ADJ11880536 — California WCAB decision

What the panel ordered

May 8, 2025 Findings and Order rescinded; matter returned to WCJ for further proceedings consistent with opinion.

Petition for Reconsideration of May 8, 2025 Findings and Order granted; May 8, 2025 F&O rescinded and matter returned to WCJ for further proceedings.

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What was disputed, and how it came out

Each issue the panel decided, with the reasoning it gave. An outcome is what this panel did on this record — not a rule, and not a prediction.

ApportionmentRemandedmultiple body parts

The WCAB found the WCJ's Findings and Order lacked sufficient findings on key issues such as the size of the recovery, amount of credit, and whether the credit is immediately allowable, and found the WCJ's reliance on the defense expert's comparative negligence report flawed. The WCAB rescinded the F&O and remanded for further proceedings to clarify these issues and develop the record further.

From the decision · page 1OPINION AND ORDER GRANTING PETITION FOR RECONSIDERATION AND DECISION AFTER RECONSIDERATION

The facts that decided it

What the panel treated as outcome-determinative, and which side it favoured.

The rules the panel named

Authorities as the decision cited them, with how this panel applied each one.

Labor Code section 3861

Labor Code Section 3861 authorizes credit to employer against compensation liability for employee's third party recovery, less expenses and attorneys' fees.

Applied to determine employer's right to credit against compensation liability.

From the decision · page 6Proceeding to the merits, Labor Code Section 3861 authorizes the Appeals Board to "allow, as a credit to the employer to be applied against his liability for compensation, such amount of any recovery by the employee for his injury, either by settlement or after judgment, as has not theretofore been applied to the payment of expenses or attorneys' fees, pursuant to the provisions

Associated Construction & Engineering Co. v. Workers' Comp. Appeals Bd. (Cole) (1978) 22 Cal.3d 829

Concurrent negligence bars employer's right to credit; Board must determine employer's fault degree and total damages to apply credit proportionally.

Applied to require Board to determine employer's fault and total damages before awarding credit.

From the decision · page 7In Associated Construction & Engineering Co. v. Workers' Comp. Appeals Bd. (Cole) (1978) 22 Cal.3d 829, the California Supreme Court observed "that the concurrent negligence of the employer bars his right to a credit against his liability for compensation for the amount of any recovery for his injury obtained by the employee by settlement of his cause of action against third parties; and [] that where the employer's negligence has not been adjudicated in such third party action, the applicant is entitled to have it adjudicated before the Board." (Id. at p. 835.) Accordingly, "[w]hen the issue of an employer's concurrent negligence arises in the context of his credit claim based on a third party settlement, the board must determine the appropriate contribution of the employer since the employee's recovery does not represent a judicial determination of tort damages. Specifically, the board must determine (1) the degree of fault of the employer, and (2) the total damages to which the employee is entitled. The board must then deny the employer credit until the ratio of his contribution to the employee's damages corresponds to his proportional share of fault." (Id. at p. 843.)

Martinez v. Associated Engineering and Construction Co. (1979) 44 Cal.Comp.Cases 1012

Shifting burdens of proof for credit claim: defendant must show third party settlement and benefits paid; applicant must prove employer negligence; then applicant must prove total damages.

Applied to outline burdens of proof for credit claim under Labor Code section 3861.

From the decision · page 7One year later, we issued our en banc decision in Martinez v. Associated Engineering and Construction Co. (1979) 44 Cal.Comp.Cases 1012, wherein we described the shifting burdens of proof necessary to effectuate the analysis described in Cole, supra:

Hamilton v. Lockheed Corporation (2001) 66 Cal.Comp.Cases 473 (Appeals Board en banc)

Decisions must be based on admitted evidence and supported by substantial evidence; WCJ must clearly designate evidence basis in opinion on decision.

Applied to require WCJ to clearly designate evidence basis for decision to allow meaningful reconsideration.

From the decision · page 8reconsideration is sought, to ascertain the basis for the decision, and makes the right of seeking reconsideration more meaningful." (Hamilton v. Lockheed Corporation (Hamilton) (2001) 66 Cal.Comp.Cases 473, 476 (Appeals Board en banc), citing Evans v. Workmen's Comp. Appeals Bd. (1968) 68 Cal.2d 753, 755 [33 Cal.Comp.Cases 350, 351].) A decision "must be based on admitted evidence in the record" (Hamilton, supra, at p. 478), and must be supported by substantial evidence. (Lab. Code, § 5903, 5952, subd. (d); Lamb v. Workmen's Comp. Appeals Bd. (1974) 11 Cal.3d 274 [39 Cal.Comp.Cases 310]; Garza v. Workmen's Comp. Appeals Bd. (1970) 3 Cal.3d 312 [35 Cal.Comp.Cases 500]; LeVesque v. Workers' Comp. Appeals Bd.

What proof carried it

The evidence the panel weighed, by kind.

Documentary evidencefavours Applicant prevailed

Rejection of additional exhibits related to third party contribution and total damages as not necessary, which the WCAB found relevant and improperly excluded.

From the decision · page 12This evidence was found inadmissible by the WCJ on the basis that was "not necessary to the proceedings." However, the presence of another third party who contributed to the settlement is certainly relevant to the analysis required to determine ACS' share of comparative negligence. We therefore cannot agree with the WCJ's stated rationale for refusing to admit this evidence.

expert methodologyfavours Defendant prevailed

WCJ's decision to discount applicant's expert and endorse ACS' expert on comparative negligence, despite flaws in ACS' expert report.

From the decision · page 9Turning to the specific legal standard governing the credit claim, we note that there are gaps in the evidence, of varying degrees of seriousness, with regard to the first, third and fourth prongs of the Martinez test. At a more basic level, the WCJ's decision to discount the conclusions of applicant's comparative negligence expert and endorse those of ACS' does not appear to align with the WCJ's actual findings as to comparative negligence, which if anything seem to endorse the reasoning of applicant's expert more than ACS', albeit while finding a much lower level of negligence than advocated for by applicant's expert.

Documentary evidencefavours neutral

Evidence of net recovery amount and issues regarding allocation of recovery between applicant and his wife affecting credit calculation.

Documentary evidencefavours Applicant prevailed

Lack of evidence on benefits paid by ACS making credit award premature.

From the decision · page 12Finally, the WCJ noted that no evidence was submitted as to the actual extent of benefits already paid by ACS. In the absence of such evidence, award of a credit was premature, as a credit is only awardable once the defendant has paid more in benefits than its comparative share of the negligence. Although it appears that substantial payments have been made in this case thus far, proof of those payments must actually be submitted before defendant can be found entitled to a credit. (See Cole, supra, 22 Cal.3d 829 at 834.)

ADJ11880536 · August 1, 2025

What the panel ordered

What was disputed, and how it came out

The facts that decided it

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The rules the panel named

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