Chevron U.S.A., Inc. v. Workers' Compensation Appeals Board

MOSK, J.

I dissent.

In what the majority explain as an attempt to avoid a harsh result for the applicant in this matter, they construe Labor Code section 4702, subdivision (a)(4), to provide for a partial dependency death benefit that was not contemplated by the Legislature. Their construction of the provision not only overlooks important historical and contextual evidence of what the statutory text was intended to mean, but results in an anomaly that is inconsistent with the policies underlying our workers’ compensation scheme.

For the reasons discussed below, I conclude that in a case of partial dependency, the Labor Code provides for a death benefit of four times the amount of earnings from employment annually devoted to the support of the partial dependent at the time of the decedent’s injury. (Lab. Code, § 4702, subd. (a)(4).)

I

A brief summary of the relevant background is as follows.

Decedent Harvey Steele, an employee of defendant Chevron, U.S.A., Inc., (hereafter Chevron), filed a claim for workers’ compensation benefits after *1200he was diagnosed with work-related asbestosis. He retired in 1977. On August 12, 1987, he was diagnosed with peritoneal mesothelioma; he died as a result of that illness in November 1987. At the time of the injury resulting in his death, he did not have any earnings from employment, but was receiving pension and Social Security benefits and income from investments and other sources.

In December 1987, decedent’s wife, Lucille, applied for a workers’ compensation death benefit. In June 1989, the Workers’ Compensation Appeals Board (hereafter the board) ordered that the date of injury for the purposes of the death benefits was August 12, 1987. The Court of Appeal affirmed the order. (Chevron U.S.A., Inc. v. Workers’ Comp. Appeals Bd. (1990) 219 Cal.App.3d 1265, 1269-1273 [268 Cal.Rptr. 699].)

In March 1995, the board determined that Lucille, also retired, was only a partial dependent at the time of her husband’s diagnosis with mesothelioma; it was undisputed that she was receiving both Social Security and pension benefits. The board awarded her a death benefit of $64,657.92. It computed the amount based on decedent’s Army pension, Social Security benefits, interest from a savings account, and his community property interest in investment income and in mortgage payments from a debtor.

The Court of Appeal annulled the board’s order, concluding that the amount of death benefit should be based only on the amount of support Lucille lost as a result of decedent’s death. Thus, it concluded, the death benefit should be based only on decedent’s Social Security benefits and Army pension, which terminated at the time of decedent’s death.1

We granted review; I would now reverse.

II

It is undisputed that decedent’s wife was a partial dependent at the time of the injury, i.e., the date when decedent was diagnosed with mesothelioma. Accordingly, the extent of her dependency must be determined by the facts as they existed at that time. (Lab. Code, § 3502.)2

Labor Code section 4702, subdivision (a)(4), in relevant part provides: “[T]he death benefit. . . fl[] . . . ft[] [i]n the case of no total dependents and *1201one or more partial dependents [shall be] four times the amount annually devoted to the support of the partial dependents, but not more than seventy thousand dollars ($70,000), for injuries occurring on and after January 1, 1991 ...”

The provision refers to a benefit for partial dependents of “four times the amount annually devoted to the support of the partial dependents.” (Italics added.) The critical question, then, is “amount” of what? The Court of Appeal concluded that the “amount” consisted of income from any source whatsoever that was “lost” as a result of the employee’s death. Thus, it could be based on decedent’s Army pension and possibly his Social Security benefits—because those benefits would terminate with his death—but could not include any income that would continue to be received by the partial dependent. The majority reject that view, concluding that the “plain meaning” of the phrase “amount annually devoted to the support” necessarily includes all income from any source whatsoever, including investment income and interest from savings, regardless of whether the partial dependent will continue to receive that income after the employee’s death.

I disagree. The phrase “amount annually devoted” is not susceptible of either the Court of Appeal’s or the majority’s broad reading.

The statutory phrase, “amount annually devoted to the support of the partial dependents,” has not changed since 1937, when the statute was first enacted. The original form of the statute was: “The death benefit shall be a sum sufficient to equal: ft¡] (a) In a case of total dependency, three times the average annual earnings of the deceased employee. [^] (b) In a case of partial dependency only, three times the amount annually devoted to support of the dependents by the employee.” (Stats. 1937, ch. 90, § 4702, p. 284.) In context, the term “amount” clearly, though implicitly, meant the “amount of earnings” annually devoted to support of the dependents”—not the amount of all income from any source whatsoever, or even the amount of income from any source whatsoever that was “lost” as a result of the employee’s death.

We so interpreted the statute in Atlantic Richfield Co. v. Workers’ Comp. Appeals Bd., supra, 31 Cal.3d at page 722. There, the death benefit for *1202partial dependents of an employee who died on the job was based on earnings only, not income from any source whatsoever. In construing the statute relating to payment of benefits to partial dependents, we stated: “Commencing with the entire earnings of the decedent, the computation of allowances for actual support should include those fixed expenses which are an integral and reasonable part of the standard of living enjoyed by the community.” (Ibid., italics added.) The “earnings” at issue consisted solely of the decedent’s “salary.” (Id. at p. 719.)

In Power Co. v. Industrial Acc. Com. (1923) 191 Cal. 724 [218 P. 1009], we focused on the character of the income to be considered in determining the extent of partial dependency. We found certain of the decedent’s income to be “disconnected from and far disassociated from his employment and earnings.” (Power Co., supra, 191 Cal. at p. 736, italics added; see also id. at p. 730 [“The fact of [the family members’] dependency on the earnings of the employee, and the degree thereof, must therefore, be determined in accordance with the existing fact at the time of the injury.” (Italics added.)].) We concluded therein that the award of death benefits to the decedent’s partial dependents should be based solely on his earnings from employment, i.e., wages, and could not include his income from other sources or the value of services he rendered to the household.

Spreckels S. Co. v. Industrial Acc. Com. (1921) 186 Cal. 256, 257 [199 P. 8], similarly, describes the purpose of the death benefit as compensating dependents for loss of support, in that case the loss of the decedent’s monthly contribution to his brother’s family to supplement their earnings. “The whole theory of the compensation act as to death cases is that the dependents of the employee killed through some hazard of his employment shall be compensated for the loss of support they were receiving ... at the time of his injury.” (Id. at p. 258; see also Insurance Co. v. Industrial Acc. Com. (1921) 186 Cal. 517, 519 [199 P. 796] [“The purpose of the [workers’ compensation] act is to provide a compensation to the dependent person for the loss such person will sustain because of the death of the decedent.... [T]he loss to be compensated for . . . is to be confined to the loss of support from the decedent.”]; Moore S. Corp. v. Industrial Acc. Com. (1921) 185 Cal. 200, 205 [196 P. 257, 13 A.L.R. 676] [“[T]he benefits of this law are not provided as an indemnity for negligent acts committed or as compensation for legal damages sustained, but [as] an economic insurance measure to prevent a sudden break in the contribution of the worker to [dependent *1203members of] society, by his accidental death in the course of his employment.”] ,)3

To be sure, Labor Code section 4702, subdivision (a), was subsequently amended to provide, in the case of total dependents, for a fixed amount— i.e., one set by statute and not based on annual earnings. (See Stats. 1955, ch. 956, § 6, pp. 1852-1853.) That does not, however, change the meaning of the provision relating to partial dependents which continues to refer to “the amount annually devoted to the support of the dependents.”

The majority acknowledge the fact that “ ‘the amount annually devoted to support of the dependents’ ” meant, as originally enacted, “ ‘the amount of earnings annually devoted to support of the dependents’ ” (maj. opn., ante, at p. 1198). They conclude, however, that subsequent amendments to the statute with regard to benefits for total dependents have “[a]t a minimum” resulted in an ambiguity that must be resolved favorably to decedent’s wife here. This is unpersuasive. There is no ambiguity when the provision for partial dependents is, as it must be, read in the context of its legislative history. As we stated in Nickelsberg v. Workers’ Comp. Appeals Bd. (1991) 54 Cal.3d 288, 298 [285 Cal.Rptr. 86, 814 P.2d 1328], “the rule of liberal construction stated in section 3202 should not be used to defeat the overall statutory framework and fundamental rules of statutory construction.”

The majority also assert that their construction of the term “amount” to mean amount of income from any source whatsoever is supported by the general principle, derived from Labor Code section 3202, that the workers’ compensation law must be liberally construed in favor of extending benefits. (Maj. opn., ante, at p. 1192.) But, like the “plain meaning” rule, that principle does not permit us to ignore the historical and contextual evidence of the statutory language whenever there is any dispute concerning the meaning of a provision. “ ‘[A] rule of construction ... is not a straitjacket. Where the Legislature has not set forth in so many words what it intended, the rule of construction should not be followed blindly in complete disregard of factors that may give a clue to the legislative intent.’ ” (People v. Jones (1988) 46 Cal.3d 585, 599 [250 Cal.Rptr. 635, 758 P.2d 1165].)

*1204When, as here, we can reasonably determine the legislative intent by examining the history and context of the statutory language, we should be guided thereby. The majority offer no sound basis for their conclusion that the Legislature intended that the phrase “the amount” should no longer refer to “the amount [of earnings]” but instead to the amount of income from any source whatsoever, or, alternatively, that the language has been rendered ambiguous and so must be construed to favor the partial dependents. It seems unlikely that the Legislature intended to alter the meaning of the phrase when it changed the method of calculating benefits owed to total dependents. Rather, it appears that the Legislature, content with our interpretation of the phrase in question, retained it unchanged while modifying the remainder of the statute several times over several decades.

Moreover, as the majority read it, the provision computes the level of a benefit based on investment income unrelated to employment. They point to no other provision in the Workers Compensation Act that has a similar effect. Rather, other workers’ compensation benefits are calculated based on the employee’s earnings. (See Lab. Code, §§ 4653, 4654, 4658, subd. (a)(2).) Indeed, under Labor Code section 4702, subdivision (b), “[t]he death benefit in all cases shall be paid in installments in the same manner and amounts as temporary total disability indemnity would have to be made to the employee . . . .” Temporary total disability payments are based on average weekly earnings during the period of such disability. (Lab. Code, § 4653.) They are thus ordinarily calculated based on wage loss.

Nor does the majority’s approach appear consistent with the purpose of the workers’ compensation laws: the partial dependents of an indigent employee unemployed at time of an injury resulting in death will receive nothing, while the partial dependents of an affluent employee also unemployed at the time of an injury resulting in death but who has income from independent sources will receive a benefit tied to how much he or she received from those sources. Moreover, under the majority’s reasoning this peculiar result must apply not only in the relatively rare case of postemployment injury, e.g., from latent disease caused by industrial exposure to asbestos, but equally in the more usual case of an employee dying from an injury on the job. I doubt that this is what the Legislature intended.

In the case of death from an employment-related injury, like mesothelioma, that occurs after retirement—i.e., when the employee is no longer receiving any earnings from employment—construing the provision to refer to “the amount [of earnings]” is a potentially harsh result for partial dependents. That is, while a total dependent would presumably be entitled to the *1205statutory fixed amount, a partial dependent would presumably be entitled to no benefit at all. There is no windfall to the employer, however, who would then be required to pay to the Department of Industrial Relations the amount of the death benefit that would have been payable had the decedent been survived by a totally dependent spouse and no dependent minor children. (Lab. Code, § 4706.5, subds. (a) & (c).)

The Legislature, of course, may not have intended to create a gap in coverage for partial dependents in the case of latent illness. But it is a problem for the Legislature to fix. “[T]he adjustment of workers’ compensation death benefits is properly and primarily a legislative function.” (Atlantic Richfield Co. v. Workers’ Comp. Appeals Bd., supra, 31 Cal.3d at p. 722.) In my view, all we can do without distorting the statutory language and. purpose is call the problem to the Legislature’s attention.

Chin, L, concurred.

The Court of Appeal, in addition, reversed a penalty for alleged unreasonable termination of death benefits by Chevron. Review was not sought on that issue.

Any death benefit in this matter must be based on “the actual amount which the deceased spouse devoted to the community and to the surviving spouse” at the time of the injury leading to death. (Atlantic Richfield Co. v. Workers’ Comp. Appeals Bd. (1982) 31 Cal.3d 715, 722 [182 Cal.Rptr. 778, 644 P.2d 1257].) The Labor Code was amended in 1989, with regard *1201to injuries occurring after January 1, 1990, to provide for a conclusive presumption that a spouse to whom a deceased employee was married at the time of death is wholly dependent for support if the surviving spouse earned $30,000 or less in the 12 months preceding the death. (Lab. Code, § 3501, subd. (b).) The statute thus provides an exception to the rule that all questions regarding the identity of dependents and extent of their dependency are determined as of the date of the employee’s injury.

The Court of Appeal correctly relied on our explanation in Spreckels, supra, 186 Cal. 256, that the purpose of the death benefit is to compensate partial dependents for “loss of support.” It erred, however, in concluding that “loss of support” refers not only to lost earnings from employment, but also may include other “lost” income from any source whatsoever (e.g., pensions and annuities). The majority beg the question, disavowing this court’s previous explanations of the purpose of the compensation act, in Spreckels and other cases, in favor of a less restrictive description of the act as “ ‘designed to mitigate hardship for dependents of . . . employees whose deaths arise out of the course of employment.’ ” (Maj. opn., ante, at p. 1196.)