CASE LAW UPDATE 2016

The opinions expressed herein are not the opinions of the State of California, the Department of Industrial Relations, the Workers’ Compensation Appeals Board, the Division of Workers’ Compensation, or other judges. They are the opinions of the presenter only. Each case is different and must be evaluated on its own merits.

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TABLE OF CONTENTS 1. Rodas v. WCAB .......................................................................................................................1

2. Star Insurance Co. v. WCAB (Tavares) ...................................................................................2

3. Chorn v. WCAB .......................................................................................................................4

4. Travelers Insurance v. WCAB (Dreher) ...................................................................................5

5. California Highway Patrol v. WCAB (Margaris) ....................................................................6

6. California Insurance Guarantee Association v. WCAB .........................................................10

7. Capital Builder Hardware, Inc. v. WCAB (Gaona) ...............................................................12

8. Truck Insurance Exchange v. WCAB (Kwok) .......................................................................13

9. Maxham v. California Department of Corrections and Rehabilitation ..................................14

10. Mansville v. WCAB (Cooper) ................................................................................................15

11. Travelers v. WCAB (Duckworth) ..........................................................................................16

12. Ramos (Uribe) v. Patterson Frozen Foods .............................................................................16

13. State of California v. WCAB (Van Dyk) ...............................................................................17

14. De Guevara v. La Golondrina ................................................................................................18

15. Geletko v. California Highway Patrol, Subsequent Injuries Benefits Trust Fund .................19

16. Pomona v. WCAB (Bryant) ...................................................................................................19

17. Stoltz Metals v. WCAB (Furman) ..........................................................................................20

18. Estrella v. Milwaukee Brewers and San Francisco Giants .....................................................20

19. Bissett-Garcia v. Peace and Joy Center ..................................................................................22

20. Sanchez v. Grapevine Catering ..............................................................................................23

21. Powell v. Fatte’s Pizza ...........................................................................................................23

22. Larsen v. Securitas Security Services .....................................................................................24

23. Schwartz v. Ease Entertainment, Starr Indemnity and Liability Company ............................25

24. Chaides v. The Kroger Company dba Ralphs Grocery Company .........................................25

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TABLE OF CONTENTS, cont.

25. Grijalva v. Care Administration and Management ................................................................26

26. Weitnauer v. Sacramento County Sheriff’s Department, Defendant .....................................27

27. Alvarenga (Luis) v. WCAB ....................................................................................................27

28. Corrado v. Aquafine Corporation ...........................................................................................29

29. Smith v. Action Roofing ........................................................................................................30

30. Naus v. Central Coast Village Centre ....................................................................................31

31. Vera v. Monsanto Co. .............................................................................................................32

32. Nickerson v. Pot Belly Deli ....................................................................................................33

33. Pineda v. Vegland Inc. ...........................................................................................................34

34. Czech v. Bank of America .....................................................................................................35

35. Parker v. DSC Logistics .........................................................................................................37

36. Beltran v. Structural Steel Fabrications ..................................................................................39

37. Moreno v. RTJ Homes, Inc. ...................................................................................................39

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COURT OF APPEAL AND EN BANC CASES

1. AOE/COE

Rodas v. WCAB (Court of Appeal, not published) 81 C.C.C. 324

The applicant, a restaurant dishwasher, placed a large rubber trashcan overflowing with waste on a dolly and pushed it toward a dumpster about 300 feet from the restaurant. He was later discovered unresponsive and bloodied in the restaurant parking lot, having died from a massive pulmonary hemorrhage. Information given to the coroner’s office revealed that the decedent had been exposed to tuberculosis as a child and had a grandfather who had died of lung disease. Decedent had tested negative for tuberculosis, and had been treated at home with an identified medication. The autopsy report concluded that applicant’s fatal hemorrhage was caused by an infection from tuberculosis.

Applicant’s family filed a workers’ compensation death claim. An evaluation was obtained with Ronald Zlotolow, M.D., an internist, whose report indicated that the trash bin was full and when it was open decedent could have been exposed to fumes and odors causing a deep cough that increased thoracic pressure, which in turn caused compromised lung arteries to bleed. Another factor could have been increased thoracic pressure from lifting the trash container, which could also cause bleeding. The physician opined decedent’s arteries were predisposed to bleed due to lack of natural protection from his nonindustrial lesions, but the exposure to fumes and/or the heavy lifting were substantial factors to the hemorrhage from which he died; thus within reasonable medical probability the death was industrial.

The matter proceeded to trial and the workers’ compensation judge found the death compensable based on the medical report of the internist. Defendants filed a petition for reconsideration.

The WCAB reversed the WCJ and found the report of the internist was based on surmise, speculation, and conjecture, and thus was not substantial evidence of industrial causation. The dissenting Commissioner reasoned that the judge’s use of the contributing cause standard was appropriate. Applicant filed a petition for writ of review.

The Court of Appeal indicated the term “arise out of employment” means that an injury must be proximately caused by the employment, and that aggravation, or acceleration of a pre-existing disease is an injury arising out of the occupation that cause the acceleration.

The court concluded that the applicant clearly had tuberculosis. The physician’s opinion that his arteries were compromised by lesions from the tuberculosis is uncontradicted.

The doctor’s view that the bleeding was caused by pressure from those arteries is likewise undisputed, leaving the only question being what caused the pressure.

That question can be answered by circumstantial evidence, since no direct evidence exist. Circumstantial evidence is sufficient to support a workers’ compensation award, and based upon reasonable inferences logically drawn from the facts or group of facts in the case. In this case the physician inferred that the intrathoracic pressure was caused by coughing in reaction to garbage

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odors and/or lifting the garbage can, based on the facts that decedent was in close vicinity of the garbage he was taking to the dumpster, that restaurant garbage admits odors, and the decedent physically exerted himself while handling the trashcan dolly and the full, overflowing can.

The Court of Appeal rejected the board’s opinion as having misconstrued the inferences, opining there was no evidence that decedent opened the dumpster and smelled its contents. The court went on to state that this is beside the point, since it is clear the decedent was handling the full trashcan and wheeling it to the dumpster and must have inhaled the can’s contents rather than the dumpster’s. Generally, the inference drawn by the physician was that decedent was physically exerting himself and was in close proximity to the garbage. Decedent’s copious bleeding is uncontested, as the inference that the pressure was generated by coughing and/or physical exertion. The inferences could have been drawn by a reasonable mind and absolute certainty is not required.

The mere fact contrary inferences may have been drawn from the circumstantial evidence does not render speculative those that were reasonably drawn. The court noted that industrial causation is established where the connection between work and the injury is a contributing cause of the injury. The employer takes a worker as he finds him, and the worker may not be denied compensation merely because his or her physical condition was such that a disability was sustained that a stronger or a healthier person would not have suffered. The court cited South Coast Framing (80 C.C.C. 489) indicating that case held a medical opinion that found causation was not zero is enough contribution to award death benefits. The Court of Appeal found the death industrial.

In a footnote, the court acknowledged defendant’s contention that the report was inadmissible. The court commented, however, that since the argument had not been raised in defendant’s petition for reconsideration, it was deemed waived.

2. AOE/COE

Star Insurance Co. v. WCAB (Tavares) (Court of Appeal, not published) 81 C.C.C. 111 Tavares’s widow and three dependent children filed for workers’ compensation benefits claiming Tavares sustained injuries that arose out of and occurred in the course of employment.

The facts show that Tavares was employed for 3 to 4 years before his death as a tractor driver on a seasonal basis. Sometimes he worked 10 to 12 hours a day, and he was a dedicated and conscientious employee. In the opinion of the manager of business operation, the job duties of a tractor driver were not physically demanding.

On June 13, 2011, Tavares reported to work at 6 a.m. He drove a tractor pulling a disc on that date. At about 11 a.m., he was pressure washing the mud off the tractor and the disc. He used a motorized cart with a hose for this purpose. He told the foreman he was having chest pain. It did not appear to be an emergency and the foreman was going to drive him to see a doctor. The foreman left for another area of the ranch. Tavares asked to use the restroom before he went to the doctor. He went into the portable toilet, but did not come out. Co-workers knocked on the door, but they did not receive a response. The door was forced open and he was found in a sitting

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position, leaning against the wall. They called 911 and the first responder pronounced him dead following an attempt at cardiac life support. A day or two before his death he had complained of chest pain to co-workers. His brother indicated he had diabetes. The coroner’s report stated the death occurred at work was related to the natural disease process and not any sort of workplace accident.

The forensic pathologist who performed the postmortem examination found the applicant died of ischemic heart disease due to coronary artery arterial sclerosis (heart attack due to hardening and narrowing of arteries which supply the heart muscle).

Dr. Betancourt found the death was solely due to non-occupational, pre-existing and extensive coronary artery disease without any contribution from work. The physician indicated within reasonable medical probability and based on the entire evidence the coronary artery disease was severe enough to be the sole cause of Tavares’s sudden death. He had no evidence in support of a work-related contribution, not even to a minimal degree.

Dr. Clayton agreed that Tavares had very severe coronary artery disease, but he concluded significant activity placed him at increased risk for development of a sudden cardiac event. He concluded that given the extensive coronary artery disease and increased activity washing the disc, had Tavares not washed the disc and had not come to work that day there is a good chance he would have survived and be alive today. Absent the work activity, he had a greater likelihood of surviving the heart attack. The work hastened his deterioration. The dependents filed a workers’ compensation claim for death benefits.

Dr. Betancourt reviewed Clayton’s report and found his reasoning as to the cause of death to be speculative. He stated Tavares may have felt the need to defecate, may have had to do a Valsalva maneuver to force the stools out and that may have tipped the scales enough to provoke a cardiac decompensation and death.

The workers’ compensation judge found Tavares had sustained an injury arising out of employment and occurring in the course of employment consisting of a fatal heart attack/heart-cardiovascular injury resulting in death. The WCJ determined that dependents were entitled to a death benefit of $320,000. The WCJ determined that based on the medical reports the applicant’s heart attack was caused by the physical strain he exerted while using the restroom facilities at work. The WCJ found that restroom activities are considered to arise out of and occur in the course of employment. The cases hold an injury precipitated by a movement which is incidental to the employment constitutes a compensable injury even though it is a normal bodily movement. Defendant filed a petition for reconsideration. The WCAB denied defendants petition for reconsideration and defendants filed a writ of review.

The Court of Appeal pointed out that expert medical opinion that constitutes substantial evidence will support the board’s decision. Medical reports that are not substantial evidence may not be used by the Appeals Board to justify its findings. Medical reports and opinions are not substantial evidence if they are known to be erroneous, or if they are based on facts no longer germane, or are based on inadequate medical histories and examinations, or are based on incorrect legal theories. A medical opinion also fails to support a board’s finding if it is based on surmise, speculation, or guess.

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The Court of Appeal granted the writ of review. The court found based on the report of Dr. Clayton that the applicant suffered from profound heart disease and severely compromised coronary arteries. The report could reasonably be interpreted as reflecting that the heart disease was so extensive and severe that any kind of physical stress or exertion would be sufficient to increase applicant’s risk of a sudden cardiac event and hasten such event, and that, in this instance, Tavares’s power washing of his equipment constituted such physical stress or exertion.

The Court of Appeal concluded that the medical opinion together with the evidence of Tavares’s very severe heart disease and his complaints of chest pain around the time he was power washing his equipment, a short time before he suffered a fatal heart attack, provided substantial evidence for finding that Tavares’s employment was a contributing cause of his cardiac death. The decision of the Appeals Board was affirmed.

After affirming the award, the court indicated that petitioner asserted that this case presents an opportunity for the court to clarify whether workers’ compensation cases are exempt from the evidentiary standards set forth in the case of Daubert v. Merrill Tao Pharmaceuticals (509 US 579). Petitioner argued that case should be applied generally to workers’ compensation matters and particularly to the medical evidence in this case. Petitioner did not raise this evidentiary issue in its petition for reconsideration. Pursuant to Labor Code § 5904, petitioner may not raise the issue for the first time on writ of review.

Further, the court rejected petitioner’s contention on the merits. All hearings and investigations before the Appeals Board or a workers’ compensation judge are governed by the division, the Labor Code and by the rules of practice and procedure adopted by the Appeals Board. The board and the workers’ compensation judges are not bound by common law or statutory rules of evidence and procedure. No informality in any proceeding or in the manner of taking testimony shall invalidate any order, decision, or award, rule made and filed as specified in the Labor Code. No order, decision, award, or rule shall be invalidated because of the admission into the record, and use as proof of any fact in dispute, of any evidence not admissible under the common law or statutory rules of evidence and procedure. “It is simply not the province of this court to establish evidentiary rules for workers’ compensation proceedings.”

3. Liens

Chorn v. WCAB (Court of Appeal, published) 81 C.C.C. 332 Plaintiffs requested that the WCAB be enjoined from enforcing Labor Code §§ 4903.05 and 4903.8 regarding lien filing fees and the restriction on payment of liens.

The Court concluded that workers’ compensation applicants did not have standing and the Court denied the petition for mandate filed in Superior Court by physician Robin Chorn, M.D., who had requested that the WCAB be enjoined from enforcing Labor Code §§ 4903.05 and 4903.8.

The Court rejected Dr. Chorn’s contentions that section 4903.05, which imposes a filing fee of $150, deprives him of the state constitutional rights to due process (Cal. Const., art. I, § 7), equal protection (Cal. Const., art. I, § 9), and petition for redress of grievances (Cal. Const., art. I, § 3).

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The Court also rejected Chorn’s claim that section 4903.8, which restricts payment of lien awards to individuals other than those who incurred the expenses, substantially impairs his constitutional right to contract (Cal. Const., art. I, § 9), and that both statutes contravene the constitutional mandate that workers’ compensation laws “accomplish substantial justice in all cases expeditiously, inexpensively, and without any encumbrance of any character.” (Cal. Const., art. XIV, § 4.)

4. Psychiatric Injury

Travelers Insurance v. WCAB (Dreher) (Court of Appeal, published) 81 C.C.C. 402 The applicant, while working as a live-in maintenance supervisor for an apartment complex, was walking in the rain when he slipped and fell on concrete. He had worked at the complex for 74 days prior to the accident. The applicant sustained numerous injuries including a fractured pelvis and injuries to his neck, right shoulder right leg and knee. The applicant also suffered gait derangement, sleep disorder and headaches. The applicant required surgery to repair the pelvic fractures, but continued to have problems with his right knee after he was discharged from the hospital. He subsequently underwent surgery to repair a torn meniscus. The surgery did not alleviate his pain and limitations. The applicant had additional surgeries to address issues with his right foot and ankle, including hammertoe and claw toes. The applicant sought compensation for a psychiatric injury arising from the accident. Applicant was evaluated and the physician concluded the applicant suffered a psychiatric disability as a result of the accident, including depression, difficulty sleeping and panic attacks.

The Workers’ Compensation Judge found the applicant sustained an injury arising out of and occurring in the course of his employment but denied his claim for psychiatric injury finding that the claim was barred by Labor Code § 3208.3 (d) because the applicant was employed for less than six months and a psychiatric injury did not result from a sudden and extraordinary employment condition.

The applicant filed a petition for reconsideration and the WCAB granted the petition finding that the applicant’s injury was caused by extraordinary employment conditions and thus was not barred by Labor Code § 3208.3 (d). Defendant filed a petition for writ of review.

Labor Code § 3208.3 (d) states that no compensation will be paid for psychiatric injury related to a claim against an employer unless the employee is been employed by that employee for at least six months. The section does not apply if the psychiatric injury is caused by a sudden and extraordinary employment condition.

The case of Wal-Mart (68 C.C.C. 1575) suggested that the extraordinary employment condition excludes accidental injuries and applies only to extremely unusual event such as a gas main explosion or workplace violence that would likely be expected to cause psychiatric disturbances. If the argument were made that an accidental injury constitutes a sudden and extraordinary employment condition, we would reject it. An extraordinary employment condition exception is something other than a regular and routine employment event or condition, that is, that the event was uncommon, unusual and occurred unexpectedly. (Matea, 71 C.C.C. 1522.) The court in Matea held that an injury that occurred when a large amount of lumber gave way without

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warning, falling on the employee, concluded that the accident was a totally unexpected occurrence and was not a routine physical injury or a routine type of stressor employment event.

In the case of Garcia (77 C.C.C. 307), the court concluded that an accident, in which a worker fell from the top of a 24-foot ladder while picking avocados from a 36-foot tree, was not an uncommon or unexpected occurrence. The court distinguished Matea on the basis that the accident there occurred in store aisles where falling lumber is rare since the aisles are open to the public.

The applicant also argued that the unexpectedly catastrophic nature of the injury can support a finding of an extraordinary employment condition. The court disagreed with this argument. The statute does not include the nature of the injuries resulting from an incident as a basis for the exception. Had the Legislature intended to include the nature of the injury as a factor in the definition of a sudden and extraordinary employment condition, it knew how to do so. Although the applicant’s injury was more serious than might be expected, it was not, nor was it caused by, sudden and extraordinary employment event within the meaning of Labor Code § 3208.3 (d). The evidence established that the applicant routinely walked between buildings on concrete walkways at the worksite and then slipped and fell while walking on a rain-slick pavement. The slip and fall was the kind of incident that could reasonably expected to occur. Where, as here, an employee alleges a psychiatric injury during the first six months of employment, he or she has the burden of proving, by a preponderance of evidence, that a sudden and extraordinary condition caused the injury. The Court of Appeal indicated the applicant did not meet that burden. The applicant’s testimony was that he was surprised by the slick surface, and his further testimony that the walkway was later resurfaced, did not demonstrate that the injury was caused by an uncommon, unusual, or totally unexpected event. Because the injury in this case did not result from a sudden and extraordinary employment condition applicant’s claim for psychiatric injury is barred by Labor Code § 3208.3 (d).

The decision of the WCAB was annulled and the matter remanded with instructions to deny the claim for psychiatric injury.

5. IMR

California Highway Patrol v. WCAB (Margaris) (Court of Appeal, published) 81 C.C.C. 561 Labor Code § 4610.6 (d) provides that the organization conducting the IMR shall complete its review and make its determination in writing within 30 days of the receipt of the request for review and supporting documentation, or within less time as prescribed by the administrative director.

The issue presented in this case was whether the Appeals Board was correct in concluding that an IMR determination that issued after the 30-day period is invalid and thereby returning jurisdiction to the Appeals Board to decide whether the treatment is medically necessary and appropriate.

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The court indicated their analysis turns, in large part, on whether the language of the statute is mandatory–such that a failure to comply with the statute’s directive renders the resulting government action invalid, or merely directory.

The Court of Appeal disagreed with the Appeals Board and concluded the 30-day time limit in Labor Code § 4610.6 (d), is directory and, accordingly, an untimely IMR determination is valid and binding upon the parties as the final determination of the director. The Court of Appeal indicated their interpretation of the statute in this manner is consistent with long-standing case law regarding the mandatory-directory dichotomy, and implements the Legislature’s stated policy that the decisions regarding the necessity and appropriateness of medical treatment should be made by doctors, not judges. They therefore annulled the decision of the Appeals Board and remanded the matter for further proceedings.

The facts of the case show that the treating physician submitted a request for authorization in the form of a lumbar epidural injection. The utilization review timely denied the request. Applicant requested independent medical review. State Fund sent the necessary medical records to Maximus Federal Services for review on November 26, 2014. On January 8, 2015, Maximus issued its IMR determination, upholding the denial of the proposed medical termination. The IMR determination became the determination of the director is a matter of law. (Labor Code § 4610 (g).) The applicant’s attorney appealed the IMR determination to the Appeals Board, which was directed to be heard by a WCJ. The WCJ at the hearing agreed the IMR determination was issued 13 days late, but nevertheless found the determination was valid and binding on the parties, concluding that an untimely IMR determination does not confer jurisdiction on the Appeals Board to decide any medical treatment issue. Applicant filed a petition for reconsideration which was granted by the Appeals Board and found that the WCAB did have jurisdiction and there was substantial evidence to support the treatment. One panel member dissented and would have found the IMR determination, though untimely, was valid and binding on the parties. A petition for writ of review was filed.

The Court of Appeal first discussed the legislative enactments pertaining to the evaluation of an injured worker’s request for authorization of medical treatment. They specifically reviewed the legislation regarding utilization review and the Sandhagen case and the injured worker’s opportunity to challenge an adverse utilization review determination by independent medical review.

The Court of Appeal then indicated that Labor Code § 4610.6 (d) provides that the organization performing the independent medical review “shall complete its review and make its determination in writing, and in layperson’s terms to the maximum extent practicable, within 30 days of the receipt of the request for review and supporting documentation, or within less time as prescribed by the administrative director. . . . Subject to the approval of the administrative director, the deadlines for analysis and determinations involving both regular and expedited reviews may be extended for up to three days in extraordinary circumstances or for good cause.” The parties dispute the meaning and effect of the word “shall” in this provision.

According to the Appeals Board, “shall” is mandatory and any IMR determination issued after the 30-day time frame is necessarily invalid. The Appeals Board concluded that construing

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“shall” as mandatory, such that an untimely IMR determination is invalid, comports with both the ordinary meaning in the statutory definition of “shall.”

The Court of Appeal indicated that in statutes directing government action “shall” may be used in two different manners: the mandatory-directory context, or the mandatory-permissive context. The court noted that, in mandatory-permissive context, the term mandatory refers to an obligatory procedure which a government entity is required to follow as opposed to a permissive procedure which a government entity may or may not as it chooses. By contrast, the mandatory-directory designation does not refer to whether a particular statutory requirement is permissive or obligatory, but instead simply denotes whether the failure to comply with a particular procedural step will or will not have the effect of invalidating the government action to which the procedural requirement relates. In other words, where a government action is mandatory in the obligatory-permissive sense and the government fails to act, the government can be compelled (mandated) to act in accordance with the statute. But where a government action is mandatory in the mandatory-directory sense and the government fails to act, it effectively loses jurisdiction to act in accordance with the statute.

Generally, time limits applicable to government action are deemed to be directory unless the Legislature clearly expresses a contrary intent. In ascertaining probable intent, California courts have expressed a variety of tests. In some cases, focus been directed at the likely consequences of holding a particular time limitation mandatory, in an attempt to ascertain whether those consequences would defeat or promote the purpose of the enactment. Other cases have suggested that a time limitation is deemed merely directory unless a consequence or penalty is provided for failure to do the act within the time command. Applying either of these tests the court concluded that the Legislature intended the 30-day provision in section 4610.6 (d), to have a directory, rather than a mandatory, fact.

As noted, statutory time limits are usually found to be directory in the absence of a penalty or consequence for noncompliance. A statute setting forth time frames for government actions that do not include a self-executing consequence are almost universally construed to be directory, rather than mandatory or jurisdictional.

The court, applying the analysis to the present case, concluded that the 30-day period provided in Labor Code § 4610.6 (d) is directory, rather than mandatory and jurisdictional. Neither section 4610.5, which relates to the initiation of IMR, nor section 4610.6, which relates to the execution of IMR, provides any consequence or penalty in the event the IMR organization, under the auspices of the director, fails to issue an IMR determination within the 30-period. Moreover, the Legislature provided that the exclusive means to challenge an IMR determination is by appeal, and expressly limited the grounds upon which any appeal may proceed. Notably, untimeliness of the IMR determinations is not one of the statutory grounds for appeal. The absence of a penalty or consequence for failure to comply with the 30-day time limit, coupled with the limited grounds for appeal, indicate the Legislature did not intend to limit the administrative director’s ability to issue an IMR determination after the 30-day window expires.

The court went on to indicate that construing the 30-day provision as directory furthers the legislative objective of S.B. 863. S.B. 863 made express findings regarding the purpose of IMR. First, it found the prior system of dispute resolution concerning an injured worker’s core request

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for medical treatment did not uniformly result in the provision of treatment that adhered to the highest standards of evidence-based medicine, adversely affected the health and safety of workers injured in the course of employment. By creating IMR, a system in which medical professionals ultimately determine the necessity of requested treatment, the Legislature intended to further the social policy of the state in reference to using evidence-based medicine to provide injured workers with the highest quality of medical care. Further, the Legislature observed that the prior system of dispute resolution, the process of appointing qualified medical evaluators to examine patients and resolve disputes, was not only costly and time-consuming, but it prolonged disputes and caused delays in medical treatment of injured workers. The Legislature also noted that the use of medical evaluators hired by the parties often resulted in bias on the part of the examiners, and therefore found that the independent and unbiased medical expertise of specialists was necessary to ensure timely and medically sound determinations of disputes over appropriate medical treatment.

The Court of Appeal concluded from these findings that the Legislature intended to remove the authority to make decisions about medical necessity of the proposed treatment for injured workers from the Appeals Board and place it in the hands of independent, unbiased medical professionals. Construing section 4610.6 (d) as directory best furthers the Legislature’s intent in this regard. The Appeals Board’s conclusion in this case that an ultimately untimely IMR determination terminates the IMR process and vests jurisdiction in the Appeals Board’s to determine medical said necessity is wholly inconsistent with the Legislature’s stated goals and its evident intent.

The Legislature provided that the IMR determination is presumptively correct and appeal is strictly limited. Further, even if an appeal from an IMR determination is successful, the case does not go to the Appeals Board for its review, instead, successful appeal results in a second IMR. The statutory provisions further indicate the Legislature intended to limit the jurisdiction of the Appeals Board to determine medical necessity a proposed treatment.

Finally, and perhaps most tellingly, the Legislature provided that in no event shall a workers’ compensation administrative law judge, the Appeals Board, or any higher court make a determination of medical necessity contrary to the determination of the independent medical review organization (§ 4610.6 (i)). The court found this portion of the statute, particularly the use of the phrase “in no event,” to be a frank expression of the Legislature’s desire to remove the issue of medical necessity of a proposed treatment from the jurisdiction of the Appeals Board in all cases subject to IMR. The Legislature’s intent would be defeated by giving section 4610.6 (d) mandatory effect, as the Appeals Board did in the present case.

As to the issue raised by the applicant’s attorney that the primary goal was that the applicant receive prompt medical treatment, the Court of Appeal stated that the statutory construction adopted by the Appeals Board would not reduce delay, but perpetuate the time-consuming litigation process the Legislature set out to eliminate. The court pointed out that in this case Maximus issued the IMR decision 79 days after the UR determination and 13 days after the 30-day time frame however, the Appeals Board did not render its decision until 13 months after the UR rejected the treatment and more than 10 months after Maximus render the IMR determination.

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The court indicated they found no evidence in the statute or legislative history to indicate the Legislature intended to divest the director of jurisdiction to conduct IMR simply because the IMR determination is untimely.

The decision of the Appeals Board after reconsideration was annulled. The matter was remanded with instructions to conduct further proceedings consistent with this decision.

6. CIGA

California Insurance Guarantee Association v. WCAB (Court of Appeal, published) 81 C.C.C. 317 The applicant filed an application for workers’ compensation benefits which was settled by way of a compromise and release agreement. In the compromise and release agreement the insurer stipulated that the compromise and release as to the applicant’s benefits would be paid 52% by Care West and 48% by Ullico. The compromise and release further provided that defendants would pay, adjust or litigate all liens of record and would share liability equally for medical-legal charges and would allocate the treatment charges to be paid 52% by Care West and 48% by Ullico. The compromise and release was approved by the WCAB on March 14, 2012. Ullico became insolvent and was liquidated on May 30, 2013, after which CIGA assumed liability for its “covered claims” pursuant to the Insurance Code.

On June 10, 2014, CIGA filed a petition to be dismissed from the workers’ compensation case, arguing that all liens were excluded from CIGA’s mandate by the insurance code which prohibits CIGA from paying any claim to the extent it is covered by other insurance. CIGA argued that because Care West was jointly and severally liable for claims arising from the applicant’s injuries, it’s policy constituted “other insurance” that covered 100% of any outstanding claims notwithstanding the compromise and release agreement apportioning liability. Care West objected arguing that the parties were bound by the compromise and release agreement.

The WCJ denied CIGA’s petition finding that the approval of the compromise and release agreement operated as a final judgment apportioning liability between the insurers. The WCJ ruled that CIGA was bound as Ullico’s successor-in-interest.

CIGA filed a petition for reconsideration which was denied by the Appeals Board. The WCAB held that insurers are not jointly and severally liable where they entered into a stipulation as to apportionment of liability between them. The WCAB held after the stipulation of liability in the compromise and release agreement there was no longer joint and several liability, but rather liability was divided between the two insurers in accordance with the stipulation. The WCAB found the final decision of apportionment of liability was res judicata and could not be re-litigated. CIGA filed a petition for writ of review which was granted by the Court of Appeal.

The Court of Appeal indicated that when two or more insurers are jointly and severely liable for workers’ compensation benefits and one of them becomes insolvent, the policy issued by the solvent insurer constitutes “other insurance” for purposes of the insurance code and excludes coverage by CIGA. In this case it is undisputed that Care West and Ullico were jointly and severally liable for the lien claims relating to applicant’s injuries. Therefore, Care West

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insurance constitutes “other insurance” for purposes of CIGA’s mandated statutes and lien claims relating to the applicant’s injury cannot be covered claims.

The Appeals Board argues that the insurers’ apportionment of liability between themselves effectively terminated joint and several liability and converted each insurer’s obligation to an individual one. The Court of Appeal indicated this argument reflects a basic misunderstanding of the nature of several liability, which is not, strictly speaking, a rule of liability at all, it is a rule of joinder. Several liability has nothing to do with and cannot be changed by apportionment of an obligation between promisors. The rule of joint and several liability applies in workers’ compensation and serves the goal of resolving injured employees’ claims expeditiously, inexpensively and without encumbrance.

In any case involving a claim of cumulative injury occurring as a result of more than one employment, the employee making a claim may elect to proceed against any one or more of the employers. When such an election is made, the employee must successfully prove his or her claim against any one of the employer’s named, and any award which the Appeals Board shall issue a workers’ compensation benefit shall be joint and several as against two or more employers who may be held liable. This rule applies to workers’ compensation insurers as well as employers. An insurer that has been held liable for a workers’ compensation award may then institute proceedings for the purpose of determining apportionment of liability or a right of contribution. When settling the applicant’s claim the parties may also settle and apportion their liability. Determination of a promise or share of the liability does nothing to change the several nature of it.

Several liability in the workers’ compensation context is a procedural right that promotes the public policy favoring expeditious and inexpensive resolution of workers’ compensation claims by enabling a claimant to obtain compensation without having to join multiple co-defendants. The several liability scheme contemplates that co-defendants will apportion liability between themselves, as a matter in which the worker and lien claimant have no interest. Whether that apportionment happens as part of litigation or settlement, or before or after the payment of a claim, is of no interest of the injured worker or lien claimant and can have no effect on the obligations owed them.

In this case Care West and Ullico understood their liability which remained joint and several even after they settled the apportionment of liability between them. According to the settlement, the rights to contribution and reimbursement between the two were reserved. The contribution and reimbursement provisions would have been meaningless in the absence of joint and several liability.

The Court of Appeal agreed with the Appeals Board that the compromise and release approved by the WCJ was a judgment having the same force and effect as an award made after hearing. The judgment merely apportioned liability; it did not change the joint and several nature of the now apportioned liability.

The petition for writ of review was granted and the order denying the petition for reconsideration was reserved and the matter was remanded to the Appeals Board with directions to enter an order dismissing CIGA from these proceedings.

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7. Orders

Capital Builder Hardware, Inc. v. WCAB (Gaona) (Court of Appeal, published) 81 C.C.C. 1122

Applicant filed a workers’ compensation claim for industrial injury.

Applicant was evaluated by an Agreed Medical Evaluator, who opined that the applicant should be evaluated by a chronic pain specialist and recommended Lawrence Miller, M.D. Dr. Miller’s report, which recommended home care assistance for 24 hours a day, seven days a week, was sent to the Agreed Medical Evaluator who accepted his opinion and made the same recommendation for care. Defendant objected to the admissibility of Dr. Miller’s report. The defendant then filed a motion to strike the report of the Agreed Medical Evaluator and remove her as Agreed Medical Evaluator in psychiatry.

The petition alleged that there was no agreement to provide Dr. Miller’s report to the Agree Medical Evaluator and that sending the report was an improper ex parte communication.

The Workers’ Compensation Judge denied defendant’s motion “without prejudice.” Defendant appealed the decision by filing a Petition for Removal and a Petition for Reconsideration.

The Appeals Board dismissed the Petition for Reconsideration as not being from a final order and denied the Petition for Removal because of lack of showing of substantial prejudice or irreparable harm.

Defendant filed a writ of review with the Court of Appeal. At issue is whether the Appeals Board’s order is reviewable.

Defendant argued that all Appeals Board decisions are reviewable. The Appeals Board took the position that because the order was “without prejudice” it was an interim procedural decision. Applicant took the position that the order was an interim procedural discovery order and had no impact on the rights and liabilities of either party.

The Court of Appeal indicated it is well-settled that writs of review issue only to review final decisions, orders or awards of the Appeals Board. Maranian v. WCAB (81 Cal. App. 4th 1074)

Because Workers’ Compensation proceedings are to be expeditious, inexpensive, and without encumbrance of any character, certain threshold issues, if finally determined, qualify as final orders. Examples of threshold issues are whether the injury arose out of and occurred in the course of employment, the territorial jurisdiction of the Appeals Board, the existence of an employment relationship or statute of limitations issues. Such issues, finally determined, may avoid the necessity of further litigation and hence render Workers’ Compensation litigation more expedition and expense.

The Appeals Board dismissed the Petition for Reconsideration and denied the Petition for Removal. Because these orders leave issues for future consideration, under the usual understanding of the concept of a final judgment or order, they are not final.

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These orders do not qualify as orders finally disposing of threshold issues in Workers’ Compensation practice. The underlying issue (whether the communication was or was not ex parte and therefore prohibited by Labor Code § 4062.3 (g)) will not avoid the necessity of further litigation.

The parties cited the case of Alvarez v. WCAB (187 Cal. 4th 475) dealing with ex parte communication with a Qualified Medical Evaluator and the defense attorney over the telephone, which is a Court of Appeal decision, supporting the fact that these decisions are reviewable.

The Court of Appeal indicated that the Alvarez court did not expressly address the preliminary issue of reviewability. Instead, it implicitly recognized that the issue is reviewable by reversing the Appeals Board decision that the communication was not prohibited.

The Court of Appeal in this case indicated that it respectfully disagreed with that decision, to the extent that the Alvarez court reached the merits of the issue before it without determining whether the Appeals Board’s decision was reviewable. The Appeals Board decision in that case was not a final order under any view of finality. (Lyon v. Goss, 19 Cal. 2d, 670) That decision left a great number of issues for future judicial consideration and decision. Moreover, the subject matter of the underlying issue, whether the communication was ex parte, did not pose a threshold issue. An unsuccessful objection to a medical report does not lead directly to the final determination of the workers’ compensation proceedings.

Because Appeals Boards decision in Alvarez was not a final order, this court concluded that the reviewing court in Alvarez aired in issuing the writ of review.

The writ of review was annulled and the case was remanded to the Appeals Board.

8. Laches

Truck Insurance Exchange v. WCAB (Kwok) (Court of Appeal, published) 81 C.C.C. 685

Applicant was working for a restaurant on 1/10/05. The restaurant was owned by applicant’s brother-in-law. Applicant fell and was seriously injured, suffering a brain hemorrhage and continues to be paralyzed from the shoulders down. Applicant’s wife (sister of the owner) notified the owner by phone the day after the incident occurred. The claim was filed in 2012, seven years after the date of injury. The applicant was never provided a claim form by the employer. At trial, the WCJ found that the claim was not barred by the statute of limitations since applicant had not been provided a claim form. Although it was raised the WCJ did not address the issue of laches. Defendant filed for reconsideration. The WCAB adopted and incorporated the WCJ’s report and recommendation which recommended the petition for reconsideration be denied. Defendant filed a petition for writ of review on the issue of laches claiming that the claim should be barred.

The Court of Appeal (second) held that the defense of laches did not bar an Application for Adjudication of Claim filed more than seven years after the date of injury.

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The Court found that because the employer received notification of the injury the day after it happened and failed to provide the employee with the required claim form the doctrine of laches did not apply.

The defendant argued that they were prejudiced by the delayed filing of the application, but the court explained that notice to or knowledge of the employer is deemed to be notice and knowledge to the insurer. Insurance Code Section 11652 states:

Every such contract or policy shall contain a clause to the effect that, as between the employee and the insurer, notice to or knowledge of the occurrence of the injury on the part of the employer will be deemed notice or knowledge, as the case may be, on the part of the insurer. (Ins. Code, § 11652.)

Because the employer was notified of the injury the day after it happened, the insurer was deemed to have knowledge at the time and there was no delay. The Court of Appeal concluded that without at least some delay, the doctrine of laches has no application.

9. Evidence

Maxham v. California Department of Corrections and Rehabilitation (en banc) 82 C.C.C._____

The parties agreed to utilize Drs. Abeliuk, Johnson and Lapins as AMEs. Applicant’s attorney sent advocacy letters to defendants asking if defendants objected to them. Defendants responded with their objection. Applicant sent the letters anyway over defendants’ objections. Defendants filed a DOR seeking to resolve the issue of the submission of the advocacy letters submitted by applicant. At the MSC, the parties submitted the following issue to the WCJ: “Whether applicant counsel’s letter to Drs. Johnson, Abeliuk and Lapins constitutes ‘other information’ as contemplated by Labor Code § 4062.3 and 8 CCR Section 35.” The WCJ issued a decision in favor of applicant finding that the letters to the doctors constituted communications under § 4062.3(f), rather than information under § 4062.3(c) and thus did not require defendants’ agreement before they were sent. The WCJ found that when communications including advocacy letters are sent to an AME, they need only be served on the opposing party.

Defendants filed a petition for removal alleging that the advocacy letter in this case should be classified as information. The WCJ recommended that removal be granted. The WCAB granted the removal and issued an en banc decision to define the terms “communication” and “information” as used in § 4062.3.

First, the board found that the case did not involve improper ex parte communication since applicant copied defendants on each of the communications with the AMEs. They state that this case addressed whether applicant violated the § 4062.3 (c) requirement that the parties agree on what “information” is to be provided to an AME. This is governed by 4062.3 (a)-(f). Under the code, the parties must agree before any information is provided to an AME. In contrast, when a party wishes to send a communication to an AME, it is only necessary to serve the opposing party with that communication. They determine that “information” means either (1) records prepared or maintained by the employee’s treating physician or physicians, or (2) medical and nonmedical records relevant to determination of the medical issue. In a footnote, they state that

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this definition will apply to either a QME or AME. They further find that a communication under § 4062.3 can become information if that correspondence or letter contains references or encloses those documents that are defined under the term “information.”

They go on to find that if a correspondence is deemed information the next step is to determine whether providing that information to the AME is prohibited. Since § 4062.3(c) states that “the parties shall agree on what information is to be provided to the agreed medical evaluator,” if the correspondence is deemed information that the parties previously agreed to provide to the AME, serving that correspondence without giving opposing counsel an opportunity to object would not violate § 4062.3(c). They disagreed with defendants that applicant’s letters to the AME s constitute information simply because the body of the letter itself included the applicant’s legal position. They note that ordinarily advocacy letters discussing legal positions would not constitute information. They also state that despite previous panels, engaging in legitimate advocacy does not transform correspondence from communication into information.

They could not determine on the record presented if the parties had previously agreed to the information that was being provided and returned the case to the trial level for the WCJ to determine whether prohibited information was provided to the AME.

DENIALS OF WRITS OF REVIEW

10. Compromise & Release

Mansville v. WCAB (Cooper) (W/D) 81 C.C.C. 216 Applicant sustained a cumulative trauma to his lungs and respiratory in the form of asbestosis during the period 1962-1993. His claim was settled by C&R on 8/20/08. Applicant died of mesothelioma on 4/11/12 due to his exposure. Applicant’s widow filed for death benefits. Defendant denied the claim alleging that it was res judicata in light of the C&R. The matter proceeded to trial and the judge determined that applicant was permitted to pursue death benefits because the evidence showed that applicant’s death was the result of injury to his abdomen, stomach and peritoneum which were different than what was on the C&R (lungs and respiratory). Defendant filed for reconsideration alleging that the C&R resolved any and all remaining claims against the employer for benefits arising out of the exposure. The WCJ recommended that reconsideration be denied stating that the WCAB Form 15 C&R signed by applicant stated that settlement was limited to those body parts, conditions, or systems regardless of the language to the contrary in any addendum, and that, here, death benefits were being sought for decedent’s death caused by malignant mesothelioma, which does not involve the lungs or respiratory identified in the C&R.

The WCAB in denying reconsideration noted that the C&R signed by defendant listed in paragraph 1 the injury and body parts being settled as “lungs and respiratory system” and found that the settlement was limited by its express terms to the body parts listed, despite any contrary language in the addendum which stated “settlement includes any and all injuries arising from exposure to asbestos, including mesothelioma and asbestos related cancers” Form 15 expressly

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states that the settlement is limited to those body parts, conditions or systems identified in paragraph 1 despite any language to the contrary in the document or any addendum. Therefore based on the express language of paragraphs 1, 2, 3 and 4 of Form 15, defendant’s attempt to incorporate into the Addendum a general release of decedent’s claims for injuries other than lungs and respiratory system was void ab initio.

Defendant’s petition for writ of review was also denied.

11. Settlement

Travelers v. WCAB (Duckworth) (W/D) 81 C.C.C. 234 Applicant played professional football in the NFL from 1980-1986. In 1987, applicant filed a CT alleging multiple body parts. The case settled in 1989 for $32,000. The C&R specified the body parts covered as “multiple orthopedic including neck, back, left shoulder, hands sternum, hip, lower extremities and as shown in the medical reports on file. The C&R form also included a general release releasing the employer and insurance carrier from “all claims and causes of action, whether known now or ascertained, or which may arise hereafter arise or develop as a result of said injury…” The C&R also included an Addendum A stating that it was the intent of the parties to compensate the applicant for any and all injuries and all parts of the body, filed or unfiled.

On 9/7/13 applicant filed a claim for CT injury to his brain and nervous system during his employment. The WCJ found that the C&R did not bar the applicant from pursuing this claim. Defendants filed for reconsideration. The WCJ recommended reconsideration be denied, stating that the 1987 case was nothing more than orthopedic complaints and that at the time of the C&R the applicant could not have known he was suffering from a brain injury. The WCAB denied reconsideration for the reasons set forth in the WCJ’s report and concluded that applicant’s current claim was not barred by the prior C&R. The petition for writ of review filed by defendant was also denied.

12. Utilization Review

Ramos (Uribe) v. Patterson Frozen Foods (W/D) 81 C.C.C. 478 The WCJ denied applicant’s appeal of a 2/4/2015 and 3/12/2015 independent medical review (IMR) determination upholding the utilization review (UR) decision pertaining to applicant’s request for various prescription medications.

The WCAB in a split decision agreed with the WCJ and rejected applicant’s position that pursuant to Patterson v. The Oaks Farm (2014) (79 Cal. Comp. Cases 910) (Appeals Board significant panel decision), defendant was required to show a change in applicant’s condition or circumstance to support UR of requested prescription refills.

The WCAB found that Patterson, which involved nurse case manager services, did not apply to prescription medications because prescription medication, by its nature, is subject to ongoing evaluation to address its efficacy and necessity.

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The WCAB rescinded the WCJ’s denial of applicant’s appeal of the 2/4/2015 IMR determination and entered a new order upholding the appeal of 2/4/2015 IMR determination because it issued based upon an incomplete medical record regarding applicant’s use of the medication Flexeril and therefore the Administrative Director acted in excess of their powers as described in Labor Code § 4610.6(h)(1).

The WCAB remanded the treatment dispute addressed by IMR to the Administrative Director to conduct a new IMR as provided in Labor Code § 4610.6(i).

The WCAB affirmed the denial of applicant’s appeal of the 3/12/2015 IMR upholding the UR decision.

Commissioner Sweeney concurred with the majority’s decision to grant applicant’s IMR regarding the medication Flexeril but, contrary to panel majority, found that grounds specified in Labor Code § 4610.6(h)(5) provide an additional basis for granting the appeal of 2/4/2015 IMR determination, and also provided basis for granting the appeal of 3/12/2015 IMR determination.

Commissioner Sweeney found that it was a plainly erroneous mistake of fact as a matter of ordinary knowledge for an IMR reviewer in both instances to not recognize the treating physician’s report documenting the existence of shoulder spasms and improvement in applicant’s pain and functional status with the use of requested medications, and for the IMR reviewer to deny medication that resulted in functional improvement based simply on the manner in which the treating physician assessed applicant’s increased functionality and on basis that the medication was prescribed in oral form instead of as intrathecal agent.

13. AOE-COE

State of California v. WCAB (Van Dyk) (W/D) 81 C.C.C. 459 Applicant suffered a specific injury on June 17, 2005 while working for the department of corrections and rehabilitation. His claim of injury was ultimately settled.

Applicant filed a continuous trauma injury alleging injury to his back and psyche for the period April 30, 2007 through January 4, 2012. His injury was accepted by defendant, but the psychiatric portion was denied.

A PQME in psychiatry found the applicant’s psychiatric condition was due to the combined effects of specific and cumulative trauma injuries with the predominant cause being the pain and failed spinal surgery and epidural injections resulting from the specific injury.

The WCJ following trial found the psychiatric claim was compensable based on the PQME indicating that applicant’s specific and cumulative back injuries taken together where the predominant cause of his psychiatric injury (at least 51%) (Labor Code § 3208.3 (b) (1)) the WCJ indicated in his decision that, even though the cumulative injury at issue was not the predominant cause of applicant’s psychiatric injury, apportionment of the temporary disability and need for medical treatment caused by the psychiatric injury between applicant’s injuries for the purposes of applying predominant cause standard was not permitted. The WCJ indicated that there is an old statement in workers’ compensation practice to the effect that temporary disability

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and medical treatment cannot be apportioned between industrial and nonindustrial. However, even if that old statement has lost its validity, there is no doubt that applicant’s current temporary disability and need for medical treatment is the result of applicant’s back injuries. Accordingly, a finding issued that applicant sustained a psychiatric injury in the continuous trauma claim. Defendants filed a petition for reconsideration.

The WCJ recommended that reconsideration be denied, pointing out in his report that a finding of psychiatric injury was supported by the medical evidence establishing that both applicant’s injuries combined to meet the predominant cause threshold of Labor Code § 3208.3 (b) (1).

The WCJ indicated that pursuant to Labor Code § 3208.3 (b) (1) a psychiatric injury to be compensable has to be caused by the actual events of employment. The WCJ then stated that there is no doubt that the actual events of employment over these two injuries meet the threshold.

The WCJ pointed out that it is very likely there will be significant apportionment of the permanent disability but that is not at issue in this case.

The WCJ stated that the parties used an Agreed Medical Evaluator in Orthopedic Surgery who found that the applicant sustained an admitted back injury and part of his disability was in part caused by the applicant willingly ignoring symptoms and working in spite of increased deterioration due to a cumulative trauma. The WCAB denied reconsideration adopting the report of the WCJ. The writ of review was denied.

14. MPN

De Guevara v. La Golondrina (W/D) 81 C.C.C. 472 The evidence established that the applicant called five doctors from the MPN list who did not accept her as a patient. The WCAB ruled that the five phone calls did not meet applicant’s burden of proof that the applicant was denied medical care and therefore entitled to treat outside defendant’s MPN.

The WCAB took note of the fact that there were more and 65 doctors within 15 miles of applicant’s ZIP Code who were qualified to treat her for her condition. The WCAB found that her efforts to contact only five of the doctors did not shift the burden to the defendants to establish that reasonable treatment was available within the MPN.

An additional important issue appeared to be that the applicant did not avail herself of the medical access assistance available pursuant to Labor Code § 4616 (a) (5). The WCAB appeared to have a problem with allowing treatment outside the defendant’s MPN when the applicant did not avail themselves of this service.

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15. SIBTF

Geletko v. California Highway Patrol, Subsequent Injuries Benefits Trust Fund (W/D) 81 C.C.C. 661

The WCJ’s decision found that applicant met his burden of proof pursuant to Labor Code § 4751 to establish that he suffered subsequent industrial injury through 6/5/2013 which caused permanent disability of at least 35 percent, considered alone and without regard to adjustment for age and occupation, and that applicant’s combined permanent disability was 82 percent, entitling him to SIBTF benefit.

The WCAB agreed with and concluded that the WCJ properly did not adjust applicant’s unadjusted impairment standards for spine, cardiovascular, gastric and head impairments by factor of 1.4 and then added impairments, rather than combining disabilities using Combined Values Chart to find that applicant’s subsequent injury met the 35 percent threshold of Labor Code § 4751.The WCAB reasoned that (1) Labor Code § 4751 expressly excludes adjustment for age and occupation from the calculation of permanent disability but makes no mention of 1.4 modifier (2) pursuant to Labor Code § 4660.1 (applicable to injuries occurring on or after 1/1/2013), permanent disability, when considered alone and without regard to age or occupation as described in Labor Code § 4751, is based solely on “the nature of the physical injury or disfigurement” under AMA Guides multiplies by 1.4, (3) Legislature’s creation of 1.4 modifier in 2013, without amending Labor Code § 4751 at same time to exclude modifier from consideration of permanent disability “when considered alone,” exhibited Legislature’s intent to exclude only age and occupation adjustments when considering disability alone, and (4) under 2005 Permanent Disability Rating Schedule, combination of impairments under combined value chart can only occur after adjustment for age and occupation , which is not permitted under Labor Code § 4751. Therefore, the combined value chart cannot be used to determine permanent disability for purposes of the 35 percent threshold to qualify for SIBTF benefits.

16. MPN

Pomona v. WCAB (Bryant) (W/D) 81 C.C.C. 81

Applicant sustained injury to his lumbar spine, right knee, and psyche. The case was settled by two separate stipulated awards. Applicant’s attorney informed defendant that applicant had elected orthopedist Scott Goldman as his treating doctor and that if he did not receive written authorization he would seek an expedited hearing. Dr. Goldman was within defendant’s MPN.

After seeking to secure defendant’s authorization for treatment for several months, applicant filed a DOR seeking an expedited hearing based on defendant’s failure to authorize treatment with Dr. Goldman. At the expedited hearing, the claims adjuster testified that she had called the doctor’s office to authorize treatment but had never sent him any written authorization.

After the hearing, the WCJ found that applicant was entitled to obtain medical treatment outside defendant’s MPN because defendant failed to provide medical treatment. Defendant sought reconsideration alleging that defendant was not legally required to issue a letter authorizing medical treatment and failure to issue such letter did not constitute a denial of medical treatment.

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The WCAB in denying reconsideration explained that defendant’s failure to give written authorization for treatment amounted to a neglect or refusal to provide medical treatment such that applicant was entitled to treat outside defendant’s MPN. The petition for writ of review was also denied.

17. Date of Injury

Stoltz Metals v. WCAB (Furman) (W/D) 81 C.C.C. 313

Applicant sustained an admitted injury on 2/23/99 and signed a stipulation on 3/28/02 for an 18% permanent disability award. In 2003 applicant filed a petition to reopen the award. On 4/4/08 an award issued pursuant to stipulation for 41% as a result of the specific injury and now a newly filed cumulative trauma through 4/4/08. The stipulation settled all injury to date. Applicant stopped working on 6/9/09 when he was taken off work by his doctor. In 2011, Dr. Cabayan stated that the applicant had a CT until his last day of work. Defendant carrier CIC denied the CT claim on 6/7/12. On 7/23/12, CIGA filed an application alleging a CT. A trial was held on this injury with CIC alleging that the CT was untimely since the applicant last worked in 2009 and applicant would have had knowledge of the injury based on a report in 2006.

The matter proceeded to trial and the judge substituted the applicant in for CIGA. The judge found that the application was timely. CIC filed for reconsideration.

In upholding the Judge, the WCAB found that CIC had not presented any evidence to establish that applicant had knowledge of a CT through his last date of work (June 9, 2009) prior to its service of the denial notice on him on June 7, 2012. The board, citing Labor Code § 5412 which requires concurrence of knowledge of disability and its causal relationship to work, found that applicant’s knowledge of disability alone did not establish the date of injury in this case. The board states that the first mention of the applicant’s CT through 6/9/09 is the November report of Dr. Cabayan. It was not until 6/7/12 (when CIC issued a written denial of the CT) that applicant had both knowledge of disability and its relationship to the work. Therefore, the WCAB found, the application was timely filed within one year of the date of injury.

18. Statute of Limitations

Estrella v. Milwaukee Brewers and San Francisco Giants (W/D) 81 C.C.C. 525

The applicant suffered a specific injury while working for the Kansas City Royals that resulted in surgery. The applicant testified at his deposition that after the surgery he did not file a workers’ compensation claim because he intended to play again and believed that if he filed a claim, no team would offer him a contract.

Applicant testified that he did attempt to pitch again but had to retire because of elbow pain. The applicant testified that he understood that his physical symptoms were caused by his employment as a professional baseball player, but that he first learned of his right to file a workers’ compensation claim through consultation with his attorney in September 2013.

The evidence indicated the applicant filed a workers’ compensation claim in Missouri in 2007 or 2008 and had secured benefits including medical treatment and ultimately settled the case.

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The parties proceeded to trial. The WCJ held both the Milwaukee Brewers and San Francisco Giants were subject to WCAB jurisdiction but the applicant’s claim was timely barred by the one-year statute of limitations of Labor Code § 5405. The WCJ ruled that the statute had not been tolled and the testimonial evidence indicated that applicant, at least as of 2009, knew that his physical complaints were caused by his employment as a baseball player and that he sustained disability that forced him to undergo surgery and retire from baseball.

The WCJ saw no substantial evidence in the record to support the application of the Labor Code § 5410 five-year statute of limitations in this case because the Brewers and Giants had not provided benefits in connection with any known or acknowledged injury claim.

Applicant filed a petition for reconsideration.

The WCAB majority held that the one-year statute of limitations applied. The board ruled the applicant either knew or should have known of his right to file a claim more than one year before his September 2013 filing.

The majority further reason that the five-year limitation in Labor Code § 5410 applies to situations where evidence demonstrates prior employer knowledge of the claim, evidenced by the furnishing of workers’ compensation benefits, such as temporary disability or permanent disability, or medical treatment, in conjunction with an identifiable injury claim. The majority saw no evidence in the record that either defendant had provided benefits or treatment to applicant within one year of the date that he filed his claim in 2013, thus, the standard one-year statute of limitations applied.

Labor Code § 5412 sets knowledge and disability requirements to establish the date of injury. Based on applicant’s strenuous work and ultimate retirement, it was evident that he had sustained disability in conjunction with his employment, at least in 2009, approximately when he retired from baseball due to an inability to pitch without pain. Applicant acknowledged that he had not filed a claim in California earlier because he feared that no other team would offer him a contract.

Further, because there was no evidence that the Brewers or Giants were aware that the applicant had sustained a cumulative trauma injury while in their employment, neither had a duty to provide him with notice of his workers’ compensation rights.

The WCAB majority upheld the workers’ compensation judge’s order that applicant take nothing.

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REPORTED WCAB PANEL DECISIONS

19. Utilization Review

Bissett-Garcia v. Peace and Joy Center (BPD) 44 CWCR 112

Applicant sustained an admitted injury to her bilateral upper extremities and shoulders. The case was settled by Compromise and Release with open future medical care. Prior to the approval of the agreement, applicant’s primary treating physician communicated to defense counsel that applicant required home assistance with activities of daily living for eight hours a day seven days a week for cooking, cleaning, self-grooming and transportation. The request did not appear on the DWC form RFA required by A.D. Rule 9792.9 .1 or a substitute described in A.D. Rule 9792.9.1 (c) (2) (B). Nevertheless, defense counsel forwarded the report to UR and a non-certification issued on September 17, 2016. The UR denial stated that the reviewer had left a message for the physician on both the afternoon of September 16, 2015, and the morning of September 17, 2015. As a result of a telephone call between applicant’s counsel and the reviewer, a second denial issued on October 2, 2015, this one stating the reviewer had successfully communicated with the physician on September 17, 2015, informing him about the reasoning for the denial. Applicant’s attorney contested the validity of the UR decision. The WCJ held that the September 17, 2015 UR had not been timely communicated because it had not recited the content of the telephone call between the reviewer and the primary treater. Defendant filed a petition for reconsideration.

The WCAB observed that there does not appear to be any requirement that a utilization review denial recite the contents of a telephone conference between the reviewer and the treating physician, and less relevant to explain the rationale behind the utilization review decision. Even assuming such requirement existed, said the panel, that requirement would be subsumed under the “material procedural defect” rule and would not, consistent with the en banc decision in Dubon II constitute a valid reason to overturn a UR determination.

Dubon II held that the board has jurisdiction over a UR determination only if the determination was untimely. The decision squarely retracted the proposition that any procedural defect other than timeliness vested the WCAB with jurisdiction to review the propriety of a utilization review denial.

The panel added that the WCJ’s determination that the lack of denial and the UR decision regarding the conversation between the reviewer and the primary treater rendered it defective, is too closely related to the reasoning rejected in Dubon II. The WCJ’s decision, were it to stand, would implicitly resurrect the material procedural defect theory rejected in Dubon II.

The WCAB stated that the UR determination had been timely made within five business days of its communication to the defendant and timely served, and so became reviewable under the IMR process. The WCAB held that the determination dated September 17, 2015 had been timely and the WCAB lacked jurisdiction to review it.

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20. QME

Sanchez v. Grapevine Catering (BPD) 2016 Cal. Wrk. Comp. P.D. LEXIS 136

The defendant issued a delay letter. The applicant requested a panel QME pursuant to Labor Code § 4060 within the 90-day investigation period, pursuant to Labor Code § 5402 (b). The defendants objected to the panel.

The WCAB concluded that Rule 30 (d) (1) states that a defendant may request a QME panel during the 90-day period to investigate the claim pursuant to Labor Code § 5402 (b). The WCAB went on to state the Labor Code and rules were silent regarding the applicant’s right to request a panel. The WCAB ruled the medical unit incorrectly interpreted Rule 30 (d) (1) as limiting the right to request a panel to the employer or insurer during the 90-day investigation.

The WCAB stated that such an interpretation would conflict with Labor Code § 4060, which states that a medical evaluation required to determine compensability at any time after the filing of a claim form shall be obtained pursuant to Labor Code § 4062.2. The section indicates “at any time” after filing a claim form. The WCAB further stated that Labor Code § 4062.2 states that either party may request the assignment of a three-member panel of qualified medical evaluators to conduct a comprehensive medical evaluation.

The WCAB concluded that interpreting Rule 30 (d) (1) to allow only the defendant but not applicant to request a QME panel during the investigation would be invalid.

21. Dismissal

Powell v. Fatte’s Pizza (BPD) 2016 Cal. Wrk. Comp. LEXIS P.D. 133

Defendant filed a petition to dismiss for lack of prosecution. Defendant filed a declaration of readiness to proceed on the issue of dismissal only.

The matter proceeded to a hearing before the workers’ compensation judge who issued an order denying defendant’s petition to dismiss applicant’s claim for lack of prosecution because applicant did not receive the required notice of intention to dismiss or hearing notice and defendant did not serve applicant at all known addresses or utilize alternative methods of notifying applicant as suggested by the WCJ.

The WCAB granted removal to the judge’s dismissal order which indicated that defendant reactivated the case by filing a declaration of readiness to proceed and would have to wait one year before filing the petition for dismissal for lack of prosecution.

The WCAB concluded that filing a declaration of readiness to proceed solely limited to dismissal pursuant to a petition to dismiss does not serve to activate the case regarding other issues.

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22. Psychiatric Injuries

Larsen v. Securitas Security Services (BPD) 44 CWCR 111

Applicant sustained an admitted injury to her neck, back and bilateral shoulders and claimed a psychiatric injury as a result of an accident when she was walking on patrol and a car struck her from behind with sufficient force to cause her to fall, hit her head and lose consciousness. The applicant testified she believe she would die and that she developed nightmares, insomnia, anxiety, and fear of parking lots and moving cars, among other psychiatric symptoms.

The QME in psychiatry diagnosed the applicant with cognitive, post-traumatic stress, and depressive disorders. The physician opined that the predominant cause of those injuries was applicant’s work injury. The physician apportioned 80% of applicant’s permanent disability to that injury.

Defendant argued pursuant to Labor Code § 4660.1 (c), which bars an increase in permanent disability for a psychiatric consequence of a physical injury applied. The issue became whether the “violent act” exception of Labor Code § 4660.1 (c) (2) (A) applied only to criminal or intentional violence. The applicant argued that the psychiatric treatment was compensable pursuant to Labor Code § 4660.1 (c) (2) (A) exception for a victim of a violent act. The matter proceeded to trial and the WCJ ruled that being hit by a moving vehicle from the blindside does make the applicant a victim of a violent act.

Defendant filed a petition for reconsideration. The WCAB denied reconsideration.

The WCAB indicated that Labor Code § 4660.1 (c) (2) does not define “violent act,” however refers to a “violent act” within the meaning of Labor Code §3208.3. Violent act is not defined within the meaning of the Labor Code §3208.3.

Labor Code §3208.3. (b)(2)-(3) requires that the victim of a violent act (or direct exposure to a violent act) demonstrate by a preponderance of evidence that actual events of employment were a “substantial cause” of the injury, defining the term as at least 35% to 45% of the causation from all sources combined. This is a less stringent causation requirement than the general standard of 51% or more as to all causes combined.

The panel indicated that Black’s Law Dictionary defines “violent” as relating to or characterized by strong physical force resulting from extreme or intense force. From this definition the panel concluded the applicant, blindsided by a moving vehicle and hitting her head on the ground, was indeed the victim of a violent act.

The WCAB indicated that had the Legislature intended to include in the definition of violent act an exception for only violence caused by criminal acts, it could have included express language to that effect in the statute. That it did not include that express language suggests a legislative intent to use the broader definition of violence.

The WCAB also saw significance in the absence from the Labor Code §s the word “perpetrated,” observing that had the Legislature indicated a requirement that a violent act be perpetrated upon the victim within numerous other statutes, but omitted such language in 3208.3. The WCAB

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found the WCJ’s determination that Labor Code § 4660.1 (c) did not bar applicant’s right to psychiatric permanent disability, and applicant had sustained a psychiatric injury based on the conclusions of the Qualified Medical Evaluator.

23. Felony exception

Schwartz v. Ease Entertainment, Starr Indemnity and Liability Company (BPD) 2016 Cal. Wrk. Comp. P.D. LEXIS 106

The WCJ found that applicant suffered injury arising out of and occurring in the course of her employment to her psyche on 2/20/2014 while employed as first assistant director of the film Midnight Rider: The Gregg Allman Story. The WCJ found that the applicant’s claim for psychiatric injury was not barred under Labor Code § 3600(a)(8).

Labor Code § 3600 (a) (8) precludes recovery of workers’ compensation benefits for injuries caused by commission of a felony. The facts showed the applicant was involved in setting up a film shoot on a train trestle located in the State of Georgia. Permission to use the trestle was expressly denied by the railroad company. The applicant suffered a psychiatric injury as a result of an accident in which the train struck and killed a film crew member and injured six others. The State of Georgia filed charges against applicant for criminal trespass and involuntary manslaughter.

The WCAB panel majority concluded that under a strict interpretation of the language in Labor Code § 3600(a)(8) a conviction is required to bar a workers’ compensation claim under this section. Pursuant to Georgia law a conviction requires a final judgment of conviction to be entered upon a verdict or finding of guilt of the crime or upon a guilty plea.

In this case there was a deferral of applicant’s prosecution by a finding of guilt by the Superior Court pursuant to Georgia’s First Offender law. The requirement that applicant’s injury be caused by a commission of a felony for which she was “convicted” was not met because applicant was not “convicted” of a felony. Therefore, her claim was not barred by Labor Code § 3600(a)(8).

A dissenting commissioner would have found that applicant was barred from receiving workers’ compensation benefits under Labor Code § 3600(a)(8). The fact that the injury to her psyche arose as a consequence of her commission of a felony (involuntary manslaughter) for which applicant was convicted by Superior Court in Georgia following an evidentiary hearing in 2015, and the fact that applicant was subsequently accorded leniency in her sentencing did not obviate the fact that she was found guilty of involuntary manslaughter.

24. QME

Chaides v. The Kroger Company dba Ralphs Grocery Company (BPD) 2016 Cal. Wrk. Comp. P.D. LEXIS 143

The WCJ ordered the Medical Director to issue a replacement qualified medical evaluator panel in orthopedics to replace orthopedic qualified medical evaluator Michael Klassen, M.D.

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Dr. Klassen’s mandatory deposition policy was that he receive a deposition fee payment of $1,000.00 at least 11 business days in advance of a scheduled deposition as a condition to proceeding with the deposition.

Code of Civil Procedure § 2034.450(a) allows for payment of deposition fee at commencement of deposition and 8 Cal. Code Reg. § 35.5(f) states that qualified medical evaluators must make themselves available for deposition within 120 days of request. Dr. Klassen’s policy did not comply with the applicable qualified medical evaluator deposition rate of $250.00 per hour provided for in Medical Legal Fee Schedule.

The WCAB in a split panel decision held that although the improper deposition policy, in itself, did not entitle the party to a replacement qualified medical evaluator panel, however, the demands of the physician could subject Dr. Klassen to sanctions or other disciplinary action. The WCAB panel majority reasoned that the decision to replace the qualified medical evaluator years after the initial evaluation and after multiple reports and examination must be weighed against the goal of promoting timely resolution of claims and the constitutional imperative that California workers’ compensation law be administered so as to accomplish substantial justice and that actual or perceived doctor shopping via use of procedural challenges should be discouraged. To have the applicant evaluated by a new qualified medical evaluator at this late stage of proceedings, even though Dr. Klassen’s prior reports are still admissible, will increase costs and significantly delay ultimate resolution of the case.

The replacement of Dr. Klassen as a qualified medical evaluator solely for improper deposition policy is not warranted as a remedy under circumstances of this case.

Commissioner Sweeney, dissenting, opined that defendant failed to show requisite substantial prejudice or irreparable harm to justify removal, or that reconsideration from a final order will not be adequate remedy, and that WCJ appropriately exercised his discretion to order a replacement panel.

25. Utilization review

Grijalva v. Care Administration and Management (BPD) 2016 Cal. Wrk. Comp. P.D. LEXIS 121

A WCJ issued an order closing discovery and directing the orthopedic panel qualified medical evaluator to comment on medical treatment proposed by applicant’s treating physician earlier denied by valid utilization review (UR) and independent medical review. A petition for removal was filed.

The WCAB granted removal and concluded that the order was improper because any further effort by applicant to obtain treatment for her 9/26/2012 back injury must be by submission of a new request for authorization of treatment pursuant to Labor Code § 4610 and not by soliciting an opinion from a panel qualified medical evaluator. Allowing the applicant to reopen discovery by obtaining a supplemental report from a QME concerning disputed treatment after discovery was closed and authorization was denied by UR and IMR was contrary to Labor Code § 5502(d)(3).

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26. Petition to reopen

Weitnauer v. Sacramento County Sheriff’s Department, Defendant (BPD) 2016 Cal. Wrk. Comp. P.D. LEXIS 171

The WCJ issued an Amended Findings and Award in response to applicant’s Petition to Reopen for increased disability and reinstated the original findings and award issued on 9/12/2011, the WCJ reopened the original award and found that applicant’s permanent disability with respect to his heart injury had decreased from prior award of 82 percent to current level of 45 percent based on the agreed medical evaluator’s reporting.

The WCAB reversed and concluded that the WCAB lacked jurisdiction under Labor Code § 5804 to issue an award which reduced applicant’s permanent disability when no petition to reduce permanent disability was filed by defendant within five years of the date of injury, even though defendant had ample time prior to the running of the five-year jurisdictional period to file a petition to reduce permanent disability, and no counter‐petition was filed within 30 days of applicant’s petition to reopen for increased disability.

27. Settlement

Alvarenga (Luis) v. WCAB (BPD) 81 C.C.C. 850

Defendant filed a Petition to Set Aside or in the Alternative a Petition for Reconsideration of the Order Approving Compromise and Release issued on March 17, 2016, which approved the compromise and release entered into between applicant and defendant which included a Medicare Set Aside of $24,079.23, which the parties did not submit to the Center for Medicare Services (CMS) for approval.

Defendant contends the parties entered into a compromise and release by mutual mistake because the parties believed in error that applicant’s MSA did not require CMS approval, and defendant alleges that the MSA does require CMS approval and defendant only discovered this after the order approving issue.

The WCAB granted defendant’s petition for reconsideration and rescinded the order approving compromise and release and returned the matter to the trial level for further proceedings consistent with the decision.

The board held that stipulations are binding on the parties. On a showing of good cause, parties are given permission to withdraw from their agreements. (County of Sacramento v. WCAB (Weatherall) (65 C.C.C. 1)

The WCAB or a WCJ makes inquiries into the adequacy of all compromise and release agreements and may, in its discretion, set the matter for hearing or take evidence when necessary to determine whether the agreement should be approved or disapproved. A compromise and release must be adequate. An injured worker is thus protected from unfortunate compromises resulting from economic pressure or lack of competent advice.

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The compromise and release can be rescinded, altered or amended by the board within the five-year jurisdictional period, upon a showing of good cause. (Smith, 50 C.C.C. 311) To rescind a compromise and release would require a showing of fraud, mutual mistake of fact, duress or undue influence. (California General Tire, 67 C.C.C. 1336)

Whenever a party is either a Medicare beneficiary or is reasonably foreseeable to become a Medicare beneficiary within 30 months of the settlement date, the parties are required to protect Medicare’s interest in settling future medical treatment.

A WCMSA allocates a portion of the settlement for all future claim-related medical expenses that are covered and otherwise reimbursable by Medicare. When CMS approval is made, the amount must be properly spent before Medicare will begin to pay for care related to the Workers’ Compensation claim. The goal of establishing a WCMSA is to estimate, as accurately as possible, the total that will be incurred for all medical expenses otherwise reimbursable by Medicare for claim-related conditions during the course of claimant’s life, and to set aside sufficient funds from the settlement, judgment or award to cover that cost. Any claimant who receives a workers’ compensation settlement, judgment, or award that includes an amount of future medical expenses must take Medicare’s interest in respect to future medical care. If Medicare’s interest is not considered, CMS has a priority right of recovery against any entity that received any portion of a third-party payment either directly or indirectly, a right to recover or take back that payment. CMS has a subrogation right with respect to any such third-party payment.

Defendant in this case argues that the order approving the compromise and release should be set aside due to mutual mistake of fact because the parties were mistaken as to whether CMS is required to review the MSA in this case. However, CMS does not actually require review of any MSA agreements. The reference guide states that the claimant may consider seeking CMS approval of a proposed WCMSA amount for a variety of reasons. The primary benefit is the certainty associated with CMS reviewing and approving the amount that must be properly spent. It is important to note, however that CMS approval of the proposed WCMSA is not required.

Although CMS review is not required, there are significant consequences when an MSA settlement is not approved by CMS. If the parties to a settlement stipulate to a WCMSA amount but do not receive CMS approval, then CMS is not bound by the amount stipulated by the parties, and it may refuse to pay for future claim related medical expenses, even if they would ordinarily have been covered by Medicare. However, if CMS approves the WCMSA amount and that amount is later properly spent, Medicare will pay Medicare-covered, claim-related medical bills regardless of the amount of care the claimant continues to require.

Defendant alludes to the $25,000 threshold settlement amount as requiring CMS review of the MSA; however, the $25,000 threshold does not require MSA review. This is merely the minimum settlement amount for which CMS will actually conduct a review.

CMS will review a proposed WCMSA amount when the following thresholds are met: the claimant is a Medicare beneficiary and the total amount is greater than $25,000 or the claimant has a reasonable expectation of Medicare enrollment within 30 months of the settlement date and

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the anticipated total settlement amount for future medical expenses and disability lost wages over the life or duration of the settlement agreement is expected to be greater than $250,000.

In this case, the parties were not mistaken as to whether CMS must review the MSA. CMS does not require review of any MSA, but only recommends a review under certain situations. The WCAB determined that the order approving compromise and release will not be set aside on that ground.

However, they found two significant issues, both of which constitute good cause to rescind the order approving. First, based on the language contained within the compromise and release, it does not appear the applicant was adequately advised of the effect of the party’s failure to conduct CMS review of the MSA. If the parties wish to enter into a compromise and release with an MSA arrangement without obtaining CMS review, the applicant should be advised of the fact that CMS may withhold future Medicare benefits if CMS deems the settlement to be inadequate. Second, the C&R is not adequate. The party states in the comments that the MSA was for $24,079.23, but applicant only received a total of $22,110 after deductions for permanent disability advances and attorney fees. The C&R did not include enough funds to cover the MSA, nor did it provide any consideration for non-Medicare covered expenses. In this case the C&R is inadequate and good cause exists to rescind the order approving.

The WCAB granted reconsideration and rescinded the order approving the C&R and returned the matter to the trial level for further proceedings consistent with the decision.

28. QME

Corrado v. Aquafine Corporation (BPD) 2016 Cal. Wrk. Comp. P.D. LEXIS 318

Applicant sustained a CT to multiple body parts during the period ending August 28, 2012. Applicant was evaluated by Dr. Shapiro as the panel QME. Applicant was deemed MMI by Shapiro on 9/3/14 and the doctor was deposed on 2/3/16. At an MSC on 4/11/16, the applicant orally raised the issue that the QME issued a late supplemental report. The parties stipulated that the QME did not issue a supplemental report within 60 days as required by AD Rule 38. The WCJ wrote on the minutes of hearing: “Finding & Order: Applicant is entitled to a new panel QME in the field of orthopedics.” Defendant filed a petition for reconsideration and removal.

The issue presented in this case is whether the WCJ should issue a replacement panel when the supplemental report is untimely. The WCAB in this case held that neither Labor Code § 4062.5 nor 139.2 mandates the replacement of a Qualified Medical Evaluator for failing to follow the administrative timelines for completing a supplemental report. They held that where a supplemental report is not timely issued, the WCJ has the discretion to order a replacement panel of Qualified Medical Evaluators for good cause.

The WCAB explained the timeliness of the supplemental report is but one factor to consider in determining whether good cause exists to order a replacement panel of Qualified Medical Evaluators.

The WCAB indicated the following factors should be considered: (1) the length of the delay caused by the late report; (2) the amount of prejudice caused by the delay in issuing the

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supplemental report versus the amount of prejudice caused by restarting the QME process; (3) what efforts, if any, have been made to remedy the late reporting; (4) case specific factual reasons that justify replacing or keeping the current panel, including whether a party may have waived its objections; and (5) the constitutional mandate to accomplish substantial justice in all cases expeditiously inexpensively and without encumbrance of any character.

29. Stay

Smith v. Action Roofing (BPD) 44 CWCR 166

Applicant, a roofer, sustained an admitted right shoulder injury and admitted cumulative trauma injury.

The defendants obtained surveillance video of the applicant at a time when he represented to the PTP that he had significant right shoulder pain and was temporarily disabled. The surveillance video showed the applicant pitching in softball games with this alleged injured shoulder.

The district attorney’s office of Santa Barbara County charged the applicant with workers’ compensation fraud, grand theft and perjury in his workers’ compensation cases.

Defendants requested a hearing. Applicant objected citing the pending criminal proceeding and contended that adjudicating the case while those proceedings remain pending would cause him substantial prejudice and irreparable harm.

The WCJ set the case for trial and applicant filed a petition for removal.

The WCAB concluded that applicant had not met the high burden required for the Board to exercise its removal power. Removal requires that the party requesting relief show substantial prejudice or irreparable harm; it is an extraordinary remedy that the board rarely exercises.

Moreover, in order to secure removal, the requesting party must prove that reconsideration would not be an adequate remedy.

The panel indicated that the constitutional mandate to achieve substantial justice through expeditious litigation and the discretionary power to grant stays in proceedings were appropriate under Rule 10470. The panel next analyzed applicant’s claim of prejudice in facing parallel workers’ compensation and criminal proceedings. To determine whether the failure to grant a stay resulted in substantial prejudice or irreparable harm required discussion of whether constitutional principles require the stay of a civil case pending the conclusion of criminal proceedings.

The board indicated that the decision whether the stay should be granted of the civil case should be made with due consideration for the facts and circumstances of each case. Among the factors to be weighed are (1) the interest of the parties and expeditious litigation, (2) the burden imposed on the defendants, (3) case management and the effective use of judicial resources, (4) the interests of nonparties and (5) the interest of the public in the pending civil and criminal proceeding.

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In this case the defendant had a significant interest in and expeditious proceeding, since the defendant continued to pay benefits. Because the criminal case could take years, continuing to pay those benefits under a stay of proceedings would result in a significant burden.

Thus applicant’s significant interest in asserting his Fifth Amendment rights was outweighed by defendant’s burden of continued payment of benefits and the board’s mandate to resolve cases expeditiously.

The WCAB upheld the WCJ’s determination that applicant’s request for a stay be denied despite the parallel criminal proceedings and denied applicant’s petition for removal.

It is noted that Evidence Code section 913 (a) prohibits the drawing of an adverse inference against a civil or criminal defendant that asserts the Fifth Amendment privilege in any proceeding. However, the panel recognized that the applicant could be prejudiced inasmuch as an assertion of the Fifth Amendment privilege during trial testimony could create an adverse inference that the applicant’s testimony would favor defendant.

30. Utilization Review

Naus v. Central Coast Village Centre (BPD) 44 CWCR 218

Applicant sustained an industrial injury to multiple body parts including spine. The primary treating physician submitted an RFA dated September 9, 2015 for a spinal cord stimulator trial and a psychological evaluation to support the spinal cord stimulator trial. Defendant submitted the RFA and UR which timely denied both treatments.

Applicant applied for IMR regarding the spinal cord stimulator. The IMR determination dated December 8, 2015, approved the psychological consultation, but upheld the denial of the spinal cord stimulator trial on the ground that a psychological evaluation was needed before it could be approved.

Applicant underwent a psychological evaluation for the spinal cord stimulator on January 5, 2016. In a report dated the same date the evaluator opined there was no psychological reason not to proceed with the spinal cord stimulator.

On February 10, 2016 the physician submitted the second RFA for the spinal scored simulator trial. The request noted that there was a change of circumstance because the psychological evaluation had now been performed and that applicant’s spinal condition had worsened since the time of the first RFA, with applicant being diagnosed with failed back syndrome. Defendant did not submit the second RFA to UR citing Labor Code § 4610 (g) (6) which states that a UR denial is effective for one year.

Applicant filed for a hearing and requested penalties and attorney’s fees.

The WCJ concluded the defendant’s failure to submit the second RFA to UR vested the board with jurisdiction to determine the reasonable medical necessity of the treatment under the substantial medical evidence standard. The WCJ determined the treatment was reasonably medically necessary and that defendant’s failure to submit the second RFA to UR was

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unreasonable because there had been a material change in circumstances between the first RFA and the second RFA, in that the psychological evaluation and taken place and the physician reported applicant’s condition had deteriorated.

Defendant filed a petition for reconsideration.

The WCAB observed that the legislative intent behind the UR statute was to require the employers and carrier to submit all RFAs to UR for determination of reasonable medical necessity and strict timelines were intended to ensure that UR determinations are made expeditiously.

Under the case of Dubon (WCAB en banc, 79 C.C.C. 1298), when a timely UR determination was not issued, the RFA remains unaddressed, there is no valid dispute for IMR to address, and the board has jurisdiction over the reasonable medical necessity of the treatment.

In this case the first RFA was timely denied and IMR upheld the denial of the spinal cord stimulator trial because a psychological evaluation and not yet taken place while simultaneously approving the evaluation.

It was only after the psychological evaluation occurred and it was determined from a psychological perspective that applicant could undergo a spinal stimulator trial and the doctor submitted the second RFA.

While Labor Code § 4610 (g) (6) provides that a UR denial is effective for one year, it also states that where there is a documented change in the material facts, a new UR must be conducted.

Here, the panel concluded, the new psychological evaluation and diagnosis of failed back syndrome constituted a material change in circumstances.

Because no UR was conducted on the second RFA, the WCJ correctly exercised jurisdiction and found the spinal cord stimulator was reasonably medically necessary under the MTUS as appropriate treatment for a failed back syndrome.

The WCAB also upheld the WCJ’s finding of penalties and interest because the change in circumstances was plainly identifiable from the IMR and second RFA. The allowance of a penalty and attorney fees, therefore was within the discretion of the WCAB and not an abuse of discretion.

WCAB upheld the WCJ.

31. QME

Vera v. Monsanto Co. (BPD) 2016 Cal. Wrk. Comp. P.D. LEXIS 360

The WCJ issued an order allowing an applicant who sustained an admitted back injury to obtain additional QME panels to evaluate her sexual dysfunction and neurological complaints pursuant to Rule 31.7 (b), even though they were not evaluated by the primary treating physician.

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The WCAB upheld the WCJ and found that the usual procedure in an accepted injury case with compensability of additional body parts is to obtain the opinion of the primary treating physician.

The WCAB went on to state that if the additional body parts are outside of the primary treating physician’s expertise, he or she should refer applicant to a secondary physician, and under Rule 9785 (e) (4), the primary treating physician must incorporate or comment on the findings of the secondary physician.

Once the parties receive the report of the primary treating physician that either incorporates or comments on the compensability of additional body parts, either party may object to the primary physician’s report, pursuant to Labor Code § 4062. Once the objection is made the party should seek agreement on obtaining an additional panel, but if they cannot agree, either party may petition for an order from the Appeals Board pursuant to Rule 31.7 (b).

The WCAB, however, recognized that in some cases there may be good cause for additional panels even without a primary treating physician’s opinion on the disputed body part.

In that case, because there was no evidence in the record to prove or disprove the allegation of injury to applicant’s neurological system or psychological dysfunction, the WCAB believed the medical report addressing them would be highly relevant, and thus found good cause to order the evaluations.

The WCAB added that defendant failed to show substantial prejudice or irreparable harm by the order because both parties were free to seek the opinion of the treating physician regarding the additional body parts.

32. IMR

Nickerson v. Pot Belly Deli (BPD) 2016 Cal. Wrk. Comp. P.D. LEXIS 329

The WCJ granted applicant’s appeal of an independent medical review determination upholding a defendant’s utilization review denying certain prescription medications. The WCJ ruled the IMR reviewer applied an incorrect treatment guideline. The defendant filed a Petition for Reconsideration.

The WCAB found the IMR reviewer denied the medication by referencing the chronic pain medical treatment guidelines. The WCAB found the reviewer should have applied the postsurgical treatment guidelines because the applicant had a spinal fusion within the postsurgical treatment period.

The WCAB stated that Stevens v. WCAB (80 C.C.C. 1262) gave the WCAB authority to grant an IMR appeal and set aside and IMR determination that relies upon an incorrect treatment guideline. The Appeals Board concluded that such an error can be described both as an action in excess of the administrative director’s powers pursuant to Labor Code § 4610.6 (h) (1), and as a mistake of fact as a matter of ordinary knowledge and not a matter that is subject to expert opinion pursuant to Labor Code § 4610.6 (h) (5). The WCAB ordered a new IMR be conducted.

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33. Burden of Proof

Pineda v. Vegland Inc. (BPD) 2016 Cal. Wrk. Comp. P.D. LEXIS 380

The WCJ held that a defendant was not liable for the payment of a copy service lien in connection with subpoenas for employment and medical records when the copy service failed to meet its burden of proof to establish all elements to prove the claim. Lien claimant filed a petition for reconsideration.

The WCAB denied reconsideration and affirmed the decision of the judge and concluded that the defendant is not required to object to discovery or file a petition to quash a subpoena in order to object to a bill for copy services.

Labor Code § 4622 requires that a defendant pay all medical legal expenses for which the employee is liable. Labor Code § 4620 (a) states a medical legal expense means any costs or expenses and incurred by or on behalf of any party which expenses may include medical records for the purpose of proving or disproving a contested claim. Copy service fees incurred to obtain medical and other records are considered medical-legal expenses under Labor Code § 4620 (a) that may be resolved by filing a lien claim.

A lien claimant holds the burden of proof to establish all elements to establish its claim. Thus, lien claimant is required to establish that a contested claim existed at the time the expenses were incurred, that the expenses were incurred for the purpose of proving or disproving the contested claim, and the expenses were reasonable and necessary at the time they were incurred.

On receipt of a bill from a medical legal provider, the defendant must provide a proper explanation of review pursuant to Labor Code § 4603.3, explaining its objection to any unpaid portion of the provider’s bill.

A defendant is required to notify a provider if it contests the reasonableness and necessity of incurring these expenses and shall indicate the reasons therefore. An employer’s objection to a medical-legal expense shall be made on the explanation of review form required by Labor Code § 4603.3.

If the provider wishes to contest defendant’s objection to any unpaid portion of the provider’s bill, the provider must request a second review within 90 days and if it fails to do so, the bill will be deemed satisfied and neither the employer nor the employee will be liable for the payment.

The WCAB stated that defendant served a copy service with the explanation of review and made five payments for five dates of service. In reviewing lien claimant’s somewhat inconsistent statements in its petition for reconsideration and petition for cost, it appears that lien claimant has a misimpression about what a defendant is required to do to object to a medical legal bill. The defendant is not required to object to discovery or file a petition to quash the subpoena. Upon receipt of a bill from a medical legal provider, defendant must provide a proper EOR setting forth objections to any unpaid portion of the provider’s bill.

By lien claimant’s admission in its petition for cost, defendant did serve a lien claimant with the EORs. It is unclear from lien claimant’s billing records which dates of service were partially

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paid, although we know that there were five dates of service and five payments. It is also unclear which bills resulted in EORs. In any event, lien claimant does not allege that it submitted a request for second review. It is lien claimant’s burden to set forth the facts of the case in an intelligible manner and to present evidence of the facts needed to prove its claim. In this case the board was certain that there were five bills, five payments and two EORs but they have no way to determine how these things correspond to each other. The board also noted that lien claimant subpoenaed two locations twice and did not provide evidence to explain the apparent duplication.

When a party has an opportunity to present evidence and fails to do so, that party waives the right to appeal the deficiency in the evidence. Given the number of unanswered questions raised by lien claimant’s exhibits and petition, the claimant has not met its burden.

Because the copy service did not submit a request for second review, did not establish which payments related to which EORs and did not explained why it obtained records from two locations twice the WCAB found the copy service was not entitled to payment on its claim.

The petition for reconsideration was denied.

BOARD PANEL DECISIONS

34. Service

Czech v. Bank of America (BPD) ADJ8917716

The WCJ issued a Findings of Fact and Award that found defendant failed to timely complete utilization review and that the applicant was entitled to medical treatment.

Defendant filed a petition for reconsideration contending that the request for authorization of medical treatment was not properly served upon the adjuster and that defendant’s duties under Labor Code § 4610 are triggered only upon the adjuster’s receipt of the RFA and not defendant’s attorney’s receipt of the RFA

The applicant’s attorney faxed a copy of both the medical report and the request for authorization dated October 21, 2015 to defendant’s attorney. Despite being served with the medical report and request for authorization through its attorney of record, the defendant took no action to review the requested medical treatment.

The WCJ then issued the decision that defendant did receive the request for authorization through its attorney of record and failed to submit the requested treatment through utilization review. The WCJ determine the medical treatment was reasonable.

The defendant argued that pursuant to Rule 9792.9.1 (a), the RFA can only be received by the claims administrator or its utilization review organization with the jurisdiction that service on its attorney would add an additional completely unintended step to utilization review process and would result in defendant’s attorneys being chained to their fax machines to ensure that the

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request for medical treatment get processed on time resulting in an unreasonable burden being placed upon the defense attorney.

The WCJ indicated that defendant ignored the fact that the WCAB has recognized that attorneys act as agents, and by their actions or inactions, subject their clients, or principles, to liability resulting therefrom. The acts of an agent, if within the actual or extensible authority of the agent, bind the principal of the agent. The negligent acts or omissions of an attorney are imputed to the client. (San Bernardino Community Hospital (McKernan, 64 C.C.C. 986).)

The WCJ indicated it was demonstrably imprudent for the defendant’s attorney to stand idly by after receiving an RFA for treatment and claim later at an expedited hearing that he had no duty to notify his client that he received the RFA. Defendants are to expeditiously and timely perform utilization review. (Romano 213 Cal. Wrk. Comp. P. D. LEXIS 125.)

The WCAB citing Labor Code § 4610 creates an affirmative duty to review requests for authorization of medical treatment. The section provides that for prospective or concurrent decisions shall be made in a timely fashion not to exceed five working days from receipt of the information reasonably necessary to make the determination, but in no event more than 14 days from the date of the medical treatment recommendation by the physician. Labor Code § 4610 does not specify whose receipt of the RFA triggers the time frame to complete utilization review.

Rule 9792.9.1 (a) (1) resolves the ambiguity in the statute. That section provides that the DWC form RFA shall be deemed to have been received by the claims administrator or its utilization review organization. The WCAB went on and indicated in reviewing the above statute, stating that utilization review is only triggered by either the claims adjuster or utilization review organizations receipt of the RFA.

However, defendant has a continuing affirmative duty to conduct a good faith investigation of the claim and to provide benefits when due (Regulation 10109). The Supreme Court in Braewood Convalescent Hospital (34 Cal 3d 159) states that section 4600 requires more than a passive willingness on the part of the employer to respond to a demand or a request for medical aid. This section requires some degree of active effort to bring to the injured employee the necessary relief. Upon notice of the injury, the employer must specifically instruct the employee what to do and whom to see, and if the employer fails or refuses to do so, then he loses the right to control the employee’s medical care and becomes liable for the reasonable value of self-procured medical treatment.

Although the strict utilization review timeframe begins upon the adjuster or utilization review organization’s receipt of an RFA, where a dispute exists over whether the RFA was transmitted to the adjuster and defendant’s attorney files an objection to the provision of medical treatment alleging the claims administrator never received a copy the RFA, and the same attorney then receives a copy of the disputed RFA, that attorney has a duty to transmit a copy of the RFA to the claims administrator within a reasonable time so the dispute can be resolved as expeditiously as possible.

Here, defendant’s attorney specifically objected to applicant’s request for an expedited hearing on the basis that the claims administrator had not received a copy of the RFA in dispute.

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Defendant had knowledge that a treatment request was made, but defendant claimed that it did not receive that request.

Defendant should have taken active steps to obtain the missing RFA and review the request for treatment. Once defendant’s attorney received the RFA from the applicant and because defendant’s attorney had specific knowledge that his client required a copy of RFA, defense attorney should have transmitted the RFA to the adjuster within a reasonable time period.

A member of the bar shall keep a client reasonably informed about significant developments relating to the employment or representation including promptly complying with reasonable requests for information and copies of significant documents when necessary to keep the client so informed.

It was found that in the limited facts of this case that defendant’s failure to provide the RFA to the claims administrator was unreasonable and the WCJ’s award of treatment was proper. The petition for reconsideration was denied.

35. QME

Parker v. DSC Logistics (BPD) ADJ 9636706; ADJ 9447837

The applicant filed the first application on May 7, 2014. Defendant filed an answer denying injury. On September 11, 2014, applicant filed two additional applications.

The party litigants in all three cases are identical and the parts of body alleged to have been injured overlap. A panel of Qualified Medical Evaluators issued and the parties selected a Qualified Medical Evaluator, following the striking procedure, who evaluated the applicant on January 9, 2015 and issued a report of the same date. On February 23, 2015, the applicant requested the issuance of two additional panels from the DWC medical unit regarding the two subsequently filed applications. The medical unit issued two new panels. Defendant filed a petition to vacate the two panels. The WCJ issued an order denying defendant’s petition to vacate QME panels. Defendant filed a Petition for Reconsideration.

Defendant contends that the factual circumstances are distinguishable from the Navarro case and that Labor Code § 4062.3 requires the Qualified Medical Evaluator already selected should evaluate the applicant for all injuries and additional panels should not have issued.

Defendant argues that a QME was properly selected and because applicant filed three separate claims of injury prior to the physician’s evaluation, the Qualified Medical Evaluator is required to evaluate for all three claims.

The WCAB stated that Labor Code § 4060 (a), (c), and (d) all referred to a single claim form, injury or claimed injury and require that any medical-legal evaluations to determine compensability of that injury or claimed injury occur under the procedure provided in Labor Code § 4062.1.

Labor Code §§ 4062.3 (j) and 4064 (a) require the medical-legal evaluation to address “all medical issues arising from all injuries reported on one or more claim forms” while section 4064

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(a) differs from 4062.3 (j) in that it does not include the phrase “prior to the date of the employee’s initial appointment with the medical evaluator,” such requirement is clearly included by reference because the claim of injury must of been reported. A claim of injury is “reported” under section 5401 when the employee files the claim form with the employer. Thus, the “reported date” under Labor Code §§ 4062.3 (j) and 4064 (a) is the filing date of the claim form under Labor Code § 5401. The date of filing a claim form determines which injury claims must be considered by the medical-legal evaluator.

Labor Code § 4062.3 (k) provides that if, after a medical evaluation is prepared, the employer or employee subsequently objects to any new medical issues, the parties, to the extent possible, shall utilize the same medical evaluator who prepared the previous evaluation to resolve the medical dispute.

Labor Code § 4067 applies to those matters in which the jurisdiction of the Appeals Board is invoked by the filing of a Petition to Reopen on the grounds that the effects of the injury have recurred, increased, diminished or terminated. Where there has already been a medical evaluation and another evaluation is needed pursuant to Labor Code § 4067, the subsequent evaluation must be conducted by the same QME or AME who previously evaluated. Labor Code §§ 4062.3 (k) and 4067 generally direct the employee to return to the same medical-legal evaluator who conducted the previous evaluation and prepared a report when a new medical issue arises related to the previously reported and evaluated injury claims.

The Navarro case makes clear that the QME is required to address all contested medical issues arising from all injuries reported on one or more claim forms prior to the initial QME evaluation. That case after reviewing all the relevant Labor Code sections concluded that the Labor Code requires that all medical-legal evaluations be obtained as set forth pursuant to sections 4062.1 or 4062.2 and that the Labor Code requires that an evaluator discuss all medical issues arising from all reported claims of injury at the time of the evaluation. The WCAB in that case further determined that in the case of subsequently filed claims of injury, a claim of injury filed after the initial QME evaluation, the Labor Code does not require an employee to return to the original evaluator, even when the subsequent claim of injury involves the same body parts and the same parties. The board held that Rule 35.5 (e) was invalid to the extent it imposes the additional requirement that an employee returned to the same evaluator when a claim of new injury or illness involves the same body parts and the same parties.

The WCAB in this case stated that the applicant filed three separate applications, and defendant disputed each of them. Each of those applications was filed prior to the evaluation by the QME. Thus, Labor Code § 4062.3 (j) and Rule 35 (c) (1) require the QME to address each claim of injury as part of his evaluation of the applicant.

The WCJ erred when he denied defendants petition to vacate the QME panels. The board consistent with Navarro granted reconsideration and rescinded the WCJ’s order and issued a new order directing the medical-legal evaluation of the disputed medical issues in all three cases be conducted by the already chosen Qualified Medical Evaluator.

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36. SJDB

Beltran v. Structural Steel Fabrications (BPD) ADJ 9721385

Defendant seeks reconsideration of an Order Approving Compromise and Release in which a workers’ compensation judge approved the Compromise and Release Agreement but added language stating that “parties may not settle or commute SJDV per Labor Code § 4658.7 (g) CCR § 10133.31 (h).” The order effectively disallowed the parties’ agreement to settle any claim applicant may have to a Supplemental Job Displacement Benefit Voucher pursuant to Labor Code § 4658.7.

Defendant contends that they are permitted to settle the supplemental job displacement benefit voucher where a good faith dispute exists could potentially defeat applicant’s entitlement to all workers’ compensation benefits.

The WCAB held that where the parties establish there is a good faith dispute which, if resolved against the applicant, would defeat his entitlement to all workers’ compensation benefits, applicant may settle his claim by a Compromise and Release Agreement that also settles his potential right to the supplemental job displacement benefit voucher. The WCAB found that in this case the parties establish that a good faith dispute exists. Labor Code § 4658.7 (g) provides that settlement or commutation of a claim for the supplemental job displacement benefit shall not be permitted.

Defendant argues that where there is a good faith dispute of compensability of a claim of injury, the party should be permitted to settle applicant’s entitlement to the supplemental job displacement benefit voucher, analogizing to the situation which existed with respect to the settlement of vocational rehabilitation benefits pursuant to the case of Thomas v. Sports Chalet (42 C.C.C. 625). Labor Code § 5100.6 provided that the Appeals Board shall not permit the commutation or settlement of compensation indemnity payments or other benefits to which the employee is entitled under rehabilitation.

37. Trial

Moreno v. RTJ Homes, Inc. (BPD) ADJ 7998608

The WCJ found the applicant sustained a compensable injury. At the time of trial, the employer was illegally uninsured. Two substantial shareholders for the illegally uninsured business appeared at trial. The applicant objected to the presence of two employer representatives. The WCJ excluded one of the employer representatives. The defendants filed a petition for reconsideration.

The WCAB granted reconsideration.

The WCAB in its opinion explained that although the employer did not have an absolute right to be present at the trial, and would not have been entitled to a delay in the proceedings had they not been available at to attend, they were entitled to have their interest in being present, as a defendant, taken into consideration.

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Because the employer was present and formally sought to attend and participate with his attorney, the Appeals Board’s interest in having the matter proceed without his presence was not compelling.

The WCAB added that the WCJ failed to adequately consider the employer’s strong personal interest as a party defendant to assist his counsel on his own defense, and not merely as a representative of the employer.

The WCAB noted the employer faced individual liability as well as consequences for failing to carry workers’ compensation insurance. The WCAB indicated under the circumstances the employer had a stronger interest in being present and able to participate in the case then just a representative of the employer.

The WCAB overturned the finding of injury and the matter was returned to the trial level for a new trial in which the excluded employer would be permitted to attend.