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A u g u s t 2 0 1 5

P o l i c y a n d P r o g r a m B r a n c h

Personal Injury Procedures

California Department of Child Support Services

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The Personal Injury Procedures document is intended to assist Department of Child Support Services (DCSS) professionals. It describes procedures for obtaining personal injury insurance information, generating income withholding orders (IWOs) or liens, making collections, and recording data in the Child Support Enforcement (CSE) system. It is not meant to be a comprehensive legal guide.

Personal injury settlements and liens provide resources for child support collection from delinquent non-custodial parents (NCPs). The term personal injury IWO is used to refer to the "Personal Injury (CIIP) Income Withholding Order/Notice for Support," formerly called, the “California Insurance Intercept Program Income Withholding Order/Notice for Support.”

Following the approach in this document will improve customer service and increase personal injury settlement collections. It will also promote statewide consistency in issuing IWOs and filing lien notices.

Workers’ compensation collection is not addressed in this document. It is covered in detail in the Workers’ Compensation Procedures document.

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Table of Contents

List of Tables ................................................................................................................... 4

List of Figures .................................................................................................................. 5

Introduction ..................................................................................................................... 6

Personal Injury IWO/Lien Collection: A Five Step Process ............................................. 7

Step 1: Obtain Personal Injury Claim or Insurance Settlement Information .......... 8

Step 2: Add or Revise Insurance Information ..................................................... 11

Step 3: Generate an IWO ................................................................................... 17

Step 4: Make Claim/Lien Determination ............................................................. 24

Step 5: File a “Notice of Lien” ............................................................................. 25

CSE Task Definitions .................................................................................................... 30

Glossary ........................................................................................................................ 31

Addendum: “LCSA’s Personal Injury Claim Validation Checklist” ................................. 32

Revision History ............................................................................................................ 33

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List of Tables

Table 1: Adding Insurance Information .......................................................................... 13

Table 2: Revising Insurance Information ....................................................................... 17

Table 3: Generating an IWO ......................................................................................... 18

Table 4: Generating a Demand Request ....................................................................... 22

Table 5: Generating a Stand-Alone “Notice of Lien” ...................................................... 26

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List of Figures

Figure 1: Personal Injury IWO/Lien Collection Process ................................................... 7

Figure 2: OCSE Match IWO Process .............................................................................. 9

Figure 3: CSE “Insurance Claim List” Page ................................................................... 10

Figure 4: CSLN Match IWO Exception Process ............................................................ 11

Figure 5: CSE “Insurance Claim Detail” Page ............................................................... 12

Figure 6: CSE “Case Participant Attorney Detail” Page ................................................ 13

Figure 7: “Participant Special Circumstances” Page ..................................................... 15

Figure 8: “Case Participant Attorney List” Page ............................................................ 16

Figure 9: LCSA Personal Injury Process ....................................................................... 16

Figure 10: CSE “Wage Assignment Detail” Page .......................................................... 22

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Introduction The definitions of employer and earnings in California law allow for the collection of non-wage compensation from insurance carriers. According to Family Code section 5210(c), an employer is “any person or entity paying earnings as defined under Family Code section 5206.” Family Code section 5206(f) defines earnings as “any (other) payments or credits due or becoming due, regardless of source.” Based on these two definitions, an insurance company is regarded as an employer and personal injury settlements are regarded as earnings.

However, these earnings are not subject to the restrictions on garnishment contained in federal law. These restrictions do not apply in the case of “any order for the support of any person issued by a court of competent jurisdiction or in accordance with an administrative procedure, which is established by State law, which affords substantial due process, and which is subject to judicial review” (15 U.S. Code section 1673(b)(1)(A)).

Federal law classifies insurance settlements as assets subject to seizure for arrears. The state has authority “in cases in which there is a support arrearage, to secure assets to satisfy any current support obligation and the arrearage by intercepting or seizing periodic or lump-sum payments from… judgments, settlements, and lotteries” (42 U.S. Code section 666(c)(1)(G)(i)(II)).

Given the federal and state provisions, personal injury settlements of noncustodial parents (NCPs) who owe arrears are subject to DCSS collection. The collection process can involve Office of Child Support Enforcement (OCSE) insurance matching, automated Child Support Lien Network (CSLN) system matching, CSLN match exception handling, and/or filing a “Notice of Lien” (EJ-185).

DCSS can request a payor to withhold 100 percent of the net amount of a settlement after deductions have been made for property damage, medical bills/lien reimbursements, and/or attorneys’ fees. Collection of a lump sum payment from a net personal injury settlement is initiated by issuing an income withholding order or filing a lien.

In some cases, NCPs will receive settlement awards for both personal injury and workers’ compensation. Generating an IWO could be appropriate in both situations. (Refer to Workers’ Compensation Procedures.)

When a civil suit has been filed regarding a personal injury claim, an LCSA will file a “Notice of Lien” prior to settling. This action puts the court and the litigants on notice of the outstanding child support obligation and confers the right to collect a lump sum from

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an NCP who owes arrears. (The California civil suit lien used by LCSAs states the lien is based on a monetary judgment.)

Personal Injury IWO/Lien Collection: A Five Step Process

To make a collection from a personal injury insurance settlement, an LCSA generates an IWO and/or files a “Notice of Lien,” according to a five-step process. The first three steps describe how DCSS/LCSAs obtain claim information, how information is added or revised, and how an IWO is generated. Steps four and five address lien filing. (For an overview of the five step process, refer to Figure 1.)

The Five-Step Process:

• Step 1: Obtain personal injury claim or insurance settlement information • Step 2: Add or revise insurance information • Step 3: Generate an IWO • Step 4: Make claim/lien determination • Step 5: File a “Notice of Lien”

Figure 1: Personal Injury IWO/Lien Collection Process

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{Step-by-Step Detail}

Step 1: Obtain Personal Injury Claim or Insurance Settlement Information

DCSS/LCSAs obtain information about personal injury claims or settlements by:

• Receiving Information from OCSE, a custodial parent (CP), an NCP, or an insurance company

• Researching the CSLN website • Performing CSE case or task reviews that provide information confirming an NCP

has made an insurance claim (EN043 – Department of Industrial Relations (DIR); EI002 & EI005 – employment; EI003, EI004, and EN005 – NCP tasks)

• Using Accurint, a LexisNexis locate tool available to LCSAs that can be used to search for people, addresses, court records, credit reports, phone numbers, email addresses, social network records, and Department of Motor Vehicles (DMV) accident reports

The California Insurance Intercept Program (CIIP)

CIIP’s electronic interface plays a key role in the exchange of information by enabling CSE to exchange data with CSLN, DIR, and OCSE. CIIP provides LCSAs with data-matching processes and reports used to intercept information regarding personal injury and workers’ compensation settlements. (Because insurance companies are not currently mandated to report through OCSE or CSLN, LCSAs may not receive notice of all claims via CSLN and OCSE data-matching.)

Office of Child Support Enforcement

On a monthly basis, CSE sends data about NCPs who owe arrears to OCSE. OCSE conducts searches to match these NCPs with claim and settlement information from insurance companies, some state workers’ compensation agencies, and the U.S. Department of Labor (DOL). OCSE sends data regarding matches to the state agency responsible for collecting support. (Refer to Figure 2.)

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Figure 2: OCSE Match IWO Process

DCSS updates the NCP’s “Insurance Claim List” page in CSE and issues a personal injury IWO. (Refer to Figure 3.) Every OCSE-matched IWO issued from CSE includes the “Insurance Company Response” (ICR) form (DCSS 0698) as the last page of the form set (FS-ENF-014). CSE populates the ICR form with the following information:

• NCP’s name • NCP’s participant number • Insurance claim number • CSE case number

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Figure 3: CSE “Insurance Claim List” Page

Child Support Lien Network The CSLN database houses information on millions of delinquent NCPs from participating states. CSE forwards data about delinquent NCPs to CSLN on a monthly basis. The CSE and CSLN information exchange leads to matches between delinquent NCPs and insurance settlements that may prove to be resources to satisfy child support obligations. When a match is found, CSLN automatically sends an IWO to the insurance company on behalf of DCSS. An ICR form and a cover letter specifying collection of up to 100 percent of the net settlement accompany the IWO. The OCSE and CSLN match processes are somewhat similar. The biggest difference between the two processes is the OCSE IWO is generated and sent by CSE while the CSLN IWO is automatically generated and sent outside the CSE system. Automatically generated CSLN IWOs are not documented in CSE. To view specific insurance match information and associated IWOs generated by CSLN, authorized child support professionals can access the CSLN website at: https://childsupportliens.com/extranet/ If a match doesn’t meet the criteria for CSLN to send an IWO, DCSS Operations Division manually generates one. These IWOs are known as rejects. (Refer to Figure 4.)

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Figure 4: CSLN Match IWO Exception Process

Step 2: Add or Revise Insurance Information

Adding Information (Refer to Table 1.)

DCSS receives ICR forms containing the following information. (If an ICR form is incomplete, DCSS contacts the insurance company to obtain the missing information.)

• NCP claimant’s name • Insurance claim number • NCP claimant’s social security number • CSE case number

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After obtaining information about a personal injury claim, DCSS/LCSA enters the following information on the NCP’s “Insurance Claim Detail” page in CSE. (Refer to Figure 5.)

• Insurance claim number • Insurance carrier’s name and address • Contact information for the assigned claims adjustor • If represented, the name, address, and contact information for attorney or law

firm

Figure 5: CSE “Insurance Claim Detail” Page

DCSS processing of ICR forms includes entering the insurance claim status in the CSE “Activity Log.” If an ICR form states an insurance company has attached a payment, DCSS manually generates a mock personal injury IWO (FS-ENF-014) to populate CSE

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with the CSLN information. This enables the payment to be allocated correctly. DCSS informs the LCSA of the pending insurance payment.

When entering an NCP’s attorney’s information, an LCSA checks the “Limited Scope” box if representation is limited to specific area(s) of law. CSE allows LCSAs to link multiple attorneys with a CSE participant. (This information may not be displayed completely on the “Case Overview/Participant Overview” pages.) (Refer to Figure 6.)

Figure 6: CSE “Case Participant Attorney Detail” Page

Table 1: Adding Insurance Information

Step Actions

Add attorney (optional step)

• Does NCP have an attorney? If no, skip to “Access Insurance Claim” page.

• Navigate to “Case Overview” screen for NCP’s open cases in CSE. • Scroll down to “Authorized Representatives” section of page. Click

"Not Represented” next to NCP’s attorney. If NCP is represented by an attorney, click on attorney’s name. CSE navigates user to “Case Participant Attorney List” page.

• Is NCP’s attorney listed? If yes, skip to “Access Insurance Claim” page.

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Step Actions • Click "Add" button. CSE navigates user to "Case Participant Attorney

Detail" page. • Click "Select" in the "Attorney Name/Law Firm" field to perform a

pullback search for an attorney who is listed in CSE. (The attorney/law firm information must be in CSE in order to conduct the pullback search. If the attorney/law firm is not in CSE, follow the procedure to add or revise the reference data.) • From the drop-down list, “Representation Type,” select “Civil.” Check

"Limited Scope" box if scope of attorney's representation is limited to specific areas of law. (This field is informational only.)

• Click "Save." CSE navigates user to "Case Participant Attorney List" page.

• Repeat these steps for each of NCP’s open cases.

Access insurance claim page

• Search for and select a participant with the role of “NCP.” • Click "Enforcement" on “Local Navigational Bar” to access

"Participant Enforcement Overview" page. • Click "Insurance Claim List Detail.” CSE navigates user to "Insurance

Claim List" page.

Enter insurance claim information

• Click "Add" button. CSE navigates user to "Insurance Claim Detail" page.

• Enter data in all required fields. o The "Date Claim Opened" and "Claim Processed Date" fields

default to current date. “Date Claim Opened” should be date injury or accident occurred.

o The "Status" field defaults to "Active." This field cannot be updated until “Insurance Claim Detail” page is saved.

o Verify “Participant SSN.” o “Participant SSN” will default to SSN of primary participant. o To enter case participant attorney information, click “Attorney/Law

Firm Name Select" to perform pullback search for case participant’s attorney.

• Click "Save." CSE navigates user to "Insurance Claim List" page and provides confirmation message.

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Revising Insurance Information (Refer to Table 2.)

LCSAs might not be aware an insurance company has made a “claim denied,” “closed,” or “medical-only” determination. To ensure information in CSE is aligned with CSLN and third party sources, LCSAs regularly review and revise claim information. If DCSS/LCSAs discover information is incorrect, they update the NCP’s participant information on the “Insurance Claim Detail” page with a reason code of “Error.”

If a case has been closed, DCSS/LCSA verifies the claim is matched to the correct NCP and updates the NCP’s participant information on the “Insurance Claim Detail” page as “Inactive.” If there are special circumstances, on the “Participant Special Circumstances” page in the “Special Circumstances” section, an LCSA indicates a personal injury case exists. (Refer to Figure 7.)

Figure 7: “Participant Special Circumstances” Page

If an LCSA learns an NCP is represented, the LCSA enters the relevant information on the “Case Participant Attorney List” page. (Refer to Figures 6 and 8.)

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Figure 8: “Case Participant Attorney List” Page

Some LCSAs implement the personal injury process in response to email. If an insurance company does not attach a payment, DCSS closes the claim in CSLN and inactivates the claim in CSE. (Refer to Figure 9.)

Figure 9: LCSA Personal Injury Process

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Table 2: Revising Insurance Information Step Actions

Access “Insurance Claim” page

• From “Participant Overview” page, click "Enforcement" on “Local Navigational Bar” to access “Participant Enforcement Overview” page.

• Click "Insurance List Detail.” CSE navigates user to "Insurance Claim List" page.

Edit insurance claim information

• Click the appropriate hyperlink under "Claim Number" column. CSE navigates user to "Insurance Claim Detail" page.

• Enter appropriate information. (All fields can be edited.) • Click "Save." CSE navigates user to "Insurance Claim List" page

and provides confirmation message.

Step 3: Generate an IWO

The third step involves manual generation by DCSS/LCSAs of a personal injury IWO. (Refer to Table 3.) If CSLN has sent an IWO to an insurer, the LCSA performing the case review will generate a mock IWO in CSE for each of an NCP’s court cases. Generating a mock IWO provides a way to track progress on a case and ensures a payment is properly allocated. (A mock IWO should not be printed or sent to an insurance carrier.)

It’s important to review all of an NCP’s cases prior to beginning the collection process. A separate personal injury IWO needs to be issued for each county court case. Issuing individual IWOs will make each case eligible to receive payments and ensure proper allocation of incoming payments.

A county will issue IWOs for all cases with active accounts, regardless of which county has jurisdiction. DCSS or the LCSA with participant management responsibility (PMR) will take the necessary actions to issue an IWO for each of an NCP’s court cases, even if multiple LCSAs are involved in managing these cases. When multiple LCSAs are involved, they need to be made aware of all relevant IWOs. A lien may be needed and each LCSA is responsible for filing liens in cases within its county.

After entering the claim information in CSE, DCSS/LCSA will use the CSE form set, FS-ENF-014, to generate an IWO to the insurance company handling the claim. In some cases, a lien will be appropriate. (Refer to “Step 4: Make Claim/Lien Determination.”)

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When an IWO is appropriate, DCSS/LCSA sends an IWO for all of the NCP’s court cases in order to attach up to 100 percent of the net insurance settlement. In the event insurance settlements are to be paid in the future, DCSS/LCSA ensures a personal injury IWO has been issued for all cases that are eligible for enforcement action. To ensure a timely response, LCSAs fax the IWOs.

If a personal injury IWO or lien is not yet appropriate, an LCSA will generate an AN001 task and monitor the case.

Table 3: Generating an IWO

Step Actions

Access “Wage Assignment Detail” page

• From the “Case Overview” page, click "Enforcement" on “Local Navigational Bar” to access “Case Enforcement Overview” page.

• Click “Wage Assignment List Detail.” CSE navigates user to “Wage Assignment List” page.

• Click “Add Insurance IWO.” CSE navigates user to “Wage Assignment Detail” page.

Verify “Insurance Claim Detail” information

• Verify information in “Insurance Claim Detail” section. o The “Insurance Claim Detail” section defaults to the most

recently added active insurance claim related to NCP. If claim information is not correct, click on insurance company name, then click “Select” and perform pullback search for an appropriate claim.

(Self-insured employer information is also stored in CSE insurance claim pages.)

Select notification detail information

• The “Notification Type” drop-down list defaults to “Workers' Compensation Income Withholding Order/Notice for Support.”

• To generate personal injury IWO, select "Personal Injury (CIIP) Income Withholding Order/Notice for Support" from the "Notification Type" drop-down list. The “Generation Date” and “Estimated Service Date” fields will not be populated until the wage assignment is generated.

• The “Maximum Wage Withholding Percentage” field drop-down list contains the following values: 100 percent and 25 percent. Since 9/21/14, CSE defaults to 100 percent lump sum collection for the personal injury IWO and 25 percent for a Workers' Compensation IWO. A validation error will occur if 100% is not

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Step Actions entered for a personal injury IWO.

Verify court caption information

• Verify the court case number, petitioner/plaintiff, respondent/defendant, and other parent in “Court Caption” section. o The “Court Caption” section defaults to last family law court

caption entered into CSE. If court caption information incorrect, click on court case number, then click “Select” and perform pullback search for appropriate court caption.

o Wage assignments are generated at court case level. If multiple support orders are connected to a single court case, all effective terms resulting in creation of charging instructions will be included on IWO.

o If multiple IV-D cases are connected to a single court case, all case numbers will be associated with IWO.

(For examples of multiple IV-D cases that are linked to a single court case, refer to Opening a IV-D Case QRG, Table 1: “Federal Case Construct.”

Verify court ordered amounts information

• Court-ordered obligations associated with court case number populate “Court-Ordered Amounts” section. Compare ordered amounts with “Charging Instructions” section of page. o This section will display support terms currently ordered for

selected court case, including terms with future commencement dates and monthly arrears payments as designated on court order. Information also includes court order payback on arrears associated with order having most recent filed date.

o If there are multiple support orders with current support for a dependent who is not deceased, inactive, or emancipated, use support order with most recent file date.

(CSE uses the charging instructions for all current support included on wage assignment. The monthly court order on arrears from this list is included on wage assignment.)

Verify charging instructions information

• Verify check boxes in “Charging Instructions” section. o The charging instructions group lists charging instructions

associated with court case. All active charging instructions in “Charging Instructions” section are selected by default. De-

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Step Actions select a check box to exclude a specific term from being used to calculate current support portion of wage assignment.

o A charging instruction or a monthly payback on arrears is required to generate IWO. If there is not a payback on arrears, a charging instruction for current support must be selected.

Verify withholding amounts information

• Verify withholding amounts. Include current support, if applicable, and total arrears balance. Current support list is in “Charging Instructions” section. If current terms were de-selected from “Charging Instructions” section, click “Calculate” to update withholding amounts displayed on page. o Current child, medical, and spousal support are mapped based

on debt type of selected charging instruction. o All other current debt types, such as family support, are

mapped to another support amount. • If arrears payback was entered in “Administrative Arrears

Payment Detail” section, past-due child support amount will be monthly payment arrears amount.

• Court-ordered monthly arrears payment defaults using following hierarchy to populate past-due withholding amounts: o If arrears terms on support order include term with child

support obligation type, ordered payback on arrears is listed as “past-due child support.”

o If arrears terms on support order include term with medical support obligation type and there is no child support arrears obligation, ordered payback on arrears is listed as “past-due cash medical support.”

o If arrears terms on support order include term with spousal support obligation type and there is no child support or medical support arrears obligation, ordered payback on arrears is listed as “past-due spousal support.”

o If arrears terms on support order do not include term with child support, medical support, or spousal support, and there is an ordered payback on arrears, it is listed as “other support amount.” (An example is a family support obligation.)

Verify payment cycle amounts

• Verify calculated payment amounts to be included on wage assignment in “Payment Cycle Amounts” section. Values are

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Step Actions information calculated from total withholding amount.

Generate an IWO

• Click “Generate.” o A warning page may display for following verifications: “Active wage assignment enforcement suppression exists.” “NCP has an active court-ordered EFT.”

• CSE navigates user to “Form Set Parameters Detail” page. Click “Central Print” or “Local Print.” o When generating an IWO to update CSE for an automated

IWO issued by CSLN, click "Local Print," but do not print document.

• Click “Continue.” CSE navigates user to “Form Set List” page. • Click “Generate Form Set.” o If “Local Print” was selected, CSE navigates user to “Print Form

Set Locally Detail” page. Print appropriate number of copies of document. Click “Continue.”

• CSE navigates user to “Wage Assignment List” page and provides confirmation message. The new wage assignment record displays.

Verify system actions

• Depending on user’s selection of notification type, CSE generates (via central or local print): “Personal Injury (CIIP) Income Withholding Order/Notice for Support” (FS-ENF-014) and “Insurance Company Response” form (DCSS 0698).

• CSE records in “Case Documents/Notices” combined log that wage assignment form set has been generated.

• CSE records in “Case Activity” log that wage assignment has been generated and “Personal Injury (CIIP) Income Withholding Order/Notice for Support” form set has been sent to insurance company. .

• CSE does not perform any automatic follow-up activities.

Prior to September 2, 2014, when a personal injury insurance IWO was generated in CSE, the “Notification Type” defaulted to the “Wage Assignment Detail” page and to the “California Insurance Intercept Program Income Withholding Order/Notice for Support.” Now, an LCSA will select “Personal Injury (CIIP) Insurance Income Withholding

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Order/Notice for Support” from the drop-down menu and it will default to 100% lump sum collection. (Refer to Figure 10.)

Figure 10: CSE “Wage Assignment Detail” Page

In addition to being used when an updated balance is being requested, a “Personal Injury Demand Request” letter (DCSS 0288) can be used in conjunction with a personal injury IWO or a “Notice of Lien.” Using the demand request and an IWO can result in collection without use of the “Notice of Lien” (EJ-185). An LCSA will mail the demand request to ensure full collection and proper allocation, then enter information in a CSE “Activity Log” reflecting this work. (Refer to Table 4.) Table 4: Generating a Demand Request

Step Actions

Access the “Form Set Search” page for selected case

• From the “Case Overview” page click the “Form Search Options” hyperlink.

Generate the “California Insurance Intercept Program (CIIP) Demand Request”

• Select the “Form Set Number” from the “Search by” drop list. Enter “FS-DCSS-0288” in the “Form Number” field. Click the “Search” button. (Category: “Enforcement;” Subcategory: “Miscellaneous”)

• Click the “FS-DCSS-0288” hyperlink. CSE navigates user to the “Form Set Parameters Detail” page.

• Verify the correct case and/or court case number are listed.

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Step Actions • Click on the “Select” hyperlink in the “Select Claim Number”

section to go to the “Insurance Claim List” page. Select the claim number and click on the “Select” button to pull it back to the “Form Set Parameters Detail” page.

• Choose local or central print. • Click on the “Insurance Company” name check box appearing in

the “Recipients” section. • Click the “Continue” button. CSE navigates user to the “Form

Set List” page. • Click the “FS-DCSS-0288” hyperlink. CSE presents the form for

user to edit. • Enter necessary information on the form. Click the “Submit”

button. CSE saves the updates to the document and navigates user back to “Form Set List” page.

• Click the “Generate Form Set” button. • If local print is chosen, CSE navigates user to the “Print Form Set

Locally Detail” page. Print the appropriate number of copies of the document.

• Click the “Continue” button. CSE navigates user back to the “Form Set Search” page and provides a confirmation message.

Automated system actions

• Information that a “California Insurance Intercept Program (CIIP) Demand Request” has been generated is recorded in the case documents/notices combined log.

Upon receiving an IWO, an insurance carrier will follow these steps:

• Contact the LCSA to discuss the IWO. • Send a written response about the IWO to the LCSA. • Remit a payment.

If the claim is active but will not be settled quickly, an LCSA will task the case for follow-up review in 60 to 90 days. (An LCSA can ask an insurance carrier claims adjuster to suggest how long to wait before making a follow-up contact for review purposes. The adjuster may indicate it is appropriate to check before or after 60 to 90 days.)

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In most cases an insurance carrier will return an ICR confirming the IWO (or lien) has been received and is in place for future withholding, or notify the LCSA the claim is closed. If an insurer indicates a claim is closed, DCSS needs to deactivate the claim in CSE on the “Insurance Claim Detail” page and document the closure on the “Activity Log.” If the claim was reported in CSLN, it also needs to be deactivated. DCSS does not notify LCSA case managers when claims are closed, denied, or identified as “medical only.” To obtain this information and update CSE, LCSAs need to research the CSLN website.

Occasionally, the insurance match process provides an incorrect address for an insurance carrier. If this happens, the post office will return the IWO to the LCSA and a new IWO must be generated and sent to the correct address.

If a payment is received and the correct IWO has not been generated in CSE, the payment will be suspended for “No Eligible Case to Allocate.” An LCSA financial worker will need to review the payment source and determine whether the correct type of IWO was generated. If an incorrect IWO was generated, the financial worker will notify an LCSA case worker of the need to generate a correct IWO. After a correct IWO is generated, the LCSA case worker will notify the financial worker who will release the suspended payment.

Monitoring case activity to ensure a personal injury IWO has been generated will decrease the number of situations in which CSE suspends payments. During the monitoring process, LCSAs may acquire information about other situations such as:

• An NCP files an appeal that reverses a prior decision and a personal injury IWO needs to be generated.

• An insurance company did not attach a payment or return an ICR and DCSS/LCSAs were unaware there has been no collection.

• A lawsuit has been filed and a lien needs to be issued. • Other action has been taken and a lien needs to be issued.

Occasionally, the California State Disbursement Unit (SDU) receives an insurance payment without DCSS receiving an ICR. When an IWO has been created in CSE the payment will be processed and disbursed, ending the collection process. To ensure case information is current, LCSAs regularly review CSLN website information.

Step 4: Make Claim/Lien Determination

Because an LCSA might not be contacted by an insurance carrier and/or an NCP’s attorney until a claim is about to be settled, or it has been settled, it is important for LCSAs to monitor personal injury cases.

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When a personal injury claim in California is nearing the expiration of the two-year statute of limitations, the claimant or the claimant’s attorney must open a civil case and file a lawsuit to protect the claim. If an NCP’s claim is not settled and a lawsuit is filed, the filing of a “Notice of Lien” might be required to make a collection.

Family Code section 17523 provides the authority and process for lien collection of child support. California Code of Civil Procedure section 491.410 authorizes the filing of a “Notice of Lien (Attachment-Enforcement of Judgment)” form (EJ-185) with the California Superior Court. Taking this step puts the court and the litigants on notice of the child support obligation.

If an NCP obtains a monetary judgment, an LCSA can attach the proceeds by filing a lien. In personal injury cases, however, there may be medical liens that have been filed by health care providers that take priority.

If an NCP is represented by an attorney, the attorney’s fees would take priority. A decision regarding an LCSA’s actual share of the proceeds is either made by the court, or is subject to negotiation if an out of court settlement was reached. If the attorney’s fees and/or medical liens exceed the settlement amount, an LCSA will need to withdraw the lien(s) and send copies of the lien termination(s) to the NCP’s attorney and the insurance carrier.

At the time of a settlement, an NCP’s attorney is required to provide the LCSA with a settlement breakdown. This written document verifies the total gross settlement, attorney’s fees/costs, medical liens, and the net amount.

Intergovernmental cases require special handling. If information is received about an out-of-state civil action, an LCSA will contact the legal staff to determine the appropriate enforcement approach. While it may be possible to file a “Notice of Lien” on an action in another state’s court, an LCSA’s ability to enforce the lien may be limited.

Step 5: File a “Notice of Lien”

This enforcement process is used to attach any funds an NCP may receive from a pending lawsuit or special proceeding. A “Notice of Lien” is commonly used in situations where an NCP is a plaintiff in a civil action for damages, including personal injury. An LCSA files a “Notice of Lien” only in an open California civil court case. (LCSAs should consult with their legal staff prior to any court filing.)

It is important to review all of an NCP’s cases prior to starting the lien collection process. If an LCSA discovers an NCP has cases in other counties, the LCSA should convey information regarding the pending insurance claim and alert the other LCSAs

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that a lien may need to be filed. This action is especially important when CSLN sends claim information only to the county with PMR.

If a lien is to be issued, the LCSA who made the lien determination will contact the other LCSAs to determine how those agencies would like the lien to be handled. When the entire statewide arrears balance is being requested and funds are to be distributed to all counties:

• The LCSA who issued the lien(s) could handle the negotiations for all LCSAs by combining the entire child support balance; or

• The LCSA with the highest arrears balance could conduct negotiations on behalf of all LCSAs.

To generate a “Notice of Lien” on the “Legal Activities” page, LCSAs use the “Notice of Lien (Attachment-Enforcement of Judgment)” form set (FS-EJ-185) for the stand-alone “Notice of Lien” form (EJ-185), or the “Civil Suit Notice of Lien and Proof of Service” form set (FS-ENF-124) for the full civil suit package.

In most cases, an LCSA caseworker prepares the stand-alone “Notice of Lien” form and routes it to the legal staff. The legal staff prepares the “Affidavit of Service (AOS)/Proof of Service (POS)” and serves the legal package by mail on all parties/attorneys. Using the “Civil Suit Notice of Lien and Proof of Service” form set enables more than one party to be served. (Refer to Table 5.)

Table 5: Generating a Stand-Alone “Notice of Lien” Step Actions

Request a new or updated certified audit

• Create an AN001 task and assign it to the appropriate financial team member. When the audit is returned and the user has a copy of the formal order, then the lien can be generated; or

• Use OBM-200 instead of doing a full audit.

Add the court caption

• Prior to generating a “Notice of Lien,” add a court caption with the civil action court information to populate the lien form.

• Go to the “Legal Activities” page, “Court Caption” list, and select “Add.”

• On the “Court Caption Detail” page, change the court type to “Civil.” The court case number is the civil action docket. Enter the “Petitioner/Plaintiff” and “Respondent/Defendant” per the caption in the civil suit.

• Select “California” for the court. • Select user’s county as the county. (If filing in another county,

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Step Actions user would select the county where the lien is to be filed.)

• Select “Civil” from the “Court Type” drop-down.

Generate the “Notice of Lien”

• Go to the “Case Level, Legal Activities” page. • Add a “Superior Court” legal action. • Select category: “Legal Civil.” Search “All.” • Select “FS-EJ-185.”

o Enter the county of the court order, o Enter the “Petitioner/Plaintiff” and “Respondent/Defendant”

per the court caption. o Enter the court docket number. o Enter the filing date of the court order or filed date of

registration. • Enter the total arrears and interest owed per the audit. • Sign the lien.

Package the “Notice of Lien”

• Clip together the “Notice of Lien,” the certified audit, and a copy of the order.

• Route to Legal Support for filing. • On the route slip, note instructions about where the “Notice of

Lien” should be filed, and the names and addresses of any parties to whom the copies should be served, such as the NCP’s attorney.

Create an “Activity Log:” (“Miscellaneous/Enforcement/ Lien”)

• Include information about the parties involved, the civil court case number, the amount of the lien, and where it is to be filed.

Data that is required to generate a stand-alone “Notice of Lien” includes:

• Civil action case name: full court caption naming petitioner and respondent • Court name: the specific California county in which the action was filed • Court address where the action was filed • Court docket number • Date the court action was filed • Name and address of the NCP’s attorney (for legal service)

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• A copy of the formal child support order or judgment (preferably not a minute order)

• A certified, updated audit

This data can be obtained from relatives, the internet, the civil court index, and/or an Accurint court search. Sources of contact information include:

• Insurance adjustor • Court website • Court clerk • Other attorneys involved in the action • Relatives

If an NCP has cases in other counties, an LCSA will make copies of the other court orders and ask the other counties to provide certified audits. All parties or their attorneys must be served.

An LCSA might use a stand-alone lien notice as a means of making a collection on a non-civil court action being settled outside of court. In this situation, the LCSA prepares the document under the LCSA’s family support court case number and serves all parties or attorneys the unfiled EJ-185 form. (The LCSA completes and mails this form on cases without civil case numbers only when an LCSA attorney advises the caseworker to do so.)

At times, an LCSA will be contacted by an insurance carrier or an NCP’s personal injury attorney before a claim has been settled. If the insurance carrier asks for the lien demand, the LCSA will demand the full amount of the NCP’s statewide arrears, including interest, for up to 100 percent of the net settlement. The amount should also include spousal support arrears/interest balance, if spousal support is being enforced.

If an NCP’s attorney seeks to resolve the child support claim or lien before settlement proceedings have begun, the LCSA will demand the full arrears and request a copy of the disbursement statement. It provides a breakdown of how the settlement money is to be disbursed and the amount available for LCSA negotiation.

If there is a medical lien against an NCP’s personal injury claim, it may be negotiated for a lesser amount by the NCP’s attorney. An LCSA needs to ask the attorney whether existing medical liens have been compromised.

Upon reaching an agreement, the LCSA will ask the NCP’s attorney to confirm the terms of the agreement in writing. The attorney will arrange for a check to be issued and signed by the designated LCSA authorized agent. This signature can be obtained via U.S. mail or a walk-in appointment.

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Some insurance carriers will issue settlement checks to an NCP’s attorney in order to avoid the negotiation process. It is important for LCSAs to ensure settlement checks are directly made to the SDU in order to avoid two-party checks.

If a payment comes through as a two-party check, an LCSA can designate an authorized agent, such as the director or lead attorney, to sign it. After the designated agent and the second party sign the check, the LCSA returns the check to the NCP’s attorney with a copy of a demand letter indicating the amount DCSS will accept to satisfy the child support arrears claim. (Some LCSAs return two-party checks, unsigned, with a demand letter.)

Regardless of who is named as a payee, the NCP’s attorney is responsible for contacting the claimants, negotiating their claims, and obtaining their signatures on a check so it can be cashed.

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CSE Task Definitions

EI002 Task: Alerts LCSA to contact employer and determine if employer has received IWO. (LCSA may learn NCP has insurance claim.)

Task type: Courtesy call to NCP's employer

Task description: Contact NCP's employer: “It has been 10 days since the income withholding order was generated.”

EI003 Task: Alerts LCSA to contact NCP when no payments have been received within 30+ days. (LCSA may learn NCP has insurance claim.)

Task type: First payment delinquency

Task description: Contact NCP no payment received

EI004 Task: Alerts LCSA to contact NCP when no payments have been received within 60+ days. (LCSA may learn NCP has insurance claim.)

Task type: Second payment delinquency

Task description: Contact NCP no payment received

EI005 Task: Alerts LCSA to contact NCP and determine why income withholding payments have stopped. (LCSA may learn NCP has insurance claim.)

Task type: Income withholding payments have stopped

Task description: Contact NCP to verify employment. NCP has active employment record, income withholding payments have stopped, and NCP is at least 30 days delinquent.

EN005 Task: Alerts LCSA to review NCP’s delinquent case for enforcement. (LCSA may learn NCP has insurance claim.)

Task type: Annual review of delinquent case

Task description: Support order obligation(s) for NCP has been delinquent since (specified date). Review case.

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Glossary

Below are definitions of terms related to personal injury settlement collections. (This glossary is not intended to serve as a legal guide.)

Arrears: Past-due child support balance that accrues interest

Disbursement statement:

A document that shows how personal injury settlement money is being disbursed and the net amount available for LCSA negotiation

Insurance: A fee-based contract in which an insurance carrier agrees to pay a beneficiary a given amount if specific events occur, e.g., life, auto, health, homeowners,’ mortgage, unemployment, accident, burial, fire, and title

Insurance claim: Demand for payment in accordance with an insurance policy

Insured: Individual(s) or entity(ies) covered by an insurance policy

Insurer: Entity that contracts to pay for losses suffered by insured

Judgment: Official decision or finding by a judge or administrative agency hearing officer regarding the respective rights and claims of parties to an action; also known as a decree or order; may include findings of fact and conclusions of law

Lien: A claim upon property to prevent sale or transfer of that property until a debt is satisfied

Net settlement: The amount of an award remaining from a total gross settlement after attorneys’ fees/costs and medical liens are deducted

Personal injury: Damage to a person’s body, mind, or emotions, but not to a person’s property.

Personal injury recovery:

Amount paid through a lawsuit or insurance settlement to compensate for physical and mental suffering sustained as a result of bodily injury

Personal injury settlement:

Amount paid by an insurance carrier, self-insured entity, and/or individual to compensate an individual for physical and/or mental suffering resulting from an actionable bodily injury

Settlement: Resolution of a dispute or lawsuit; payment or adjustment

Statute of limitations:

When filing a lawsuit on a personal injury claim in California, two years from the date of injury (Code of Civil Procedure section 335.1)

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Addendum: “LCSA’s Personal Injury Claim Validation Checklist”

Insurance Carrier Information

Name:

Address for liens / garnishments:

Claim Information

Claim #(s):

Date of loss/injury:

Claim status: open / closed

Claims adjustor / examiner name:

Phone #:

Email address:

Fax #:

If claim is open:

What is status of settlement?

Is claim being handled administratively or judicially? administratively / judicially

If handled judicially, what is court case #?

Name & location of court involved:

If claim is closed:

Date claim was closed:

Was claim settled? Yes / No

Did NCP receive award? Yes / No

If so, for what amount? Date of payment:

Applicant (NCP) Representation Information

Is applicant (NCP) represented? Yes / No

If so, attorney / law firm name:

Address:

Phone #:

Fax #:

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Revision History

DCSS: Enter date and brief description of each change on a new line.

Date Section Description of Change Reason for

Change