Arbitration/Administrative: Ruling of Workers' Compensation Appeals Board Is Annulled Because Rescission Issue Remained "Factually Open And Unresolved"

Arbitrator And Appeals Board Did Not Address Whether Rescission Was A Meritorious Defense To Employee's Claim.

    Southern Insurance Company rescinded an insurance policy based on violation of a representation that covered employer's employees did not travel out of state, after an employee injured out of state made a workers' comp claim. The matter was referred to arbitration.  The arbitrator concluded that the insurer could not rescind, the Workers' Compensation Appeals Board affirmed, and the insurer appealed. Southern Insurance Company v. Workers' Compensation Appeals Board, et al., B278412 (2/2  5/10/17) (Chavez, Hoffstadt, Goodman) (unpublished).

    Held:  "The conclusion is unavoidable that the issue whether  Southern's rescission was legally effective remains factually open and unresolved."  Accordingly, the decision of the appeals board was annulled, and the matter remanded to the board for proceedings consistent with the opinion.

    COMMENT:  We would have liked to see a discussion of the standard of review and relevant authority in this opinion.