California Court of Appeals, Fourth District, First Division
CALIFORNIA INSURANCE GUARANTEE ASSOCIATION, Plaintiff, Cross-defendant and Appellant,
SAN DIEGO COUNTY SCHOOLS RISK MANAGEMENT JOINT POWERS AUTHORITY et al., Defendants, Cross-complainants and Respondents.
from a judgment of the Superior Court of San Diego County
37-2016-00004801-CU-IC-CTL Katherine A. Bacal, Judge.
Offices of Adrienne Dee Cohen, Adrienne D. Cohen and Julie R.
Ursic for Plaintiff, Cross-defendant and Appellant.
TencerSherman, Sam G. Sherman and Jessica L. Mulvaney for
Defendants, Cross-complainants and Respondents.
bus driver Colleen Knowles sought workers' compensation
from her employer, Mountain Empire Unified School District
(the District). The District is a self-insured employer under
the workers' compensation scheme, and its workers'
compensation claims are administered through the San Diego
County Schools Risk Management Joint Powers Authority (JPA).
JPA purchased excess workers' compensation insurance to
cover claims exceeding a set retention. The District is an
additional insured under those policies.
dispute over compensation arose, Knowles and the District
sought adjudication before the Workers' Compensation
Appeals Board (WCAB). An administrative law judge ultimately
approved their stipulation that Knowles suffered a
"specific" injury on May 6, 2003. The distinction
between a "cumulative" and a "specific"
injury matters for determining which of JPA's
excess insurance policies was triggered. As JPA's excess
insurer during the stipulated injury date, Kemper Insurance
Company (Kemper) indemnified JPA until it went insolvent. JPA
then approached California Insurance Guarantee Association
(CIGA), a statutorily created insolvency insurer of last
resort, to make up what Kemper had failed to pay.
CIGA is only obligated to pay "covered claims,"
defined to exclude claims for which other insurance is
available. (Ins. Code, § 1063.1, subd. (c)(9).) On this
basis CIGA denied coverage, asserting Knowles suffered a
cumulative injury, which meant that JPA might
recover from a different excess insurer (other than
Kemper). CIGA sued JPA and the District (collectively,
defendants) for declaratory relief, asserting that because
Knowles suffered a cumulative injury, JPA's claim was not
a "covered claim." In their cross-complaint,
defendants sought reimbursement from CIGA of benefit payments
made to Knowles after Kemper went insolvent.
moved for summary judgment on the complaint and
cross-complaint. The trial court granted both motions and
entered judgment in their favor, requiring CIGA to reimburse
$129, 836.91 plus costs. Central to the court's ruling,
and to CIGA's appeal, is a jurisdictional question: Does
the superior court have jurisdiction to find that Knowles
suffered a cumulative injury even if this conflicts with the
stipulation before the WCAB, or is injury characterization an
issue within the WCAB's exclusive jurisdiction? The court
granted defendants' motions because it believed the WCAB
had exclusive jurisdiction to decide the nature of
this issue appears to be one of first impression in
California, federal courts have rejected WCAB exclusivity in
similar cases involving excess workers' compensation
insurance. (San Francisco BART Dist. v. General
Reinsurance Corp. (N.D.Cal. 2015) 111 F.Supp.3d 1055,
1074 (BART I), affirmed (9th Cir. 2017) 726
Fed.Appx.. 562 (BART II); San Diego Cty. Schs.
Risk Mgmt. Joint Powers Auth. v. Liberty Ins. Corp.,
et al. (2018) 339 F.Supp.3d 1019, 1030
(Liberty).) For reasons we explain, we agree with
these authorities and conclude based on the purpose of excess
insurance that the superior court has jurisdiction to
characterize Knowles's injury in this action differently
than was reflected in the WCAB stipulation. Accordingly, we
reverse the judgment and direct the court to enter a new
order denying defendants' motions for summary judgment.
AND PROCEDURAL BACKGROUND
Knowles Is Injured and Files a Workers' Compensation
began working for the District as a substitute school bus
driver in 1986 and became a permanent driver in 1993. She
injured her elbow in 1995 and felt muscle strain after bus
accidents in 1998 and 2002. Her upper body pain seemed to
worsen in 2002 and early 2003.
6, 2003, Knowles informed her supervisor that she was
experiencing pain. The supervisor told her to fill out a
claim form for workers' compensation benefits. She did so
a week later, listing tendonitis in her right elbow from
"repeated usage over a long period of time [from] 1995
to 2003." Her supervisor filed a contemporaneous report
likewise attributing Knowles's injury to "repeated
use over a long period of time." Following a medical
evaluation, Knowles was placed on a modified work schedule in
February 2004. She filled out an amended claim form in March
listing tendonitis in her right elbow and carpal tunnel
syndrome in her right wrist, again from "repeated use
over a long period of time [from] 1995−2003."
worked a modified schedule from February 2004 until her last
day on June 16, 2004. In September, she submitted a third
claim form indicating she had suffered an injury on May 6,
2003, in her "right upper extremity−neck"
from driving a bus. As Knowles would later explain, May 6 was
simply the date she reported the pain to her supervisor, not
the date of any specific workplace injury. Medical reports
consistently stated Knowles had pain from "repetitive
September 3, 2004, Knowles filed an Application for
Adjudication before the WCAB. In its July 2005 answer, the
District accepted her right elbow injury but disputed
injuries to her neck and upper extremities. It also disagreed
she was injured on May 6, 2003, stating Knowles had
instead suffered "CT [cumulative trauma] ending on
05/06/03." Dr. Gregory Mack performed an Agreed Medical
Evaluation in 2006 to resolve disputed issues regarding
Knowles's injuries. Knowles continued to seek treatment
over the next several years.
2011, Knowles and the District signed a Stipulation and
Request for Award in the WCAB action. Notwithstanding the
District's prior objection, the parties stipulated that
Knowles suffered a "specific injury" on May 6,
2003, to her shoulder, wrist, upper extremities, and neck.
They further agreed on a payment schedule to cover
Knowles's temporary and permanent disabilities. A
workers' compensation judge entered an Award (hereafter
Award) in August 2011, indicating by checking a box that he
had approved the parties' factual stipulations.
Kemper Provides Excess Coverage for JPA
District is a lawfully self-insured employer under the
workers' compensation scheme. (Lab. Code, §
3700.) It is a member of JPA, which
administers a self-insurance program for workers'
compensation claims involving its members. JPA, in turn,
opted to purchase excess workers' compensation insurance.
(§ 3702.8, subd. (c).) The District is an additional
insured on JPA's excess insurance policies.
the WCAB Award, JPA tendered compensation to Knowles and
sought reimbursement from its excess carrier, Kemper.
Kemper's policy covered JPA from July 2002 to July 2003,
meaning it was in effect on the May 6, 2003 stipulated
specific injury date. (JPA previously satisfied the
self-insured retention of $100, 000 on the Kemper policy.)
Kemper made payments totaling $207, 908 until 2013, when it
After Kemper's Insolvency, JPA Seeks Reimbursement
then turned to insolvency insurer CIGA for reimbursement.
CIGA denied coverage in May 2014, explaining there was no
evidence Knowles had suffered a specific
injury. If her injury was found to be
cumulative, CIGA believed that JPA could pursue other
available insurance-namely, under the Swiss Re Group (Swiss
Re) excess workers' compensation insurance policy that
covered JPA from July 2003 to June 30, 2004.
November 2015, defendants filed a request for
"Reimbursement by CIGA" in the WCAB. The WCAB
corrected the original Award in April 2016 to reflect that
the District was "Self-Insured," delete the
erroneously named insurance carrier, and indicate that the
District would be the responsible party under the Award. The
amendment did not affect the parties' stipulation that
the Award was for a "specific injury" occurring on
May 6, 2003. CIGA was not joined as a party to the WCAB
action until May 6, 2016.
in February 2016, CIGA filed this action in superior court.
It sought declaratory relief that JPA's reimbursement
request is not a covered claim because Knowles suffered a
cumulative injury for which other insurance is available. The
parties agreed in October 2016 to stay WCAB proceedings
pending resolution of the superior court action. Defendants
answered the complaint and filed a cross-complaint for
reimbursement of funds paid to Knowles after Kemper went
The Motions for Summary Judgment
filed motions for summary judgment on the complaint and
cross-complaint. They argued the court lacked jurisdiction to
determine Knowles suffered a cumulative injury, as this fact
had already been settled before the WCAB. The court agreed,
distinguishing BART I, supra, 111 F.Supp.3d