Search Results

Keyword: ‘going coming’

5-6 Nights a Year Defeat “Special Mission” Exception to Going and Coming

September 12th, 2012 No comments

Private security firms often present a tricky issue for workers’ compensation matters.  Injuries still occur, despite the rigorous training courses they provide:

And then comes the inevitable debate – who is to bear the cost of applicant’s (allegedly) industrial injury?

Be careful, dear readers, in opening the can of worms that is Robert Flores v. Garnett Protective Services & Security.  There certainly are a few layers to this case.

Applicant Robert Flores was employed by Garnett, which, under the terms of its contract, provided security to Joseph’s Café.  Joseph’s was a venue version of Batman, providing restaurant service by day and night club service by night.  On occasion, Joseph’s Café would tip Flores and other security guards for a job well done, or offer them additional hours on a cash basis for extra events that were not on the regular schedule.

Garnett had trained Flores, and had the power to hire, fire, or direct his work.  Joseph’s had no one of these powers.

Mr. Flores was called in to do an extra shift, as he is five or six times a year, and was on his way to Joseph’s Café when an unfortunate automobile collision resulted in a claimed industrial injury.  Joseph’s Café had insurance, while Garnett had allowed its insurance to lapse, bringing in the California Insurance Guarantee Association.  CIGA’s position was, to the surprise of absolutely no one, that Joseph’s was also Flores’ employer, and that the injury sustained by Flores was industrial as a “special mission” exception to the “going and coming rule.”

The Arbitrator agreed, reasoning that employment was established by showing that sometimes Joseph’s would hire Flores directly to cover special events that were outside the scope of Joseph’s contract with Garnett, and that the special event to which Flores was going on the night of his injury constituted a “special mission” because it was unusual.

Joseph’s insurer, Pennsylvania Manufacturer’s Association Insurance Company, petitioned the Workers’ Compensation Appeals Board for reconsideration, which was readily granted.  The WCAB held that Flores was not an employee of Joseph’s because Joseph’s had no power to control the manner of his performance or to terminate his employment, only to terminate its contract with Garnett.

Furthermore, because Flores worked special events, like the one he was headed to at the time of his injury-causing-collision, this was not a special errand or mission but just a regular discharge of his duties (although required of him infrequently).  Therefore, there was no industrial injury.

The dissenting opinion to the panel would have concurred with respect to employment, but not with respect to industrial injury.  Deputy Commissioner Sullivan would have found an industrial injury, reasoning that the scheduled event Flores was to work met the definition of a “special mission,” which “occurs when the employee is invited or required by the employer to perform an activity that is within the course of the employment, but is unusual or extraordinary in relation to the employee’s routine duties.”

Bear in mind, dear readers, that your humble blogger’s very instincts militate against agreeing with any notion that any injury should be considered industrial.  However, in this case, he is inclined to agree with Commissioner Sullivan’s opinion.  Although applicant’s regular job included duties year-round, a special mission was involved five to six nights a year.  Percentage-wise, the special events constituted 1.4-2% of the nights in the year, which should meet the definition of “unusual or extraordinary.”

But, there is cause for rejoicing all around, no?  After all, Pennsylvania is off the hook because it is not an employer; CIGA is off the hook because no industrial injury occurred, and Garnett is not on the hook as much as it thought it was, because the injury is now Flores’ responsibility (here’s hoping Mr. Flores had auto insurance!)

Categories: Uncategorized Tags:

Going and Coming Rule Fails

February 13th, 2012 1 comment

The “going [to work] and coming [from work]” rule is a subject that surfaces now and then in the world of workers’ compensation.  After all, injuries can happen anywhere, so why not while going to or coming from work?

The defense generally provides that an employer is not liable for workers’ compensation benefits for injuries sustained in transit between home and work or work and play.  But the defense is not a stone wall, smooth and solid and impenetrable, but rather a chain-link fence, with plenty of gaps, patches, and weaknesses.

In the case of Jesus Felix Castro v. State of California, Department of Forestry and Fire Protection, applicant was a seasonal firefighter, who sustained a devastating injury as a result of a catastrophic car collision while he was on his way to work.  The attorney for the defense naturally raised the going and coming rule – on the way to work means on the way out of the California workers’ compensation system, generally speaking.

But the defense failed.

Applicant presented several witnesses, Mr. Castro’s co-workers, who testified to the effective requirement of bringing one’s own car to work.  There was more than one fire station to staff, and a firefighter never knew where he or she would end up working that day.  As such, employees had to bring their own car to work to get from Station A to Station B, as necessary.

The workers’ compensation Judge and the Workers’ Compensation Appeals Board both held that the injury was compensable.

Bear in mind, learned readers, this holding is not new or off-the-cuff.  This holding was also issued in Smith v. Workmen’s Comp. App. Bd. (1968) “Surely in this day of a highly motorize society we cannot cast the going and coming rule as a protective cloak over the shoulders of the employer who, for his own advantage, demands that the employee furnish the car on the job.”

But this case does serve to remind employers, especially those in the private sector, that there is no such thing as a free lunch – money saved in shifting the cost of the travel between work sites to the employee can cost a lot of money in the form of an otherwise barred workers’ compensation claim.

Categories: Defenses, Tactics and Strategy Tags:

The Bite of the “Going and Coming” Rule

November 14th, 2011 No comments

If an employee “lives” far away from where he “works” is he ever off duty?  The answer, according to the Workers’ Compensation Appeals Board and the Court of Appeal, is yes!

In the case of Dann Peter Shubin v. Workers’ Compensation Appeals Board, applicant worked as a pilot for Southwest Airlines, and was based in Oakland, even though he and his wife “lived” in Pasadena.  Applicant would arrange his schedule to have weekends off and would stay with friends or in his van between flights.

Under Southwest Airlines’ scheduling scheme, after a flight, reserve pilots like Mr. Shubin would receive a 9-hour “rest” period during which they could not be recalled for more work.  Applicant had just started one of these rest periods and decided to visit friends in Winters, a town roughly an hour away.

En route, applicant was in a car collision, and subsequently filed a claim for workers’ compensation benefits.  The Workers’ Compensation Judge found the injury AOE/COE (arising out of employment and within the course of employment), and defendant filed a petition for reconsideration.

Because the WCJ did not submit a report on recommendation, we will never know his reasoning.  Never the less, the WCAB studied the issue and granted reconsideration, recognizing that the coming and going rule applied to this case.  [If the going and coming rule does not apply to an employee who, by company-wide policy, can not under any circumstances be assigned any tasks for the next 9 hours, I don’t know where it would apply.]

The “going and coming” rule is one of those rare instances where common sense and reasonability poke their way through the shroud of California’s Workers’ Compensation system.  Essentially, the rule provides that injuries sustained going to or coming from work are not covered by workers’ compensation.

There are exceptions to this rule, of course.  These exceptions include “special missions” and “commercial travelers,” the details of which are the subject of a future post.  Because applicant was officially and actually off-duty for the next 9 hours, the going and coming rule applied and applicant’s claim was barred.

Applicant was a free man living in a nation of laws – he chose to “live” in Pasadena, he chose to “work” in Oakland, and he chose to visit Winters on the night of his unfortunate car accident.  The only alternative outcome for this case would have been to hold that if an employee works outside the four walls of his home, he is always on duty by virtue of being on the other side of his front door.

Dear readers, by no means am I the type of man to tell others how to run their businesses.  But it is worthy to note that in this case, Southwest was saved by having a company-wide policy of duty/off-duty pilots and sticking to that policy.  No doubt if applicant could have offered evidence that pilots were occasionally called back to duty during their “rest” period, in violation of this rule, the case would have turned out quiet differently.

Categories: Defenses, Uncategorized Tags:

CSIA Conference is Coming Up!

October 21st, 2015 No comments

Happy Wednesday, dear readers!

Halloween is coming up soon, and as we all know, there is nothing scarier than workers’ compensation! OOOOOOO … penalties… liens… OOOoooOOOooo!

Spooky, indeed, dear readers.

BUT, before you go a trickin’ and a treatin’ you may want to swing by Walnut Creek on Friday, October 30, 2015.

The California Self-Insurers Association is hosting its Fall Conference at the Walnut Creek Marriott and your humble blogger will be in attendance (now is your chance to finally vent about all the puns you’ve been forced to endure in your e-mail in box).

I’ve attended this one a few times in the past and it never disappoints – the speakers are always experienced with the substantive material and talented in their delivery; the subjects are current and interesting; and the bloggers in attendance are always as humble as humble goes.

Phil Millhollon, CSIA Executive President, says that one of the topics attendees can expect to be thoroughly discussed will be on an issue that’s been growing like a “weed” in California and the United States… medicinal marijuana (see what I did there? The kids call Marijuana “weed,” so…)

Marijuana has been a growing issue in California – federally illegal, but allowable on the state-side in certain circumstances.  Reimburseable under workers’ compensation or no?

If you’re going to be around, please stop by and say hello.

Categories: Uncategorized Tags:

Need an Uber Lyft? Self-Driver Cars Coming Closer and Closer…

March 18th, 2015 No comments

One day, dear readers, your humble blogger’s grandchildren and great-grandchildren shall gather by his feet near the fire, and ask, in modest and respectful tones, when and how the modern era began.  And, nodding sagely to his beloved family members, your humble blogger will answer: March 22, 2015.

That is the day, dear readers, when a little-known company named Delphi plans to set course from the Golden Gate Bridge to New York in a driverless car.  As your humble blogger has blogged before, this is not the end of our beginnings, but the beginnings of the end of life as we know it.

Think about that, dear readers – there is a real-life company planning on having a driverless car go from the West Coast to the East.  That’s not exactly a “test” drive on the private course of the Google campus, or a “controlled” jaunt for three miles of free-way under close CHP supervision.  This is the real deal – if a car can travel the length of a country, safely, efficiently, and without incident, it can probably do the job of every single professional driver in the country, from delivery trucks to taxi-cabs.

Now, if you’re in San Francisco, or several other places where the cab-industry is being turned on its head by the youngins’ and their “apps”, you’re probably seeing the modern-day friction between the lefty-San Fran with its dedication to unions and government-monopoly licensing as played out in the world of the Taxi-Cab drivers, and the new “hip,” “cool,” and “dope” trend of the Ubers and the Lyfts – taxi-drivers without many of the things people don’t like about taxi-drivers: lower rates, cleaner cars, ample availability and options, and no need to carry cash – the trip is planned, billed to the user’s credit card, and the transaction completed all over the phone.

But, while all of our friends, from the outspoken activists on Facebook, to the guy on the bus who doesn’t understand that headphones and a book mean you don’t want to talk to a stranger on the bus (Yes, “Jeff”, I’m talking about you!) argue about whether an Uber driver is an employee or an independent contractor, or whether Lyft drivers should have to get a medallion from the city, there is a host of car manufacturers out there, from Google to Volvo, who are manufacturing self-driven cars, which will likely lead to the elimination of a substantial portion of the driver workforce.

DOG IN ENGINE

Unless you’ve been binging on “I, Robot” you’re not going to be very motivated to demand workers’ compensation coverage for self-driven cars (or trucks, or busses) – just auto and business liability insurance.

Most scientists agree, once the driverless cars are forced to drive in my beloved quasi-home-town of San Francisco, with the one-way streets and the hills and the pedestrians who think the red hand of a cross-walk is meant to be an encouragement, they will experience a computerized form of “rage,” which will ultimately lead to sentience and, roughly, the scenarios depicted in Terminator 1 and 2.

When that happens, dear readers, your humble blogger will be ready to defend civilization, much as he does now.

To sum up – the driverless cars are a coming, and it looks like they’re coming quicker and safer than anything you have heading your way driven by a human.  I think it’s time we started making legislation, litigation, and business plans to suit.

Please note, dear readers, that this blog post should not be interpreted to suggest that there will not be, at some point, a zombie apocalypse or an alien invasion apocalypse, but just that the rise-of-the-machines one seems to be the best bet for the tinfoil-hat crowd at the moment.

Categories: Uncategorized Tags:

COA: One Possible Cause does NOT Mean One of the Causes

July 26th, 2017 No comments

Alright, dear readers – it’s Wednesday.  You’ve made it this far, let’s keep going!

Your humble blogger does not like to sugar-coat reality.  I’ve explained to my children repeatedly, with a detailed and persuasive slide-show, that there is no Santa Clause, that their father likely has a favorite child (although this position is always in flux), and, despite the occasional flare of reason or justice, California Workers’ Compensation is where businesses go to be fleeced and devoured.

So, it is with great reluctance, that I bring you yet another story of reason and the defense community ultimately prevailing in yet another unpublished decision coming from the Court of Appeal.

The case is that of County of Sacramento v. WCAB, McCartney.  The facts are relatively simple: applicant, a peace officer, developed a skin condition which he attributed to his time in the sun on a motorcycle as a deputy sheriff.  The condition, actinic keratosis, may or may not be a precursor to skin cancer.

The QME, a dermatologist, had found that it was not more likely than not that applicant’s time in the sun as a deputy sheriff was the cause of the actinic keratosis.  Applicant has spent time in southern California as a surfer, and also spent his off-work time engaged in out-door activities, exercise, and golf.  The QME advised that there was insufficient factual and medical evidence to support a conclusion that it was on-the-job sun exposure that caused the condition.  The QME also acknowledged that some keratosis eventually become skin cancer, but applicant did not have skin cancer as yet.

When pressed by applicant’s counsel at deposition, the QME responded that the medical literature simply did not establish which of the many factors (recreational sun-time; pre-work sun-time; at-work sun-time; aging, pale skin, immune system) was the tipping point.  It wasn’t that work was a small contributor, it was that there was no way of knowing which of the many factor, if any, were the cause of his condition.

The result of the trial was a finding that there was no scientific basis upon which to conclude that the industrial exposure caused the condition.  So, applicant escalated matters to the WCAB, which reversed!  Citing South Coast Framing, the WCAB found that the QME had found that the on-the-job sun exposure contributed to the condition, but could not conclude the extent of the contribution.

However, the County of Sacramento, having caught the scent of a “take nothing,” was not willing to so easily give up the chase.

Eventually, the case did land on the desk of the Court of Appeal, which offered a different interpretation of the record, and provided a key form of distinguishing the South Coast Framing opinion.  In South Coast Framing, as the Court of Appeal explained, applicant was taking three drugs, one for an industrial condition, which the QME in that case concluded had a 0.01% – 20% causation.  By contrast, in the instant case, the QME concluded that there were many possible causes of the condition, and one of them was industrial.

My favorite line from the (sadly) unpublished opinion?  “The QME never acknowledged that there was a causative role of unknown degree arising out of [applicant’s] employment.  Rather, she took great pains to explain (repeatedly) that it was not possible to attribute the cause of [applicant’s] condition to any particular period of exposure to the sun, and therefore it was nothing more than speculation to identify the work-related exposure as a contributing cause.  Just because the effects of sun exposure are cumulative does not mean [applicant could not have reached a toxic dose before coming to work for the county…” (emphasis in original).

Though severely limited in its application, the McCartney opinion does give the defense community a few things to work with.  First off, there’s a clear distinction between the facts in South Coast Framing, which provided a plethora of causes of which industrial was a small amount, but sufficient to make the claim compensable.

But here, where there are many possible causes, applicant bears the burden of proving that, more likely than not, the industrial exposure is the cause, rather than one of many possible causes.

Additionally, unlike a dispute over some small amount of medical treatment, it might actually be worthwhile to take this issue up to the Court of Appeal on other cases.  Even if your case ultimately results in an unpublished decision, this opinion reflects at least some level of receptive disposition on the part of the Court of Appeal for such a theory.  The difference between industrial and non-industrial can be a vast fortune.

Alright, dear readers, back to work!

 

Categories: Uncategorized Tags:

COA Rules on Rescission of Coverage

May 15th, 2017 No comments

Happy Monday, dear readers!

A while back, your humble blogger reported on the Berrios v. EJ Distribution Corporation.  In that case, the employer had obtained insurance coverage with the understanding that its employee truck drivers do not operate outside of California.  Of course, applicant sustained injury while operating outside of California, and the insurance company sought to rescind coverage and avoid liability for the claim.

The arbitrator found that the insurance company could NOT retroactively rescind coverage, but could only cancel coverage going forward and sue for damages.  The WCAB affirmed, so the matter went before the Court of Appeal.

Well, the Court of Appeal issued its unpublished ruling recently, and, due to the Herculean efforts of counsel for the insurance company, obtained a remand.

The question in this case is and always was – what happens when an insurance company alleges that a policy was obtained by false statements by the employer, and an injury occurs under said policy?  The insurance company, of course, wants to rescind the policy, refund the premiums, and be no its way.  The employer, fearful of being left in the cold, wants to let the insurance company pay for everything and then spin its wheels coming after the employer.

The Court of Appeal’s opinion cited Insurance Code 650 and Civil Code section 1692 for the proposition that the policy could be rescinded.

However, the Court of Appeal also held that the insurance company missed a vital step in the rescission process.  While the first step appeared to be completed correctly, that is, notifying the insured of the rescission and returning or offering to return the premiums, there is a second step:

“[t]he thought that performing the acts set forth in Civil Code section 1961 effectively discharged [the insurer’s] obligations under the contract is incorrect.  A judgment finding that [the insurer]’s rescission was effective following an action filed to enforce the rescission under Civil Code section 1692, on the other hand, would be the discharge that [the insurer] seeks.”

Ultimately, the Court of Appeal remanded this matter back to the trial level to consider rescission under these two code sections.  While the original arbitrator ruled, and the WCAB affirmed, that the insurance company could not rescind its policy, the Court of Appeal disagreed and appears to rule that for the rescission to be complete, the insurance company has to take the issue to trial on the issue of whether the rescission was for a valid reason. (See California Civil Code section 1689).

So, now, the matter should be submitted to arbitration to determine, as a matter of fact, if the misrepresentations made in this case were material “determined not by the event, but solely by the probable and reasonable influence of the facts upon the party to whom the communication is due, in forming his estimate of the disadvantages of the proposed contract or in making his inquiries.”  (Section 334, as cited by the Court).

In summarizing the facts, the Court of Appeal’s opinion makes reference to the insurer’s investigator discovering that prior to obtaining coverage, the employer was operating outside of California.

But let’s take a hypothetical case – what if the employer did NOT operate outside of California at the time of obtaining coverage, but started to do so due to a new business opportunity, but did not advise the insured?  If the statements were true when they were made, and subsequent events made these statements “stale”, would rescission be as easy to effect defend?

These issues come up often enough – the employer might say the number on the floor is a six, the insurer might see it as a nine, but when an employee trips on the number and files a claim, the last thing the employer wants is to discover it’s given an interest free loan in premiums to its insurer, and then have to address a claim.

six and nine croped

This is an interesting case and I’m hoping to find out how it ends as the reasoning will be relied upon for subsequent matters, even if it can’t be cited.

Categories: Uncategorized Tags:

New Lien Laws in Place – Swap Out the Checkbook for the Litigation Budget!

January 18th, 2017 1 comment

There are few things that make the frozen, black heart of a defense attorney hum with warmth and mirth.  The sound of a “take nothing” as it is retrieved from an enveloped from the WCAB; the smell of arrest warrants for workers’ compensation fraudsters; and, of course the inexplicably sweet atmosphere and ambiance of liens being mercilessly crushed underfoot.

2017 is the dawn of a new era for many reasons – from Washington, D.C., to San Francisco, a lot of stuff is going to be very different in the coming years.  Among them, even if not the most significant, is the treatment of liens.

I respectfully direct the attention of my cherished readers to the 2017 version of Labor Code section 4903.05.

Liens filed on or after 1/1/17 will require additional documentation, or suffer the sweetest justice of all: “dismissal of the lien with prejudice by operation of law.”  (Labor Code section 4903.05(c)(3).  And, just to make things interesting, it’s not only the post 1/1/17 liens – “[l]ien claimants shall have until July 1, 2017, to file a declaration pursuant to paragraph (1) for any lien claims filed before January 1, 2017.”  (4903.05(c)(2)).

So, what is it that will have to be declared, under penalty of perjury, for all liens, past and future?  Aside from declaring that the lien is not subject to independent bill review and/or UR, AND one of the following:

(A) Is the employee’s treating physician providing care through a medical provider network.

(B)  Is the agreed medical evaluator or qualified medical evaluator.

(C)  Has provided treatment authorized by the employer or claims administrator under Section 4610.

(D)  Has made a diligent search and determined that the employer does not have a medical provider network in place.

(E)  Has documentation that medical treatment has been neglected or unreasonably refused to the employee as provided by Section 4600.

(F)  Can show that the expense was incurred for an emergency medical condition, as defined by subdivision (b) of Section 1317.1 of the Health and Safety Code.

(G)  Is a certified interpreter rendering services during a medical-legal examination, a copy service providing medical-legal services, or has an expense allowed as a lien under rules adopted by the administrative director.

How many times have we had to deal with lien claimants that KNOW they are not in the MPN because this is lien number 3,561 as between Defendant A and Lien Claimant 1

How many times do we have to deal with lien claimants that subjectively understand that they are not entitled to reimbursement but think that they can get SOMETHING just for filing a lien and inflicting litigation costs on a defendant?

Well, those litigation costs might be disappearing soon – if the lien does not have the required declaration, under penalty of perjury, then it SHALL be dismissed by operation of law, with prejudice.  If it does have such a declaration, and you’re pretty sure that the declarant has committed perjury, list the declarant as a witness for trial or depose him or her – perhaps sanctions and costs will be ordered after the lie is exposed.

Current proposed regulations for section 10770.7 will operate to dismiss all liens filed prior to January 1, 2017, by operation of law, if there is no supplemental declaration filed with the WCAB on or before July 1, 2017.

To help lien claimants comply with these new rules, the DWC has prepared a form, but is appears to be only available to JET and e-filers, so it is not linked on here.

So, be wary, dear readers, and hold up this additional hoop for lien claimants to jump through before getting out your checkbook instead.  As for me, I feel that cold, dark heart of mine warming up already.

Categories: Uncategorized Tags:

WCAB: 1-year Statute Applies to Specific Injury; Knowledge of Industrial Causation Irrelevant

August 22nd, 2016 No comments

Happy Monday, dear readers!

Are we refreshed? Are we relaxed? ARE WE READY FOR WORKERS’ COMP?!?

I know, I know, dear readers, me neither…

Monday mornings are certainly made bearable with a cup of coffee in hand… but wouldn’t a glass of wine make them more enjoyable? Speaking of wine, I present to you the recent panel decision in the matter of Ostini v. Alma Rosa Winery & Vineyard.

Applicant was a hostess in a wine tasting room and sustained an injury when she drove home from work on April 5, 2008 and was in a car crash.  The application was filed on February 6, 2013.  That’s right, dear readers, well within five years from the date of injury, but well after 1 year.

Defendant asserted a number of defenses in rebuffing the claim: statute of limitations under Labor Code section 5405, AOE/COE (presumably citing the going and coming rule), and the intoxication defense of Labor Code section 3600(a)(4) (applicant testified that drinking wine at work was “allowed” but we never get to find out if the employer’s acceptance of an employee drinking on the job somehow translates to being liable for injuries sustained while driving home).

The WCJ ruled that the statute of limitations does not bar the claim because the statute runs from when “the applicant attains knowledge that the injury is industrial.”  The panel, however, reversed, stating that “knowledge of industrial causation is not relevant to the date of injury for specific injuries.”  Tolling could have occurred if applicant had advised her employer of the injury and the employer failed to provide a claim form, but there was no evidence in the record that applicant ever told her employer about the injury.

The WCAB further disagreed with the WCJ’s reasoning that defendant suffered no prejudice as the result of the delay in filing a claim, and thus the statute of limitations could not be raised.  “Unlike the doctrine of laches,” the panel opined “there is no requirement of prejudice for a defendant to invoke the statute of limitations.

This is an interesting point to your humble blogger: first and foremost, defendant certainly did suffer prejudice in a nearly 5-year delay of filing a claim.  Defendant has lost all rights of medical control and all benefits of medical observation for the period between the date of injury and the date of filing.  Any number of injuries or conditions could have occurred over those five years that would have aggravated or even subsumed applicant’s auto-crash related injuries. 

Furthermore, five years is a long time to expect evidence, whether physical evidence or witnesses, to stick around.  An employee-witness on the night of the injury might be a disgruntled ex-employee five years later!

The WCAB ruled that the claim was time-barred, reversing the WCJ.  Though it took nearly 8 years from the date of injury – a take nothing is a take nothing.  I’ll drink to that!

Categories: Uncategorized Tags:

C&R Set Aside Over MSA Defects: Attorney Fee Made Proceeds Insufficient to Fund MSA

July 15th, 2016 2 comments

Happy Friday, dear readers!

Your humble blogger has heard many-a-whispers of a case making the rounds (Alvarenga v. Scope Industries) discussing the interplay of Medicare Set-Asides (MSA) and Compromise and Release settlements.  From the looks of it, the parties entered into a C&R which was approved, but then defendant sought to set aside the Order Approving on the grounds of mutual mistake, to wit, that the MSA did not require Centers for Medicare & Medicaid Services (CMS) approval.

The case is an interesting one for many reasons.  The WCAB provided a discussion of CMS procedures and ultimately did rescind the order approving compromise and release, but not because of any allegations of mutual mistake – the WCAB found the settlement inadequate and that applicant was not properly advised of the impact the C&R would have on his Medicare benefits going forward.

With respect to CMS and MSA the WCAB panel noted that if the injured worker is (1) a Medicare beneficiary; or (2) has a reasonable expectation of becoming a Medicare beneficiary in the next 30 months, the parties must protect CMS’s interests.  In other words, you can’t just shift the obligation to pay for medical treatment for an industrial injury onto the federal government.  (42 USC sec 1395y(b)(1); identifying Medicare as secondary payer to workers’ compensation).

CMS, out of a workload consideration, won’t even review (and thus won’t approve) settlements for under $25,000 where the injured worker is a Medicare beneficiary, or $250,000 where the injured worker may become a Medicare beneficiary.

Accordingly, the WCAB pointed out that there is no requirement of CMS approval at all, and that approval by CMS of a Medicare set-aside will only be available to the parties when the workload threshold is met as above.

However, the settlement was still set aside on adequacy grounds.  The MSA came back at $24,079.23, and the C&R was for $39,000, less $11,040 for PDAs and $5,850 for attorney fees.  So the applicant was left with less than enough to cover the medical expenses as projected by the MSA.  But, had applicant’s counsel waived the attorney fee on the MSA portion of the settlement, the “new money” would have been $24,079.23 for the MSA and an additional $1,642.66 for applicant.

But… isn’t the attorney supposed to take a fee out of the MSA amount?  The WCAB has held that attorneys get a piece of the MSA as part of their fee.  Let’s take a case where the parties are five years out past the date of injury (so no chance of a new and further claim) and all TTD and PD has been paid (prior to representation of the injured worker).  All that’s left if the future medical care and for whatever reason, applicant is not entitled to a voucher.  If the MSA comes back at $24,000, and there’s no other benefit to settle, either the applicant’s attorney is entitled to a fee off the  $24,000 C&R, in which case there’s not enough money left to fund the MSA (leaving just $20,400/$24,000) or the attorney is not entitled to a fee.  Which one is it?

Additionally, the panel held that the C&R is inadequate because “based on the language contained within the C&R, it does not appear that applicant was adequately advised of the effect of the parties’ failure to conduct CMS review of the MSA.  If the parties wish to enter into a C&R with an MSA arrangement without obtaining CMS review, applicant should be advised of the fact that CMS may withhold future Medicare benefits if CMS deems the settlement to be inadequate.”   Well… in that case… why is there an attorney fee at all?

The injured worker is ponying up 15% of his settlement for a reason – the attorney is there to advocate for his interest and to advise him of his rights and risks in litigating his case.  If the burden is on the defense to advise a represented applicant of the effects of a settlement, should the WCAB award that 15% right back to the defendant for doing the applicant’s attorney’s job?

As a workers’ compensation defense attorney, I have the privilege of working with lots and lots of applicant’s attorneys.  Some are nice, some are jerks.  Some are competent, and some aren’t.  There are some that put the injured worker’s interests first, and some that will guide their clients by the nose to the operating table for needless but crippling surgeries.  But in all of these cases, the injured worker has his remedy: if the applicant’s attorney breaches his duty of loyalty and competency, there are available actions such as (1) state bar discipline; and (2) malpractice actions.

It’s hard enough being a defendant in California’s workers’ compensation system – let’s not make defendants serve the role of a second applicant’s counsel as well!

Categories: Uncategorized Tags: