Archive for June, 2014

No Liens For Injuries Not Alleged in Application

June 4th, 2014 No comments

Every time a lien gets denied, an angel gets its wings.  At least that’s what the Labor Code says [citation needed].

The recent case of Llamas v. Guild, Inc. provided a wonderful example of why it is important to properly draft settlement documents.  Identify your objectives – identify the parties involved in the agreement and what their respective interests are – shift as much of the cost away from those parties and to other people as you can.

Llamas’s attorney had retained a psychologist, Elena Konstat, Ph.D., to evaluate and prepare a report on the state of applicant’s psychiatric condition.  Dr. Konstat sought reimbursement for the cost of her evaluation and report from the defendant.

When attempting to settle this case, however, the parties, having declined to invite Dr. Konstat to the negotiation table, resolved applicant’s claimed injuries to her lower back and spine and settled the claim by way of Compromise and Release.

But what about Dr. Konstat?  Is she to be left in the cold?  Apparently…

The WCAB held that, as the burden of proof is upon the lien claimant (Labor Code section 5705) to prove its claim by a preponderance of the evidence (Labor Code section 3202.5).  Thus, it is Dr. Konstat’s burden to prove that it is more likely than not that the services she provided were reasonable, and the fees charged for those services as well.

In this case, the application was never amended to allege an injury to the psyche, so there was no contested psyche claim to make her services necessary (Labor Code section 4620: “a medical-legal expense means any costs and expenses incurred by or on behalf of any party … for the purpose of proving or disproving a contested claim.”)

Your humble blogger can’t help but wonder – shouldn’t a lien claimant make it standard intake procedure to make sure there is a contested claim?  Dr. Konstat, after all, is out her time in evaluating the applicant, writing her report, and possibly reviewing records and performing some research.

On the other hand, perhaps this threat of a psyche claim and the related litigation costs made it easier for the parties to reach a middle ground on settlement, splitting the costs that would have been incurred if the application had been amended to include a psyche injury.

Do you hear that, dear readers?  The fluttering wings of a new angel.

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