California Insurance Guarantee Ass'n v. Workers' Compensation Appeals Board

Filed 3/22/16 CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION ONE

CALIFORNIA INSURANCE B263869 GUARANTEE ASSOCIATION, (W.C.A.B. Nos. ADJ7167413, Petitioner, ADJ7167333)

v.

WORKERS’ COMPENSATION APPEALS BOARD et al.,

Respondents.

PROCEEDINGS to review a decision of the Workers’ Compensation Appeals Board. Order annulled. Guilford Sarvas & Carbonara, Frank E. Carbonara, Richard E. Guilford; Benthale, McKibbin & McKnight, Robert A. Mata for Petitioner. Anne Schmitz, James T. Losee, Margaret W. Hosel for Respondent Workers’ Compensation Appeals Board. ___________________

Two insurers, Care West Pegasus Modesto (Care West) and Ullico Casualty Company (Ullico), were jointly and severally liable for claims arising from an employee’s workplace injury. In a compromise and release agreement, they settled the employee’s claims and apportioned between themselves roughly 50/50 liability for any remaining third party charges.1 When Ullico became insolvent and was liquidated, responsibility for third party claims against it was assumed by the California Insurance Guarantee Association (CIGA), which the Legislature established in 1969 to protect against loss to insureds “arising from the failure of an insolvent insurer to discharge its obligations under its insurance policies.” (Ins. Code, §§ 119.5, 1063, et seq.; Isaacson v. California Ins. Guarantee Assn. (1988) 44 Cal.3d 775, 784.) CIGA moved to be dismissed from the instant workers’ compensation cases on the ground that it was authorized to pay only “covered claims,” from which the Legislature expressly excluded any “claim to the extent it is covered by any other insurance.” (Ins. Code, §§ 1063.1, subd. (c)(9), 1063.2, subd. (a).) CIGA argued Care West’s policy constituted “other insurance” that covered third party claims. The Workers’ Compensation Appeals Board (the Appeals Board) denied CIGA’s motion on the ground that the Care West/Ullico agreement limited Care West’s liability to roughly half of any third party claims, thereby rendering Care West’s insurance unavailable as to the remaining half. CIGA petitioned for a writ of review, contending the CareWest/Ullico agreement did nothing to change the “several” nature of Care West’s obligation, under which Care West was liable for 100 percent of the lien claims, with contribution rights against Ullico’s estate, not CIGA. We summarily denied the petition, but the Supreme Court granted review and remanded the case to us with directions to hear the matter on the