WCDefenseCA

THIS IS WHY WE CAN’T HAVE NICE THINGS.

It looks like California is losing about 3000 jobs, as Toyota recently announced that it plans to move its headquarters from Torrance, California to Plano, Texas.

Although some 2000 jobs will remain (for now), a lot more are trading in their marijuana and grapes for 10-gallon hats and guns.  Yee Haw!

What could possibly have prompted Toyota to move from California to Texas?  Well, your humble blogger’s understanding is that the cost of doing business may have had something to do with it.

For example, in 2010, the average premium paid in workers’ compensation insurance in California for every $100 in payroll was $2.29.  So, on average, an employee making $40,000 per year cost $928 per year just in workers’ compensation premiums.  By contrast, in 2009, Texas had a subscriber premium of $1.47 for every $100 of payroll.  That same employee, earning $40,000 per year, would only cost a Texas employer $588, or almost half.

So, by moving to Texas, Toyota could expect to save $2,460 for every $100 in payroll for those 3000 jobs.  If we were to assume that the average Toyota job moving to Texas will be offering $40,000 in annual payroll, Toyota moves to save around $1,000,000 per year in workers’ compensation premiums alone.

That doesn’t factor in that Toyota will have the option to opt out in Texas, nor do those numbers reflect that California’s costs have gone up while Texas continues to be more affordable.

Mind you, again, dear readers, that the cool million dollars is for workers’ compensation premiums alone, and not the host of other fees, taxes, licenses, lawsuits, and other schemes, graft, and harassment Toyota can look forward to avoiding by fleeing California.

Now, don’t get me wrong – I love it here in California.  I love the weather, I love the food, and I love a good portion of the people, excluding that sizeable and significant minority – the lawyers.

But we’ve got to get this thing fixed.  Toyota is not the first business to leave and it certainly won’t be the last, and California’s workers’ compensation system, much like the pantheon of regulations and liabilities for employers big and small, are slowly but surely strangling us.

Accordingly, the most effective route of this mess is to gather up all the members of California’s Legislature, and organize a field trip to a sheep farm.  There, the farmer can demonstrate to California’s elected representatives, that you can sheer a sheep many times, but only skin it once.  California needs less leather and more wool.

From time to time, your humble blogger has offered advice to his beloved readers.  Sometimes this is in a one-on-one e-mail exchange, and sometimes it is offered more broadly as part of a blog post.  But, as with all things, one gets exactly what one pays for, and free advice is no exception.

Today, however, your humble blogger offers this advice upon which he is ready to stake his professional reputation.  If this advice leads you astray, may the mighty deities of the California Bar strike my license down in all their righteous vengeance.  The following advice is submitted for your consideration:

If you are claiming an industrial injury which precludes you unable to stand, run, reach, or grab, DO NOT (and your humble blogger, despite his linguistic skill and rhetorical expertise, simply is incapable of articulating this prohibition with sufficient gravity) appear on a nationally broadcast television show in which you jubilantly, and without the slightest sign of pain, repeatedly stand, run, reach, and grab.

Now, to some of you, this may appear obvious, and no advice at all.  This may seem as common sense that should be discarded, as your own most natural instincts of self-preservation would keep you from doing this, while your inclinations of honor and honesty would stop you from lying about your injuries in the first place.

For the rest of you, please consider the story of Ms. Cathy Cashwell.  Ms. Cashwell claimed an industrial injury to her shoulder for which she was apparently receiving $3000 (or there about) in workers’ compensation benefits, when she went on The Price is Right.  She clapped, she bounced, she ran, she jumped, she hopped up and down as happy as a clam, and she even got to spin the big wheel.

Law enforcement officers were not impressed.

Now, normally your humble blogger would not waste your time with a non-California case or story, as wasting your time with California issues is sufficient to make me happy. However, this is a story that is a bit hard to pass up in relating.

When I was diligently working in the Insurance Fraud Unit at the District Attorney’s Office, my old mentor imparted some valuable law enforcement advice: “we don’t catch the smart ones.”

Ms. Cashwell pleaded guilty to fraud back in 2013, but your humble blogger just became aware of this case recently.  May this blog post be the most frustrating experience you face this week!

There are very few flames of conflict that burn as hot as those fueled by intra-family feuding.  We can forgive those enemies we made at arm’s length just as we would forgive a bee for buzzing or a blogger for blogging, but when family members, however distant, cross swords, pretty it ain’t.

So it seems was the case in the matter of Yacoub v. Talia, a recent unpublished Court of Appeal decision.

This was a civil trial, but it bears some importance for all of us aboard the slowly sinking ship U.S.S. Comp.

Yacoub sustained injury to his shoulder after falling from a ladder while pruning trees outside of Talia’s store.  Talia’s cousin was Yacoub’s wife, and Yacoub had done some odd jobs for Talia in the past, receiving payment in cigarettes, lottery tickets, and cash.

It appears that Yacoub and Talia has a serious falling out, with Talia telling Yacoub never to return to his store, well before this injury.  Yacoub, on the other hand, claimed that he was an employee and that Talia should have carried workers’ compensation insurance which would have covered Yacoub’s tree-trimming activities.

After hearing testimony, the jury found for Talia, and that Yacoub was an independent contractor rather than an employee.

Now here comes the kicker: Yacoub appealed, arguing that he was entitled to a jury instruction that one person rendering service to another is presumed to be an employee.

The court of appeal was not sympathetic to Mr. Yacoub’s argument, however, noting that a party is only entitled to jury instructions which are legally correct, and that Labor Code section 3357 provides that any person rendering service for another, other than an independent contractor, is presumed to be an employee.

Mr. Yacoub also argued that, under Labor Code section 2750.5, as he was doing work which required a license and he didn’t have a license, he was conclusively presumed to be an employee and thus entitled to be considered an employee.

The Court of Appeal likewise rejected this argument, reasoning that section Business and Professions Code section 7048 requires at least a $500 contract price in order to trigger the licensing requirement, but there was no proof that there was contract price over $500, and, in fact, the proof to the contrary established the price of the contract (if there was one) to be under $200.

Nor was the Court of Appeal persuaded by the argument that, as there was no contract in place, there was no contract price, making section 7048 inapplicable.

Mr. Yacoub’s final argument on appeal was the fact that the Mr. Talia used the fact that there were no W-2s filed, and there were no withholdings made, which further supported the finding that there was no employee relationship.  His argument rested on “tax-payer privilege.”  However, the Court of Appeal found that this so-called privilege only applied to the compelled disclosure of financial information, rather than the lack of existence of these documents.  The payment or non-payment of taxes, rather than the specific finances involved, are fair game.

So, why is your humble blogger wasting your time with non-citeable appeals decisions from civil cases?  Because, dear readers, this serves as a friendly reminder about what happens when an independent contractor gets hurt on the job.

Remember, after all, how quickly things change.  The man who claims the title of entrepreneur, the same one who defiantly shrugs off the yoke of employment, the one who risks the famines to reap the feasts, quickly changes to a scared, abused victim when he gets hurt on the job and can blame his former client.

So, when an independent contractor gets hurt, he or she will fight tooth and nail to be judicial found an employee rather than an IC.  And if that claim succeeds, then the added pressure of the Uninsured Employer Benefit Trust Fund and its bag of tricks comes into play to force a larger settlement.

This entrepreneur, while defiantly shrugging off the yoke of employment, wishes you a good weekend!

The other night, your humble blogger had trouble sleeping.  The world is full of so much injustice – insurers and employers everywhere are exploited and abused by the very system they themselves fund, and yet there is only so much a humble blogger such as myself can do, except to correct these wrongs one case at a time…

To calm my wretched nerves, I pulled an ancient tome from my shelf, the 1937 California Compensation Cases reporter, and came upon an interesting case stemming from a 1936 incident in which fatal coffee was most certainly involved.

The applicant, the widow of deceased employee Oliver Gunderson, was awarded death benefits after her husband was tragically hit by a car while crossing the street.

On the way back from his duties from a pier at which he was to examine the extent of repairs needed for a pipeline, in his capacity as a pipefitter foreman, Mr. Gunderson and his subordinate deviated about five blocks off their return route to buy a pound of coffee.  As it turns out, the employees brew and drink coffee while at work (shocking!) and were not forbidden to do so by their employer.

Just before getting into the employer’s car after buying the coffee, Mr. Gunderson saw another employee in a new car and proceeded to cross the street to speak with him, when the fatal car accident took place.

The award was based on the notion that the five-block deviation was a minor detour, and not an abandonment of the entire mission or purpose of employment, and that crossing the street was arising out of and in the course of employment, as the deceased could have expected to receive news or instructions from his employees.  (The case is Union Oil Company of California v. Industrial Accident Commission of the State of California, 2 CCC 30 (1937), writ denied).

Now, it is entirely possible that back in the day, circa 1937, coffee held some particular importance as an enshrined worker’s right, right next to dignity, a safe work place, and fair wages.  Being a coffee addict myself I can’t help but be sympathetic, but the second part of the analysis is troubling.  Crossing the street to examine a co-worker’s new car hardly gives rise to the likelihood that business was to be discussed, let alone a foreman receiving instructions.

Needless to say, this result did little to help your humble blogger sleep.

Labor Code section 5502(d)(3) says that discovery shall close on the date of the mandatory settlement conference.  “Evidence not disclosed or obtained thereafter shall not be admissible unless the proponent of the evidence can demonstrate that it was not available or could not have been discovered by the exercise of due diligence prior to the settlement conference.”

The language is pretty straight forward, no?  Do your job, don’t waste the court’s time or the time of the other parties, and either explain why you need discovery to be left open, or re-up on your attorney malpractice insurance.  Right?

Well, the term “discovery shall close” is apparently not as clear as a workers’ compensation defense attorney’s conscience.

The case your humble blogger is allowing to ruin his weekend is Rios v. Jones, a recent split panel decision in which two of the three WCAB commissioners ruled that applicant’s exhibits could come in, even though they were obtained after the date of the MSC.

The pertinent facts are as follows: applicant allegedly sustained an injury in 2006, and applicant’s counsel’s attorney filed a DOR to proceed to an MSC, which was held in January of 2012.  The matter was continued repeatedly for various reasons, including, at one point, to obtain vocational rehabilitation evidence.

At a March 19, 2013, hearing, applicant testified that his symptoms had gotten progressively worse since as early as March of 2012.  But he didn’t bother obtaining additional medical reports at that time, and the matter was ultimately submitted for a trial in October of that year. In fact, it appears, based on the WCJ’s report, that the first effort to obtain additional medical reports started in July of 2012.  The WCJ ordered discovery closed and excluded the supplemental reports.

The majority panel, however, disagreed.  Reasoning that the majority of medical reports in this case were from 2007 or earlier, and applicant had been waiting to go to trial since late 2011, that this provides good cause to reopen discovery.

However, the WCAB limited this floodgate to previously disclosed physicians and their supplemental reports, rather than newly found vocational rehabilitation experts and doctors.

The dissent (if you want to know what really happened, always read the dissent), would have denied reconsideration, noting that applicant only disclosed his worsening condition and the need for vocational rehabilitation analysis after settlement negotiations fell through.  Also, this information was discoverable before – applicant could have sought a re-evaluation at any time, but chose to wait four years since his last treatment to seek a new visit.

This decision is fairly new – having only been issued in late March of 2014.  Who knows if the parties will seek review, but as this appears to be one of those uninsured cases, your humble blogger doubts there is anyone with a pocket deep enough to finance a petition for writ of review.

My name is the Humble Blogger, you’ve read my posts, prepare to cry…

Your humble blogger is always a sucker for a love story.  So, when I heard of Melinda O’Connor and her boyfriend, David Muro, pleading no contest to charges of workers’ compensation fraud, I couldn’t help but post on the topic.

Ms. O’Connor worked as a teacher’s aide for special needs children, but then decided she had her own special needs: namely money without work.  She claimed to have sprained her ankle back in April of 2009 and was since out of work.

She received medical treatment, but it didn’t seem to improve her condition any (you know, like when you aren’t thirsty, and you drink water, and you’re not any less thirsty because you weren’t thirsty to begin with?)

Surveillance video was obtained showing, among other things, Ms. O’Connor going about her every day business with no apparent signs of injury, and then using a wheelchair and carrying a cane to attend medical appointments.

Her boyfriend, Mr. Muro, helped her by pushing the wheelchair.

Just to re-cap: after a sprained ankle in April of 2009, we are seeing the conclusion of the fraud case five years later.

Congratulations are due to the law enforcement folks who got this done, of course.  But something needs to change strategy-wise if every prosecution takes this long and costs this much.

If you are going to commit insurance fraud, take some friendly advice from your humble blogger: leave the significant others out of it so you have someone to bail you out of jail.

Why do we need QMEs?  Or  AMEs, for that matter?  Why can’t the primary treating physician make a full review of the records, provide measurements and a list of subjective complaints following the evaluation, and then allow the attorneys or the DEU to plug those measurements into the AMA Guides and come up with a whole person impairment rating?

After all, your humble blogger is a doctor of sorts, and why can’t the Juris Doctorate be applied to fill in the role for the doctor?  It’s not like I would be performing surgery, and I’ve seen enough episodes of House and Scrubs to wing this whole medical stuff, right?

Oh… well fine!

In that case, let me tell you about the recent panel decision in the matter of Tallent v. Infinite Resources, Inc.  Mr. Tallent was employed as a mechanic (what kind of mechanic? A very Tallent[ed] one!)

All kidding aside, Mr. Tallent sustained very serious injuries, and his treatment included orthopedists and neurosurgeons, among others.  In the course of his treatment, he became depressed and was referred to a psychologist.

Ultimately, the QME, a chiropractor, wrote a report in which he provided ratings for all impairment, including psyche and the results of the spinal surgeries.  In writing this report, he apparently relied on the findings of the various treating physicians and his training as a chiropractor and a QME.

Well, as one can imagine, the defendant had a problem with that.  Defendant made the argument that a chiropractic QME cannot comment on the impairments that fall outside of his or her scope of practice.

The WCJ considered both sides of the argument, but ultimately ruled that a Chiropractor QME could and should render opinions on all sections of the AMA Guides, and such opinions did not constitute providing medical treatment outside the scope of the chiropractor’s medical license.  The Chiro QME’s report was supported by the reports issued by treating physicians, which were incorporated into his own.

The WCAB denied reconsideration and adopted the WCJ’s report.

Now, your humble blogger can’t help but ask, as discussed above: why do we need QMEs?  Can’t a primary treating physician take measurements? Can’t a DEU rater be trained in the AMA Guides and just plug those ratings into the AMA charts and graphs?  For that matter, can’t this all be done with software?

If a professional’s expert opinion is valid because of his or her training, rather than any particular license, why can’t the DWC just provide the AMA Boot Camp and call it quits on the whole QME system?

Furthermore, at what point would a chiropractic QME feel qualified in disagreeing with a neurosurgeon or psychologist as to findings, treatment, or causation?  And if the medical referee does not have the training or experience to provide a meaningful second opinion on an issue, what is the point in the objection and the QME/AME process?ss

Your humble blogger has friends from all walks of life – I talk with crowds and keep my virtue, I walk with Kings – nor lose the common touch.  So, it should come as no surprise that as I and my circle of friends were sipping tea and grumbling about our lives into the wee hours, an idea was hatched.

Did this idea have to do with Workers’ Compensation? Yes!

Is it a crackpot idea to reform the workers’ compensation system? Yes!

Am I about to bore you with another Utopian pipe dream, the only redeeming quality of which is that literally ANY system has the potential to improve California’s workers’ comp jungle? Oh, you better believe that’s a yes!

The Anarchist at the table, having heard my ranting about workers’ compensation, made the point that if employers can shift the responsibility of buying car insurance for employee delivery drivers to the employees (see Craigslist for any number of driver positions that require the applicant to have his or her own car and insurance), why can’t the employer do the same for workers’ compensation insurance?

After all, if the experience modification that determines the workers’ compensation rate (to some extent) is determined by the number of injuries the worker sustains and the extent of the injuries, the worker himself has the incentive to work safely and careful and keep his premium down.  Also, he can shop around for the company he trusts and that will promptly pay benefits rather than try to stonewall him.  The injured worker could even base his choice on such options as (1) the Medical Provider Network in the area or (2) the pre-authorization of treatment.  Unions could pool their resources to purchase policies for their members.

The response quickly came from the Communist (the Democrat and the Republican at the table were both already planning their move out of California and quickly lost interest in the arrangement of the deck chairs on the Titanic).  The Communist, calling on his experience with labor union and the plight of the working class made a good point: what incentive would the employer have for returning injured workers to their jobs or even providing a safe work environment?  After all, why bother with safety training or equipment when workers become disposable and someone else is footing the insurance bill?

At that point, your humble blogger stepped out for some fresh air, but upon my return, this compromise seems to have been reached: the best system would require the injured worker to purchase his or her own insurance, and would require the employer to reimburse the employee for half of the premium (some employers, no doubt, would offer to reimburse the entire policy as a competitive recruitment tool, and some employers could continue to provide the coverage as they do now).  This way, both the employee and the employer would have a vested interest in a safe working environment, a responsible insurer, and a careful and responsible work force.

What do you think dear readers?  Are the abused employees of California just seeing another attempt to further squeeze their meager purses by a heartless defense attorney?  Or is this a breath of air to stoke the dying fire of California’s economy?

Now, again, dear readers, before you sharpen your pitchforks, light your torches, and angrily demand a refund on your blog subscription dues, just recall: this is yet another crackpot idea.  It’s something to think about and to (hopefully) encourage a bit of discussion on why we have a system like we do, and what we should do about it.

Happy Hump Day!

If an injured worker gets into a car accident on the way to an AME evaluation, is the injury compensable?

Consider the recent panel decision in the case of Evans v. San Joaquin Regional Transit District.  The unfortunate applicant, having suffered a history of back injuries, now claimed a cumulative trauma to the back.  She was evaluated by an AME, who offered several conflicting opinions, wavering back and forth on the issue of whether there was an industrially caused cumulative trauma to her back, in excess of those past claims for which she had already been compensated.

While en route to an evaluation by the AME, applicant was in a car accident and sustained additional injuries, which she claimed were compensable.  As applicant was rear-ended while at a red light, presumably the compensation would be recoverable from the third-party insurer or the third party him/herself.  However, the unfortunate facts of the workers’ comp system would require the defendant, if the injury is admitted, to pay out first and seek credit or recovery later.

The matter proceeded to trial and the WCJ found both injuries compensable, awarding 15% permanent disability for the cumulative trauma, and an additional 14% permanent disability for the car accident as a compensable consequence.

On review, the WCAB reversed – the AME ultimately settled on the conclusion, after much back and forth, that there was no cumulative trauma injury to the back.

Additionally, the car accident claim was not compensable for two reasons: the first was that it was a consequence of a non-injury, and such no more compensable than applicant getting into a car accident while traveling to receive treatment for a non-industrial skiing injury.

Finally, the WCAB relied on the case of Rodriguez v. WCAB, where the Court of Appeal held that injuries sustained as a result of the litigation process were not compensable as consequences of an industrial claim.

Accordingly, the WCJ was instructed to issue a take-nothing order.

This case offered a good result for the defense, and a good reminder of AOE/COE boundaries.  The workers’ compensation claim is not a part of the job description, and while the events that give rise to the original claim might have compensable consequences, attending an AME evaluation certainly does not.

Jack doesn’t have insurance.  Jack gets an employee.  Jack wises up after having an employee for almost a year, and gets workers’ compensation insurance.  Jack’s employee files a claim for a cumulative trauma injury.  Jack’s insurer refers the file to its defense attorney, who notes that the date of injury, as per Labor Code section 5412, falls on the first day of the insurer’s coverage.

So, 364 days of the cumulative trauma period fall under the uninsured employer’s umbrella, and just one day falls under the insurer’s coverage.  Great right?  Yeah, not so much.

What generally happens when an employer is uninsured, is the Uninsured Employer Benefit Trust Fund gets involved.  UEBTF, after being joined, will pay out anything that the employer is ordered to but doesn’t, and then come after the employer.  Neither limited liability business formations nor bankruptcy protections provide absolute defenses to the UEBTF’s reach.

So why can’t the 1/365 insurer just seek contribution from the UEBTF, who can in turn collect it from the employer?  Because of Labor Code section 3716(b): “it is the intent of the Legislature that the [UEBTF] … is not created as a source of contribution to insurance carriers, or self-insured or legally insured employers.”  The UEBTF isn’t liable for a CT injury when there is anyone else in that CT period that is insured or self-insured.

If that sounds familiar, it should.  California Insurance Guarantee Association (CIGA) has a similar set-up, with a statutory defense to liability when there is any “other insurance” available.  In fact, my dedicated readers may recall the Crawford case, where One Beacon was forced to pay for an entire claim for just 10 days  covered out of a cumulative trauma period, because the other 355 were carried by a now-dead insurer, and CIGA put the target on One Beacon’s back.

So, if you’re faced with a situation like this, do not go forward expecting to recoup 99% of your costs through a petition for contribution.  Instead, focus on shifting the 5412 date of injury away from your coverage completely – you’re not going to get much from the illegally uninsured employer, who might not have any assets or might use its assets to finance its legal defense.

The other player to consider is the District Attorney.  If the DA takes an interest in prosecuting the failure to carry workers’ compensation insurance, the insurers left footing the bill can rightly be considered victims, and should be entitled to restitution, which usually finds its way into a plea bargain.  Talk to the DA, let him or her know what’s going on, and set up a payment plan – you might get some of that money back!