DPR Construction v. Workers' Compensation Appeals Board CA3

Filed 5/16/25 DPR Construction v. Workers’ Compensation Appeals Board CA3

NOT TO BE PUBLISHED

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for

publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication

or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

THIRD APPELLATE DISTRICT

----

DPR CONSTRUCTION et al., C102117

Petitioners, (WCAB Case No.

ADJ11348013)

v.

WORKERS’ COMPENSATION

APPEALS BOARD

and ALONZO MCCLANAHAN,

Respondents.

Employer DPR Construction (DPR) and its workers’ compensation carrier,

National Union Fire Insurance Company (collectively, petitioners), challenge a Workers’

Compensation Appeals Board (the board) decision in favor of DPR’s former employee,

Alonzo McClanahan. Petitioners contend the board exceeded its powers in two ways:

(1) by failing to state the reasons for finding McClanahan credible and (2) by admitting

two medical reports that were not listed in the pretrial conference statement. We disagree

with petitioners as to the first contention but agree as to the second. Because we reject

the board’s harmless error defense to the second contention by applying longstanding

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precedent, we annul the board’s decision and remand for further proceedings. Statutory

references are to the Labor Code unless otherwise indicated.

FACTUAL AND PROCEDURAL BACKGROUND

I

Pretrial

At the end of July 2017, McClanahan claimed workers’ compensation benefits for

an alleged industrial injury to his right shoulder that occurred on July 25, 2017, while

working at DPR. Petitioners’ claims administrator denied the claim a few months later.

The following year, McClanahan sought board adjudication of his claim. (§ 5500; Cal.

Code Regs., tit. 8, § 10455.) Dr. Hanley was originally designated as the qualified

medical evaluator and prepared two reports in that capacity in 2018 (the Hanley reports).

He was later replaced as the qualified medical evaluator by Dr. Foglar and then by Dr.

McGahan. After engaging in discovery, the parties participated in a mandatory settlement

conference (§ 5502, subd. (d)), which was unsuccessful, so the matter was set for trial.

The pretrial conference statement stipulated to Dr. McGahan as the qualified medical

evaluator (§ 4062.2) and provided a list of exhibits, including reports by Dr. McGahan,

but the Hanley reports were not included.

II

Trial

At trial, McClanahan testified that his right shoulder was injured on the morning

of July 25, 2017, while working for DPR (the 2017 injury). Specifically, he was “moving

like 200 2-by-4s, 20-foot long, from one place to another” for four or five hours when the

area between his shoulder and neck started to get stiff. He told his foreman that he

couldn’t lift anymore with his shoulder hurting, and when he got off a few hours later, he

told his superintendent that his “shoulder up in [his] neck” was sore. The superintendent

asked him if he wanted to make a report, but McClanahan declined because he didn’t

think it was that bad. But when McClanahan woke up the next day, his arm and shoulder

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were stiff. He went to a doctor that night who advised taking a few days off work

because his shoulder may be overworked. McClanahan reported this to DPR, but he did

not see a workers’ compensation doctor until August 10, 2017. In his view, DPR caused

the delay.

Three DPR employees disagreed with McClanahan’s account. Both the foreman

and the superintendent stated that McClanahan did not report an injury to them on July

25, 2017. And the DPR safety manager who prepared the incident report testified that to

his knowledge, McClanahan did not report an injury to anyone on July 25, 2017. DPR’s

evidence included the employee sign out sheet for July 25, 2017, that indicated

McClanahan signed out at 3:00 p.m. and checked the box indicating he was not injured.1

The safety manager also testified he made several attempts to take McClanahan to the

workers’ compensation clinic between July 27, 2017, and August 7, 2017, in accordance

with DPR policy, but McClanahan never showed up.

In a deposition, McClanahan testified DPR was the first place he ever had right

shoulder pain, but at trial he admitted he suffered an industrial injury below his right

elbow in 2013, a few years before working for DPR (the 2013 injury), and felt pain in his

right shoulder as a result. He also testified he never went to a doctor for right shoulder

pain before July 2017, but medical records showed that he sought or obtained care for

shoulder pain or strain several times between 2013 and 2015, had an MRI of his right

shoulder in 2014, and was diagnosed with a right shoulder condition in 2015. The

records also indicated that he sought treatment for impingement in the right shoulder after

a tree branch fell on it in 2015, but McClanahan could not remember a tree ever falling

on his shoulder.

1 In a deposition, McClanahan denied checking this box.

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Between August 2017 and October 2019, McClanahan saw several medical

providers. According to three of those providers, McClanahan identified his injury as

stemming from wearing a work harness, lifting heavy garbage bags, and lifting a heavy

bar. When asked about these reports, McClanahan either denied or claimed he could not

remember identifying those sources of injury.

According to Dr. McGahan’s evaluation, McClanahan sustained “an industrial

injury to his right shoulder arising out of and caused by the industrial exposure of July

25, 2017.” Dr. McGahan found it clear that McClanahan had preexisting right shoulder

pathology but concluded it was “medically probable that [McClanahan’s] work duties on

July 25, 2017, contributed to a worsening of his right shoulder pain.” In a supplemental

report, Dr. McGahan stated that if “McClanahan is not a credible witness, then this

certainly would call into question the credibility of his claim. Under this circumstance,

the incident of July 25, 2017, may simply represent an exacerbation of his prior industrial

injury rather than aggravation.”2

Over DPR’s objection, the workers’ compensation judge (WCJ) admitted the

Hanley reports because DPR had received them before the mandatory settlement

conference. In the first report, Dr. Hanley noted that some of McClanahan’s providers

were suspicious about the validity of his complaints. As to causation, Dr. Hanley

emphasized that “all we have to go on at this point in time is [McClanahan’s] history,”

which is consistent with something that could lead to an aggravation of an underlying

degenerative tear of a rotator cuff. In a supplemental report, Dr. Hanley concluded the

“red flags” in McClanahan’s history were no longer of concern. Based on an 840-page

2 In a deposition, Dr. McGahan testified that a temporary exacerbation is “an injury that

occurs in the setting of a prior injury where the symptoms are temporarily worsened but

then return to their preinjury level, causing no new impairment.” (See Guillen v. Horizon

Health (Oct. 22, 2013, No. ADJ4148705) 2013 Cal.Wrk.Comp. P.D. Lexis 550, *13

[employer not liable after temporary aggravation subsides].)

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packet of records, he found that McClanahan “reported the symptomatology

appropriately and consistently in the medical record.” In his view, McClanahan “did

indeed lift and carry a number of 20-foot 2x4s as described in the deposition” and “more

than likely developed some discomfort and symptomatology from that activity.”

III

WCJ Ruling and Board Review

In an eight-page opinion, the WCJ described the 2013 injury and the medical

services McClanahan obtained between then and July 25, 2017. She then described the

2017 injury, the medical services McClanahan received pertaining to that injury, the

Hanley reports, the deposition and reports by Dr. McGahan, and some of McClanahan’s

responses to inconsistencies in his accounts. Based on McClanahan’s “credible

testimony, the treatment records, and the findings by QME Dr. McGahan,” the WCJ

concluded that McClanahan sustained an injury to his right shoulder arising out of and in

the course of employment on July 25, 2017.

DPR filed a petition for reconsideration, which the WCJ recommended denying.

In her recommendation, the WCJ restated much of the evidence described in her opinion

and added that McClanahan “appeared credible and consistent with the medical records

overall.” The board granted the petition “to allow sufficient opportunity to further study

the factual and legal issues in the case.” After reconsideration, the board affirmed the

WCJ’s determination in a two-to-one decision.

The affirming board members found that McClanahan erred by omitting the

Hanley reports from the pretrial conference statement but concluded the error was

harmless for two reasons: (1) the WCJ did not rely on the Hanley reports to find the

industrial injury; and (2) the WCJ retains the discretion to determine if evidence should

be admitted into the record as a matter of due process. As to McClanahan’s credibility,

the affirming board members gave the WCJ’s credibility determination great weight

because the WCJ had the opportunity to observe McClanahan’s demeanor. The affirming

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members acknowledged inconsistencies in the record but concluded that McClanahan

addressed those inconsistencies and the WCJ found his testimony credible.

The dissenting board member opined that the error regarding the Hanley reports

was fundamental to the proceedings, so the matter should be returned to the trial level for

correction. Also, in his view, it was unclear whether the Hanley reports contributed to the

WCJ’s decision and the WCJ’s credibility finding was not based on an adequate review

and explanation of the record.

We granted DPR’s petition for writ of review.

DISCUSSION

“The [b]oard is a court of limited jurisdiction authorized by the California

Constitution to exercise a portion of the state’s judicial power.” (Mayor v. Workers’

Comp. Appeals Bd. (2024) 104 Cal.App.5th 1297, 1304.) WCJs are empowered by the

board to hear and decide cases, and their orders, findings, decisions, and awards are

deemed to be those of the board. (Ibid.; Cal. Code Regs., tit. 8, § 10330.)

Anyone affected by a board order may file a petition for writ of review in the court

of appeal. (§ 5950.) That review “is limited to determining whether the [b]oard acted

‘without or in excess of its powers’ and whether its decision was unreasonable, not

supported by substantial evidence, or procured by fraud.” (Department of Corrections &

Rehabilitation v. Workers’ Comp. Appeals Bd. (2018) 27 Cal.App.5th 607, 617; see

§ 5952.) If the board acts in excess of its powers, its decision may be annulled on judicial

review. (Telles Transport, Inc. v. Workers’ Comp. Appeals Bd. (2001) 92 Cal.App.4th

1159, 1163 (Telles).) We review the board’s interpretation of its governing statutes de

novo. (Alvarez v. Workers’ Comp. Appeals Bd. (2010) 187 Cal.App.4th 575, 585.)

Here, petitioners contend the board acted in excess of its powers in two ways:

(1) by failing to state the reasons for finding McClanahan credible under section 5313

and (2) by admitting reports that were not listed in the pretrial conference statement,

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contrary to section 5502. As we explain, the first contention lacks merit, but the second

is well taken.

I

Section 5313

Section 5313 requires the board or the WCJ to “make and file findings upon all

facts involved in the controversy and an award, order, or decision stating the

determination as to the rights of the parties.” The parties must receive the findings and

the decision, order, or award along with “a summary of the evidence received and relied

upon,” and “the reasons or grounds upon which the determination was made.” (§ 5313;

see also 5908.5 [board decision affirming WCJ must state evidence relied upon and

specify the reason for the decision].) Petitioners contends the board failed to satisfy

section 5313 by not specifying why it found McClanahan credible. We disagree.

Section 5313 requires findings on ultimate facts. (Argonaut Ins. Exchange v.

Industrial Accident Commission. (1958) 49 Cal.2d 706, 712.) For example, a finding that

an employee’s injury arose out of and in the course of employment is sufficient. (Walter

v. Industrial Accident Commission (1930) 209 Cal.636, 638.) And the mandate for the

WCJ to provide the “reasons and grounds” relied upon was intended “to avoid careless

and arbitrary action and to assist the reviewing court in meaningful judicial review by

providing the court with the principles relied on . . . .” (Twentieth Century-Fox Film

Corp. v. Workers’ Comp. Appeals Bd. (1983) 141 Cal.App.3d 778, 784.)

Here, the WCJ found the ultimate fact that McClanahan sustained an industrial

injury to his right shoulder on July 25, 2017. And the WCJ explained that this finding

was based on McClanahan’s testimony, the treatment records, and Dr. McGahan’s

findings, all of which the WCJ described in detail. The WCJ’s explanation adequately

provided the reasons and grounds upon which its ultimate determination of industrial

injury was made, and the board affirmed that determination. We reject petitioners’ view

that section 5313 requires additional detail regarding credibility findings. (Compare

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§ 5313 with Gov. Code, § 11425.50, subd. (b) [requiring identification of specific

evidence of witness demeanor, manner, or attitude that supported credibility

determination].)

Petitioners’ reliance on Bracken v. Workers’ Comp. Appeals Bd. (1989)

214 Cal.App.3d 246 is also misplaced. That case involved the board’s rejection of a WCJ

decision. (Id. at p. 253) According to Bracken, a WCJ finding of compensable injury

supported by solid, credible evidence must be accorded great weight by the board and

should be rejected only based on contrary evidence of considerable substantiality. (Id. at

p. 256.) Here, the board found no evidence of considerable substantiality to reject the

WCJ’s determination and, as required by the law, expressly gave great weight to the

WCJ’s credibility determinations. (Garza v. Workers’ Comp. Appeals Bd. (1970)

3 Cal.3d 312, 319.) Bracken does not support petitioners’ position.

II

Section 5502

In workers’ compensation proceedings, discovery closes on the date of the

mandatory settlement conference. (Telles, supra, 92 Cal.App.4th at p. 1164; § 5502,

subd. (d)(3).) If the claim is not resolved at the conference, the parties must file a pretrial

conference statement noting the specific issues in dispute, listing the exhibits, and

disclosing witnesses. (§ 5502, subd. (d)(3); Cal. Code Regs., tit. 8, § 10759, subd. (b).)

Evidence not disclosed or obtained thereafter is not admissible unless the proponent can

demonstrate it was not available or could not have been discovered by the exercise of due

diligence before the settlement conference. (§ 5502, subd. (d)(3).) The purpose of this

requirement is two-fold: (1) to “eliminate the element of surprise in workers’

compensation proceedings” and (2) “ ‘ “ ‘to guarantee a productive dialogue leading, if

not to expeditious resolution of the whole dispute, to thorough and accurate framing of

the stipulations and issues for hearing.’ ” ’ ” (Telles, at pp. 1164, 1167.) The board

abuses its discretion when it relieves a party from the sanctions of section 5502 without

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that party showing good cause. (San Bernardino Community Hospital v. Workers’ Comp.

Appeals Bd. (1999) 74 Cal.App.4th 928, 938 (San Bernardino).)

Here, the WCJ admitted the Hanley reports even though those reports were not

listed on the pretrial conference statement. The board concedes this admission was not

permitted by section 5502, but contends any error was harmless because the Hanley

reports did not form the basis of the board’s decision. Applying longstanding precedent,

we disagree that this error is reviewed for harmlessness.

Section 5502 establishes the “bounds of discretion in the [WCJ] for keeping

discovery open after the mandatory settlement conference.” (County of Sacramento v.

Workers’ Comp. Appeals Bd. (1999) 68 Cal.App.4th 1429, 1433.) “[D]isregard for the

statutory procedural mechanisms for resolving workers’ compensation cases is

inappropriate.” (Ibid.) Such disregard is not subject to harmless error analysis. (San

Bernardino, supra, 74 Cal.App.4th at p. 938.)

In San Bernardino, the WCJ allowed the employee to offer additional testimony

through a witness not disclosed at the time of the mandatory settlement conference. (San

Bernardino, supra, 74 Cal.App.4th at p. 931.) The court concluded that the board abused

its discretion and annulled its decision. (Id. at pp. 935, 938.) In doing so, the court

explicitly rejected the argument that the employer was not prejudiced because it was

given additional time to prepare to meet the unexpected evidence. (Id. at p. 938.)

According to the court, “the absence of prejudice cannot be the deciding factor” because

“[a]n opposing party might often be unable to show specific prejudice” or the WCJ

“could virtually always obviate any possible prejudice by granting a continuance or

scheduling further hearings . . . [which] would threaten to make section 5502, subdivision

(d)(3) meaningless.” (Ibid.; see also Burtnett v. King (1949) 33 Cal.2d 805, 807 [“where

a statute requires a court to exercise its jurisdiction in a particular manner, follow a

particular procedure, or subject to certain limitations, an act beyond those limits is in

excess of its jurisdiction.”]) We see no reason to depart from this precedent. (See Arentz

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v. Blackshere (1967) 248 Cal.App.2d 638, 640 [adopting rule from appellate court

decision that “has stood without contradiction for seven years”]; Wolfe v. Dublin Unified

School Dist. (1997) 56 Cal.App.4th 126, 137 [“we ordinarily follow the decisions of

other districts without good reason to disagree”].)

DISPOSITION

The board’s decision is annulled. The matter is remanded to the board for

reconsideration without reference to the Hanley reports. Petitioners shall recover their

costs in pursuing this petition. (Cal. Rules of Court, rule 8.493(a)(1)(A).)

/s/

MESIWALA, J.

We concur:

/s/

BOULWARE EURIE, Acting P. J.

/s/

WISEMAN, J.*

* Retired Associate Justice of the Court of Appeal, Fifth Appellate District, assigned by

the Chief Justice pursuant to article VI, section 6 of the California Constitution.

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