Fidelity & Casualty Co. of New York v. Workers' Compensation Appeals Board

Opinion

FLEMING, Acting P. J. Petitioner Fidelity and Casualty Company of New York (Fidelity) contends the Workers’ Compensation Appeals Board erred in assessing a 10 percent penalty in the amount of $2,383.38 pursuant to Labor Code section 58141 based upon the entire amount of a [194]multiparty compromise and release ($23,833.83) rather than Fidelity’s specified total contribution of $406.06 on the settlement. Fidelity does not here contend that it did not, in fact, unreasonably delay prompt payment of its share of the settlement, but contends the penalty should have been only $40.61 rather than $2,383.38.

Relevant Facts;

Respondent Bobby Joe Hart (Hart) in June 1975, filed with the appeals board an application for adjudication of claim alleging injury in his lungs as a result of his job exposure to fiberglass dust particles for various employers during the period 1954 through April 13, 1971. Numerous employers and insurance carriers were named as parties defendant for the above mentioned period of employment including F & F Heating Company, whose workers’ compensation insurance carrier was petitioner Fidelity for part of the time Hart was employed by F & F Heating Company.

As the result of negotiations among the numerous parties to Hart’s claim a settlement was reached in the total amount of $23,833.83. The settlement compromise and release documents specified the exact amount of the respective contribution to be made by each insurance carrier participating in the settlement. The settlement papers stated Fidelity’s contribution was to be $406.06., On May 24, 1976, the settlement papers were submitted to. the workers’ compensation judge for 2 On August 9, 1976, the judge issued an order approving compromise and release (Order). The Order directed each participating carrier to pay the respective amount it had agreed to pay in the compromise and release documents. Thus, the Order directed Fidelity to pay directly to Hart the amount of $406.06. Fidelity' did not pay its $406.06 share until December 3, 1976.

A hearing regarding the late payment was eventually held. The judge held a penalty was warranted against Fidelity and assessed a 10 percent penalty payable by Fidelity computed upon Fidelity’s share of $406.06 [195]