Category Archives: Tactics and Strategy

On Vexatious Litigants

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The life-time claimants.

Most of us have at least one of these applicants in our past.  You know the ones – no matter how slight or serious their injuries, they refuse to move on with their lives.  Often enough, their own attorneys have had enough of them and they find themselves living out that old proverb about having oneself for a client.

All of a sudden, everything becomes “sanctionable” conduct, Defense lawyers are reported to the bar by the applicants for anything and everything.  The Workers’ Compensation Judge has to hear about the laundry list of abuses practiced by the defense.

Before you know it, the applicant starts relying on such relevant authority as Federal Rules of Civil Procedure, the Constitution of the State of Idaho, and probably some United States Resolution regarding water rights.

Meanwhile, the defense attorneys are racking up a bill reading and responding to every pointless 30 page brief the applicant files.  Soon you start suspecting the method to the madness is the expense inflicted upon the defendant in defending its position.

Well, one remedy the defense has at its disposal is that of California Code of Regulations section 10782, which allows a self-represented applicant to be declared a “vexatious litigant.”  If successful, the applicant can only file documents which the presiding judge has approved, filtering out a lot of the meaningless gibberish the defense would otherwise have to waste time on.

This is a very difficult maneuver to pull off and the standard is fairly high.  But, in a recent writ denied case, defendant was successful in doing just that!

Sylvia Santos filed four applications for three specific injuries and one (3-day) cumulative trauma.  Unrepresented she fought the defense tooth and nail on routine issues like release of medical records.

Defendant’s investigation revealed that Santos had filed an application for the same body parts against almost every employer she has had.

In response to defendant’s petition to have applicant declared a vexatious litigant, applicant filed a petition to have defendant declared a vexatious litigant, too!

The insanity continued, with applicant accusing the WCJ of bias against the applicant, and claiming the vexatious litigant regulation is unconstitutional.

The WCJ found applicant a vexation litigant, and the Workers’ Compensation Appeals board denied applicant’s petition for reconsideration.

In denying applicant’s petition for writ of review, the Court of Appeal reasoned that:

“a review of this record shows that Santo’s multiple filings do not serve the interest of her moving her cases forward toward decision on the essential issues, but, instead, a great deal of court time has been required to understand, organize and respond to the pleadings and other documents.  The designation of vexatious litigant will not prevent Santos from proceeding with her claims or from having the opportunity to be heard, but will allow the [presiding judge] to examine her conditionally filed documents to determine which documents may be appropriately organized and filed in order to mover [sic] her case to adjudication.”

If you’re dealing with one of these life-time cases, perhaps § 10782 is something to look into as a possible strategy.  If you have any luck with it, let me know – your humble editor would love to hear the story.

On Mysterious Deaths

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What happens when a man is murdered on the job, but no one (except, perhaps, the at-large murderer) knows the motive for the slaying?  Enrique Vicente Rincon, deceased, was working in a liquor store when a hooded man walked in and shot him.  The gunshot wound resulted in Mr. Rincon’s death and the hooded gunman escaped.

The widow filed a claim for death benefits (Rincon v. South Bay Liquor & Market), and the defendant elected to put the issue of Arising Out of Employment/Course of Employment on trial.

The defense conceded COE, recognizing that the death causing injury occurred while Mr. Rincon was on the job.  But what was the motive for the murder?  If it was a personal vendetta against Mr. Vincent, then it can hardly be AOE – an ex-girlfriend, a driver cut off the day before, an angry neighbor in the final stage of the Hatfield – McCoy feud.  None of these have to do with the job, and should not be compensable (also known as the “personal risk” doctrine).

The investigating police officers could only speculate – it could have been a gang initiation, or a robbery in which the robber lost his nerve (explained by the fact that no money was taken during the crime).  There was really no way to know, unless the murderer was caught, or at least identified.

The Workers’ Compensation Judge applied the “mysterious circumstances” doctrine, holding that, because the motive for the murder was unknown, the death must be presumed to satisfy both the AOE and the COE requirements for finding the injury compensable.

The Workers Compensation Appeals Board adopted and incorporated the WCJ’s opinion.

Sometimes, nothing can be done – the facts aren’t there or there is no way to get them.  But in cases like these, the employer needs to do an even better job investigating the case than the police.

Who had a motive to kill the employee?  Facebook, e-mails, cell phone logs (and texts) should all be subpoenaed.  The only real restraint on the thoroughness of the investigation should be the cost (with no medical treatment and statutory caps on recovery, the limits are easy to see).

Mr. Rincon is the tragic victim of a terrible murder.  Unfortunately, the employer was victimized by California’s Workers’ Compensation system as well.

A Small Caveat to the MPN

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It is no secret that I’m a fan of Medical Provider Networks.  A useful tool in California’s Workers’ Compensation defense practice, MPNs save the employer money in medical treatment, filter out junk-science reports, and protect the injured worker from being tricked into adopting a cash-cow posture for less-than-ethical medical practitioners.

Although an employer/insurer can set up an MPN fairly easily, and impose upon the injured worker the duty of using it (if the employee expects the employer to pay for the treatment), there are a few small cracks in the wall.

One such crack can be found in Labor Code § 4616.2, subsection (d)(3)(B).  This exception to the general rules of MPNs allows the current non-MPN treating physician to continue treating the employee for up to 12 months for a “serious chronic condition.”  The determination is initially made by the employer/insurer, and the employee can dispute the determination, first by requesting a report from the treating physician and then by getting a panel QME.

According to section 9767.9(e) of the California Code of Regulations, a chronic condition is one “that persists without full cure or worsens over 90 days and requires ongoing treatment to maintain remission or prevent deterioration.”

In other words, the employer must approve the continuation of treatment for the serious chronic condition, for up to one year, starting on the day that notification is received by the employee.

[Note, as per § 9767.9(f), notice must be sent to the employee and the employee’s treating physician, in English and Spanish, that the employer/insurer has determined that there is not a serious chronic condition and that the employee will be transferred into the MPN.  The regulation also provides that “to the maximum extent possible” layperson’s terms must be used in this notice.]

In other words, dear readers, if you are thinking of adopting an MPN, this is one of the delay tricks doctors and employees will use to stay out of it as long as possible.  This provides them with an additional year to rack up the bill on treatment and produce one report after another.  [Note – under subsection (h), the employer, insurer and employee all have the right to have this matter resolved by going to a panel qualified medical evaluator.]

By no means does this take away from the great value of MPNs – but it is something to be aware of before refusing to pay for an extra year of non-MPN treatment.

All About Applicants’ Attorneys’ Fees (Part 3 of 3)

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In the last two posts, we discussed the difficulties in facing an unrepresented applicant who has not filed an application, and covered responses such as withholding benefits until an application is filed or simply paying all benefits.

The most common course of action in such cases is for the defendant to file an application for the unrepresented employee, and thereby become liable for applicant’s attorney’s fees.  There is a chance, of course, that applicant will eventually settle without ever hiring an attorney, making § 4064 inapplicable.  But the potential consequences should be weighed before deciding on the plan of attack.

Filing an application for an unrepresented applicant to be able to perform discovery (as per 8 CCR § 10403) will likely make defendant liable for applicant’s attorney’s fees; filing an application for the purposes of settlement approval will likely not (8 CCR § 10400(b)).  But what about other petitions a defendant might file?

Let’s say the employee is injured at work but some third party is at fault, such as the driver in a car accident or the manufacturer of a faulty ladder.  The injured worker is entitled to workers’ compensation benefits, but the employer is entitled to credit under Labor Code § 3861.

Often enough, these cases are not contested by the employer, and benefits are paid and treatment is provided on an industrial basis.  If the injured worker has not retained a workers’ compensation attorney and has not filed an application, how does the employer go about getting an order of credit?

Labor Code § 5500.5 tells us that a workers’ compensation case is commenced with the filing of an application, and California Code of Regulation § 10878 states that “[t]he filing of a compromise and release agreement or stipulations with request for award shall constitute the filing of an application.”

Generally, no Board file will be opened or started for the purposes of filing a Petition for Credit without an application being filed first.  The case law appears to be silent as to the question of whether an application filed on the sole issue of defendant’s petition for credit will trigger § 4064(c).  But speaking from policy, legislative intent and common sense (admittedly weak medicine for defendants to use in the world of California’s Workers’ Compensation practice), merely filing an application on the sole issue of third party recovery credit should NOT trigger liability for applicant’s attorney’s fees.

Having to pay the applicant’s attorney’s fees can make an expensive case 15% more burdensome.  So tread lightly and avoid the landmines that activate this additional liability.

All About Applicants’ Attorneys’ Fees (Part 2 of 3)

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In yesterday’s post, we talked about the problems defendants encounter when facing an injured worker who has yet to file an application.  One approach to this problem, when the injury or causation itself is contested, is to withhold benefits until an application is filed, but there are other options that don’t come with the same risks and liabilities.

There are, after all, times when filing an application for adjudication of claim will not (or at least, should not) trigger Labor Code § 4064.  California Code of Regulation § 10878 states that “[t]he filing of a compromise and release agreement or stipulations with request for award shall constitute the filing of an application.”

However, § 10400(b) states that “[a] case opening Compromise and Release Agreement, a case opening Stipulations with Request for Award, and a Request for Findings of Fact under section 10405 are each an ‘application’ for purposes of invoking the jurisdiction of the Workers’ Compensation Appeals Board, but none of these documents shall be deemed an application for purposes of Labor Code section 4064(c).”

Therefore, at least in theory, filing settlement documents without having first filed an application for the unrepresented applicant, should not trigger future liability for applicant’s yet-to-be-hired attorney.  But, it appears that there were different results in the case of Monument Car Parts v. WCAB (Teach) (2007), in which the Workers’ Compensation Judge ruled that defendant’s filing of a compromise and release agreement for approval triggered a duty to pay attorney’s fees.  However, the facts of that case reflect a defendant somewhat unresponsive to the Judge’s inquiries regarding the adequacy of the proposed settlement.

Another alternative course of action is simply roll over and pay out for all treatment and permanent disability in accordance with the treating physician’s report.  But then the defense loses many of the benefits of discovery, including possible grounds for apportionment (Labor Code §§ 4663 and 4664) or defenses based on Arising Out of Employment/Course of Employment (AOE/COE).

So what happens if the defense files an application for the unrepresented applicant?  Check back tomorrow for Part III!

All About Applicants’ Attorneys’ Fees (Part 1 of 3)

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The work of an applicant’s attorney in California’s Workers’ Compensation system is rarely a venture in charity – applicant’s attorneys are paid a fee out of the applicant’s recovery.  But there are factual circumstances under which the employer must pay the applicant’s attorney’s fees in addition to, rather than out of, applicant’s benefits.

This can happen when the self-insured employer or the insurer over-advances without reserving funds for attorney fees, which is a subject of an article written by Lisa Kasselik of Harbinson Tune Kasselik.  The defendant can also be required to pay applicant’s attorney’s fee if the defendant files the application for applicant.

Usually, an employee is injured and fills out a claim form.  The employer decides to conduct some form of discovery, such as deposing the applicant or witnesses.  But the cases of Donna Yee-Sanchez v. Permanente Medical Group and Natalie Piatt v. Eureka Union School District tell us that discovery is prohibited, (see 8 C.C.R. § 10403), and even sanctionable, before the commencement of a case, and a case is only commenced by the filing of an application for adjudication of claim.  (Labor Code § 5500.5)

If applicant has not retained an attorney and has not filed an application him or herself, how is the defendant to proceed?  One option, when injury is in dispute, is to withhold benefits, forcing the employee to lawyer-up or file an application.  Of course, when injury is NOT in dispute, this comes with a 10% delay penalty (or 25%, depending on the facts).  (Labor Code § 5814).

Whatever the benefits withheld may be, the employer faces a 10-25% penalty only on those benefits already due and withheld.  On the other hand, by filing an application for the employee, defendant exposes itself to 15-18% of all permanent disability benefits in attorney’s fees.

However, there is a danger in using this tactic.  If an applicant retains an attorney in response to withheld benefits and there is no dispute as to the injury, any attorney worth his salt would file a petition for penalties with his notice of representation.  This would bring the penalties to 25% of the withheld benefits (or a maximum of $10,000).  This could also bring upon the insurer or self-insured employer administrative penalties under California Code of Regulations § 10111.1.

Another disadvantage to this tactic is the fact that, when the injury is not in dispute, the defense is essentially using bad-faith delay tactics.  This is inappropriate, unethical, and will likely result in long-term self-injury such as damage to reputation and ability to maintain an insurance certificate.

All in all, this course of action is a gamble and brings with it a slew of its own risks.  But there are other options available to the defense in such cases.  Check back tomorrow for Part 2 of 3.

Excluding a Co-Defendant From QME Communications

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Ever since the decision in Alvarez v. Workers’ Compensation Appeals Board  the issue of ex parte communication with a qualified or agreed medical evaluator, as prohibited by Labor Code § 4062.3 has been a cloudy one.  The very language of the Alvarez opinion (“an ex parte communication may be so insignificant and inconsequential that any resulting repercussion would be unreasonable”) leaves nothing more to grasp at than mist when one puts himself to the task of defining what is, and what is not, ex parte communication.

In the recent case of Morales v. Workers’ Compensation Appeals Board, the Court of Appeals denied a petition for writ of review of a decision touching on this topic.

The skinny:  providing the remedy of a replacement panel for applicant’s act of sending medical records to the a Qualified Medical Evaluator and only one of two defendants does not prejudice the applicant, nor is it a final order.

In this case, after the Workers’ Compensation Judge ordered a new panel to issue on defendant’s motion, applicant’s attorney petitioned for reconsideration or removal.  The petition for reconsideration was denied as the ordering of a replacement panel was not a final order.  The petition for removal was denied because applicant failed to show any prejudice from the WCJ’s order.

The facts of this scenario present some interesting questions regarding the right to a new panel.

The ideal outcome for co-defendants can be mutually beneficial, such as a favorable judgment regarding causation, extent of impairment or apportionment.  For co-applicants, such as competing dependents in a death claim, there is only one pie, and it can only be sliced so many times.

Let’s assume the last QME standing after the panel selection process is known to the defense community to issue high-rating reports.  Seeing that this panel QME is not good for either defendant, could one of them send an ex-parte communication to allow the other to demand a new panel?  Or, without planning it, could one defendant accidentally forget to serve the other, the way an applicant might not serve a second defendant, as appears to be the case in Morales?

The ethical implications of this tactic are questionable at best, but the thought does present an interesting question regarding the inner workings of the new-panel remedy.

In any case, absent a settlement, I expect we will see the case of Morales v. Workers’ Compensation Appeals Board again.

When “Employment” Begins

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A recent writ denied case addressed the details of one of the defenses to psyche claims.  Labor Code § 3208.3 provides that psyche claims can not proceed if the employee has been employed less than (not necessarily continuous) six months.  The exception to this is a sudden and extraordinary event.  An earlier blog post covers this exception.

The skinny:  Employment starts with the first day of actual service – not the technical hire date, preparation dates, or anything else.  If Employee is “hired” and begins work the next week, the next week is the first day of employment for purposes of § 3208.3.

In the case of Hamilton v. WCAB, applicant Jill Hamilton was hired on September 14, 2008 to work as a home mortgage assistant, and began work on September 15, 2008, all after filing an online application for the job on August 6, 2008.  Applicant’s last day of work (and earning wages) was on March 12, 2009, and she was taken off the company books on January 25, 2010.

08/06/08– Applies for the job

09/14/08– Official hire date

09/15/08– First day of work

03/12/09– Last day of actual work/earning wages

01/25/10– Removed from company books

As in all things, timing is everything – had applicant started work just a few days earlier, her psyche claim would have survived § 3208.3.

Knowing this, applicant argued that in early September of 2008, she went, at her own expense, to an office in Ventura to pick up a laptop for her training program.  Although she was not compensated for her time, she claimed that this was her first work-related act, so her “employment” commenced sometime (any time that it might please the court) before September 12, 2008.

The Workers’ Compensation Judge found that applicant began working more than six months before March 12, 2008, and therefore was entitled to proceed on her psyche claim.

The Workers’ Compensation Appeals Board granted defendant’s petition for reconsideration, taking a position contrary to the WCJ’s.  Relying on previous case law, the WCAB found that employment begins with actual work, and does not include time off for disability.  Rather, what counts is the “days of actual service” and not those “days of employment where there was no actual performance of services.”

On appeal, applicant’s Petition for Writ of Review was denied.

Before you follow this next tidbit, bear in mind that this is a crazy idea and using it might incur ridicule, discipline, penalties, or even sanctions!  Of course, if you pull this one off, your name will live forever in endless glory.  When signing autographs, don’t forget to tell the fawning fans where you first got the idea for this maneuver.  That being said, let’s walk down “what if” road.

What if we took the language of this opinion one step further.  Averaging six months to 180 days, can we say that vacations, holidays, and weekends don’t count?  Can we argue that applicant is barred against a psyche claim until he or she has worked an actual 180 days (not counting weekends, holidays, etc.?)

After all, if the job is causing a psyche claim, shouldn’t not being on the job slow the progress of the injury?

It’s unlikely to work, but could provide an interesting chance to test the limits of § 3208.3.

Yet Another Way to Get a Second Panel

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It’s hard to be a California Workers’ Compensation defense attorney and not become a little cynical.  After all, the California legislature dangles a carrot in front of you, and just as you’re about to bite, the Workers’ Compensation Judge, the Workers’ Compensation Appeals Board, or even the higher-ups in the judicial branch yank it away.

At the moment, I’m brooding over the case of Denys-Peck v. Sonora Surgery Center.  There, applicant braved the workers’ compensation system alone, and ended up with a panel Qualified Medical Evaluator finding her various body parts either non-industrial or without a ratable impairment.

Applicant then called in the cavalry, and her attorney demanded a new panel.  Now, if you’re a regular reader of my humble post, you know that Labor Code § 4062.1 specifically prohibits an additional evaluation in cases where a formerly unrepresented applicant becomes represented after already having an evaluation.  Can’t you just taste that juicy carrot that the legislature is dangling?

Here is where the carrot gets yanked away.  Applicant and her attorney claimed cumulative trauma to the same body parts (and one more, the knees).  Then they demanded a new panel for the cumulative trauma.

The WCJ ruled and the WCAB affirmed that the applicant must return to the first QME for the specific injury but can have a new panel for the CT.

With the same body parts injured, the applicant effectively gets a second panel, now that she is represented.  Hopefully, an appeal will see this position adjusted – the legislature clearly expressed its hostility to QME shopping and repeat attempts at an evaluation.  Simply pleading the same body parts over a cumulative period to get a new QME flies in the face of the law.

For now, the best the defendant can do in this case is to minimize the damage dealt by the second panel.  Other than that, just sing the carrot song to make it all better.

What Constitutes a Request for Medical Treatment?

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Under Labor Code § 4600, the insurer or self-insured employer must provide medical treatment “reasonably required to cure or relieve the injured worker from the effects of his or her injury” or else face the risk of having to reimburse the employee for his or her visits to Dr. McOver-Prescribe.

But at what point do the adjuster’s duties of approving the treatment or undertaking the expense of Utilization Review kick in?  For example, if a chiropractor calls the adjuster and says “Jim needs 100 more treatments of Placebo-tox” or “your employee Kathy would really benefit from my patented Medo-Widget,” must the adjuster act?

Or what if you open your mail and there is a note from a treating physician, simply saying “please authorize treatment X”?

Labor Code § 4603.2(a) states that the employee’s treating physician “shall submit a report to the employer within five working days of the initial examination and shall submit periodic reports at intervals that may be prescribed by rules and regulations adopted by the administrative director.”

So what regulations have been adopted by the administrative director?  Take a look at 8 CCR § 9792.6 (o).  This sets out the requirements for a request for treatment.  If the request is made orally, such as in a telephone call, it must be followed by a written request within seventy-two hours.

The written requests (both as originals and as the follow-up) must be on forms PR-1 or PR-2.  Otherwise, the request must be in a narrative, containing the same information as a PR-2, and “the document shall be clearly marked at the top that it is a request for authorization.”

In other words, if the proper procedure is not followed, no soup for you!