NOURSE, J. pro tem.
In each of the above matters we have before us for review an award by the respondent commission by which petitioner, Fireman's Fund Indemnity Company, hereinafter called "Fireman's," was denied a lien for the full amount paid by it to the injured employee as unemployment insurance benefits.
The parties have stipulated that the judgment rendered in the matter first designated in the caption (in which Ries is the claimant) shall govern insofar as applicable, the decision in the second matter designated and that judgment shall be entered in that case accordingly.
The facts: Ries was an employee of the Madison Iron and Sheet Metal Company; respondent California Casualty Indemnity Exchange, hereinafter called "Indemnity Exchange,"
Ries asserted a claim against his employer alleging that he had on December 3, 1956, while in the scope and course of his employment, sustained a disabling injury. Indemnity Exchange denied Ries' right to compensation on the ground that any disability from which he was suffering was not the result of an accident occurring in the scope and course of his employment. Ries' right to compensation being questioned, petitioner as the unemployment compensation carrier for Ries' employer paid to him the sum of $40 per week for the period commencing December 19, 1956, to and including June 19, 1957. During that period Ries was hospitalized for 11 days and petitioner paid to him an additional sum of $110 pursuant to the terms of its policy and section 2801 of the Unemployment Insurance Code which entitled Ries to the sum of $10 per day for each day not in excess of 12 days, during which he should be confined in the hospital during any disability benefit period. Ries was the beneficiary under a policy of group accident and health insurance issued by Occidental Life Insurance Company of California, hereinafter called "Occidental," to the union of which he was a member. Under this policy Occidental either paid directly or reimbursed applicant for payments made by him for medical care, these payments being in the sum of $573.14.
On March 27, 1957, Ries filed an application for hearing upon his claim for compensation. Thereafter both petitioner and Occidental gave notice of a claim of lien upon any award of compensation made to Ries. Petitioner's claim of lien was in the sum of $1,150 and Occidental's was in the sum of $573.14.
Issue having been joined, hearings upon Ries' application were had. Petitioner, through its counsel, participated in all the hearings.
Findings and award: After reopening the cause the referee found (1) that Ries had sustained an injury arising out of and occurring in the course of his employment (2) that this injury temporarily aggravated a preexisting physical impairment (3) that the injury had not caused any permanent disability but (4) had temporarily totally disabled the applicant for 23-5/7 weeks for which he was entitled to compensation
Based upon these findings the referee awarded (1) the applicant $971.72 for temporary disability (2) of which amount it directed $746.72 be paid directly to petitioner in satisfaction of its lien and the sum of $225 paid directly to the attorneys for the claimant (3) the sum of $573.14 to applicant as reimbursement for self-procured medical treatment (4) that that amount be paid directly to Occidental and (5) the award denied Fireman's a lien for the hospital benefits paid by it.
Fireman's petitioned the commission for reconsideration of the findings and award of the referee. In this petition it asserted that it was entitled to have paid directly to it in satisfaction of its lien the full amount of the award for temporary disability; that it could not be compelled to prorate its claim with that of the attorneys for the claimant and that the findings and award of the referee did not in fact constitute a proration of the attorneys' fees but an imposition of the full amount of them upon Fireman's; it further asserted that it had not reduced its claim of the lien to $850 but that the letter written by it to the referee agreeing to reduce its claim to $850 was for the purpose of aiding Ries and Indemnity Exchange in arriving at a compromise but that said compromise had not been consummated; that it was entitled to have awarded to it the sum of $110, the hospital indemnity paid by it, as against the award to Ries for his self-incurred medical expense and that Occidental was not entitled to a lien for the payments made by it under its accident policy whether those payments were made to
The commission denied Fireman's petition for reconsideration and affirmed the findings and award of the referee but in so doing refused to pass upon the question as to whether Fireman's had in fact reduced its claim of lien from $1,150 to $850 upon the grounds that that question was immaterial to its decision inasmuch as the lien of the attorneys was entitled to priority and as the amount awarded for disability compensation was less than the sum of the attorneys' fees awarded plus $850, with the result that irrespective of the amount for which it might be entitled to a lien it could in no event recover more than the amount awarded.
The questions presented here are: Where the total amount awarded as compensation for temporary disability is less than the sum of the amounts paid to the applicant as unemployment disability benefits and the amount awarded by the commission to the claimant's attorneys, does the commission have the power to give the lien for attorneys' fees priority over the lien for unemployment compensation benefits and reduce the award to the unemployment disability lien claimant?
The second question: Is an insurer under a voluntary plan adopted under the Unemployment Insurance Code for the payment of disability benefits, entitled to a lien for the amounts paid by it as benefits on account of hospitalization of an employee?
The commission's power to determine and allow liens against awards of compensation is set forth in sections 4903 and 4904 of the Labor Code as amended in 1957.
"(f) The amount of unemployment compensation disability benefits which have been paid under or pursuant to the Unemployment Insurance Code in those cases where, pending a determination under Division 4 of this code, there was uncertainty whether such benefits were payable under the Unemployment Insurance Code or payable hereunder; provided, however, that any lien under this subdivision shall be allowed and paid as provided in Section 4904." (Emphasis added.)
Section 4904 so far as material provides: "... In determining the amount of lien to be allowed for unemployment compensation disability benefits under subdivision (f) of Section 4903 the commission shall allow such lien in the amount of benefits which it finds were paid for the same day or days of disability for which an award of compensation for temporary disability indemnity is made." (Emphasis added.)
If we assume that Fireman's lien had not been reduced to the sum of $850 it was entitled to reimbursement in the sum of $908.53.
Respondent commission contends that Fireman's received the benefit of the services performed by the attorneys employed by the claimant and that it, therefore, had a right to make the fees fixed by it a prior lien on the award for
Ries was not entitled to receive both workmen's compensation benefits and unemployment disability benefits. Having received from Fireman's the total amount of the compensation to which he was entitled for the periods during which the commission found he was disabled, he no longer had any interest in prosecuting an application for temporary compensation and was under no compulsion so to do. If he desired to prosecute an application for compensation in order to obtain an award for permanent disability to which Fireman's lien would not attach (Lab. Code, § 4904) he was at liberty to employ an attorney to prosecute such an application on his behalf but could not contract for the payment of such fees by Fireman's. Fireman's was an interested party entitled to prosecute an application for an award to the applicant of temporary disability compensation to which its lien would attach and had the right to contract with its own attorneys so to do. (Independence Indem. Co. v. Industrial Acc. Com., 2 Cal.2d 397 [41 P.2d 320]; Lab. Code, § 5501.) It did so contract and its attorneys participated in all of the hearings before the commission.
It is true that the commission has the right to fix the fees payable under any contract made by a claimant for compensation and to make such fees payable out of the award of compensation made to the applicant but it has no jurisdiction to determine the legality of a contract made (except insofar as the contract may attempt to fix the fee to be paid) or, by its award, to in effect obligate some other person than the claimant to pay the fees which it fixes as reasonable. (Schilling v. Industrial Acc. Com., 47 Cal.App. 190 [190 P. 373].) We, therefore, hold that Fireman's was entitled to an award reimbursing it for the amounts paid by it on account of unemployment insurance benefits for the period during which the commission found that the applicant was entitled
Under section 4903, subdivision (f), the commission may only allow a lien for "unemployment compensation disability benefits which have been paid under or pursuant to the Unemployment Insurance Code." (Emphasis added.) Under section 4904 the amount of the lien so allowed is limited to the amount which the commission awards as compensation "for temporary disability indemnity" for the same period of time. (Emphasis added.) It is thus clear that the only payments made under the Unemployment Insurance Code for which a lien may be allowed are payments of disability benefits and that the lien allowed may only attach to an award, made to the claimant, of compensation for temporary disability indemnity.
We are not advised as to whether under the voluntary plan under which Fireman's was the indemnitor of the employer, Ries was entitled to these hospital benefits irrespective of his rights to compensation or whether that plan only gave him the benefits provided for by section 2801.
If the payments made to Ries were made pursuant to an obligation of the voluntary plan, they constituted payments of indemnity of the same nature as payments under a policy of disability insurance as such policies are defined by section 106 of the Insurance Code, and as such were the proceeds of an investment made by him. (Anheuser-Busch v. Starley, 28 Cal.2d 347, 349, 355 [170 P.2d 448, 166 A.L.R. 198]; Sayles v. Lofflane Bros. Co., 17 Cal. Comp. Cases, 103.)
The liability for hospital care was incurred by the claimant and he satisfied that liability out of his own funds and it is immaterial whether the source of those funds was his savings, indemnity paid to him by some disability insurance carrier or by Fireman's either under its policy or as a gift or loan. Inasmuch as the statute does not authorize the commission to grant a lien to a person making such payments or advances the commission was without power to award a lien to Fireman's on account of such payments.
Fireman's asserts that the commission exceeded its powers in granting a lien to Occidental. While it may be true that Occidental was no more entitled to a lien than Fireman's, Fireman's is not affected by the award to Occidental and as the applicant does not complain thereof that award does not fall within the purview of this review.
In this matter the applicant Huyck left his employment on April 12, 1957, claiming a disability arising out of and in the scope of his employment. His employer's compensation carrier disputed his claim. Fireman's was the unemployment compensation disability insurance carrier of the employer and paid unemployment compensation disability insurance to Huyck, the claimant, for the period commencing April 18th and to and including September 4, 1957, at the rate of $40 per week, or a total sum of $794.29. The commission found that Huyck had not sustained any permanent disability but had sustained total temporary disability for the period beginning April 12, 1957, to and including September 4, 1957, and was entitled during said period to the sum of $40 per week or a total amount of temporary disability compensation of $834.29. It fixed the reasonable value for services rendered by Huyck's attorney at $150, ordered this amount paid directly to the attorney and the sum of $684.29 paid to Fireman's in satisfaction of its right to reimbursement. It thus charged to Fireman's $110 of the fees of plaintiff's attorney. This, for the reasons stated in the companion case, it was without power to do.
The award in case Number 23695 is annulled with directions to the commission to determine as a fact whether Fireman's did reduce its lien for disability compensation payments made to the claimant to the sum of $850 and to enter an award in favor of Fireman's in accordance with its findings as to the
The award in proceeding Number 23684 is annulled with directions to the respondent commission to award Fireman's the sum of $794.29.
White, P.J., and Lillie, J., concurred.