Home > Uncategorized > CIGA Must Reimburse Longshore Payments

CIGA Must Reimburse Longshore Payments

Today’s post has to do with a narrow area of the law for most of us California comp people.  The Longshore and Harbor Workers’ Compensation Act is a Federal law which functions as a workers’ compensation of sorts for dock workers.  So if you’ve got employees unloading ships in the Port of Oakland, there’s a good chance you’re dealing with this draconian system on a regular basis.

Now, I won’t bore you with the details, but apparently there is no CIGA equivalent under Longshore – only a requirement that, when an employer’s insurance company becomes insolvent, the employer must continue paying benefits in place of the insurer.  However, in cases where the insurer and the employer are insolvent, there is a Special Fund that might step in.  But that’s not particularly comforting to the (insolvent) employer.

So if a California employer has a federal Longshore claim on one hand and an insolvent insurer on the other, can it knock on CIGA’s door?  The recent panel decision (and ultimately a writ denied case) of Kohn Koch v. R.E. Staite Engineering, Inc. says it can.

Applicant was a commercial diver for Staite and sustained an injury that was accepted by Staite’s insurer.  Applicant pursued a Longshore claim and, just three years later, Staite’s insurer was placed in liquidation.  Staite continued to make payments to the unfortunate Mr. Koch, but then sought reimbursement from CIGA.  CIGA naturally had a problem with this, and made its objections, which looked something like this:

In any case, the workers’ compensation Judge found that the matter had already been resolved and collateral estoppel applied.  After all, the exact same issue had been resolved in the case of Roy Rogers v. CIGA, a 2007 case in which the exact same facts presented with the only difference being Roy Rogers instead of John Koch (Staite was the employer in that case too!).

The Workers’ Compensation Appeals Board took a different approach to the same conclusion.  Reasoning that the injured worker can pursue California workers’ compensation benefits AND Longshore benefits, but is precluded from a double recovery, the WCAB found that CIGA would be liable if applicant pursued California comp benefits as well.  Given this, CIGA would be on the hook for those California benefits, and Staite should receive credit for those benefits paid under Longshore, to the extent they would be available under California law.

There was a dissenting opinion to the panel decision, which noted that just because something could have happened, such as the filing of a California comp claim, does not mean that a judicial determination should be made on that “could-have.”

In any case, employers – if you may fall under the Longshore Act, it appears that CIGA, willing or not, has you covered.


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