Happy Labor/Labour day! Just to make you crack a smile:
Happy Labor Day!
Reply
Category Archives: Uncategorized
On Demanding a Lien Representative’s I.D.
On a regular basis, liens I encounter are filed by lien representatives. Rather than prosecuting the lien itself, the lien claimant assigns the task to one office or another, generally for a percentage of the recovery. In fact, a regular part of practicing California Workers’ Compensation defense is fighting off unwarranted and baseless liens.
Some cases go on for years, however, and a lien-claimant’s representative might change with the seasons – different person, different office or even a different firm/company. How do you know if the “new” lien representative actually has the power to negotiate and settle a lien, and the old one no longer does?
For swapping attorneys in the case-in-chief, there is a process to substitute attorneys, as per the Code of Civil Procedure § 284. It appears that no such procedure is followed for lien representatives.
With that in mind, I have a suggestion: When a lien representative sends that initial demand letter, a proper response includes some demand for documentation that the lien representative actually represents the lien claimant. That includes authority to negotiate and settle the lien.
In a recent case, Green v. State Roofing systems, Inc., the Workers’ Compensation Appeals Board reviewed a Workers’ Compensation Judge’s granting of a Petition to Quash a Subpoena Duces Tecum, which, among other items, demanded documentation of the agreement and arrangement between the lien claimant and the lien representative.
The case was remanded to work out a discovery plan, but the point is a valid one – defendants must be able to know who the lien claimant is and who its representative is before the lien can be paid, adjusted or litigated.
Of Broken Hearts and Broken-down Benefits
Jack and Jill fall in love and get married. Jill hurts herself coming down the well and makes a Workers’ Compensation claim. Because Jill fell in 1992 and this occurred under the California Workers’ Compensation system, this was going to be a long, drawn-out affair.
Jill’s injury left her unable to work, and, in 2002, she received a lump sum award of just over $172,000 (after her lawyer was paid). In 2005, Jack and Jill decided to go their separate ways, but there was some dispute as to how, exactly, they ought to split the sheets.
Jill, of course, maintained that the Workers’ Compensation award was her separate property! Jack, on the other hand, claimed that it was community property and should therefore be split between them, in accordance with Family Code § 760.
So what is the right answer? Are Workers’ Compensation benefits community property? Or do they stay with the injured spouse? That was the issue in the case of In re the Marriage of Flora S. and George L. Ruiz (2011). [Practitioners, be careful – not all parts of this case are certified for publication.]
The trial court held, and the Court of Appeals affirmed, that the portions of a lump-sum Workers’ Compensation award that are meant to cover out-of-pocket expenses for medical treatment and to replace the lost earning capacity during marriage are community property. The rest sits comfortably in the injured spouse’s pockets.
But here’s the catch – the burden of proof lies squarely on the injured spouse to prove that this property is separate. Without some proof as to how the lump sum was calculated, the injured spouse is out of luck. Otherwise, the Family Code presumption kicks in and the community wins.
The implications of this case are something to look out for when the injured worker wants to itemize his or her benefits award (Yes, I’ll waive reimbursement for medical treatment if you note in detail that all benefits are for lost earning capacity…)
Happy 4th of July!
Happy Independence day! And here’s something to make you smile:
America… what a country!
On self-insuring
In California, every employer must either have workers’ compensation insurance or become self-insured. Given the rising workers’ compensation costs, including the costs of defending these claims, the option of self-insuring becomes more and more appealing as every dollar counts more and more.
Many of the advantages of self-insuring are outlined here by Thomas Harbinson, Esq.
Overall, the medical costs and permanent disability indemnity, along with all the other workers’ compensation benefits, will hit self-insured employers and insurance companies alike. But, if an employer can self-insure, there are several advantages that make that initial investment worthwhile.
The first advantage is control – a self-insured company gets to make sure that the loyal, hard-working employees are taken care of. The company also get to make the decision about whether frauds should be fought tooth-and-nail for every inch of ground or given Danegeld. Local control allows a company to bring its culture and history to the workers’ compensation arena.
Another advantage is cost-saving. Imagine a company owns an insurance company as a subsidiary – and all the profits can either go back to the parent company or lower the price for the one customer (the same parent company). The profits previously owned by the workers’ compensation insurer are staying within the “family” coffers.
One of the other advantages is to pool the lobbying resources as a self-insurer. There are groups such as California Self-Insurers Association that pool advocacy dollars to advance not only those interests that self-insurers share with insurance companies, but the specific interests of self-insurers as well. This includes lectures, seminars and training sessions specifically for self-insurers.
But there are some drawbacks as well that need to be considered. For entities with relatively small claims files, the insurance companies will do the job cheaper because of economies of scale. However, the answer to that is to join a self-insured group. This allows several companies to pool their resources together and (hopefully) save on the costs of insuring their employees.
And remember – self-insured doesn’t necessarily mean self-administered. There is a spectrum of options from just sending a check to a workers’ compensation insurance company to keeping it all in the company.
Another drawback is the (erroneous, I believe) perception that employers will be seen as the “bad guy.” However, if a worker feels he is not being taken care of fairly when he is hurt, he’s going to blame the company that hired the workers’ compensation insurer as much as the employer, whether there is self-insurance or not.
In either case, self-insuring is an option that should be explored and considered when ends must be made to meet.
Almaraz/Guzman – the howling in the night (Part II)
Last time we covered the state of the law – specifically the state of Almaraz/Guzman and the wiggle room given to evaluating physicians to increase the whole person impairment. Is there nothing that can be done to curb the inflation of permanent disability? As a matter of fact, there is.
Your typical Almaraz/Guzman medical report reads something like this: “The applicant underwent a partial medial and lateral meniscectomy. Utilizing Table 17-33, this is a 4% whole person impairment. Taking into consideration the Almaraz/Guzman case, noting his symptoms, Table 15-6 should be used and I would assign him an additional 9% whole person impairment.”
The rating just went from an unadjusted $2,760.50 in permanent disability indemnity to an unadjusted $9,717.50. Factoring in profession, age, etc. the ratings can go drastically up. Often enough, these ratings are combined as expressly prohibited by the AMA Guides. So what’s the solution?
Milpitas Unified School District v. WCAB (Guzman III) (2010) 187 Cal.App.4th 808 pricks the ever-inflating whole person impairment balloon. According to Guzman III, an evaluating physician can only deviate from the AMA Guides in “complex or extraordinary cases.” These are cases that are “new or complex … or the range, evolution, and discovery of new medical conditions.”
In terms of actually performing an Almaraz/Guzman increase, simply invoking the name Almaraz/Guzman is not enough. Guzman III holds that “[i]n order to support the case for rebuttal, the physician must be permitted to explain why departure from the impairment percentages is necessary and how he or she arrived at a different rating.”
In other words, when you’re faced with an Almaraz/Guzman rating, ask yourself the following questions:
1) Did the evaluating physician describe a condition that is “complex or extraordinary,” and one that deals with a “new or complex case” dealing with the “range, evolution, and discovery of new medical conditions?” If the answer is no, then the impairment rating as increased by the non-strict application of the guides is not substantial evidence.
2) Did the evaluating physician “explain why departure from the impairment percentages is necessary?” If Dr. Ouch! simply says it is based on his experience, then the portions of the report addressing Almaraz/Guzman increases are not substantial evidence.
If one, or both, of those questions is answered in the negative, then the report should proceed on strict AMA Guides ratings only.
This argument was used successfully in a recent unpublished panel decision, where the WCAB held that “the AME has not adequately explained his use of [the tables] for spinal impairment for station and gate disorders, where the Guide specifically states that gait derangement impairment is not to be combined with a Diagnosis Based Estimate method.”
The Almaraz/Guzman increase-happy report can be whittled down, and this is how you do it.
In the near future, I’ll discuss how you can use the arguments to permanently shave off the Almaraz/Guzman increases. But that is a post for another time. Good hunting!
5500.5 and spreading the wealth of sovereign immunity (Part 2)
In the last post, we set the stage for the breakdown in co-defendant cooperation in cases where the bulk of the liability should (but, of course, doesn’t) fall on the liability-immune Federal government. The California Workers’ Compensation system and California case-law offers us a silver lining to this scenario.
In the case of Cloristeen Collins v. Plant Insulation Company (185 Cal. App. 4th 260 (2010)), the Court of Appeals found that when our dear monarch proudly declared that the King can do no wrong, his loyal subjects had, all along, correctly noted that the King had no clothes!
Essentially, the Court held that fault for personal injury should be apportioned amongst the parties, regardless of the sovereign immunity defense, and that each party must only pay for their percentage of fault. So if the Federal government is 50% at fault, although it is immune to actual liability, the plaintiff can expect to receive only 50% of his or her recovery, and the defendants need dread only paying the same.
So how does this help Joe Business or Jane, Inc.? Well, let’s say an asbestos applicant wins an award of $1,000,000.00 in a civil claim against a group of defendants, including the Federal Government. If the jury assigns 40% of the fault to the federal government, and only 10% of the fault to Joe Business, that means that Joe Business gets a credit against Workers Compensation liability.
Why not 100% of the award credit? Under Labor Code § 3861 a defendant employee’s credit is related to its relative fault. So, what does that mean in the Workers’ Compensation case?
Well, Joe Business first must pay out 10% of applicant’s civil trial recovery – that’s after applicant (at that point a plaintiff) pays his or her attorney, after the costs, and after the reduction due to the Federal government’s sovereign immunity. Assuming an attorney fee of 33%, and pretending that there are no costs to be paid out as well, Joe recovered $198,000.00 ($1,000,000.00 [base award] x 50% [federal immunity] x 66% [recovery after attorney fee]).
Joe Business will first have to pay up to $19,800.00 in the Workers’ Compensation arena. (See Rodgers v. Workers’ Comp. Appeals Bd. (1984) 36 Cal.3d 330, 336.) But after that, Joe gets a credit for $178,200.00. Pretty nifty, right? More on practical application at a later date. For now, let’s re-form the phalanx and stop playing the whipping boy for Uncle Sam tort-happy history.
Just a caveat: I’m not aware of any case where this theory has been put to the test. So, just like the first back-yard distillery, there’s no way of knowing if it will be the cause of a huge mess or a huge celebration. In either case, good hunting!