The Rule of Zenith Insurance Company v. Workers' Compensation Appeals Board is that equitable tolling of the 60-day deadline under former Labor Code section 5909 cannot justify the Workers' Compensation Appeals Board's 20-month delay in issuing a decision on reconsideration after granting a petition for "further study," under circumstances where the Board failed to demonstrate reasonable and good faith conduct in attempting to comply with statutory procedures.
Appeal from petition for writ of review challenging order and decision after reconsideration in Superior Court, Santa Clara County.
Petitioner Appellants were Zenith Insurance Company and New Sam Kee Restaurant, LLC — the insurance carrier and employer who successfully defended against a workers' compensation claim based on the initial physical aggressor defense.
Respondents were the Workers' Compensation Appeals Board and Kin Chan — the administrative agency that granted reconsideration outside the statutory deadline and the injured employee seeking benefits after being struck by a coworker.
The suit sounded in workers' compensation benefits denial based on the initial physical aggressor defense under Labor Code section 3600, subdivision (a)(7).
The key substantive facts leading to the suit were Chan, a prep cook, was struck in the eye by coworker Huynh during a workplace altercation on September 15, 2020, causing a broken eye socket and other injuries. The WCJ found Chan was the initial physical aggressor after witnesses testified Chan approached Huynh with a knife, barring compensation under section 3600(a)(7).
The procedural result leading to the Appeal: The trial court (WCJ) denied Chan's workers' compensation claim, finding he was the initial physical aggressor. Chan timely filed a petition for reconsideration on November 18, 2022. The Board did not receive notice until January 17, 2023 (day 60), then granted reconsideration "for further study" on March 3, 2023, and finally issued a decision rescinding the WCJ's order on November 1, 2024, ruling that Chan was not barred from compensation.
The key question(s) on Appeal: Whether the Workers' Compensation Appeals Board exceeded its jurisdiction by granting Chan's petition for reconsideration and issuing a decision on the merits approximately two years after the 60-day deadline under former Labor Code section 5909, and whether equitable tolling could justify this delay.
The Appellate Court held that while equitable tolling may be available in narrow circumstances under former section 5909, the Board's 20-month delay between receiving the case file and issuing its decision, combined with its use of a non-compliant "grant-for-study" order and failure to demonstrate reasonable diligence, did not satisfy the requirements for equitable tolling, rendering the Board's action in excess of its jurisdiction.
The case is inapplicable when the administrative delay is brief and the agency acts with reasonable diligence upon receiving notice of the petition, or when the agency issues a compliant decision on reconsideration within a reasonable time after the initial jurisdictional period expires.
The case leaves open whether longer delays might be justified under different circumstances showing greater diligence by the agency, and does not address the merits of the initial physical aggressor defense or the Board's substitution of its factual findings for those of the WCJ.
Counsel
For Appellant: Chernow, Pine & Williams, Barbara Mendenhall and Jeffrey J. Williams; Horvitz & Levy, Lisa Perrochet and Benjamin P. Covington
For Respondent: Allison J. Fairchild and Eric D. Ledger (WCAB); Hanna Leung, Dan Herman Pelin (Chan)
Amicus curiae: [Not determinable from opinion text]