Archive for June, 2012

Compensability Presumption Must Be Raised or Waived

June 15th, 2012 No comments

Labor Code section 5402 is a cruel mistress – the burden is placed on the defendant to deny a claim within 90 days of the ink drying on a claim form, otherwise the applicant gets to enjoy the presumption of compensability.

But what happens when an applicant doesn’t raise the issue at trial?

After all, California’s world of workers’ compensation is not a game of rock-paper-scissors and not every conceivable issue may be raised at trial.  In the case of Maria Rosas v. S & S Resort Management, that’s exactly what happened – applicant’s claim was not denied within 90 days but the issue was not raised at trial.

In her petition for reconsideration, applicant argued that the workers’ compensation Judge erred by not applying the presumption in her favor without it being raised.

The Workers’ Compensation Appeals Board rejected the claim.  Reasoning that, without the issue of a timely denial being raised the defendant was not on notice to prepare evidence and arguments to show a timely denial, and applicant’s claim would therefore unfairly prejudice the defendant.

So what does this mean for the defense community?  Even in cases where a denial was not timely made within the 90 day period afforded by Labor Code section 5402, the defense should not limit itself and push forward with all necessary evidence at trial.  Applicant’s counsel may just waive the presumption.

For an example of the presumption being rebutted, see this post.

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Yet Another Sacramento CHP Officer Charged with WC Fraud

June 14th, 2012 No comments

Is there something about being in Sacramento and working for the CHP that makes one more likely to commit workers’ compensation fraud?  Is seeing California’s finest politicians hard at “work” in the state’s capital a source of inspiration for those that so effectively patrol our highways?

Back in April, your friendly neighborhood blogger reported on the workers’ compensation fraud charges lodged at Tony Yao, a California Highway Patrol officer in Sacramento.  My more interested readers can track the result of that case here.

But now, it appears that lightning has struck again, with the Sacramento District Attorney’s office accusing Officer Brian Christopher Hansen of faking an injury to collect workers’ compensation paymentsNormally, WCDefenseCA does not like to name names, but in cases of alleged fraud and criminal activity this rule is waived.

Sub rosa video showed Hansen moving furniture, driving for long periods of time, and picking up heavy objects with no signs of impairment, all while on leave because of a back injury that left him with restrictions that precluded his ordinary duties – even limited office duties.

According to this nifty device from the Sacramento Bee, in 2008, Hansen made $88,133.55, and in 2009 he was paid $83,906.26.  Was this not enough?  Is the job of a CHP officer really so horrible and the pay so meager that an injury needed to be faked?

Well, WCDefenseCA wishes the DA’s office the best of luck in obtaining a conviction, and hopefully recovering some of the money improperly obtained by Mr. Hansen.

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“Change of Heart” not Grounds to Rescind Settlement

June 13th, 2012 2 comments

When you’re dealing with a litigated workers’ compensation case, depending on applicant’s counsel, the situation can get hectic at times.  Some applicant’s lawyers just have a job to do, and are eager to get a fair and speedy settlement for their clients.  Some, on the other hand, use the age-old tactic of gaining their clients no ground, but winning themselves a reputation as an unpleasant attorney to deal with.

But that’s all part of the territory and isn’t anything special.  Then you have the cases where the applicant decides to take the reins and drive the wagon train to Unpredictable Town.

Such appears to be the case in Linda Aiello v. Library Systems Services, LLC.  There, Ms. Aiello settled her case by compromise and release while represented by counsel, agreeing to a $38,000 settlement to resolve her claim.  The C&R was approved by the workers’ compensation Judge and everyone lived (almost) happily ever after.

Ms. Aiello decided to file her own petition for reconsideration, without the assistance of counsel, alleging that the order approving the compromise and release was not justified by the record.  Now, dear readers, I will allow you an opportunity to guess whether Ms. Aiello thought she was being paid too much for her claim or too little.

The theory for the petition was that, although the settlement agreement relied on the reports of the panel qualified medical evaluator (rating at 33% PD), the treating physician actually rated out to 54%.  Also, the compromise and release agreement failed to provide for future medical treatment.

The WCJ, in her report, noted, quiet aptly, that “[a] change of heart is not sufficient basis to set aside an Order.”  And the Workers’ Compensation Appeals Board seems to agree.

Of course, applicant also argued that she “did not receive [or see] a copy of her medical reports until after signing the settlement.”

Here is what your humble oft-confused blogger always wonders about these cases – if you’re alleging that your attorney didn’t do a good enough job, why are you bothering the defense?  Not to imply that Ms. Aiello’s attorneys did an inadequate job – it appears they represented her interests and secured for her a settlement.

But if she is saying that they did an inadequate job, failed to keep her informed, and settled for far less than they should have, why does the employer have to waste attorney and adjuster hours in dealing with this claim and be put at risk for more liability?  There is probably another type of insurance (it starts with the letter “m” and rimes with “pal-practice”) which exists specifically to address these issues.

Disputes between applicants and their attorneys should be resolved in the legal malpractice arena and the defense should be left out of it.  Perhaps then applicant can get a taste of a system legally stacked against her, which is the world the defense community lives in year-round and the atmosphere in which she brought her claim.

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California Legislature Moving Towards Limiting Spinal Implant Costs

June 12th, 2012 No comments

Spinal surgery has been in the news recently… sort of.  The issue that has captured the attention of the media, the California Workers’ Compensation Institute, and even the legislature, isn’t the need for “actual” spinal surgery, but the removable spinal implants, commonly known as neural stimulators, which are performed over the course of an hour or so in out-patient settings.

Currently, Labor Code section 5318, allows “implantable medical devices” to be reimbursed separately at the provider’s cost, with an additional $250 in fees.  The problem with this is that the procedures (not just the equipment) already reimbursed and provide for the cost of the equipment.

Senate Bill 959, recently sent to the Committee on Insurance, would repeal section 5318, allowing for the (sane) reimbursement scheme under the Official Medical Fee Schedule, allowing for the insurer/self-insured employer to reimburse the cost of the procedure, and the facility performing the procedure to pay for the equipment out of that reimbursement.

According to the CWCI, the double-dipping of these devices and similar equipment increased the cost of claims by an average of $20,137 in 2010 (or adding $67.5 million dollars to the cost of doing business in California).

Here’s hoping the legislature delivers (and quickly).

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Lien Attorney Sanctioned for Two Years of Delays

June 11th, 2012 No comments

The Workers’ Compensation Appeals Board recently affirmed a workers’ compensation Judge’s award of sanctions and costs against an attorney representing lien claimants.  The WCJ had found a pattern of failing to appear or appearing late.

The case is that of Ramona Anaya v. Port Hueneme Unified School District.  The attorney for the lien claimant (recall, dear readers, that your humble blogger does not like to name names) apparently caused six of the eighteen delays in the case, providing various excuses of illness, vacation time, and other excuses.

Under Labor Code section 5813 and Code of Regulations section 10561(b)(1), the WCJ found that the long string of delays, which resulted in a lien trial finally happening on December 16, 2009 after being originally set for November 15, 2007.  That’s right, the delays added up and the lien trial had to wait two years from its original date.

Just so we’re not losing sight of the difficulties experienced by the self-insured employer in this case, the date of injury is January 25, 2002.  This means that for more than 10 years, this file has remained open and required the attention of an adjuster and an attorney to keep it current as it consumed hours, sunlight, desk space and, to some small extent, the good will and sunny disposition of the defense professionals connected with it.  As new files came in, this one lingered and added to the pile.  Two of those years can be attributed to this lien issue.

The WCJ found that, although the attorney appeared to have an excuse for every delay, section 10561 allowed for the imposition of sanctions upon the finding of a pattern of delay and non-appearance, even if justified.

The attorney fired back that the other 12 delays were not caused by her, and that the WCJs had all conspired to punish her and her clients in all of her cases.  The WCAB didn’t really address the conspiracy allegation, simply noting that it was made in the attorney’s briefs.

From what your humble blogger has observed, there is not so much a conspiracy against lien claimants as a widespread frustration with the effect they are consciously and collectively having on the workers’ compensation system.  Even applicants’ attorneys must recognize that money wasted on these liens is money out of their clients’ respective recoveries, and perhaps the age-old tactic of using lien claimants to drive up the costs to the defense of not settling has started to backfire.  After all, even the most useful scorpion eventually stings its master.

As to delays allegedly caused by the defense, the WCAB simply noted that “it is [not] relevant whether defendant caused any of the other continuances because defendant’s behavior is not at issue.”

The sanctions held up, as did the defense’s attorney costs.

Now, before my dear readers shake their heads at the calloused and insensitive writings of their cold-hearted blogger, allow him to say the following in his defense.  Everyone gets sick from time to time, scheduling conflicts arise, and continuances are needed here and there.  They can be frustrating and wasteful, but necessary at times.

But here, we’re looking at two years of delays before a trial finally happened – many of these delays were reported on the date of the hearing when they should have been noticed ahead of time to avoid unnecessary preparation and travel.  Even if these delays were the product of the lien-claimant’s attorney’s bad luck, it seems unreasonable that the defense must continue to suffer the effects of the attorney’s ill fortune.

The defense’s time was wasted.  The WCJ’s time was wasted.  And most of it could have been avoided with proper regard and diligence.

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Serious and Willful Negated by Contract Issue

June 8th, 2012 1 comment

When a wall collapses at a work-site, you can be pretty sure that a Serious and Willful Misconduct Petition under Labor Code section 4553 will follow.  However, it appears that a contract or budget dispute may work as a defense to the claim.  That’s what happened in the case of Arnold Farpella (Dec’d) v. R & L Brosamer, Inc.

Applicant was working near a supporting wall for a Cal-Trans contractor when it collapsed.  As he was running away from it, he sustained injury to his left ankle and foot, as well as his right shoulder.  He later sustained a psyche injury in the form of depression.

The matter was settled by way of compromise and release with a Thomas finding, but applicant passed away, and his widow filed a petition for increased benefits under Labor Code section 4553.  The theory was that defendant-employer knew that the wall was unstable and had done nothing to correct the danger posed to the workers, including applicant.

At trial, the evidence essentially showed that the supporting wall was built upon bad soil (running sands), and the wall collapsed from the construction activity around it when the ground beneath it gave way.  Apparently, neither Cal-Trans nor defendant were aware of the condition when the work contract was signed, and upon discovering it the employer was in the process of obtaining approval and funding to address it.

The workers’ compensation Judge found that there was no evidence of serious and willful misconduct – just a poor location for a wall and, at most, negligence.  Applicant’s widow petitioned the Workers’ Compensation Appeals Board for reconsideration, but the WCAB was not persuaded.

The interesting thing in this case was that the contract dispute tipped the balance at least enough to show that there was no intent on the part of the employer.

Serious and willful misconduct is a difficult standard to prove – and rightly so.  The applicant is alleging that the employer committed a borderline criminal act.  Fortunately, the fact that the employer’s hands were tied as to repairing the wall allowed for sanity to prevail.

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Job Title: File Clerk – Duties Include Heavy Construction, Dangerous Physical Labor, and Some Fraud

June 7th, 2012 1 comment

Every business looks for ways to cut expenses – and workers’ compensation insurance is no exception.  So what’s a better way of saving a few dollars than by reporting your roofers as marketers, your truck drivers as mail clerks, and your construction workers as data entry specialists?

And what do we call such efforts?  Resourcefulness? Creativity? Perhaps even efficiency?  The San Bernardino County District Attorney’s Office calls it fraud, and has charged two business owners with felony insurance fraud because of these very efforts, in what appears to be a case of employer-broker collusion to rip off an insurance company.

Sadly, the complaint is a little light on the details, so we can only imagine what the defendants’ are charged with and just how creative they were in (allegedly) stretching the truth as to what their employees actually did.

WCDefenseCA sends its salute to First Comp Insurance for detecting this possible fraud and making sure a case made its way to the DA’s office.  Most times, it is the insurer or self-insured employer that provides the eyes and ears laying the foundation for a fraud case.

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Res Judicata Fails to Save Defendant from Litigating Progression of Injury

June 6th, 2012 No comments

In the recent case of Mark Williams v. City of Pasadena, the Workers’ Compensation Appeals Board clarified the application of res judicata to workers’ compensation injuries.  Res judicata is the basic legal doctrine of precluding the re-trial or re-adjudication of the same matter.  In the Williams case, the defense argued that applicant’s application for benefits stemming from a claimed injury of hypertensive heart disease was barred because of the previously adjudicated injury of hypertension.

Just to clarify, hypertension, or high blood pressure, is a distinct as an injury from hypertensive heart disease, which is caused, apparently, by high blood pressure.

The factual background of this case is fairly straight-forward: applicant filed an application for alleged injuries to the neck, right shoulder, arm, and hand, as well as hypertension, sustained while employed as a police officer.  Both QMEs (this was a pre-2005 case) both found industrially-caused hypertension but found no impairment caused by the hypertension and no left ventricular hypertrophy.  The case settled by way of stipulation in 2005.

Then, applicant filed a second application claiming an injury to the heart in the form of hypertension and heart disease during a period of 1982-2002.  (If you’re wondering why this isn’t a petition to re-open, I direct you to Labor Code section 5803 — the application was filed in 2008).

So, as applicant signs his application, ready to jump into the world of workers’ compensation once more, the question of whether he has any hypertension-caused impairment has already been decided – tried, adjudicated, evaluated, researched, etc.  There is no hypertension-caused impairment.

And, at least according to the U.S. National Library of Medicine National Institutes of Health, hypertensive heart disease is caused by … you guessed it! Hypertension.

The Workers’ Compensation Judge ruled that the hypertensive heart disease was a progression of applicant’s prior hypertensive condition, and was not a distinct injury, therefore the doctrine of res judicata applied.  The WCAB reversed, citing Western Growers Ins. Co. v. Workers’ Comp. Appeals Bd., for the holding that “one exposure may result in two distinct injuries … if a worker not only suffers a nervous breakdown but also develops an ulcer as a result of work- related stress, there would be two distinct injuries from one exposure.”

Now, far be it from your humble blogger to disagree with the learned wisdom of the Western Growers case.  After all, it makes sense as several body parts could be injured or several conditions can be contracted from one “exposure.”

But, in this case, we have a career-long cumulative trauma that results in, among other injuries, hypertension.  The applicant, with the advice and consent of his counsel, selected a qualified medical evaluator who agreed with the defense QME that there is no permanent impairment caused by his hypertension.

This isn’t the case of a nervous breakdown and an ulcer, this is the case of hypertension becoming hypertensive heart disease long after the claimed injury of exposure and after the issue was settled by stipulation.  In fact, the WCAB noted that the Agreed Medical Evaluator testified at his deposition that “applicant did not have ventricular hypertrophy when he was examined … on April 9, 2006 … the first evidence of hypertrophy was from the October 2006 reporting by [a cardiologist] from Kaiser.”

Be on your guard, dear readers, res judicata appears to be yet another medicine that has lost its potency in the world of workers’ compensation.

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DWC Wants Your Opinion on Copy Services (New Survey Posted)

June 5th, 2012 1 comment

In the immortal words of Twisted Sister, “we’re not gonna take, no we’re not gonna take it, we’re not gonna take it anymore!”  And so, dear readers, what will we do?  We’re going to politely but firmly complete yet another survey from the Department of Workers’ Compensation on the subject of copy services and their associated costs.

That’s right, dear readers, it appears that the DWC would like to survey the workers’ compensation community once again: adjusters, lien claimants, defense lawyers and applicants’ attorneys alike – what are your thoughts?

In any case, if you’re interested in giving the Department a piece of your mind, now is the time.

The survey will remain open until July 2nd and can be filled out here.  Give em what for!

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Joint Degeneration and Age Discrimination

June 4th, 2012 No comments

Welcome back from the weekend, my dear readers.  It was a good to see you all attend the funeral pyre of California’s MPN, but one can only hope our next meeting will be under happier circumstances.

Today, your humble blogger brings you a different case, William Slagle v. Department of Corrections California Men’s Colony.  Applicant, a 65-year-old dental lab technician instructor, was evaluated by an Agreed Medical Evaluator for various injuries to various body parts, among them his right knee.  The AME found that 80% of the damage sustained by applicant’s knee was caused by his industrial injury, but 20% was caused by non-industrial degenerative changes.

During his deposition, the AME said “the degenerative findings in [applicant’s] knee are related to the fact that he’s 64 years old.  I don’t think it is unremarkable for a 64-year-old person to have some degenerative changes in their knee.”

Applicant’s counsel seized upon this to claim that the award, based on the AME’s opinions, constitutes illegal age-discrimination in violation of Government Code section 11135.  Needless to say, the WCJ was not impressed, and neither was the Workers’ Compensation Appeals Board.  The fact that applicant’s age makes the degeneration of his knees “unremarkable” is not age discrimination.

The Court of Appeal likewise denied applicant’s petition for a writ of review.

But, as a defense attorney, I can’t help but think about the other side of the coin.  Let’s say a 35 year-old applicant sustains the same type of injury and the Agreed Medical Evaluator notices some sort of degeneration on his knee.  The AME then concludes that it is “remarkable” to find that sort of degeneration on a person of that age, so the damage must be industrial.

In the Slagle case, the AME noted that the degeneration found just three months after the date of injury appeared to have been present since before the date of injury.  In the case of a 35 year-old, perhaps it would be appropriate to ask the same question: is it possible that this much degeneration would have occurred only since the date of injury?

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