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.
Cal.Rptr.3d 356] APPEAL from a judgment of the Superior Court
of San Diego County, Katherine A. Bacal, Judge. Reversed.
(Super. Ct. No. 37-2016-00004801-CU-IC-CTL)
[Copyrighted Material Omitted]
[Copyrighted Material Omitted]
[Copyrighted Material Omitted]
Offices of Adrienne Dee Cohen, Santa Ana, Adrienne D. Cohen
and Julie R. Ursic, for Plaintiff, Cross-defendant and
Sam G. Sherman, San Diego, 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’ [254 Cal.Rptr.3d 357] 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.
Defendants 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 Knowles’s injury.
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.
FACTUAL AND PROCEDURAL BACKGROUND
Knowles Is Injured and Files a Workers’ Compensation
Knowles 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 [254 Cal.Rptr.3d 358] 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."
Knowles 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
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.
July 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 from
then turned to insolvency insurer CIGA for reimbursement.
CIGA denied [254 Cal.Rptr.3d 359] coverage in May 2014,