WCDefenseCA

Ever wonder why the law enforcement seems more inclined to go after workers’ compensation fraudsters on the employer side rather than the employee side?  Ever wonder why bears don’t look for honey in wasps nests?  Be like the bear – follow the honey!

watch?v=EqWNhDohn6Q

A recent story stumbled upon by your humble blogger tells the tale of John and Camille Applegate, owners of Hallmark Roofing, have reportedly sold their home to pay $200,000 to law enforcement officials as part of their restitution for several years of operating without workers’ compensation insurance and cheating their way out of paying taxes.  This allowed them to underbid several of their competitors for various contracts.

When gubmn’t finds out that an employer illegally operates without insuring against its employees’ injuries, law enforcement officials are swift to act in investigating and prosecuting offenders.  Must swifter, typically, than when an employee is defrauding the employer or the employer’s insurer.  Fraud divisions of various law enforcement organizations actively go out seeking contractors offering to do jobs and then checking them for insurance.  The efforts are considerably less energetic when it comes to catching employees engaged in fraud.

In fact, most insurers and self-insured employers have discovered that, unless the case is presented to the district attorney with a slam-dunk basket of evidence including surveillance, documentation, medical reports, and a tidy cover-letter drafted by a former investigator or deputy district attorney, making the case for the D.A.’s office, not much will get done.

The above-referenced story is why – once an employee cheats an employer out of compensation, that money is spent and gone.  You can’t get back the damaged personal property or funds spent on personal services.  You also can’t hope to recoup your cost of investigation.  The D.A.s’ offices, well aware of the economics of the situation while busy tightening their belts against dwindling budgets, follow the honey and avoid the wasp stings – the employers have something to take.

So, the next time you are competing against a rival for a bid or a contract, bear in mind that their price might not account for (1) insurance premiums; or (2) investigation of insurance fraud.  Yours does.

Everybody loves a good movie.  Well, almost everybody.

Recently, the Workers’ Compensation Appeals Board granted defendant’s petition for reconsideration in the matter of Clemi Boubli v. Cast & Crew Payroll Services, Inc.  One of the interesting aspects of the petition for reconsideration was that the workers’ compensation Judge had refused to accept into evidence subrosa video tapes of applicant engaged in various activities.

Applicant sustained an injury to the head, brain, psyche, back/cervical spine, and bilateral shoulders while employed as a stage technician on March 22, 1997.  The parties brought their disputes to an Agreed Medical Evaluator, who found applicant was totally permanently disabled and needed a whole host of in-home care and various services.

Defendant subsequently ordered over 160 hours of surveillance which yielded roughly seven hours of videotape, which it promptly sent to the AME (with a crate of microwaveable popcorn).  The AME, upon seeing applicant’s various activities in the video tapes, immediately changed his opinion and drastically reduced applicant’s impairment rating and need for in-home services in a supplemental report.  Rumor has it that the seven hours of surveillance ruined the AME’s plans to watch the hit film, Marley and Me, allowing a co-worker to blurt out how the movie had ended and thereby ruining the experience for the AME.

When the matter proceeded before the WCJ, she ordered the report stricken and the tapes deemed inadmissible.  In her report and recommendation, the WCJ reasoned that the tapes should be excluded because (1) defendants only turned over 9 of the 10-24 video tape cassettes; (2) the subrosa film consists of a very small percentage of applicant’s activities on the days of surveillance; (3) the videotapes depict applicant with her caregivers doing activities which are recommended by her doctors; (4) the video tapes are not substantial evidence, even if admissible, and should be given no weight.

The WCAB, however, rejected the WCJ’s analysis and ruled the tapes are admissible, and that “no good reason has been shown to exclude them from the record.”  Although the applicant retains her ability to challenge the tapes if they do not actually depict her, or to depose the AME to explore his opinions as to the weight of the tapes, the tapes should not be excluded for the reasons stated by the WCJ.

Here’s one thought from your blogger – if the parties elect to bring their disputes to an Agreed Medical Evaluator, it is usually because they trust this AME for his medical competence and unbiased disposition.  On what grounds is the WCJ to substitute her own evaluation of the tapes for a medical professional’s?  After all, the AME reviewed the tapes and, in a supplemental report, wrote that applicant “has the capacity to perform at a much higher level than what she indicated to her examiner … I can no longer recommend services which are given in my previous report based on the current information…”

Some members of the defense community hesitate to use surveillance as a means of influencing an evaluating physician.  Your humble blogger is not among them.  Surveillance should be taken often enough, the only trick is to keep a clear record for use in authentication, and to review and use the surveillance tapes swiftly, before they grow stale.   And to clear up any confusion, the surveillance should be of the applicant and not of the evaluating physician.

California Labor Code section 5410 allows applicants to petition the Workers’ Compensation Appeals Board to reopen their cases previously resolved by stipulation, assuming the injury has caused “new and further disability.”  For those of us just joining the world of workers’ compensation, that means that fifty four months after the date of injury, without fail, even if the order approving the stipulations has yet to cool from the heat of the copy-machine, the defense can except a crisp new petition, claiming new and further disability.

What constitutes new and further disability?  Well, according to a recent panel decision, a change in the law will work.  In the case of Tuyet Tran v. Cong Tran, applicant sustained an injury to her upper extremities.  The panel Qualified Medical Evaluator included grip loss in the rating, but the stipulations eventually reflected his opinions without the grip loss (recall if you dare, dear readers, those golden years before the insanity of Almaraz/Guzman).

Well, applicant filed a petition to reopen.  The panel QME found no new and further disability – applicant was as disabled at the filing of the petition as she was at the time of the stipulations.  But what of the change in the law under Almaraz/Guzman?  After all, a change in the law is good grounds for a petition to re-open.  (See Kenneth H. Knowles v. Workmen’s Compensation Appeals Board.)

While the workers’ compensation Judge found that applicant’s petition to reopen would bring her no new further loot from the defendant’s coffer, the Workers’ Compensation Appeals Board granted reconsideration. The WCAB reasoned that the change in the law brought about by the several appeals and decisions in Almaraz/Guzman made such a change in the law as to justify a petition to reopen.

Here’s a fun thought – if an applicant with a pre-A/G stipulation can petition to reopen and claim the right to hook an injury up to the A/G machine and start inflating away, could a defendant do the same?  What I mean is, of course, A/G has been used in the past to decrease whole person impairment, couldn’t the defense proceed under the same theory and put it to a QME to see if a lower rating is appropriate?

Have any of this humble blogger’s faithful readers made a try for this yet?