You will recall that I severely criticized the Court of Appeal’s opinion case of Kay Christian v. WCAB (65 CCC 643) in last year’s September edition of the CompDigest. I suggested if the underlying decision was not reversed, that legislative change was warranted. In view of the recent Supreme Court decision on the matter, such legislative change is not needed.

It is interesting to note that two of the justices were in favor of multiple penalties. Justice Mosk, along with Justice Kennard, reasoned that multiple penalties was consistent with the case of Rhiner v. WCAB, 4 Cal.4th 1226. Justice Mosk argued that, “the majority pay insufficient heed to our recent recognition that, ‘an unreasonable delay or refusal in payment that is monetarily of little consequence to an employer or carrier may be disastrous to an injured worker struggling to obtain medical treatment and to pay basic household expenses. Thus, there are competing policy considerations.’” Justice Mosk argued that failure to apply penalties for each payment missed would in fact give incentive to the employer or carrier to be unreasonable. According to Justice Mosk, it was clear that each TTD payment constituted another act for which a penalty would apply.

At first blush, Justice Mosk’s opinion would appear to have sound reasoning. However, as a practical matter, his opinion would have created substantial injustice. Aside from giving the applicant what can only be described as a windfall, it would be very unfair to the defendants. For example, as actually happened in the Christian matter, the defendant was of the opinion, though wrongly, that they did not owe TTD payments during the time in question. Their decision not to pay the payments was based essentially upon one mistake. They should pay for that one mistake. The number of penalty requests which are made by the applicant should not change the number of penalties applied.

It has been my experience that employers, as well as insurance carriers, are very cognizant of penalties. Defendants are always concerned about the possibility of a penalty. I do not think that the final result in the Christian matter should give any defendant solace that penalties will not be imposed when payments are unreasonably delayed. The Christian case does not stand for this proposition. The Supreme Court only addressed the issue when multiple penalties applied. For a complete review of this case, see U. B. DeJudge.

Federal Court Allows ADA Claim As Well As Simultaneous 132(a) Claim

erry Buckley brought a claim against his employer in Federal Court for violations of the Americans with Disabilities Act and the California Fair Employment in Housing Act. The employer sought dismissal of the ADA claim and the FEHA claim. The district court reviewed the various State cases on the matter. One of the cases reviewed was Cammack v. GTE California, Inc., 48 Cal.App.4th 297. The Cammack court did an extensive review of the legislative history regarding the ADA and the FEHA and then concluded that the legislature did not intend to appeal the preemptive nature of the Workers’ Compensation Act. However, the district court judge disagreed. The judge noted, “It is readily apparent that Labor Code §132(a) provides less protection than the FEHA for workers’ discriminated against on the basis of work-related injuries.” The judge noted that the only aspect of section 132(a) that is in tension with the FEHA is the exclusive remedy provision. As such, that is the only aspect which is deemed repealed by the FEHA. The fact that the employee may present a claim in front of the WCAB under Labor Code §132(a) on the same facts which create a cause of action under section 12993 does not lessen the protections of the FEHA. Quite the contrary, the judge noted that the potential remedy under workers’ compensation affords further protection to workers who have suffered discrimination by their employers. “This Court believes that the Supreme Court will hold that the plain language of the FEHA acts to repeal the exclusive jurisdiction over employees alleging discrimination on the basis of a disability incurred at work. Consequently, this Court holds that the plaintiff may bring an action for physical disability discrimination pursuant to the California Fair Employment and Housing Act, CA Govt. Code §12920 and §12940, in Federal Court as supplemental claims to her cause of action under the Americans with Disabilities Act.

Jerry Buckley v. Gallo Sales Company, 97 Daily Journal D.A.R. 3627.

I think that Judge Henderson’s observation will be correct. I do believe that the California Supreme Court will allow the FEHA claims as well as the 132(a) claims to operate simultaneously. While most probably the employers would prefer to have Labor Code §132(a) as the exclusive remedy, such a holding would definitely limit the remedies of injured workers for an ADA claim.

Workers’ Compensation Claim is Barred After Civil Matter Dismissed With Prejudice

incent Duran was injured while driving a truck on December 19, 1991. He filed a workers’ compensation claim on February 14, 1994. The defendant, Ready Transportation, Inc., responded that they were not the applicant’s employer.

Duran also filed a civil complaint against Ready. Among other things, Duran alleged that Ready did not have workers’ compensation insurance and negligently supplied him with the defective truck which ultimately caused the accident.

Ready filed a summary judgement motion regarding the civil claim. On January 9, 1995, the date before the hearing on the motion, Duran dismissed the complaint. In doing so, he used a judicial council form on which he indicated the dismissal was “with prejudice.” He added the language that, “Dismissal as to all causes of action alleged against defendant Ready Transportation only. Dismissal does not apply to any other defendants. Dismissal does not apply to the case pending before the California Workers’ Compensation Appeals Board.”

On July 19, 1995, Ready petitioned the Workers’ Compensation Appeals Board to dismiss Duran’s workers’ compensation claim. It asserted that the dismissal with prejudice of the Superior Court action was a decision on the merits and, therefore, Duran’s claim was barred by res judicata.

The WCJ found that res judicata did not apply and denied the petition. Ready then filed a Petition for Reconsideration which was denied. A writ of review was then denied.

The Court of Appeal granted the Petition. They found that, “A dismissal with prejudice is a retraxit constituting a dismissal on the merits invoking the principles of res judicata.” The Court went on to state that Duran could have avoided the harsh results of the res judicata by simply dismissing the Superior Court action without prejudice. However, he voluntarily chose to dismiss with prejudice. As such, the dismissal had res judicata effect. The Court went on to find that res judicata not only bars the reopening of the original controversy, but also subsequent litigation of all issues which were or could have been raised in the original suit. As such, the appeals court remanded the matter to the Board with directions to enter an order dismissing Duran’s claim against Ready.

Ready Transportation Inc. v. WCAB, 97 Daily Journal D.A.R. 2281

The attorney for Mr. Duran thought that the language exempting the WCAB claim protected his dismissal, even though it was with prejudice. Obviously, the Court of Appeal disagreed. The effect of the working “with prejudice” ended all of the applicant’s claims forever.

Multiple Penalties

ay Christian sustained an injury to her psyche and in ternal system from her employment and was subsequently TTD beginning February 3, 1993. The State Compensation Insurance Fund (SCIF) was the employer’s workers’ compensation insurance carrier on the date of the injury.

SCIF paid TTD through May 23, 1994, at which time, based upon the medical report which was subsequently found to be inadmissible, stopped TTD payments. SCIF began PDA’s.

The WCJ ruled that because the medical report was inadmissible, SCIF inappropriately stopped TTD payments. As such, SCIF’s action was unreasonable. The judge found that the applicant was entitled to TTD payments at the rate of $336.00 per week, and was also entitled to a penalty of 10% (cumulative) for each TTD payment due after June 16, 1994. The WCJ directed that each of the penalties be applied to the full amount of the award for the class of compensation, temporary disability, without deduction for pre-award penalties. At the time in question, eleven penalties were found due under the award.

SCIF filed a Petition for Reconsideration. The Board granted the Petition and amended the decision of the WCJ to impose a single penalty against all TTD benefits. A Petition for Writ of Review was filed. The Court of Appeal accepted the writ. The Court of Appeal found that multiple penalties applied. In other words, because biweekly payments were due, every two weeks when a payment was not made, a penalty was to apply.

The Court of Appeals decision was appealed to the California Supreme Court. The California Supreme Court granted review.

The California Supreme Court agreed that Labor Code §5814 permits multiple penalties for delay for nonpayment of pre-award TTD payments. However, multiple penalties are allowed, “only when the unreasonable delay or refusal of those benefits is attributable to separate and distinct acts by an employer or insurance carrier.” When the TTD benefits are terminated by a single act of the insurance carrier, such as in the case of Christian, there is only one penalty. The fact that Christian gave more than one notice that penalties would be sought does not change the fact that one penalty would apply.

The Court went on to explain why their decision was consistent with Rhiner and Gallamore. The Court then reversed the opinion of the Court of Appeal. Justice Mosk and Justice Kennard wrote dissenting opinions.

Kay Christian v. WCAB, 97 Daily Journal D.A.R. 6026

WCAB Has Exclusive Jurisdiction for Fraudulent Lien Claims

merican International Adjustment Corp. brought suit against various companies allegedly owned by Byron Crawford, a doctor. The Complaint generally asserted that there were double billings, un-rendered or unauthorized medical services, fraudulent diagnoses, premature medical-legal evaluations, and 158 separate workers’ compensation claims. American had sought compensatory and punitive damages, as well as injunctive relief.

The defendant, Professional Consulting Services and four other Los Angeles medical clinics, argued that the WCAB had exclusive jurisdiction. The trial court judge agreed. However, on its own motion, the judge added the issue of sanctions. The judge later imposed $60,000.00 of sanctions on the basis that the claim was frivolous. An appeal followed. The appeal court agreed with the trail judge that the WCAB had exclusive jurisdiction regarding bad faith or fraudulent medical-legal liens. However, on the issue of sanctions, the lower court was reversed. The court found that the complaint was not objectively frivolous and presented a matter of first impression of arguable merit. No sanctions were awarded on appeal either.

American International Adjustment Company v. Crawford, 97 Daily Journal D.A.R. 423 and 97 Daily Journal D.A.R. 5576

While the attorneys for American International Adjustment Corporation were able to reverse the award of sanctions against them, it would be unwise to think that anyone else pursuing a similar course of conduct at this time would also be able to escape sanctions. The Court of Appeal clearly indicated that the exclusive remedy for bringing fraudulent claims against lien claimants is with the WCAB. This means that the WCAB is obliged to review all of the laws as they pertain and apply to medical providers generally. This includes the entire Business and Professional Code section and other related sections.

If the WCAB is the sole arbiter as to whether or not the medical provider has a fraudulent claim, then it must be knowledgeable in all areas of law. This will require extensive briefing from both the lien claimant and the defendants.

There are numerous cases which do stand for the proposition that the WCAB should review and apply not only the Labor Code, but all related codes, including the Business and Professional Code sections. See Ledwin v. WCAB, 54 CCC 281, as well as 54 CCC 452.