13i' WORKERS' COMPENSATION APPEALS BOARD STATE OF CALIFORNIA. Case No. ADJ (ANA ) 4 icarlota BAHNEY,

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1 WORKERS' COMPENSATION APPEALS BOARD STATE OF CALIFORNIA 4 icarlota BAHNEY, Case No. ADJ (ANA ) 5 Applicant, OPINION AND DECISION 6 vs. AFTER RECONSIDERATION 8 PROULX MANUFACTURING CO.; TRAVELERS PROPERTY CASUALTY 9 CORPORATION; APPLIED WORKFORCE 1 SOLUTIONS; CALIFORNIA INSURANCE SGUARANTEE ASSOCIATION for 2:d 13i' RELIANCE NATIONAL, in liquidation, by INTERCARE INS., Defendant(s). 14 We previously granted the petition of defendant special employer Proulx Manufacturing 15: Co. (Proulx) and its workers' compensation insurer on the dale of applicant's injury, Travelers I 61 17V 18i Property Casualty Corporation (Travelers), for reconsideration of the August Findings and Order of the Arbitrator who found that "Since Travelers provided 'other insurance' for Proulx." the California Insurance Guarantee Association (CIGA), "is entitled to reimbursement for benefits 19! inadvertently paid to applicant" after the insolvency of Reliance National Insurance Company 2 D' (Reliance), the workers' compensation insurer for applicant's general employer on the date of her 1: injury. Allied Workforce Solutions (Allied). 22i Earlier. on or about July 27, 2006, applicant's claim of industrial injury to her right foot, 23'1ý back and psyche while employed by Allied as general employer and by Proulx as special employer 24! on July 27, 2000, was settled by compromise and release. Thereafter, CIGA petitioned for 25 contribution to obtain reimbursement of benefits it provided applicant after Reliance became 26i insolvent, and the case was referred to an arbitrator appointed pursuant to Labor Code section

2 52 75(a). 2 Travelers and Proulx contend that Proulx agreed with Allied that Allied would provide 3 workers' compensation insurance for the employees it sent to work for Proulx, and for that reason 4 it should not be found liable to provide contribution to CIGA for workers' compensation benefits provided by CIGA to applicant after Reliance became insolvent. 6 We have carefully reviewed the record and considered the petition for reconsideration and 71 the Arbitrator's Report and Recommendation on Petition for Reconsideration (Report) with respect 8 to the contentions raised in that petition. For the reasons stated by the Arbitrator in his Report, 9 which is incorporated by this reference, and for the reasons stated below, we affirm the August 7, Findings and Order as our decision after reconsideration. III This case. was previously before us on separate petitions for reconsideration by Travelers 12! and CIGA from a Septenber 5, 2008 Findings and Order of a different arbitrator, who also found 131: that CIGA was entitled to reimbursement from Travelers. In our December 1, 2008 Opinion and 141 Order Granting Reconsideration and Decision After Reconsideration, which is incorporated by this.51 reference, we granted reconsideration and rescinded the earlier September 5, 2008 decision of that 16ll arbitrator because a summary of evidence had not been prepared and the record that was available 17 did not allow us to fairly consider the issues presented. The case was returned for development of I a proper record before a new arbitrator and for a new decision. 19l Following return of the case, the new Arbitrator was selected by the parties and a hearing 2 01 was conducted on July 9, Thereafter, the Arbitrator issued the August 7, 2009 decision as 211 described above. A transcript of the July 9, 2009 hearing was prepared, and it was reviewed as part 22 of our consideration of defendant's petition. 23, In his Report. the Arbitrator reasons thai Travelers failed to meet its burden of proving that 241 Proulx had a-oreed with Alliance that only Alliance's workers' compensation carrier, Reliance, 25. would be liable for injuries to the special employees it was providing Prouix. Travelers argues in 2 6' its petition that the Arbitrator did not properly weigh the evidence presented at the July 9, ~ Labol Code section 5275(a) proides in full as follows: "(a) Disputes involving the following issues shall be submitted for arbitration: (1) Insurance coverage. (2) Right of contribution in accordance with Section 550C.5." BAHNEY. Carlota 2

3 1 hearing, particularly the testimony of Richard Proulx, the president of Proulx. As argued by 2 Travelers, the fact that Proulx and Alliance agreed that Alliance's workers' compensation carrier 3 would be solely liable for industrial injuries to all the special emiployees provided by general 4 employer Alliance to special employer Proulx is dispositive of CIGA's claim for reimbursement. 5 This is incorrect. Aside from the issues of proof discussed by the Arbitrator in his Report, the C intent of the general and special employers is only one factor to be considered in assessing CIGA's 7 liability. (Miceli i). Jacu[zi, Inc. (2006) 71 Cal.Comp.Cases 599 (Appeals Board en banc) (Miceli 8 ilt).) This is because the general and special employers are jointly and severally liable for 9 applicant's injury, and because CIGA is not an insurance carrier and the limits of its liability were 1 0Qi prescribed bx the Legislaturc when it was created. i1i I 2h CIGA is a statutorily-mandated involuntary association of insurers. (Ins. Code, 1063.) Its duties and obligations are imposed by statute and not by contract. (Isaacson v. Cahjibrnia Ins. 131 Guarantee Assn. (1988) 44 Cal. 3d 775, 791.) CIGA does not "stand in the shoes" of the insolvent 14! insurer, and is only authorized to pay "covered claims"' as defined by the statute. (Calilfýrnia Ins. 15i[ Guarantee Assn v. iorkers' Co. Appeals Bd. (1992) 10 Cal. App. 4th 988, : Savlin California Ins. Guarantee Assn. (1986) 179 Cal.App.3d 256, 262; c.f. California Ins. Guaranmee 17 Assn. v. Workers' Comp. Appeals Bd. (Weirzman) (2005) 128 Cal. App. 4th Cal.Comp.Cases 556] (Weitzman); Califbrnia Ins. Guarantee Assn. v. Workers' Comn. Appeals Bd. I9ý; (HWooen) (2005) 128 Cal.App.4thl 569 [70 Cal.Comp.Cases 551] (Hooten); California Ins. 23: Guarantee Assn. v. Workers' Comp. Appeals Bd. (Hernande:) (2007) 153 Cal.App.4th 524 [72 11; Cal.Comp.Cases 910] (Hernandez).) 22 ~ The relevant statutory provision concerning CIGA's liability in this case is hisurance Code 231; section (c)(9), which provides in pertinent part, "'Covered claims' does nior include (i) any 24 claim to the extent it is covered by ono other insurance of a class covered by this article aaiiahle 25 to the claimant or insured..." (Emphasis added.) 2 61 As discussed by the Arbitrator in his Report, the liability of general and special employers 27ý for workers' compensation benefits is joint and several. (Fireman's Fund Indem. Co. v. Stare BAHNEY, Carlota 3

4 i Compensarion Ins. Fund (Smith) (1949) 93 Cal.App.2d 408 [14 Cal.Comp.Cases 180].) The 2 insurer of the general employer ordinarily carries the liability for industrial injuries. (his. Code, ; c.f. Old Dominion Freighl Lines v. Workers' Comp. Appeals Bd. (Garrido) (2003) 68 4 Cal.Comp.Cases 1236 (writ den.).) 2 However, in this case Reliance, the workers' compensation 5 insurer of general employer Alliance, became insolvent. Thus, the issue of CIGA's liability and 6 the liability of Travelers as the workers' compensation insurer of special employer Proulx must be considered in light of the limitation of CIGA's liability to "covered claims," as expressed by the 8 Legislature in Insurance section (c)(9). 9 1Here, CIGA met its initial burden of showing that Travelers is "other insurance" available 10~ to applicant within the meaning of Insurance Code section (c)(9) when it showed that 11,1 Travelers provided workers' compensation insurance for special employer Proulx, and that there 12 was no policy exclusion for Proulx's special employees. (Weitzman, supra; Hooten, supra; 131: Hernandez, supra; Industrial Indemni0' Company v. Workers' Comp. Appeals Bd. (Garcia) (1997) Cal.App.4th 548 J62 Cal.Comp.Cases 1661] (Garcia); Nike USA v. Workers' Comp. Appeals N,5 Bd. (Sandoval) (2008) 73 Cal.Comp.Cases 399 (writ den.); Kaiser Foundation Hospitals v. 16 Workers', Cornp. Appeals Bd. (Lambeth) Cal.Comp.Cases 701 (writ den.); Manzano v. 17. Flavurence Corp. (2002) 67 Cal.Comp.Cases 914 (significant panel decision).) 81 RThe testimony of Mr. Proulx concerning the oral agreement between Proulx and Alliance 49 does not change the fact that Proulx, as a matter of law, is jointly and severally liable for 20. applicant's injury. WVhether or not the special and general employer agreed that the general 21_i employer's insurer would provide workers' compensation insurance coverage for the injured 22' employee is not dispositive. The controlling fact is that there is "other insurance" coverage 231i 2 4i available to applicant within the meaning of Insurance Code section (c)(9) because CIGA, 2 5.i I'Insurance Code section provides in full: "As between insurers of general and special employers, one which 2 6, insures the liabilito of the general employer is liable for the entire cost of compensation payable on account of injury occurring in the course of and arising out of general and special employments unless the special employer had the 2 7 employee on his or her payroll at the time of injury, in which case the insurer of the special employer is solely liable. For the purposes of this section, a self-insured or lawfully uninsured employrc is deemed and treated as an insurel of his or her workers' compensation liability." BAHNEY, Carlota 4

5 I. as a matter of law, is not liable to provide workers' compensation benefits if such "other 2 insurance" coverage is available. 3 Here, there is no evidence that special employees were expressly excluded from the insurance coverage Travelers provided Prouix, In the absence of dispositive evidence that Proulx has no liability to applicant or that special employees were excluded from the workers' 6 compensation insurance coverage provided Proulx by Travelers, the Arbitrator properly found that Travelers is "other insurance" that is available to applicant within the meaning of Insurance Code 8 section 1063.l(c)(9). (Weitzman, supra; Hooten, suprac (Hernandez, supra; Garcia. supra; Miceli ILSupra.) 10 [ The August 7, 2009 decision of the Arbitrator is correct and it is affirmed. 12i tl , II! 1& Ii I/I 4! 2! 25II 2 31I/I 26 1: BAUNEY, Carlota 5

6 For the foregoing reasons, 2 IT IS ORDERED as the Decision After Reconsideration of the Appeals Board that the August Findings and Order of the Arbitrator is AFFIR'MED. 4 WORKERS' COMPENSATION APPEALS BOARD FRANK M. BRASS 101 ICONCUR, II- 1 :ji', ~JAMES 0. CUNEC) /, 161, 1iý 19;' DEIDRA E. LOWE 201! DATED AND FILED AT SAN FRANCISCO, CALIFORNIA 21ý NOV SERVICE MADE BY MAIL ON ABOVE DATE ON THE PERSONS LISTED BELOW AT THEIR ADDRESSES AS SHOWN ON THE CURRENT OFFICIAL ADDRESS RECORD: Carlota Bahney Arbitrator, Charles Adcock 25 Barnard & Associates,,, - Grancell Lebovitz et. al. 26 JFS/jp 27i, BAHNEY, Carlota 6