Hello, dear readers!

Your humble blogger wishes you and yours a happy Veterans Day!  If you, a friend, or family member served this great country please accept my most sincere thanks for your service.

Here’s to hoping you get to take today off, and if nothing else, celebrate your status as a Workers’ Compensation veteran.

Cheers!

Greg

Once in a rare while, one of the parties in a workers’ compensation case are not happy with the primary treating physician’s decisions with respect to any host of issues.  Whether the parties go to an Agreed Medical Evaluator or a Panel Qualified Medical Evaluator, there’s typically a WHOLE lot of paper.

First, the defendant will flood applicant’s counsel with every scrap of paper subpoenaed, every page of every deposition transcript, all past awards, past-injury medical reports, etc.  Then, the defense will typically send that same giant stack of paper to the PQME.  (See California Code of Regulations section 35)

So, if once all legal documents were written by hand, and now we require all represented legal proceeding to go forward by type-print (does anyone still use a typewriter?), why can’t we move past that and require QMEs to accept electronic copies of documents?

After all, anyone who doesn’t care about all the trees that go into the paper-mill probably cares about all the money and time wasted on reproducing these records and shipping them over (not once, but at least twice – and that’s only if there is one QME and one applicant and no other defendants).

So, since we don’t hesitate to regulate almost every aspect of the QME process, from report contents to evaluation locations to days for a report, why not require QMEs to accept electronic versions of records?  If the QME really needs to, he or she can print them out.  Otherwise, just read them on the computer and safe yourself the filing cabinet space and the paper.

Additionally, by providing records via an electronic link (see, for example , the file sharing abilities of a Dropbox account), the other side can make sure that no records were sent to the QME that weren’t first sent to the other parties.

After all, the Bar and Supreme Court already require all lawyers to have e-mail addresses, and a (regularly ignored) Rule of Court requires a declaration that all filing were made on recycled paper.

Perhaps it’s time to make the default approach paperless, and simply place the burden of printing out and wasting paper on the individual QMEs and attorneys.

Death benefits – hardly a cheerful subject, and made no less gruesome by the fact that, as the body departs, the haunting specter of dependent benefits lingers.

Take, for example, the recent writ denied case of Jamie Xelowski (Dec.)/J. Campbell v. Community Health Network.

The facts are pretty simple – Jamie Xelowski sustained an industrial injury while employed by the Community Health Network/City and County of San Francisco, and, unfortunately, passed away as a result of her injury.  Her daughter, J. Campbell (“JC”), sought benefits under Labor Code section 3501, which provides that a child of any age found by any trier of fact to be physically or mentally incapacitated from earning, shall be conclusively presumed a total dependent.

And, as Labor Code section 4703.5 provides, in additional to the total death benefit for all of applicant’s dependents, the “physically or mentally incapacitated child” is entitled to temporary disability benefits until his or her death.  In short, a defendant is better off having an injured worker be found 100% permanently disabled rather than pass away.  Yes, yes, I know – I don’t like writing about this stuff too much for the very reason that it makes your humble blogger feel dirty for calculating how to minimize liability by wishing for one death or another.

So, back to the Xelowski case – JC had sought and received social security benefits in October of 2010, after her application was initially denied on May 5, 2010.  JC had appealed the first result, and her case was reviewed by an analyst and a physician.  There was no appearance on the part of JC at any Social Security Administration Hearing.

JC argued that the finding by the Social Security Administration triggers the effects of Labor Code section 3501, in that she is “a child of any age found by any trier of fact … to be physically or mentally incapacitated from earning.”  Defendant, not wanting to be stuck with an employee’s daughter’s lifetime of temporary disability benefits (it’s like having an employee on the payroll but not getting any work out of him or her) decided it might be worth a billable hour or two to fight.

The WCJ was persuaded – what happened before the SSA was the equivalent of a Panel Qualified Medical Evaluation – there was no judicial officer involved.  So, while JC might still prove her incapacity, mentally or physically, the presumption was not there yet.  Additionally, the finding still allowed JC to earn some income, so this finding did not satisfy the requirements of 3501.

Well, the WCAB didn’t agree – the panel of commissioners found that the Social Security Administration’s finding of disability triggered section 3501.

Now, your humble blogger has a bone to pick, but not with this particular case.  The Commissioners properly  applied section 3501, as it is, and when your humble blogger has to feed the meter in San Francisco, he can explain to his visiting friends why the meter makes more per hour than he does (San Francisco is self-insured, after all).

But, the proverbial bone your humble blogger has to pick is with the language of the statute itself.  Section 3501 conclusively presumes a fact (mental or physical incapacity) without affording the defendant fair notice of a hearing and an opportunity to be heard.

Picture, if you will, some poor unfortunate soul attending a hearing before the Social Security Administration, with proof of physical or mental incapacity, and some attorney like your humble blogger kicking down the hearing room doors and demanding to be heard because the poor soul’s mother or father works for his client.  “Her mother might die on the job, some day, and I want to make sure you don’t make a ruling that would affect us…”

Exactly – insanity.  The conclusive presumption should be done away with – if a person is found incapacitated from earning, then those same documents can be used to prove the case again before a workers’ compensation Judge.  After all, the SSA is giving away other people’s money, and might not be as zealous in its defense as a client with a million dollars on the line (picture $500 per week for 40 years).

If there is time for public comment at the next midnight reform session, perhaps we can bring this up?

Every now and then, your humble blogger puts on that old Johnny Cash CD to hear the man in black sing of the Folsom Prison Blues.  My favorite verse?

“I said I slipped down stairways, and then I hurt my foot;
I couldn’t guard the prison, I couldn’t wear my boot;

And then they said they filmed me, they saw me playing ball;
So now I’m a defendant, and hearing Folsom call…”

Ok, so maybe the Man in Black sang it a bit differently, but the lyrics aren’t that bad for the story of Todd Phillips, a 17-year veteran Folsom correctional officer recently charged with felony fraud.  It appears that the evidence against him consists of several competitive softball tournaments caught on tape, as well as other alleged evidence of him exceeding his claimed work restrictions.

Time will tell the extent, if any, of Mr. Phillips’ fraud, but your humble blogger wishes the District Attorney’s office the best of luck in this case.  Having some experience with the excellent deputy district attorneys in the Sacramento DA’s Insurance Fraud Unit (not as a defendant, I assure you), I’m fairly certain charges would not be filed unless there was actual wrongdoing.

But, this is an important lesson for all of us on the defense community and for employees in general.  Workers’ Compensation Fraud hurts everyone – it turns a potentially productive worker into a fraudulent parasite, it costs society the time and resources to investigate, prosecute, and ultimately punish criminal behavior, and it raises prices on the consuming public.

After all, if the cost of doing business goes up because an employer has to deal with fraudulent claims, the cost of the product on the shelf is going up with it.

In any case – good luck Sacramento DA!

English fluency is by no means a requirement for making a claim in California’s workers’ compensation system.  In fact, it is a short career for a comp attorney, defense or applicant, that doesn’t encounter an injured worker that knew enough of the common tongue to adequately perform his job duties, but not so much that he could readily follow the Queen’s English seasoned with a bit of legalese.

In fact, it’s not that hard to find a native English speaker that feels like a freshly arrived immigrant when long-winded lawyers start serenading themselves with the lovely sounds of their own voices.  (You know who you are…)

So, when an applicant is to be deposed, and an interpreter is needed, who gets to select the interpreter?  After all, a defense-friendly interpreter service might agree to contracted rates and might filter possible interpreters for skills and experience.  And, as always, time is money for the defense — there’s the applicant’s attorney fees to consider, and there’s the time of the interpreter, the court reporter, the room rental (sometimes), and, last and possibly least, the defense attorney.

Meanwhile an applicant’s attorney might want a more expensive interpreter, or to help an interpreter friend, or even might want a workers’ comp savvy interpreter that will mitigate the meaning of an applicant’s words when there is wiggle room for translation.  In fact, a really sneaky applicant’s attorney could see profit in a slow-speaking interpreter to double his deposition fee.  Or, maybe, the applicant’s attorney just trusts a particular interpreter and thinks the defense interpreter service is trying to save money by getting lower-quality work.

The case at hand is that of Porfirio Contreras v. Gibson Farms.  There, the applicant’s attorney refused to allow the deposition of the applicant to be set unless the AA got to pick the interpreter.  Defendant wouldn’t agree, so the matter went before a workers’ compensation Judge, who found that the Defendant, and not the applicant, had the right to choose a deposition interpreter.

The reasoning lies in Labor Code section 5811, which provides that the party producing a witness requiring an interpreter shall bear the responsibility of arranging the presence of an interpreter.  The applicant’s attorney argued that he was producing the witness, namely the applicant, so he should choose the interpreter.  The WCJ disagreed: “Applicant’s role in bringing the deposition about is almost entirely passive.  Applicant has no reason to depose himself.”

The WCAB concurred.

But how would this play out with potential witnesses such as co-workers?  Is the defense “producing” the witness because he is an employee?  Is applicant “producing” the witness because the testimony is beneficial to the case of the applicant?

Now, recall, if you will, dear readers, an earlier blog post on who gets to choose the Nurse Case Manager, but this one is different.  Even though the deposition is typically held in applicants’ attorneys’ offices, it really is defendant’s deposition of the applicant.  It’s defendant’s court reporter, defendant’s transportation to the deposition (if it is needed), defendant’s interpreter, and, ultimately, defendant’s dime.

For now, at least, the defense still has some control over its own discovery process, including who will bridge the language gap between the two parties during the deposition.  Tomorrow, perhaps the Legislature will “reform” workers’ compensation to do away with attorneys all together.  In any case, stay tuned and have a good weekend!

Your humble blogger learned a long time ago to give credit where credit was due.  After all, the law in general dislikes windfalls and encourages disgorgement of unearned benefits.  Workers’ compensation law, not so much.

Credit is a tricky issue in comp law, and many defense attorneys find themselves fighting an uphill battle when money goes into the applicant’s left pocket instead of the right (or vice-versa).

Take, for example, the case of Lumb v. City of Chula Vista.  There, the injured worker claimed a cumulative trauma as well as a specific injury to the same body parts.  Defendant had overpaid permanent disability benefits in one case by roughly $2,500, and the WCJ was inclined to let the injured worker keep the extra money while making the defendant pay the same amount on the other case.

So, because of a mislabeled check, or the wrong claim number, the defendant was set to be out an extra $2,500, and the injured worker was set to receive that amount.  That seems fair, right?

The WCJ reasoned that the injured worker would have received more money prior to the decision in Benson, and the WCJ is merely mitigating the loss caused by that decision. (“It is clear that Applicant would have received more permanent disability prior to Benson and that Defendant received a monetary benefit regarding the overall amount of permanent disability owed, after the application of Benson.”)

Well, the defense didn’t think so, and it filed a petition for reconsideration, seeking to have the credit applied.  The Workers’ Compensation Appeals Board reversed the WCJ.

Relying on Maples v. WCAB (“Such resulting overpayments of temporary disability indemnity are typically small and do not result in any significant interruption of benefits.  Equity favors the allowance of such credit against permanent disability indemnity”), the panel reasoned that this was a relatively small amount and the injured worker was still going to receive plenty of permanent disability benefits as a whole.

But, that being said, we’re talking about a $2,500 credit which will now have to be reduced by the cost of the petition for reconsideration.  So, the injured worker gets no additional funds, the employer gets back less than what it should have, and there was delay and uncertainty in resolving the case.

Perhaps the proper thing to do here would have been to settle the matter of credit?  But, that’s a hard call to make: some defendants are willing to invest the time and money to develop a reputation for protecting their rights, and some don’t think the attrition is worth it.

Some have asked if there is a way to get the money back without seeking credit.  After all, if the injured worker has received benefits to which he is not actually entitled, don’t we have a case for unjust enrichment?  Well, good luck – even if a Superior Court Judge were disinclined to kick your case to the curb noting that whole exclusive jurisdiction matter, injured workers fighting tooth-and-nail for workers’ comp benefits don’t tend to have a lot of cash on hand for one to recover.

Well, at least in this case, the WCAB was willing to give credit where credit was due.

Welcome back from your weekend, dear readers.  Your humble blogger is aware that many of his readers eagerly rush to get to their offices on Mondays, Wednesdays, and Fridays so they can read his blog posts before starting their day.  Well, if you’re one of those folks – good news!  Check your to-do list or the next few weeks.  Does the word “Implantium” appear anywhere?

If you were preparing to write a check to the durable medical equipment provider (and frequent lien claimant) Implantium, perhaps you should put a pin in that idea.

The former CEO of Implantium has plead no contest to felony insurance fraud chargers.  Implantium apparently overcharged Santa Clara County and the City of San Jose (both self-insured) by faking the amounts paid to manufacturers for surgical spinal implants.

As my beloved readers may recall, a previous blog post noted when charges were first filed.  Furthermore, an EAMS search reflects about 10 liens filed by Implantium for a total of more than $336,000.

Look through your old bills – perhaps it might be a good time to get some of that money back, or at least seek credit against any outstanding liens/bills.

A hearty congratulations to the Santa Clara County District Attorney and his hard-working (and often unmentioned) deputy DAs who helped make this happen.

So, dear readers, we learned that the ambitious and totally unlucky laboratory mice, Pinky and the Brain, are probably forming a partnership during their nightly ventures to take over the world.  We have also reckoned that, in all likelihood, they are not covered by the requirement to purchase workers’ compensation, and won’t be covered by any policy unless they go out and buy it themselves.

However, does that mean that the business-killing monster known as workers’ compensation does not apply to partners in partnerships?  After all, if your humble blogger was hired to build a house, and wanted to hire a dozen or so workers to get the job done, couldn’t he just have the dozen workers form a partnership and hire the partnership?  What if they were all independent contractors forming a partnership?

Not really.  After all, Labor Code section 3360 holds that workers forming a partnership for a particular piece of work are employees of the person having the work done, unless the workers purchased workers’ compensation insurance for themselves.

In fact, the situation was explored in the case of Jose Guzman v. Workers’ Compensation Appeals Board (1984).  There, Guzman worked as a tree pruner for one company, and his cousin was a head gardener for a hotel.  Guzman’s cousin often contracted for specific jobs on weekends and Guzman helped him.  For one job, Guzman’s cousin offered to split the fee 50-50, and each provided some of their own tools to get the job done.

On that job, Guzman sustained an injury and filed a claim against the alleged “employer,” a gas station for whom the work was being done.  At trial the workers’ compensation Judge found that Guzman and his cousin had formed a partnership for the specific job, and so Section 3360 applied to place liability on the gas station for the injury.  The WCJ ruled that independent contractor status did not negate section 3360.

The Workers’ Compensation Appeals Board reversed, reasoning that Guzman, his cousin, and the partnership were all independent contractors and that, because Guzman and his cousin had done this type of work together for other customers before (and had not formed the partnership just for this one job), section 3360 did not apply.

The Court of Appeal, on the other hand, agreed with the WCJ.  Recognizing that Guzman probably qualified as an independent contractor, the Court of Appeal still held that even if the partnership is an independent contractor, section 3360 still applies. Furthermore, the Court of Appeal held that a history of such one-job ventures does not negate the elements of section 3360.

So, dear readers, to sum up – Pinky and the Brain, so long as they truly are partners, don’t need to get workers’ compensation insurance for themselves while they are trying to take over the world.  But as for Brian and Mr. Pinkman?  It might make it easier to sell their services if they can assure whoever is hiring them that they come with insurance provided.

As for the folks out there considering hiring someone for a particular job, be very careful about the effect of section 3360 – even independent contractors can suddenly be entitled to workers’ compensation benefits if they form a partnership just for this particular job.

Last time we talked about our good friends, Pinky and the Brain.  To the extent that these two maniacal laboratory mice cooperate in repeated efforts to take over the world, are they forming a partnership?

This is a significant question – if their relationship should be one of employer and employee, rather than partner, the one unlucky enough to be labeled the employer suddenly loses the protections of Labor Code section 3351(f), and instead finds himself to be an illegally uninsured employer.  On the other hand, if they are partners, when Pinky inevitably gets crushed by a laboratory widget as part of Brain’s plan, Brain is in the clear!

The Uniform Partnership Act, section 202, defines partnership as an “association of two or more persons to carry on as co-owners of a business for profit.”  In California, there is an endless wealth of advice about good practices involving partnership formation, but there is no requirement to file any paper work or registration work as part of a general partnership.  A firm handshake and some good intentions is more than enough.

In fact, California Corporations Code section 16202(a) specifically holds that “the association of two or more persons to carry on as coowners a business for profit forms a partnership, whether or not the persons intend to form a partnership.” (Emphasis added.)

But, recall, dear readers, that in the writ denied case of Aubrey v. WCAB (Larrea) (1996), an employment relationship was found even though the alleged employer and the deceased (alleged) employee had discussed forming a partnership and the fee for the fencing job during which the deceased lost his life was to be split 50-50.

Do Pinky and the Brain plan to be co-owners of the world once they take over?  Or is Pinky going to be just one of the favored subjects to Brain’s rule?  Can ownership of the world count as a business for profit?  Unfortunately, the cartoon was cancelled long ago, so we may never know.

Assuming, however, that Pinky and the Brain (or Brian and Mr. Pinkman) intended to rule the world together, then, even without intending to do so, they could find themselves in a partnership.  That means that neither one would be covered by anyone for workers’ compensation, right?

Without specifically electing to do so, they would be naked against the injuries of the workplace.

However, there is one particular code section that militates against closing the workers’ comp books once the word “partnership” gets mentioned.

Gather round, dear readers, as your humble blogger will relate to you the story of Pinky and the Brain.  As related in a 1990s cartoon with a hilarious premise and exceedingly witty dialogue, Pinky and the Brain were two laboratory mice who spent their evenings, without fail, desperately trying to take over the world.  Each brought to the [laboratory] table a different set of skills (“one is a genius, the other’s insane.”)

In each episode, Brain and Pinky came up with clever plots by which they would harness the masses of the world under their iron rule, only to have their plans fall to pieces at the last moment, often with serious injury as a result, although the signs of these distresses were often gone by the start of the next adventure.

Cartoon rodents and hilarious situations aside, do these two need workers’ compensation coverage?  After all, in our crazy world, it can just as easily be Brian and Mr. Pinkman trying to improve their lots in life.  Whether two maniacal rodents or desperate blue collar workers, does the existence of a joint venture into the marketplace prompt the need for workers’ compensation insurance (or self-insurance) in California?

Now, your humble blogger’s dear readers would be in for several blank pages if the answer to this question could be reached in Part 1 of 3.  The answer is, as always, “it depends.”

Let’s start with the basics.

California Labor Code section 3700 requires every employer within the state to secure payment of compensation by (1) getting insurance; or (2) self-insuring as a group or an individual employer.  Section 3300 includes in its definition of “employer” every person which has any natural person in service.  And, of course, an employee is defined as every person in the service of an employer. (Section 3351).

Now, pay close attention to section 3351 – it provides the basis for the exceptions invoked by so many partners and corporations for cutting overhead costs in their operations:  Subsection (f) allows all partnerships and limited liability companies to opt in to the workers’ compensation system, although they start out outside of it by default (“the partners or managers shall come under the compensation provisions of this division only by election”).

So, partners have to choose to be covered by workers’ compensation, and have to obtain coverage, while employees do not.  So the next question is: what is a partnership?