County of Los Angeles v. Workers' Compensation Appeals Board

Petitioner County of Los Angeles contends that respondent Workers’ Compensation Appeals Board erred in assessing a 10 percent penalty against county pursuant to Labor Code section 5814 for its discontinuance of permanent disability payments to respondent injured worker, Mary King. We hold that the board correctly decided that county should not have terminated payments to King prior to the board’s order reducing the permanent disability award, but we annul the penalty in this case as, under the circumstances, county did not act unreasonably.

I. Procedural history.

On November 19, 1973, while employed as a vocational nurse by county, King sustained an injury to her right eye. She was initially awarded a 4 percent permanent disability rating ($840), but her petition to reopen for “new and further disability” resulted in a finding that the eye injury had resulted in a depressive neurosis. In a decision filed January 16, 1976, her permanent disability was rated as a “moderate neurosis,” a 50 percent standard rating, which was adjusted for King’s age and occupation to 61 percent permanent disability. Based upon her earnings this rating entitled her to 318 weekly payments at…