Marsh & McLennan, Inc. v. Superior Court

MOSK, J.

I dissent. In my view, Mrs. Silvestri is entitled to bring an action at common law against Marsh & McLennan because it is an independent contractor, and therefore an entity “other than the employer.” (Lab. Code, § 3852.)1

The majority are critical of the decision in Dill v. Claims Admin. Services, Inc. (1986) 178 Cal.App.3d 1184 [224 Cal.Rptr. 273] (hereafter Dill), but they fail to note that Dill was based on our decision in Unruh v. Truck Insurance Exchange (1972) 7 Cal.3d 616, 625-626 [102 Cal.Rptr. 815, 498 P.2d 1063] (hereafter Unruh). Dill’s application of Unruh was entirely correct. The holding of the majority is in conflict with our holding in that case.

In Unruh the plaintiff, who had been awarded benefits for workers’ compensation, brought an action at common law for damages she suffered when a private investigator named Baker, employed by the insurer, acted improperly in conducting an investigation as to the extent of her disability. She brought suit not only against the insurer, but also against two of its agents, and Baker as well. This court held that the agents and Baker “are clearly not the employer’s insurers and . . . are subject to civil suit as third parties. *12Defendant Baker, the investigator employed by . . . [the insurer] is also subject to civil suit as a third party .... We, therefore, conclude that the . . . defendants, other than . . . [the insurer] are persons ‘other than the employer’ within the meaning of section 3852, against whom plaintiff was entitled to bring an action for damages . . . .” (7 Cal.3d at pp. 625-626.)

Dill simply applied this holding to an independent claims administrator, concluding that it, too, is a “person other than the employer.”

The majority conclude that the court in Dill erred in focussing on sections 38502 and 3852 “because the exclusive remedy doctrine also stems from sections 5300 and 5814, which refer to the ‘recovery of compensation’ and the ‘payment of compensation.’ ” (Maj. opn., ante, at pp. 7-8.) But this is entirely a bootstrap argument. Mrs. Silvestri is not seeking to recover compensation from Marsh & McLennan, but is seeking relief in an action at common law. Therefore, the fact that these statutes relegate her to the workers’ compensation system for the recovery of compensation does not prevent the filing of an action for damages at common law against a defendant who is not an “employer.”

A further ground on which the majority base their conclusion is that the 10 percent penalty imposed on the employer (or the insurer) for compensation benefits “unreasonably delayed or refused” (§ 5814) will deter independent claims administrators from such misconduct because an employer required to pay the penalty for the administrator’s dereliction will “most likely request reimbursement from the administrator.” (Maj. opn., ante, at p. 8.) But the same may be said of any agent of the insurer. Nevertheless, the fact that the employer might hold the agent responsible did not deter our court in Unruh from holding that the insurer’s agents and Baker were “persons other than the employer” for purposes of section 3852.

The majority’s final reason for failing to follow the holding of Dill is that a private investigator, held liable in a common law action in Unruh, has more narrow duties than a claims administrator. I fail to see how this provides a reason for holding that a claims administrator is not a “person other than the employer,” while a private investigator, employed by the insurer to investigate a workers’ compensation claim, is such a person. Moreover, in Unruh we held the agents of the insurer were also liable for civil damages.

It seems unavoidable to me that the holding of the majority that “the workers’ compensation system encompasses all disputes over coverage and payment” (maj. opn., ante, at p. 8) is contrary to Unruh. In Unruh as well *13as in this case, the worker had been awarded compensation. The claims made by the worker in Unruh arose out of the acts of the investigator in the course of attempting to cast doubt on the worker’s claim for compensation. She allegedly suffered mental distress when the films taken during the surveillance were shown at a hearing in the workers’ compensation proceeding. These acts were clearly “disputes over coverage and payment” of workers’ compensation benefits, yet they were nevertheless held to be cognizable in a civil action against the insurer’s agents and the investigator hired by the insurer. How can it be said, therefore, as do the majority, that “all disputes over coverage and payment” of benefits must be brought under the workers’ compensation system?

Finally, the majority unjustifiably take judicial notice of the “fact” that the “firms often use the appellations ‘administrator’ and ‘adjuster’ interchangeably and that the activities of the two types of businesses often overlap.” (Maj. opn., ante, fn. 9, at p. 8.) These matters are not “[fjacts and propositions of generalized knowledge that are so universally known that they cannot reasonably be the subject of dispute.” (Evid. Code, § 451, subd. (f).) In the absence of evidence, the subject was apparently unknown to the trial judge and to the justices of the Court of Appeal—and I confess it is not within my “generalized knowledge.”

I would hold that the Court of Appeal correctly denied the petition for a writ of mandate.

Section 3852 provides in part: “The claim of an employee ... for compensation does not affect his or her claim or right of action for all damages proximately resulting from the injury or death against any person other than the employer . . . .”

All statutory references hereafter are to the Labor Code unless otherwise specified.

Section 3850 provides in part: “As used in this chapter: ...(b) ‘Employer’ includes insurer . . . .”