by "Jake" Jacobsmeyer

The Fourth Appellate District has issued a very interesting case involving the "commercial traveler" rule holding that injuries sustained by an executive traveling for defendant in Europe on a vacation which was an extension of his business trip were not in the course and scope of employment and reversing a WCAB determination on that issue.

In Fleetwood Enterprises v. WCAB (Moody) the applicant was an executive who was sent to Europe as part of a group to attend a major RV (recreational vehicles) show in Dusseldorf, Germany followed by a visit a German RV manufacturer then traveling on to Italy to meet with a fiberglass supplier. Applicant picked up a rental car in Dusseldorf arranged for by Fleetwood. The arrangements called for the car to be returned to Dusseldorf.

Moody had also arranged (with his employer's permission) to have his wife meet him in Geneva, Switzerland after the RV show and visit to the German manufacturer. The arrangements called for him to pick up his wife the visit to the fiberglass manufacture in Italy was occurring. Fleetwood handled the spouse's travel arrangements also.

After the meeting with the fiberglass manufacturer and socializing with the manufacturer's representatives, the business trip of applicant was complete. The coworkers returned to the United States. However, Mr. Moody and his wife remained in Italy with the rental car traveling to Florence and Rome for overnight trips before heading north towards Germany and Dusseldorf. Over the anticipated three remaining days of their trip they were going to travel without specific itinerary in the general direction of Dusseldorf with the intention also of visiting some personal friends along the way.

Shortly after leaving Rome they were involved in a motor vehicle accident with serious injuries sustained by applicant. His employer handled all of his medical care through the group health carrier but did direct provision of specific enhancements such as being flown back by air ambulance and also sending an Italian-speaking employee to Italy to assist with his arrangements. Fleetwood directly paid some of the extraordinary expenses and care upgrades. During that period of time Fleetwood's representatives repeatedly assured the applicant and Ms. Moody that they would be taken care of and whatever they needed would be provided.

The accident occurred on October 8, 1999; applicant returned to work in April 2000 but was laid off in November 2002. He filed a workers' compensation claim form in May 2002 and liability was denied by Fleetwood within 90 days thereafter. At trial before the WCAB, the WCJ ruled that applicant's injury was presumed compensable based on the failure of the employer to provide the claim form within 90 days of knowledge of the injury. The WCJ also determined that under the "commercial traveler" rule, applicant's entire trip to Europe was considered as having been in the course and scope of employment. Defendant appealed and the WCAB upheld the Trial decision.

Defendant appealed the decision of the WCAB on both the presumption of injury issue and the commercial traveler ruling. On the question of whether the applicant's claim was presumptively correct under Labor Code section 5402 it was undisputed that the claim was denied within 90 days of the claim form being filed; however, applicant argued that the employer was either estopped to argue denial on the basis that they had admitted the injury by virtue of the Fleetwood representative's comments to the applicant or that the claim form having not been provided on a timely basis after injury, the denial of injury almost three years later was not timely.

The second issue was the application of the commercial traveler rule to applicant's claim of injury AOE/COE. Fleetwood argued the employer business portion of the trip had concluded while applicant was in Ferrera, Italy (after the meeting with the Italian fiberglass manufacture) and that the remainder of the trip, including the travel down to Rome and then back up through Germany was of a personal nature and therefore a significant "deviation" from the employee's business trip, removing that portion of the trip from compensability. .

LABOR CODE section 5402 ISSUE:

While this case was pending the California Supreme Court issued its landmark decision in Honeywell v. WCAB (2005) 35 Cal. 4th 24 (Honeywell). In that case the Supreme Court had determined that an employer's obligation to deny liability for an industrial injury did not arise until the claim form was actually filed. The court did however note that there was an issue involving potential estoppel to deny the injury. The court seemed quite skeptical that estoppel was likely to apply. However, it noted that the Appeals Board, in reviewing this case prior to Honeywell having been decided, did not address the issue of estoppel and appeared to be unclear whether estoppel even was a consideration. Therefore, while the court held that the presumption of compensability was improperly applied as the claim had been denied within 90 days of the filing of the DWC-1 form, the issue of estoppel was still potentially viable and the matter should be remanded for the employee to see if they could demonstrate that there was an estoppel argument to be made.

Authors Note: Given the fact that the employee received virtually all of their benefits including extra care (the court noted that "Fleetwood appears to have acted with commendable concern and even generosity in assisting the Moodys."), it does not appear that there are any significant benefits that the employee would have gotten if a claim form had been filed on a timely basis, nor is there any information which would have been available that is not currently available that raises an issue involving estoppel. However, this is obviously an issue that the WCAB will need to readdress in light of Honeywell, cited supra.

COMMERCIAL TRAVELER RULE:

The Court of Appeals extensively discussed and reviewed the case authorities and theories behind the commercial traveler rule. The general rule is that a commercial travel is covered at all times during the course of a business trip. The court framed the issue in the following terms:

"The most critical issue is whether applicant was still on a "special mission" for his employer at the time of the accident..."

"The applicant had attempted to argue in favor of compensability for what was clearly a primarily personal trip between Farrar through Florence and Rome and back up to Dusseldorf that compensability existed because as part of his job he was also on the lookout for interesting and unusual applications of technology that might be useful in designing RVs for his employer. He argued that during the course of the trip he would take pictures of RVs or discuss with RV owners their desires and expectations and that this was in effect a fact-finding mission in part for his employer. The assertion therefore is that this constituted a dual mission and not a business trip which was over with the conclusion of meetings with the fiberglass manufacturer."

The court however was skeptical of this argument and noted as follows:

"However, although it is commendable for an employee to keep his employer's business in mind at all times, such a unilateral devotion to duty cannot be permitted to expand the employer's liability for workers' compensation to a "24/7" basis. We decline to extend the concept of "course of employment" to cover applicant's every waking hour. Accepting the fact that applicant looked at RV's during his Italian holiday, this did not transform his personal vacation into a business trip. Although a trip which has components of both business and pleasure may give rise to a compensable injury, the business element must be integral to the trip. The fact than an employee performs "some tidbit of work" during a personal trip will not transform the journey into part of the "course of employment."

The court further noted that while there might be some argument regarding some employment relationship, this was not sufficient to extend the entire trip to compensability:

In this case, applicant's occasional sighting of an interesting RV was clearly no more than a "tidbit" compared to several days of sightseeing. Although, as a conscientious employee, he may have always kept an eye open for useful ideas, which was not the purpose of his trip from Ferrara to Florence to Rome. We think it can be assumed that many employees -- especially "white-collar" employees -- give occasional thought to their employers' business, but such attention does not mean that they are "at work" at such times. Applicant, for example, may well have thought out design possibilities while at home, or while jogging, or while out for a Sunday drive, but Fleetwood would have not been liable to pay workers' compensation benefits if he had slipped in his hallway, suffered a heart attack on the track, or been involved in a collision.

The most compelling argument that the applicant presented for the court to review was the issue regarding the return of the rental car to Dusseldorf. The car was rented in Dusseldorf and required to be returned there. Obviously, someone had to return the car to Dusseldorf. The court noted this but concluded that inasmuch as the employee had extended the trip significantly by several days and quite a bit of mileage this constituted a deviation from the business purpose assigned to the trip. It seems much more likely that if the employee had been traveling directly from Farrar to Dusseldorf that the entire trip would have been considered in the course and scope of employment. However, by adding on several days and several hundred miles to the trip, the court felt that the conclusion that there was a substantial deviation was inescapable.

The court was further unimpressed with the argument that the motor transportation was selected by the employer and done for the benefit of the employer. The court noted that there was no evidence that the employer actually benefited form the requirement to provide a car in Dusseldorf and that in fact the employee could have easily flown to and from the different locations without driving. The court noted that the arrangement was "definitely to applicant's advantage". Having a car in which to drive south from Germany to Italy allowed him to pick up his wife at a Swiss airport, not to mention the convenience of having a car 'ready to go' when the other Fleetwood representatives " ... headed for their respective homes."

The court also noted that the extension of time and distance to the trip significantly expanded the potential exposure for the employer that an injury might occur.

"Another potent factor bearing on the conclusion that the business trip had ended, for workers' compensation purposes, is that applicant's decision to go sightseeing with his wife substantially extended his time on the trip. It does not require a degree in statistics to recognize that if X accidents are likely to occur in a period of Y days, twice as many accidents will occur in 2Y days. Here, Fleetwood legally assumed the obligation that applicant would be involved in an accident some time in a period of Y days. However, applicant's decision to extend his trip also increased the chance that he would be involved in an accident, and that risk is not properly placed on Fleetwood."

While this case is being remanded on the Labor Code section 5402 issue and it is certainly possible we may see it again on the commercial traveler rule issues this case is a significant decision which gives us clarity on when during commercial travel an employee is covered and when they are not covered in the course and scope of that travel what kind of information is necessary to determine if and when a significant deviation occurs that takes the employee out of the course of employment.

There are a lot of cases on both commercial traveler and significant deviation. The line of cases on at first blush appears to be inconsistent and difficult to pin down into any sort of consistent set of rules. Each case seems to depend very heavily on the facts that the court decides to focus on. In this case one cannot help but be impressed with the effort that the court described the Employer as having made to take care of their injured employee. It may very well be that Fleetwood's conduct in extending extra consideration to their employee in this circumstance provides extra incentive for the court to look favorable on their legal arguments.

The case can be read in its entirety by clicking on the case title in the sidebar at right.

By attorney Richard "Jake" Jacobsmeyer, managing partner of the Concorde office of Adelson, Testan, Brundo & Popolardo. Jake can be reached at richardjacobsmeyer@atblaw.net.

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