ADJ2648786 · January 22, 2024

The WCAB found that the requirements for collateral estoppel were not met because the prior court decision was not final and on the merits.

From the decision · page 5above were contained within the superior court judge's Addendum to Notice of Intended Decision. The evidentiary record before us does not reflect the final decision of the judge, or a subsequent entry of judgment. Accordingly, we cannot conclude that the issue of misappropriation of funds was necessarily decided in the former proceedings, or that the determination was final and on the merits. (Pacific Lumber, supra, at p. 943.) Because the requirements necessary to assert issue preclusion/collateral estoppel have not been met, we will amend the WCJ's Findings of Fact to reflect that applicant's claim of misappropriation of her worker's compensation settlement proceeds is not precluded under the doctrine of collateral estoppel.

The WCAB lacks authority to order disgorgement of funds by guardian ad litem and does not have jurisdiction over the alleged misappropriation issue.

From the decision · page 5Pursuant to Labor Code section 5300,1 the WCAB has exclusive jurisdiction to adjudicate the "recovery of compensation, or concerning any right or liability arising out of or incidental thereto" of injuries that "arise out of and in the course" of employment," and that "[c]ompensation includes medical treatment, temporary disability indemnity, permanent disability indemnity, SJDB vouchers, and death benefits... In other words, the WCAB maintains exclusive jurisdiction pursuant to the California Constitution and section 5300 to adjudicate workers' compensation disputes." (Dennis v. State of California (2020) 85 Cal.Comp.Cases 28 [2020 Cal. Wrk. Comp. LEXIS 1] (Appeals Board en banc).) The Appeals Board has continuing jurisdiction over all its orders, decisions, and awards made and entered. (Lab. Code, § 5803.) The Appeals Board may rescind, alter, or amend any order, decision, or award, for good cause. (Lab. Code, § 5803.)

The guardian ad litem was appointed on June 24, 1999, after the Compromise and Release was approved.

Favours Defendant prevailed

This timing means the guardian was not a party to the settlement and the WCAB lacks authority over his receipt of funds.

The prior Superior Court decision on misappropriation was not final and on the merits.

Favours Applicant prevailed

Therefore, collateral estoppel does not bar applicant's claim.

From the decision · page 5above were contained within the superior court judge's Addendum to Notice of Intended Decision. The evidentiary record before us does not reflect the final decision of the judge, or a subsequent entry of judgment. Accordingly, we cannot conclude that the issue of misappropriation of funds was necessarily decided in the former proceedings, or that the determination was final and on the merits. (Pacific Lumber, supra, at p. 943.) Because the requirements necessary to assert issue preclusion/collateral estoppel have not been met, we will amend the WCJ's Findings of Fact to reflect that applicant's claim of misappropriation of her worker's compensation settlement proceeds is not precluded under the doctrine of collateral estoppel.

Labor Code section 5300

The WCAB has exclusive jurisdiction over workers' compensation disputes under Labor Code section 5300 and the California Constitution.

Applied to determine the scope of WCAB jurisdiction over the misappropriation claim.

From the decision · page 5Pursuant to Labor Code section 5300,1 the WCAB has exclusive jurisdiction to adjudicate the "recovery of compensation, or concerning any right or liability arising out of or incidental thereto" of injuries that "arise out of and in the course" of employment," and that "[c]ompensation includes medical treatment, temporary disability indemnity, permanent disability indemnity, SJDB vouchers, and death benefits... In other words, the WCAB maintains exclusive jurisdiction pursuant to the California Constitution and section 5300 to adjudicate workers' compensation disputes." (Dennis v. State of California (2020) 85 Cal.Comp.Cases 28 [2020 Cal. Wrk. Comp. LEXIS 1] (Appeals Board en banc).) The Appeals Board has continuing jurisdiction over all its orders, decisions, and awards made and entered. (Lab. Code, § 5803.) The Appeals Board may rescind, alter, or amend any order, decision, or award, for good cause. (Lab. Code, § 5803.)

Labor Code sections 5803 and 5804

The WCAB may rescind, alter, or amend any order, decision, or award for good cause but not after five years from the date of injury except for enforcement purposes.

Applied to limit the WCAB's authority to alter the Compromise and Release after five years.

From the decision · page 5Pursuant to Labor Code section 5300,1 the WCAB has exclusive jurisdiction to adjudicate the "recovery of compensation, or concerning any right or liability arising out of or incidental thereto" of injuries that "arise out of and in the course" of employment," and that "[c]ompensation includes medical treatment, temporary disability indemnity, permanent disability indemnity, SJDB vouchers, and death benefits... In other words, the WCAB maintains exclusive jurisdiction pursuant to the California Constitution and section 5300 to adjudicate workers' compensation disputes." (Dennis v. State of California (2020) 85 Cal.Comp.Cases 28 [2020 Cal. Wrk. Comp. LEXIS 1] (Appeals Board en banc).) The Appeals Board has continuing jurisdiction over all its orders, decisions, and awards made and entered. (Lab. Code, § 5803.) The Appeals Board may rescind, alter, or amend any order, decision, or award, for good cause. (Lab. Code, § 5803.)

Smith v. Workers' Comp. Appeals Bd. (1985) 168 Cal.App.3d 1160

An approved Compromise and Release is a final judgment with res judicata effect after five years, and may only be set aside for fraud or mistake.

Applied to conclude the finality of the Compromise and Release agreement.

From the decision · page 5However, section 5804 provides that "No award of compensation shall be rescinded, altered, or amended after five years from the date of the injury." "An approved workers' compensation compromise and release rests `upon a higher plane than a private contractual release; it is a judgment, with "the same force and effect as an award made after a full hearing."'" (Smith v. Workers' Comp. Appeals Bd. (1985) 168 Cal.App.3d 1160, 1169, quoting Johnson v. Workmen's Comp. App. Bd. (1970) 2 Cal.3d 964, 973.) Consequently, after the five year period has expired, the Order Approving Compromise and Release constitutes a final judgement with the full effect of res judicata. (Smith v. Workers' Comp. Appeals Bd., supra, 168 Cal.App.3d at p. 1169.) Therefore, after five years, an award may only be set aside on the showing of fraud or mistake. (Id.)

Barnes v. Workers' Comp. Appeals Bd. (2000) 23 Cal.4th 679

The WCAB's jurisdiction to enforce awards extends beyond the five-year limit for rescinding awards.

Applied to explain the WCAB's continuing jurisdiction to enforce awards but not to alter them after five years.

From the decision · page 6In contrast to the limitations imposed by the statute on the Appeals Board to set aside an entire award, the Appeals Board continues to have jurisdiction after five years to enforce its awards. (Barnes v. Workers' Comp. Appeals Bd. (2000) 23 Cal.4th 679, 687 [65 Cal.Comp.Cases 780].) That is, the WCAB's jurisdiction to enforce an award extends beyond section 5804's five- year limitations period because an order ascertaining and fixing the exact amount of liability does not rescind, alter or amend any prior award in violation of section 5804. (Id.) Consequently, collateral changes may be made to an award so long as the merits of the basic decision determining the worker's right to benefits are not altered, and the amount of benefits remains unchanged. (Hodge v. Workers' Comp. Appeals Bd. (1981) 123 Cal.App.3d 501, 509 (Hodge); see Garcia v. Industrial Acci. Com. (1958) 162 Cal.App.2d 761, 767.)

Superior Court decision was not final and on the merits, so collateral estoppel does not apply.

From the decision · page 5above were contained within the superior court judge's Addendum to Notice of Intended Decision. The evidentiary record before us does not reflect the final decision of the judge, or a subsequent entry of judgment. Accordingly, we cannot conclude that the issue of misappropriation of funds was necessarily decided in the former proceedings, or that the determination was final and on the merits. (Pacific Lumber, supra, at p. 943.) Because the requirements necessary to assert issue preclusion/collateral estoppel have not been met, we will amend the WCJ's Findings of Fact to reflect that applicant's claim of misappropriation of her worker's compensation settlement proceeds is not precluded under the doctrine of collateral estoppel.