WCDefenseCA

Here we are again, dear readers!  While we’re all dodging COVID19, fires, poisoned air… could it be that The Ghostbusters were right in their predictions?

Well, in any case, I’ve got something that might cheer up one or two of my readers with a soft spot in their heart for the defense community: a defeated lien!

The split panel decision is that of Ross v. Therma Corporation/Travelers.  Therein, lien claimant filed a petition for reconsideration after a WCJ ruled that its lien was not timely filed.  As we all know, Labor Code section 4903.5(a) provides that a lien must be filed “more than 18 months after the date the services were provided, if the services were provided on or after July 1, 2013.”

Well, in this particular case, the lien claimant was the Regional Medical Center of San Jose, and a lien in excess of $2 million was filed on January 10, 2018, less than 5 years from the 2015 date of injury, but well over 18 months from the last date of services provided.  Well, shortly after the case was resolved via C&R, applicant’s attorney advised that the parties had all be served with copies of the lien claimant’s lien in 2016, but the lien was rejected by the WCAB as there was no filing fee attached.  So, the question posed was, of course, should the statute of limitations bar the lien?  Since the parties had notice of the lien claim in 2016, although it was not accepted by the WCAB, would that be enough to toll the statute of limitations?

Well the WCAB majority, in affirming the WCJ, held that the statute of limitations served as a bar.  The 2018 “refiling” of the lien was not timely, as no lien was filed within 18 months of the last date of service.

The majority reasoned that once the affirmative defense under the statute of limitations was established by showing that the lien was not filed within 18 months of the last date of service, the burden shifted to lien claimant to prove either waiver of the defense on the part of defendant or estoppel on an equitable basis.   Because there was no evidence that defendant knew of lien claimant’s error regarding the lien filing, estoppel could not be established.  Likewise, nothing in the record suggests that defendant tried to trick the lien claimant into thinking it had successfully filed its lien to get an advantage.   Nor was there any evidence of waiver of the defense, as it was first raised some two months after the lien was filed.

The dissent, however, would have reversed the WCJ, reasoning that the purpose of the statute of limitations is to prevent a party from being prejudiced by surprise or delayed action.  However, since in this case, there was no surprise – defendant was aware of the lien as early as 2016, and allegedly operated on the assumption that a valid lien was filed, that no prejudice is present.

A pretty decent result for the defense, and some more guidance, though not binding, that the statute of limitations does have a few teeth (even though they snag more lien claimants than applicants).  

Aside from the result in this particular case, should the fact that there was a clerical error matter?  In your humble blogger’s opinion, yes it should.  Part of the reason for the rejection of the lien was the failure to include a filing fee.  If the Board were to allow the lien prosecution to proceed, then wouldn’t every lien claimant serve the lien but not file it, and then only file the fee when all efforts at settlement were exhausted?  The filing fee isn’t an admission ticket to go to trial, but rather a bar to baseless liens.  Perhaps the Board should send out a Notice of Lien Filed the way it sends out a Notice of Application, so that the parties can defer responding to “served” liens until the Board confirms the lien has been filed and processed.

What do you think, dear readers?  Lien on that comment button or send your humble blogger an e-mail.