarantee Association (CIGA) to pursue a claim for reimbursement against State Farm General Insurance Company (State Farm), after the WCAB had previously rejected the claim and CIGA had failed to timely seek judicial review. We conclude that CIGA's claim is barred by principles of res judicata. We annul the WCAB's decision and remand for further proceedings.


On June 8, 1999, and January 20, 2000, Joanne Lutz (applicant) was injured while working as a personal assistant to Linda McDonald, President of Roto Rooter (aka Russell Warner, Inc.). The applicant was on Roto Rooter's payroll at the time. During 1999 and 2000, Roto Rooter was insured for workers' compensation by Fremont Compensation Insurance Company and Paula Insurance Company, respectively. Linda McDonald and her homeowner's insurance carrier, State Farm, were joined as additional parties to the applicant's claim.

In February of 2002, at a mandatory settlement conference, the parties disputed the issues of employment and which insurance carrier should be responsible for coverage of the applicant's claim, i.e., whether the applicant was working as a domestic employee of McDonald at the time of her injuries such that State Farm should provide coverage for her claim, or whether she was employed by Roto Rooter.

On March 15, 2002, in lieu of trial, the parties entered into "Joint Stipulations With Request for Award." The parties stipulated that the applicant was employed by Roto Rooter and Linda McDonald, and "sustained injury arising out of and in the course of employment." Paula Insurance Company agreed to administer all benefits under the award, and under any future award. State Farm agreed to "indemnify and/or contribute 25% of all incurred benefits paid to or on behalf of applicant (including, but not limited to TD [temporary disability], PD [permanent disability], medical treatment, and vocational rehabilitation), as to injuries of 6/8/99 and 1/20/00. [¶] Paula Ins. reserves its right to seek contribution from Fremont Compensation Ins. Co." That same day, Workers' Compensation Judge (WCJ) William Carero approved the award allocating liability between the parties. No party sought reconsideration of the award and, consequently, it became final between these parties.

In June of 2002 and July of 2003, Paula Insurance Company and Fremont Insurance Company, respectively, were liquidated. CIGA assumed administration of the claim. Since then, State Farm has been reimbursing CIGA for 25 percent of all benefits paid to the applicant.

In September of 2003, CIGA filed a petition for dismissal, arguing it should be dismissed because Paula Insurance Company had not provided workers' compensation coverage for residential or domestic employees. State Farm opposed the petition, contending the evidence supported a finding of employment by Roto Rooter and coverage, and that the March 15, 2002, stipulated award was final and binding on CIGA. The record before us discloses no action on this petition.

In February of 2008, five years later, CIGA sought to be relieved as administrator of the applicant's claim. CIGA filed a declaration of readiness with the WCAB, stating that the parties were unable to "resolve the dispute concerning employment as a domestic employee versus employment with Roto Rooter." CIGA requested resolution of the questions (1) "whether State Farm homeowner's insurance qualifies as 'other insurance' to make the claim against CIGA a non-covered claim per Insurance Code section 1063.1"; ...

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