Settling Cumulative Trauma Claims with Multiple Defendents
A blog post by Sure Log, June 2022
Pursuant to Labor Code 550 0.5(a), liability for a cumulative trauma injury is limited to employers who employed the worker during the one-year period immediately preceding the date of injury (LC 5412), or the last date of injurious exposure, whichever occurs first. Multiple employers or insurers can be liable for a cumulative trauma injury. An employee can choose to obtain an award for her or his entire CT injury from one or more employers for whom they have worked within the preceding year (LC 5500.5(c)).
LC 5005 also allows an employee and any employer to enter into a compromise and release (C&R) agreement settling all or any part of the employee’s claim in cases involving cumulative trauma or occupational disease. If an employer settles all of the applicant’s cumulative trauma claim, it may resort to contribution proceedings against all remaining defendants. If an employee and an employer settle only part of the worker’s CT claim, the worker may recover from other defendants for the portion of exposure not released. So, in cumulative trauma claims involving multiple defendants, the terms of a C&R will determine whether the employee or the settling employer has ongoing rights against the remaining defendants.
The Workers’ Compensation Appeals Board (WCAB) has authority to interpret the terms of a C&R, and it has demonstrated that there must be clear intent within that document to settle the entire claim before it will find that an employee is precluded from pursuing claims against other defendants.
In Bodishbaugh v. Southern Maryland Blue Crabs, Miami Marlins, 2022 Cal. Wrk. Comp. P.D. LEXIS 63, a baseball player claimed a cumulative trauma injury from June 5, 2008 to Aug. 1, 2015 against multiple employers. The applicant entered into a C&R with the with the Southern Maryland Blue Crabs (Blue Crabs) and its insurer. In Paragraph No. 9 of the C&R, it was stated, “Applicant understands and agrees that he is resolving all claims against the employer/carrier related to all body parts mentioned herein, …” It was also stated, “Defendants reserve their right to seek contribution against the Miami Marlins and/or any other joined defendants.” After the C&R was approved, the applicant filed an amended application to add a new defendant. The applicant and two of the remaining defendants disputed whether the C&R intended to settle the entire claim against all defendants or just the applicant’s claim against the Blue Crabs.
The WCAB upheld a decision that the C&R was limited to settlement of his claim against the Blue Crabs and its insurer. The WCAB found that the only parties to the C&R were the applicant and the Blue Crabs. It found that per Paragraph No. 9 of the C&R, the applicant resolved claims against only the employer/carrier named in the C&R; it did not believe that the C&R settled the entire CT claim. It found that the reservation of the right to seek contribution by the Blue Crabs did not change the result, and that an evaluation of the right to contribution was premature. Finally, because the WCAB found no ambiguity in the C&R, it did not consider parol evidence to determine the intent of the parties.
So, the WCAB has concluded that a defendant reserving its right to contribution alone does not mean it’s settling the entire cumulative trauma claim. (See also Ventura v. Dana Point Cleaners, 2019 Cal. Wrk. Comp. P.D. LEXIS 114.) Defendants must do more than that if they want to pursue contribution following a C&R.
Defendants must ensure that the intent to settle the entire claim is expressly stated in the C&R. They should specify that the C&R settles the applicant’s entire claim against all defendants, whether named or unnamed, that the applicant does not have the right to pursue benefits against any remaining defendants, and that only the settling defendant has the right to contribution from the remaining defendants. Otherwise, the WCAB might find that a settling defendant settled only part of the cumulative trauma claim, which would preclude it from seeking contribution from other defendants.
About the Author
Sure Log, of Counsel, is a specialist in workers’ compensation defense and related labor law issues. He analyzes files for litigation and settlement, conducts research, reviews records to facilitate completion of discovery and drafts a variety of documents, including trial and appellate briefs. He was instrumental in a 2009 case that ended vocational rehabilitation in California.
IEA traces its history to our predecessor organization, “The Fire Underwriters Association of the Pacific” (FUAP) created in 1876 in San Francisco, CA after the post Gold Rush building boom. Its stated purpose was the promotion of harmony and good practice among the claims adjusting profession. Over time, we became an all industry, all-lines organization with national outreach across the United States.
Today, we are committed to providing professional development to a changing workforce with changing needs. IEA offers myriad courses, seminars, and on-demand training to meet our students where they are and help them reach their goals. We are proud of our contribution to better risk analysis and high operating standards in the industry.