Lambreton v. Industrial Accident Commission , 46 Cal. 2d 498 ( 1956 )

SCHAUER, J.

Petitioner seeks annulment of an order of respondent Industrial Accident Commission dismissing his claim for the increased compensation provided by section 4553 of the Labor Code in case of serious and wilful misconduct of the employer. The dismissal was based upon the ground that the claim was barred by the limitations provisions of section 5407 of the same code. We have concluded that the claim was propérly dismissed, and that the order should be affirmed.

Section 5407 provides that “The period within which may be commenced proceedings for the collection of compensation on the ground of serious and wilful misconduct of the employer, under provisions of section 4553, is as follows:

“ (a) Twelve months from the date of injury. This period shall not be extended by . . . the filing of application for compensation benefits under other provisions of this division. ’ ’

Petitioner was injured on June 10, 1953. On July 13, 1953, he filed through his attorney an application for compensation benefits on a printed form furnished by the commission and entitled “Application for Adjustment of Claim.” After the printed words alleging that petitioner “sustained injury arising out of and in the course of the employment, as follows:” the following was filled in: “Punch press broke so that it punched twice in rapid succession,” resulting in injury to petitioner’s right hand. The line starting with the printed words “The reason for filing this claim is:” was filled in: “Partial disability of claimant. Claimant alleges that employer was grossly negligent in maintenance of the press.”

The commission gave the parties notice of hearing for September 21, 1953, which stated no issue of serious and wilful misconduct of the employer, but by stipulation of the parties the matter was taken off calendar to be reset at the request of either party. On October 22, 1954, petitioner filed a substitution of attorneys. On December 17, 1954, the new attorney filed on petitioner’s behalf a document entitled “Amendment (By Interlineation)” in which it was stated that in place of the allegation that “Claimant alleges that employer was grossly negligent in maintenance of the press, . . . claimant alleges as follows:” That on the date of injury, June 10, 1953, the employer “Bowers Mfg. Company operated and maintained a certain punch press in its place of manufacturing in violation of section 3601 (b) Title 8, of the California Administration Code, in that all points of operation guards were not properly set up, adjusted or maintained in safe and efficient working order, ’ ’ and that petitioner was injured as “a proximate result of said serious and wilful misconduct.’' It was prayed that in addition to the normal award the employer “be assessed extraordinary damages for serious and wilful misconduct.”

The matter came on for hearing in January, 1955, and the parties appeared, but upon stipulation it was continued to a later date upon all issues. By letter the employer raised the issue of the statute of limitations as to the misconduct issue, pointing out that more than 12 months from the date of injury had elapsed before the employe commenced proceedings to collect compensation for the special liability which is provided for in eases where an employer has been guilty of serious and wilful misconduct. The commission agreed with the employer and on March 4, 1955, the proceeding for benefits based on the asserted misconduct was ordered dismissed.

As ground for annulment of the commission’s order petitioner contends that his first application for benefits, filed July 13, 1953, sufficiently presented the misconduct issue to constitute the commencement of proceedings for the collection of additional compensation by reason thereof, while the employer and the commission urge that the issue was first raised •with the filing of the so-called amendment on December 17, 1954, and that because such filing occurred more than 12 months from the date of injury the misconduct issue was barred by the limitations statute and the application for benefits based thereon was properly dismissed. (See Lab. Code, § 5407.)

In Peterson v. Industrial Acc. Com. (1947), 81 Cal.App.2d 352 [183 P.2d 927], the employe, who was injured in January, 1941, and had received compensation until September 22, 1941, filed his first claim in October, 1941, stating that he “sustained injury ... as follows: the excavation in which applicant was working caved in due to the fact that the walls of the excavation were not properly shored up,” and that the reason for filing the claim was that a question had arisen as to whether “the applicant has recovered and is now able to resume work and does not suffer from any permanent disability.” At a hearing in December, 1941, the referee stated the sole issue was “ nature, extent and duration of disability,” and counsel for all parties agreed. When the employe’s counsel sought to elicit evidence concerning the shoring up the referee said, “That is not in issue. If you want to raise the issue, you will have to do it.” Counsel replied, “Yes, I think we probably should raise that”; the referee then said, “Additional Issue: Was injury proximately caused by serious and willful misconduct of the employer ? ”; and counsel for the employe stated that he would file a supplemental application setting forth the basis on which misconduct was claimed, with particular reference to certain safety orders. No supplemental application was filed, and after several continuances the matter was ordered off calendar in 1942. In 1946 it was again noticed for hearing, a “new” application was seemingly filed, an order was made that “the application will be considered as an amended application,” an additional issue of “statute of limitations’’ was stated, and a hearing was had on all issues, including serious and wilful misconduct. Normal benefits were thereupon awarded, as well as an increased benefit based on the asserted misconduct. On the employer’s petition for review the award of an increased benefit was annulled on the ground that, although “there is, and should be, great liberality in the matter of amendments this amendment in 1946, bringing in a new and different issue which must be separately ‘commenced, ’ could not relate back and be effective as of a date in 1941, in the face of the clear provisions of section 5407 of the Labor Code. While considerable informality in proceedings before the commission is permitted, and properly so, the meaning and effect of these statutory provisions cannot be entirely set aside, and some attempt must be made to comply with them and to raise issues in the manner and within the time there provided.” (Pp. 359-360 of 81 Cal.App.2d.)

In the Peterson ease it would have been more nearly justifiable than in the present one to permit the so-called amendment stating misconduct, to relate back to the original date of filing the claim, inasmuch as there the employer was on specific notice within 12 months from the date of injury that the employe intended to claim serious and wilful misconduct. In the present ease, however, the original claim not only did not state that serious and wilful misconduct was claimed but it expressly stated' that the “employer was grossly negligent in maintenance of the press.” As this court has repeatedly emphasized (see Mercer-Fraser Co. v. Industrial Acc. Com. (1953), 40 Cal.2d 102, 117, 120 [251 P.2d 955]; Hawaiian Pineapple Co. v. Industrial Acc. Com. (1953), 40 Cal.2d 656, 662-663 [255 P.2d 431]; Lynch v. Birdwell (1955), 44 Cal.2d 839, 847-848 [285 P.2d 919]), serious and wilful misconduct means something different from and much more than negligence, however gross; such misconduct is basically the antithesis of negligence; and the two types of behavior are mutually exclusive. It follows that the original claim could not serve as the basis for a later “amendment” setting forth a charge of serious and wilful misconduct which would impose an entirely new and different legal liability on the employer. At no time within 12 months from the date of injury was it even suggested in this case that such a charge would be made.

Petitioner nevertheless, in reliance upon Wennerholm v. Stanford University School of Medicine (1942), 20 Cal.2d 713 [128 P.2d 522, 141 A.L.R. 1358], (see also LeCyr v. Dow, (1939), 30 Cal.App.2d 457, 462-463 [86 P.2d 900]), urges that “Liberality is indulged in by the courts in permitting amendments, and no reason appears why a proceeding before the Industrial Accident Commission should be more technical.” In the Wennerholm case the following appears: “The ground of general demurrer principally urged by the defendants is that the cause of action is barred by the statute of limitations. This contention is based on the theory that the fifth amended complaint charging fraud states a new and different cause of action from that for negligence stated in the original complaint. Unless the amended complaint sets forth an entirely different cause of action from the original, however, the amended complaint, for the purposes of the statute of limitations, must be deemed filed as of the date of the original complaint. [Citations.] The modern rule, where amendment is sought after the statute of limitations has run, is that the amended complaint will be deemed filed as of the date of the original complaint so long as recovery is sought in each complaint upon the same general set of facts. [Citations.] A mere change in legal theory will not subject the amended complaint to the bar of the statute of limitations. [Citations.] In the present case the only substantial difference between the factual situations set forth in the original and the fifth amended complaint is that the former charged that the representations were negligently made while the latter charges that they were made with knowledge of their falsity. Despite the change in legal theory from an action for negligence to one for fraud, it cannot be said that an entirely different cause of action is stated. Therefore the latter complaint is not barred by the statute of limitations. ’ ’ (Pp. 717-718 of 20 Cal.2d; italics added.) And in the Wennerholm case the relief sought by the amended complaint remained the same; i. e., damages for the injuries allegedly ensuing from the misrepresentations.

However, in proceedings before the Industrial Accident Commission, a claim for normal benefits and a claim for increased benefits by reason of serious and wilful misconduct are not sought upon the same general set of facts, nor do they involve merely a difference or change in legal theory. The relief sought is not the same; the legal liability is not the same; and the “proceedings” to recover the benefits as respectively provided are recognized as being different. (Lab. Code, § 5407.) Normal benefits automatically follow from an injury within a covered employment relationship, whereas the additional award based on serious and wilful misconduct of the employer is an additional award which, although denominated and regarded for administrative purposes as “increased compensation,”¹ is actually of the nature of a penalty, which is imposed only in “proceedings” commenced within “Twelve months from the date of injury” (Lab. Code, § 5407), and only upon proof of the aggravated criminal or quasi-criminal behavior which constitutes serious and wilful misconduct, and against which the employer cannot purchase insurance. (Mercer-Fraser Co. v. Industrial Acc. Com. (1953), supra, 40 Cal.2d 102, 108, 121, and authorities there cited; Ins. Code, § 11661.) Thus the two types of benefits are cumulative, rather than merely alternative, and are at least as different in essential supporting facts and legal theory as are negligence and serious and wilful misconduct. As pointed out in Frost v. Witter (1901), 132 Cal. 421, 426 [64 P. 705, 84 Am.St.Rep. 53], “for the purpose of determining whether amendment is possible, the ‘cause of action’ referred to as furnishing the test means only the legal obligation which it is sought to enforce against the defendant.” (Klopstock v. Superior Court (1941), 17 Cal.2d 13, 20 [108 P.2d 906, 135 A.L.R. 318].) Here, as shown above, the legal obligation to pay normal benefits is one obligation, while that to pay additional compensation by reason of serious and wilful misconduct is an entirely distinct and further obligation. From what has been said, it follows that a claim specifically alleging gross negligence not only does not constitute the commencement of proceedings to collect additional compensation based on the statutorily defined misconduct of the employer but implicitly negatives existence of a basis for such proceedings. Hence, the commission, bound by the statute, as are we, correctly held that the misconduct issue was raised too late.

The employer points out, further, that under the provisions of sections 3756 through 3759 of the Labor Code (see also Ins. Code, § 11662)² the insurer will be substituted in place of the employer and the latter dismissed, in proceedings for normal benefits, whereas the employer must himself defend against a claim for extra benefits based on his alleged misconduct, against which, as already mentioned herein, he cannot insure. The legal liabilities or obligations for the two types of benefits are thus again shown to be essentially different. (See Klopstock v. Superior Court (1941), supra, 17 Cal.2d 13, 20.)

By reason of our conclusion that the commission correctly dismissed the proceeding for additional compensation on the ground of serious and wilful misconduct because the so-called “amendment” was filed more than 12 months from the date of injury, no useful purpose would be served by discussing other points raised by the employer.

The order of dismissal is affirmed.

Shenk, J., Traynor, J., Spence, J., and McComb, J., concurred.

1 Such concept was deemed necessary in order to sustain jurisdiction in the Industrial Accident Commission to make the additional award. (E. Clemens Horst Co. v. Industrial Acc. Com. (1920), 184 Cal. 180, 192-193 [193 P. 105, 16 A.L.R. 611].)

2 Insurance Code, section 11662: “Whenever any employer is insured against liability for compensation with any insurer, such insurer is subrogated to the rights of the employer to recover losses arising out of any of the following acts by the insurer:

“(a) Assuming the liability of the employer for compensation in the manner provided by the law relating thereto.

‘(b) Payment of any compensation for which the employer is liable.

“Such insurer may enforce any such subrogated rights in its own name. ’ ’