In California Ins. Guar. Assn. v. San Diego County Schools Risk Management Joint Powers Authority, 41 Cal.App.5th 640 (October 31, 2019), the California Fourth District Court of Appeal reversed the trial court’s entry of summary judgement in favor of Mountain Empire Unified School District (“the District”) in connection with a judgement requiring the California Insurance Guarantee Association (CIGA) to reimburse the District $129,836.91 for workers’ compensation benefits paid to an injured school bus driver (“bus driver”). The District was self-insured under the workers’ compensation scheme and claims were administered by the San Diego County Schools Risk Management Joint Powers Authority (JPA). In that regard, the JPA purchased excess workers’ compensation insurance from Kemper Insurance Company for claims exceeding a set retention. The District was an additional insured under the Kemper excess policy.

The parties’ dispute arose out of the bus driver’s claim for benefits. The District and bus driver stipulated that she had suffered a specific injury on May 6, 2000. Kemper was the excess workers’ compensation on the risk on the stipulated date. However, Kemper was insolvent. As such, the District requested CIGA to pay the benefits owed the bus driver. CIGA refused to do so, arguing that the injury sustained by the bus driver was “cumulative” in nature. Hence, because “other insurance” was available to satisfy the claim, CIGA was not obligated to respond to the claim based on Insurance Code Section 1063.1, subd. (c)(9) which only requires CIGA to pay covered claims.

Thereafter, CIGA filed an action in state court seeking a declaration that the bus driver’s injury was cumulative in nature and therefore CIGA was not required to reimburse the District. In response, the District filed a motion for summary judgment, arguing that the court had no jurisdiction to change the stipulation approved by the Workers’ Compensation Appeals Board (WCAB) that the bus driver’s injury occurred on the stipulated date of May 6, 2000. According to the District, the WCAB had exclusive jurisdiction to determine the date of the bus driver’s injury. The trial court agreed with the District and entered judgment in favor of the District.

In reversing the trial court’s decision, the Court of Appeal reasoned as follows:

“As a creature of the Legislature, the [WCAB] has no powers beyond those conferred on it.” (Victor Valley Transit Authority v. Workers’ Comp. Appeals Bd. (2000) 83 Cal.App.4th 1068, 1072 [100 Cal.Rptr.2d 235] (Victor Valley).) The WCA gives the WCAB exclusive jurisdiction over proceedings “[f]or the recovery of [workers’] compensation, or concerning any right or liability arising out of or incidental thereto.” (§ 5300, subd. (a).) The superior court and WCAB do not have concurrent jurisdiction over any given action—depending on the injuries claimed, one entity will lack jurisdiction to grant any relief whatsoever. (La Jolla, supra, 9 Cal.4th at p. 35.) “The only point of concurrent jurisdictions of the two tribunals is jurisdiction to determine jurisdiction; jurisdiction once determined is exclusive, not concurrent.” (Ibid.) Relying on section 5300, the trial court concluded the WCAB had exclusive jurisdiction to determine that Knowles suffered a cumulative, rather than specific, injury. As we explain, this was incorrect.

“It is by now well established that the WCA’s exclusivity provisions preempt not only those causes of action premised on a compensable workplace injury, but also those causes of action premised on injuries “collateral to or derivative of” such an injury.” (King. v. CompPartners. Inc, (2018) 5 Cal.5th 1039. 1051 [236 Cal Rptr.3d 853, 423 P.3d 975] (King); see Vacanti, supra, 24 Ca/.4th at p. 811.) Thus, our first step is to evaluate whether the alleged injury is collateral to or derivative of an injury compensable exclusively under the WCA. If it is, the cause of action may be barred; otherwise, it is not barred. (Vacanti, at p. 811.) Here, there is no dispute that the characterization of Knowles’s injury is collateral to or derivative of injuries compensable under the WCA.

We therefore proceed to the next step to evaluate “whether the alleged acts or motives that establish the elements of the cause of action fall outside the risks encompassed within the compensation bargain.” (Vacanti, supra. 24 Cat4th at pp. 811-812.) “Where the acts are ‘a “normal” part of the employment relationship’ [citation], or workers’ compensation claims process [citation], or where the motive behind these acts does not violate a ‘fundamental policy of this state’ [citation], then the cause of action is barred.” (Id. at p. 812.) By contrast, actions to recover economic or contract damages incurred independent of a workplace injury are not barred. (Id. at p. 814.)

This second step is where the court erred. Although perhaps prompted by Knowles’s workplace injuries, CIGA’s coverage dispute falls “outside the risks encompassed within the compensation bargain.” (Vacanti, supra. 24 Cal4th at p. 812.) The question of whether a workers’ compensation claim against a self-insured employer is covered by the employer’s excess insurance policy is not a “”normal” part of the … workers’ compensation claims process.’ ” (Ibid.) CIGA’s action can have no legal effect on Knowles’s ability to recover workers’ compensation. As a self-insured employer, the onus is on the District to provide “compensation” to Knowles. (§ 3700 [employers must “secure the payment of compensation” by purchasing workers’ compensation insurance or self-insuring].) “‘Compensation’ … includes every benefit or payment conferred by this division [Workers’ Compensation and Insurance] upon an injured employee … , without regard to negligence.” (§ 3207, italics added.) As an excess insurer, Kemper was not obligated to provide compensation to Knowles; it merely had a contractual obligation to indemnify JPA for certain claims. CIGA’s action only determines who—as between the District/JPA, CIGA, and another excess insurer – bears the ultimate cost of the District’s compensation obligation. Accordingly, it does not fall within the WCAB’s exclusive jurisdication.

Based on the above reasoning the Court of Appeal concluded as follows:

In short, CIGA’s action for declaratory relief is not subject to the WCA’s exclusivity bar. The WCAB’s exclusive jurisdiction over actions involving “the recovery of compensation, or concerning any right or liability arising out of or incidental thereto” (§ 5300, subd. (a)) does not extend to contract-based disputes between a self-insured employer and its excess carrier (or that carrier’s insolvency insurer). The court is not without jurisdiction to make a factual determination that Knowles suffered a cumulative injury, even if its finding contradicts a stipulated fact approved by the WCAB.