WC Fraud Allegations Made Against Former CHP Captain

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Well, dear readers, the week is just zipping right by and the weekend is coming up fast!

Long-time readers of this blog will know I offer the Latin quote, “Quis custodiet ipsoscustodes?” with some frequency, and I really shouldn’t. Law enforcement is entrusted with a lot by society, not just with safety but with honesty. How can those we trust to protect us from criminals engage in crime themselves?

Sadly, we have, all too frequently, seen law enforcement officers engage in the very fraud we would want them to help investigate, catch, and prosecute.

In the long standing tradition of this most humble of blogs, we won’t be naming names, but it appears a former CHP captain was arrested on allegations of workers’ compensation fraud recently. The accused was out on workers’ compensation leave when he was observed engaging in activities “inconsistent with limitations” reported to his treating physicians.

Of course, the typical workers’ compensation claim involves the treating physician asking the injured worker about his or her limitations, and then, under medical reason, imposing work restrictions within those limitations. Those work restrictions often enough preclude continued work which generates the right to temporary disability benefits.

Your humble blogger is not jumping to any conclusions about this particular case, but such fraud robs the citizenry of their tax dollars through unwarranted benefits. When such fraud is the result of actions by law enforcement, that raises a question: is this particular law enforcement officer credible and honest?

When the LEO is not honest – when a court determines that he or she has engaged in fraud – it raises a question that is not as applicable or devastating for a common civilian’s fraud: how many convictions were obtained by statements or testimony from that particular law enforcement officer? How many convicts can now challenge their convictions and demand new trials based on this “new evidence” that the officer who testified in their trials should not have been trusted by Judge and Jury?

Your humble blogger hopes for a swift investigation and that the truth is discovered through our adversarial legal process. But this instances serves as a reminder for us all – we must be vigilant in all instances. Hopefully, the fallout from such cases imposes upon all law enforcement officers their obligations and duties and how critical that trust is that we put into them every day.

On WC and Defamation Lawsuits

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Happy Wednesday, dear readers!

Gather around for story time!  It was about 15 years ago, that on a scorching Sacramento morning, I sat down for my first class in Torts.  I cannot adequately describe for you’re the excitement I felt that first day of law school, as I look forward to what promised to be the best grad school class ever!

Nor can I now, all those years later, relate to you the depth of sadness and the merciless feeling of betrayal that grew in my heart over the next several weeks, as I learned that torts had nothing to do with tasty little baked goods, but instead was the province of civil wrongs.  It was there that I  learned that, technically speaking, two civil wrongs could potentially lead to the creation of a civil right.

Anywho, jumping back to today, one of the torts that we studies with so much alacrity is the tort of defamation.  There are many species of this, such as slander, libel, etc., but generally speaking, if you damage a person’s reputation, you will have to make him or her whole.

So let’s talk about the case of Fonseca v. Wal-Mart.  In late 2024, a jury awarded Mr. Fonseca almost 35 million dollars in his defamation suit against Wal-Mart.  After he filed a workers’ compensation claim for his former employer, Wal-Mart accused him of making a fraudulent claim because his doctor gave him work restrictions against driving at work, and he was video-taped driving his personal vehicle. 

Ultimately, Mr. Fonseca applied for other jobs with other employers, but alleged that he had to repeat the reason for his termination of employment to these potential new employers.  Wal-Mart apparently plans to “pursue all available remedies” which would likely be an appeal.

As you can imagine, your humble blogger wasn’t there when Mr. Fonseca first was injured, or was video-taped, or was fired, or was trying to get another job with another employer.  The jury found the facts based on the evidence presented and awarded money accordingly.

But, in true Wal-Mart fashion, we are being offered a great value here!  For the price of reading this blog post, we are all reminded that unlike Las Vegas, what happens in comp doesn’t necessarily stay in comp.  What should the employer do when given information suggestion the injured worker is exceeding work restrictions?

Well, for starters, it’s a good idea to establish a record, particularly with an investigator who can document dates, times, and activities to a level that will not be effectively impeached in court.  Then, it’s important to realize that the only ones among us who are doctors… are doctors.  No amount of watching House or reading Sherlock Holmes will qualify the laymen among us to determine if the applicant is a faker.

Factual evidence should be submitted to the treating physician and/or a med-legal.  It can be done with a deposition or a request for supplemental report.  “Dear Dr. Nick Riviera, would you please review the enclosed footage, taken on April 1, 2025, and advise if Mr. Malingerer is engaged in activities consistent with his presentation in your clinic about 20 minutes ago?”

Whatever the actual facts in the Fonseca case, facts that are, no doubt, hotly contested by the parties, this serves as an excellent reminder to all of us to be very careful with the downstream consequences of our actions.  

Happy Martin Luther King Jr. Day 2025!

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Time flies, does it not, dear readers? Today is MLK day once again! Of course, due diligence requires us all to check if what we might consider a “holiday” is also a holiday for the courts. Of course, your humble blogger remains a zealous advocate of his own birthday becoming a holiday because who wants to work on one’s own birthday, right?

Anywho, pursuant to the Rules of Court, today is a holiday (1/20/2025) and the same is true pursuant to California Government Code 6700. Safe to say, dear readers, that if you had a deadline falling on today, you probably have until tomorrow to get it done, for filing and the such.

Your humble blogger wishes you a peaceful and reflective day, full of meaning and recuperation.

Convictions and SIBTF

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Here we are again, dear readers, at the end of the week.  So, what your humble blogger would like you to check your files for liens Liberty Medical Group, Inc., of Rancho Cucamonga.  The reason why is, Doctor Kevin Tien Do has agreed to plead guilty to fraud in relation to his work for Liberty Medical Group.

InsuranceJournal.com reports that Dr. Do wrote reports for Liberty Medical Group, Inc., related to the Subsequent Injuries Benefit Trust Fund.  When Dr. Do was suspended from participating in the workers compensation program, he continued to write reports (and bill for them) but Liberty Medical Group would submit the reports as if they were authored by other doctors, thus circumventing the suspension.

Dr. Do admitted that he “conspired to defraud the state of millions of dollars by defrauding California’s [SIBTF].”  But don’t let the semantics fool you – SIBTF is funded by state collections from employers, which means the depleting of the fund results in more payments by employers to correct.  Of course, that means higher costs for the rest of us when patronizing the businesses not driver to closure by the cost of doing business in California.

Seriously… what the heck?

In this particular case, SIBTF was the target of fraud.  But what system do we have in place to avoid the same practice where the target is a self-insured employer or a workers’ compensation insurance company?

Imagine the time and the effort it takes to get a dishonest doctor out of the comp system, only to have him or her come back by recruiting a doctor with a good name and authoring (and billing for) more poison reports.

Your humble blogger does not have a solution in mind for this practice, but it serves as more evidence that the workers’ compensation system is open to exploitation by unscrupulous actors.

Have a great weekend, dear readers!

On Serious and Willful Calculations…

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Your humble blogger has a post for you today, dear readers, that is both serious and was drafted willfully.  Let’s begin with a question – what are the benefits due under a finding of serious and willful misconduct on the part of the employer?

Under Labor code section 4553, [t]he amount of compensation otherwise recoverable shall be increased one-half, together with costs and expenses not to exceed two hundred fifty dollars ($250)…”

Easy enough, right? Well, the Supreme Court is going to be addressing this issue where it pertains to a corrections officer injured in a pre-planned attack by inmates.  The most pressing issue in the case of Department of Corrections & Rehabilitation v. WCAB, Ayala, isn’t whether or not the defendant is liable for Serious and Willful Misconduct, but rather what benefits should be counted to determine exposure.

Government code sections 19871 and 19871.2 provide for industrial disability leave in some injury cases, basically equating to one year of full wages rather than temporary disability benefits.  However, Labor Code section 3207 defines compensation as the benefits or payments “conferred by this division upon an injured employee.”  The Government code is not part of the division of the labor code, so would those difference between temporary disability benefits and wage continuation go into the Serious an Willful exposure compensation?

Let’s play with some numbers!  An employee injured on 1/1/23 would have a maximum TD rate of $1,619.15.  Let’s say that employee was earning $2,700 rather than $2,428.72 per week.  Well, for TD benefits for 52 weeks, that applicant would receive $84,195.63, but under the industrial leave benefits of Government Code section 19871, the employee would receive $140,400 instead, a difference of just over $56,200.  Prevailing under a theory of Serious and Willful Misconduct would yield an increase of just over $28,000, if those additional benefits are calculated as part of the package.

So… should they be?

Well, in this case, the WCJ found that the additional benefits under the Government code should not be included in the calculations, while the WCAB found it should.  The Court of Appeal then weighed in, siding with the trial judge and defendant, excluding the additional benefits under the Government code from the calculation.

The Court of Appeal relied on LC 3207 to come to its conclusion, but it also had a very interesting reason to reject applicant’s argument under Labor Code section 3202 (the notorious and very frustrating “liberal construction” section).  To the Court of Appeal, Ayala argued that the court should “liberally construe” labor code section 3207 to include the additional benefits found in the Government code.  The Court of Appeal responded that while this particular holding doesn’t help applicant, it might help applicants in other situations, such as those defendant an employer claim of the employee’s Serious and Willful Misconduct.  Thus, the COA reasoned, “had Ayala’s injuries been caused by his own serious and willful misconduct, his industrial disability leave would not have been reduced by one-half for the very same reason it does not increase by one-half here.” (emphasis original).

We don’t know what the Supreme Court will do with the Ayala case, of course, but assuming it leaves the Court of Appeals decision intact, perhaps we can draw from that (1) that any benefits the employee would receive originating outside of the Labor Code are not to be calculated towards Serious and Willful Misconduct claims; and  (2) if a WCJ or the WCAB uses the “liberal construction” doctrine found in Labor Code section 3202 to reach its reasoning, doesn’t this dicta militate against it if the interpretation can be applied adversely to other injured workers?

As always, dear readers, time will tell!

On Labor Code 4605 and Dependent Claims

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Welcome back dear readers!  I hope your weekend was more restful than mine.  After hours upon hours child-proofing my house, they still got in!  (Tip your waitress, folks, I’ll be here all night).

Anywho, your humble blogger has a really interesting panel decision for you, Sanchez v. Agser Contracting.  Applicant is the widow of Agser’s employee, and retained her own doctor who offered an opinion concluding that the death was caused by, in part, the contributions of work exposures.  The panel PQME, however, found that the death was non-industrial.

At trial, the WCJ excluded the retained physician’s report and relied on the PQME’s report to issue a “take nothing” order.  Why would the WCJ exclude applicant’s privately retained physician’s report?  After all, Labor Code section 4605 specifically provides that  “[n]othing contained in this chapter shall limit the right of the employee to provide, at his or her own expense, a consulting physician or any attending physicians whom he or she desires.” 

The WCJ reasoned that section 4605 specifically provides this right to an employee and not a dependent seeking death benefits.  On reconsideration, the WCAB rejected this reasoning, finding that 4605 has to do with evidentiary rights, and denying this evidentiary procedure to dependents would violate due process rights.  Thus, the WCAB ordered the retained physicians report admissible.

However, the ultimate ruling was not disturbed. 

First, the available pool of medical evidence included one QME report which found the injury to be non-industrial, and one 4605 report which found it did.  On what basis could the WCJ or the WCAB find an industrial injury?  Solely on the 4605 report, of course.  And Labor Code 4605 specifically provides “[a]ny report prepared by consulting or attending physicians pursuant to this section shall not be the sole basis of an award of compensation.”

The WCAB panel opinion found the 4605 report to be speculative and found the PQME report more persuasive, leaving the “take nothing” order undisturbed.

Here’s some food for thought, dear readers.  When your file starts getting sprinkled with these 4605 reports on a denied claim, ask yourself this: is there a lien? 

Can the 4605 physician produce bills showing they are paid by the applicant? 

Your humble blogger’s thought is as follows: if there is an unpaid bill, especially with the anticipation that the defense will ultimately be asked to pay it, then the report is not “at [applicant’s] own expense” and thus should not qualify as a Labor Code 4605 report.  Therefore, it should not be reviewed by the PQME or admissible as evidence.

Just another crackpot idea.

What do you think, dear readers?

WC Fraudster Goes Down in Sacramento; Some Thoughts on Preventing Such Fraud

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The Sacramento County District Attorney’s office announced that fraudster Gustavo Cisneros has pled no contest to felony insurance fraud.

According to this press release, “Cisneros had at least six previous workers’ compensation claims.  In these claims, Cisneros used different social security numbers and dates of birth to make his actions more difficult to detect.”  The sentence for this fraud is 150 days in county jail, 2 years of formal probation, and restitution to the victim.

As always, your humble blogger is happy to see that the fraud has been detected and that the prosecutor has taken up the case.  However, this is far from a perfect result.

Only a fraction of the fraud referrals sent to the district attorney’s office are taken up. 

But this tactic used by Cisneros is not uncommon.  Often enough, we see applicant’s represented by the same applicant attorney filing claims with “typos” on the date of birth or the spelling of the name.  If you’re a cynic like your humble blogger, there’s no “error” here but a deliberate effort to conceal prior claims. 

The WCAB appears to offer no remedy for this – there is no penalty for an incorrect DOB, social security number, or failing to list prior workers’ compensation claims or injuries in paragraph 8 of the application. 

Certainly, defendants can explore this with a deposition or an ISO report, but these methods take time and carry their own expense.  Furthermore, even when these discovery methods are used, when you have an applicant such as Cisneros who is actively trying to avoid detection of prior claims and is willing to engage in fraud, a deposition under oath is of limited assistance. 

What are the remedies that are available for such issues?

When it is the allegedly injured worker filing the application, a government photo ID would address some of these issues, especially if the failure of the pleadings to conform to the government ID data (date of birth, spelling of name, etc.) is a basis to dismiss the application.

Furthermore, when an applicant attorney is involved, perhaps the failure to disclose prior WC claims for which the same firm represented the same applicant should be sanctionable.  If an applicant attorney assumes representation after an application has been filed, an amended application listing prior claims for which the same firm represented the same applicant can be filed within 45 days of assuming representation.

I defer to the wisdom of the legislature and the WCAB if the added burdens on applicants and their attorneys from the suggestions above outweigh the public’s interest in deterring and preventing fraud and reducing the delays and costs of workers’ compensation litigation.

What do you think, dear readers? 

Have a great weekend!

Get Out The Bow Ties, Check Your Cat Filters, Video Hearings En Route

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Slowly and steadily, dear readers, our beloved swamp of workers’ compensation is moving into the future.

Your humble blogger applauded the use of telephone conference lines to conduct status conferences and mandatory settlement conferences in response to the COVID19 pandemic, but long bemoaned the bow ties and suits that sat unused in their various owner’s drawers where once they brought grace, dignity, and a slight hit of Mad Men to the WCAB.  Well, no longer (or, almost no longer).

As of March 1, 2025, the status conference and MSC calendars will transition to CourtCall video platform.  The same is true of Priority Conferences and Lien Conferences.    That’s right, dear readers, suits, bow ties, shirts – we’re all going to dress like real lawyers again.  Depending on the angle of your camera, pants might be optional.   The WCAB was sadly silent about whether cat face filer will be allowed…

From the looks of things, though, the walkthrough calendar is NOT returning to remote appearance, which may have the unintended (or possibly intended?) effect of discouraging walkthroughs. 

In the meantime, that’s not the only change.  AB-2337 took effect January 1, 2025 (I know, I know, dear readers, this should have been covered in my 1/1/25 post, but no one wants too much of a good thing) as well, which means that the chronic degradation of the quality of settlement paperwork due to printing, signing, and re-scanning will hopefully be done for too.  AB-2337 specifically allows for electronic signatures on all filings with the WCAB “subject to restrictions or requirements that may be adopted by the administrative director or the Workers’ Compensation Appeals Board.”  Hopefully we can look forward to more legislative and regulatory assistance to help us make this practice nimble and efficient.

How, your humble blogger is a dreamer at heart, a poet in his soul, and a warrior in his fantastical imagination.  So what can technology do to make workers’ comp practice better?

For one thing, perhaps we can retrofit the various WCAB Boards to make it more convenient for WCJs to conduct trials remotely.  Presently, several board rooms are completely ill-equipped for this, requiring the trial judge to move to the hearing room in the building set up for remote trials.  Upgrades of this sort would make remote trials more feasible and will eliminate the travel costs involved. 

This isn’t only for the benefit of applicants, mind you – how many times have you encountered difficulty in your cases when the non-employee witness doesn’t want to undertake the travel to get down to the Board?  As always, the party offering the witness should bear the burden of making sure that witness is technologically set up.  I would not object to never again having to drive 3 hours just to be told that there’s no court reporter available and now we have to reschedule, just to drive another 3 hours back.

Your humble blogger would also like a requirement that QMEs and AMEs must make themselves available for telephone or video deposition.  The suggestion that parties must incur the cost of travel to ask the QME 15 minutes of questions is absurd, especially when electronic depositions are not some “new fangled do whacky that all the kids learned about on the interwebs”. 

What do you think, dear readers?  Is there some new app that can make all the workers’ compensation headaches go away?  Straight on till Friday, dear readers!

OTOC + Recon = Sanctions

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Welcome back from the weekend, dear readers! 

Who is in the mood for a brief discussion on 5710 fees?  Your humble blogger anticipates a resounding “we are” emanating from all his beloved readers in unison.

Labor Code section 5710 allows for the payment of an applicant’s representative at deposition of the applicant.  Often enough, disputes arise as to what time is compensable related to the deposition as well as what the rate should be.  For example, how much time is reasonable to prepare an applicant for deposition?  An hour? What if an interpreter is necessary?  What about the applicant attorney’s time preparing to prepare the deponent?

 Then there’s the deposition itself – if applicant’s counsel and defense counsel discuss settlement for 30 minutes off the record, is that time included?  How about after the deposition – should the AA be compensated for time spent going over the transcript with the applicant for the errata sheet?

The typical procedure after a deposition is to have AA send a demand for 5710 fees to defense counsel.  Defendants will typically pay the bill in full, with or without an objection, or reduce the bill by a reasonable amount.  To my wonderful colleagues representing injured workers all across the state, although I agree that every moment of your precious time really is priceless, all y’all need to get real with how much an hour of a workers’ comp attorney’s time is really worth.  Spoiler alert: whatever you think it is, I assure you, it’s less.

The regulations provide the procedure for resolving these disputes, found in 8 CCR 10547, which provides the form and content necessary for said petition.  Of interest, although there is some provision for hearing representatives attending deposition, section 10547 does not seem to provide for hearing representatives, but instead requires, in subsection (f), “the name of the attorney who attended the deposition along with the attorney’s State Bar number.”  

Anywho, a recent panel decision, one of the last of 2024, touched on the issue of 5710 fees.  In the case of Amezcua v. Milgard Windows Manufacturing, AA wanted to set the issue of $115 in disputed 5710 fees for trial.  When the WCJ took the matter off calendar, AA filed a petition for reconsideration.  The WCAB cited its En Banc decision of Ledezma v. Kareem Cart Commissary and Mfg. for the holding that a petition for reconsideration is NOT appropriate for an Order Taking Off Calendar.  Not only was the petition for reconsideration denied, the petition was treated as one for removal and denied as well, as there was no evidence that deferring the issue until the trial in the case-in-chief would not cause substantial prejudice or irreparable harm to applicant (or applicant’s counsel). 

The WCAB emphasized that seeking reconsideration from an order taking off calendar is sanctionable.  The opinion then gave notice of intent a monetary sanction on applicant’s counsel absent written objection and good cause for the contrary. 

So, what can we take away from this?  The WCAB’s position has now been made abundantly clear that seeking reconsideration of an order taking the matter off calendar is sanctionable, and, perhaps, seeking attorney fees for responding to such a petition should be an option to explore.  Of course, removal appears to be a non-sanctionable way to appeal so long as the nature of the irreparable harm can be reasonably articulated in the petition.

What’s more, especially if your humble blogger has any say in this matter, the amount paid in 5710 fees needs to be revisited and brought down to reality – that is, it should be brought into line with what the market actually pays for attorney time and experience.    

On Being Vigilant Against Kites

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Happy Friday, dear readers! Are we all over the shock that rumors of your humble blogger’s incarceration, demise, and/or loss of his blogging fingers have all been exaggerated? 

Well, let’s play a bit of catch up, shall we?  How about a discussion of Kite and Vigil?

First, a brief history!  The Permanent Disability Rating Schedule from 2005 calls upon us to combine various ratings for a final permanent disability.  So, a fall that results in injury to the back and the knee would ultimately be combined using the PDRS formula.   20% for the lumbar spine and 20% for the knee would not add up to 40% ($58,290) but instead combine to 36% ($50,170.00).  But as we get up higher in numbers the combined values yield more significant results.  Two impairments of 50% each, rather than adding to 100% would instead be 75%.  The basic formula is a (first PD) plus b (second PD) x (1 – a)

So, if we have 50% and 50%, the formula would be .50 + .50(1-.50) = .75 or 75% PD.

Then, of course, came the Kite decision.  In Athens Administrators v. WCAB (Kite), the PQME found impairment to both hips, and opined that the impairment should be added rather than combined.  The WCJ approved this approach and despite defendant’s appeals, the ruling was not disturbed by the WCAB or by the Court of Appeal. 

After some back and forth with various panel cases interpreting the theory, some limiting some expanding its application, the WCAB took matters into its own hands.   In the June 2024 En Banc decision in Vigil v. County of Kern, the WCAB endorsed the practice of adding rather than combining impairment, but only when “there is no overlap between the effects on ADLs as between the body parts rated; or … there is overlap, but the overlap increases or amplifies the impact on the overlapping ADLs.”

In the Vigil case, applicant sustained a CT to the bilateral hips and low back.  The WCJ added the hips and combined the combined that amount with the back.   So, the Vigil decision held that when there is no overlap of ADLs, the PD for the body parts should added rather than combined.  (As an aside, dear readers, is it now fair to call applicant attorneys pushing for adding rather than combining impairment… Vigilantes?)

For example, a left knee injury which impacts standing and walking might not overlap with a psyche claim or an eye injury which limits sight.  Likewise, when a person might otherwise use a left hand to compensate for a right hand injury, but now both hands are injured, the impact on ADLs is synergistic and triggers adding impairment.

But the en banc decision also provided guidance and gave the defense some maneuvering space in making arguments.  For example, the decision notes “[w]e cannot stress enough that to constitute substantial evidence ‘… a medical opinion must be framed in terms of reasonable medical probability, it must not be speculative, it must be based on pertinent facts and on an adequate examination and history, and it must set forth reasoning in support of its conclusions.’” (emphasis original).  The WCAB places the burden on the party attempting to deviate from the CVC (combining method) to explain why the adding method is justified, through an articulated discussion of the synergistic effect and overlapping ADLs. 

The burden is applicant’s to show that (1) the ADLs do NOT overlap or (2) the ADLs overlap in such a way as to “increase or [amplify] the impact on the overlapping ADLs”.

Without naming names, I can think of a few medical-legal evaluators that will need hand-holding through a deposition in order to meet the requirements of the burden of proof on various issues, whether apportionment or Almaraz/Guzman or Kite/Vigil. 

One odd thing about the result here is, though, that the Vigil court returned this matter to the trial level for the WCJ to consider developing the record.  But why?  There is a rateable report in the record already using the combined values chart.  The fact that applicant failed to carry the burden of proof on rebutting the CVC does not mean the record is not developed, only that the burden was not carried.  If your humble blogger was calling the shots (which he always does in his imaginary arguments), an Award would have issued on the current record using the CVC.

Of course, for good reason, our system of checks and balances keeps such crazy ideas out of decision-making process.