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

INTRODUCTION

After the Employment Development Department (the EDD) paid temporary unemployment compensation disability (UCD) benefits to a disabled worker, it filed a lien claim for reimbursement from the employer’s insolvent workers’ compensation carrier. California Insurance Guarantee Association (CIGA) assumed the insolvent carrier’s obligations, but refused to satisfy the EDO’s hen. CIGA argued it is only required to pay a “covered claim” and the EDO’s lien is an obligation to a state that is excluded from the definition of “covered claims.” (Ins. Code, § 1063.1, subd. (c)(4).) The Workers’ Compensation Appeals Board (the Board) ruled against CIGA, reasoning that reimbursement of the EDO’s lien is a payment to the particular disabled worker’s account, not to the EDD.

CIGA petitioned this court for a writ of review (Lab. Code, § 5950) to determine the lawfulness of the Board’s decision. We hold that the EDO’s hen is an obhgation to a state because the EDD is a department of the State of California. Hence, its hen claim is not a “covered claim” that CIGA is required to pay. (Ins. Code, § 1063.1, subd. (c)(4).) Accordingly, we reverse the Board’s decision.

FACTUAL AND…