What’s happening in the world of workers' compensation and employment law at The Law Offices of Pearlman, Brown & Wax, LLP.

California: Assessing Potential Workers’ Compensation Liability Related to the Coronavirus (COVID-19)

Mar. 20, 2020

California Case Law Related to Non-Occupational Diseases and Special Exposure or Special Risk Exceptions-Introduction: There is no reason to believe that the holdings and related legal principles derived from the key cases discussed hereinafter will not govern and control determinations of whether an alleged work related exposure to the coronavirus (COVID-19) will be found to be compensable as an injury arising out of and in the course of employment AOE/COE.

In Re: COVID-19 State of Emergengy En Banc

Mar. 3, 2020

On March 19, 2020, the California Workers’ Compensation Appeals Board issued the attached en banc decision in response to the Covid-19 emergency which will affect how you administer some of your claims. The WCAB has temporarily suspended various rules of practice and procedure as follows: (1) the WCAB will only serve documents electronically and not by mail; (2) with respect to compromise and release documents, signatures of witnesses are not required. Signatures of all the parties to a compromise and release are still required but may be electronic. However, this does NOT affect stipulations with request for award. It is still required that applicant’s actually “wet ink” sign a stipulated findings and award.); (3) all filing deadlines have been extended to the next day after a closed district office is reopened; (4) WCJs and arbitrators have an unlimited extension of time within which to issue reports in response to petitions for reconsideration or removal; (5) applications and lien claims will not be dismissed for failure to appear at a hearing.

California: Dismissals With Prejudice: Not As Final As You May Think

by: Raymond F. Correio Feb. 3, 2020

(Note: Lexis Advance online subscribers can access the links below.)

There is a widespread belief that once a party is dismissed with prejudice they are immune or insulated from rejoinder and the case can be closed forever. In the majority of cases this is probably true. But as demonstrated in the case of Noble v. Washington Redskins; Dallas Cowboys; San Francisco 49ers et al., 2018 Cal. Wrk. Comp. P.D. LEXIS 631, there are certain situations where a dismissal with prejudice may not be final when a party previously dismissed with prejudice fails to act timely when there is an attempt to rejoin them.

A Substantive and Procedural Quagmire for the Unwary: Dismissals with and without prejudice and attempted rejoinders can lead to complex litigation with unpredictable results and consequences. A lot of the confusion related to dismissals with prejudice stems from the “with prejudice” phrasing that understandably engenders a justifiable sense of finality. Unfortunately, the conclusive finality of Orders of Dismissal with Prejudice may not always be warranted in situations involving multi-party/multi-defendant cases where the entire claim or cause of action is not dismissed with prejudice and only portion of the claim or just one party is dismissed with prejudice.

In Noble, applicant, a professional football player, was last employed by the Washington Redskins (Redskins). He also had significant periods of employment with both the Dallas Cowboys and the San Francisco 49ers. On August 20, 2014, applicant’s attorney filed a Petition for Dismissal of the Redskins with prejudice. It appears the basis for the dismissal was an NFL arbitration award which ordered applicant to cease and desist from litigating his workers’ compensation claim against the Redskins in California. The Order of Dismissal of the Redskins with prejudice was issued on September 10, 2014. There is nothing in the record that applicant’s counsel ever filed and served a verified Petition to Rejoin the Redskins. Even in the absence of a Petition for Rejoinder, a WCJ issued an order rejoining the Redskins on March 13, 2017. A hearing was scheduled on May 9, 2017, but the Redskins did not appear. The Redskins appeared for the first time at a hearing on July 25, 2017. At the July 25, 2017 hearing, counsel for the Redskins made a general appearance and also made no objection on the record to the March 13, 2017, Order of Rejoinder.

The first time the Redskins objected to rejoinder as a party was in a joint pre-trial conference statement dated October 9, 2017. The matter was then set for trial which took place over two days on December 4, 2017 and February 22, 2018. As indicated by the WCAB:

The issues of the prior dismissal of the Redskins and the arbitration were raised in post-trial briefing. The Redskins’ brief argues that it could not have been validly rejoined to the case because it had been previously dismissed with prejudice. The brief does not explain why the Redskins neglected to raise the issue until trial, approximately 8 months after the Order rejoining them. The brief also argues that applicant should be precluded from bringing his claim in California based upon the arbitration agreement.

Following trial the WCJ issued a Findings and Order finding that the Redskins had been previously dismissed with prejudice and there was no good cause being established by applicant to reverse or overturn the Prior Order of Dismissal with Prejudice of the Redskins issued on September 10, 2014. The WCJ also issued a take nothing on the basis there was no other defendant liable for applicant’s injuries pursuant to Labor Code Section 5500.5. Applicant’s counsel filed a Petition for Reconsideration which was granted by the WCAB. The WCAB reversed the WCJ’s decision and found that the Redskins had waived any valid objection to the Order of Rejoinder by not timely objecting.

The WCAB’s Decision: The WCAB initially discussed that a WCJ has broad powers to join interested parties per Labor Code Section 5703.5(b). However, failure to object to joinder or rejoinder in a timely matter ordinarily waives any later objection to the propriety of joining the party to the case. (Superior Care Facilities v. Workers’ Comp. Appeals Bd. (1994) 27 Cal. App. 4th 1015, 1023.) The Board engaged in an extensive analysis of the law related to dismissals with prejudice. The first defense to an order of rejoinder is the doctrine of res judicata. A dismissal with prejudice “has the same effect as a common law retraxit and bars any future action on the same subject matter.” (Torrey Pines Bank v. Superior Court (1989) 216 Cal. App. 3d 813, 821) “Accordingly, the doctrine of res judicata bars further litigation of issues after a voluntary dismissal with prejudice to the same extent it does after a judgement on the merits.” (Torrey Pines. Supra, 216 Cal. App. 3d 821; Sears v. DeMota (1958 157 Cal. App. 2d 216, 222.) However, the Board also stressed that the defense of “res judicata is not jurisdictional and is subject to waiver if not properly raised by pleading or evidence.” (Busick v. Workmen’s Comp. Appeals Bd. (1972) 7 Cal. 3d 967, 977).

Voluntary Dismissal of an Entire Action: The WCAB pointed out the critical difference between a dismissal of an entire cause of action or case versus dismissal of just a party to the action. “A voluntary dismissal of an entire action deprives the court of subject matter jurisdiction as well as personal jurisdiction of the parties.” (Casa de Valley View Owner’s Assn. v. Stevenson (1985) 167 Cal. App. 3d 1182, 1193). Subject matter jurisdiction over the dispute as opposed to personal jurisdiction “cannot be conferred by consent, waiver, or estoppel….” (Viejo Bancorp, Inc. v. Wood (1989) 217 Cal. App. 3d 200, 207). Any “order issued after voluntary dismissal of an entire action is void on its face for lack of subject matter jurisdiction, and may be set aside at any time, the doctrine of waiver does not apply.” (See Harris v. Billings (1993) 16 Cal. App. 4th 1396, 1405).

Voluntary Dismissal of Only a Portion of a Lawsuit: However, when only a portion of an action or case is dismissed or one party is dismissed as opposed to the entire case or action, the Court is only deprived of personal jurisdiction and still retains subject matter jurisdiction over the case. Personal jurisdiction is subject to waiver such as by a further appearance on the case without objection. (Casa De Valley, supra, 167 Cal. App. 3d at 1192). In this case, “....applicant did not voluntarily dismiss his entire action; he dismissed only the Redskins. Dismissal of a party with prejudice, but not the entire action, deprives the court only of personal jurisdiction over the parties impacted by the dismissal, not of subject matter jurisdiction over the case.” (See Casa De Valley, supra, 167 Cal. App. 3d at 1192).

The Board noted that the Redskins could have easily objected to their rejoinder to the case after they received the rejoinder order dated March 13, 2017, based on the prior September 10, 2014 dismissal with prejudice. However, they failed to do so. Instead the Redskins waited until October 9, 2017, when they objected to rejoinder as part of a jointly filed pre-trial conference statement. There was no explanation as to why the Redskins waited almost seven months to assert an objection to rejoinder for the first time, nor did they explain their failure to timely object in their Answer to applicant’s Petition for Reconsideration.

Waiver: The WCAB stated that the key question was whether the Redskin’s objection to rejoinder was subject to waiver. The Board held that it was subject to waiver based on the fact only a party was dismissed and not the entire action or case by the prior Order of Dismissal with Prejudice issued on September 10, 2014. The court still retained subject matter jurisdiction under these circumstances since the order rejoining the Redskins while “presumably erroneous in light of the dismissal with prejudice, was not void on its face for want of subject matter jurisdiction.”

“It therefore follows that the Redskins waived any objection to the propriety of their rejoinder by failing to raise the issue at the first opportunity” (Superior Care, supra, 27 Cal. App. 4th at p. 1023). The WCAB said the last opportunity the Redskins had to object was at the July 25, 2017 hearing when they first appeared on the case subsequent to their rejoinder by the order dated March 13, 2017. At the July 25, 2017 hearing, the Redskins made a general appearance and did not object to the order of rejoinder. “Instead, they merely requested time to get back up to speed on the case after rejoinder, implying some level of acquiescence or at the very least no objection.”

Failure of Applicant’s Attorney to File a Petition for Rejoinder of the Redskins: The Redskins also belatedly raised the issue of their being rejoined to the case without applicant’s counsel filing a Petition for Rejoinder and without being afforded a hearing on the issue. The WCAB said this may have been a valid objection if it had been timely raised or asserted, but this issue was not raised by the Redskins until October 9, 2017. To compound matters even further, while this issue was listed on the October 9, 2017 pre-trial conference statement, it was not listed in the Minutes of Hearing and Summary of Evidence or in the Redskin’s post-trial brief. The Board found that under these facts the Redskins also waived this issue.

Lesson: In light of Noble, a party that has been previously dismissed with prejudice can no longer simply assume that an Order of Dismissal with Prejudice that relates only to an individual party or just a portion of an action as opposed to dismissal of the entire action permanently insulates them from an attempt to rejoin them. In order to avoid any issue of waiver, a party that has been previously dismissed with prejudice and then is later subjected to an attempted rejoinder action must undertake immediate and correct procedural steps to oppose any rejoinder. Using Noble as a guide to navigate the applicable case law is highly recommended.

© Copyright 2020 Raymond F. Correio, Esq. All rights reserved.

PRACTICE POINT: No Notice of Representation of Lien Claimant?

by: Clifford D. Sweet, III May 21, 2019

Some clients overlook potential issues which arise when the lien claimant’s representative has failed to timely file and serve a fully executed proper notice of representation as required by Cal. Code Regs., tit.8, §10774.5. WCAB Rule 10774.5 requires the representative (including an attorny) of any lien claimant to file and serve on all parties and their attorneys within 5 days of representation a properly executed notice of representation which includes specifically mandated language and a declaration signed under penalty of perjury. The properly executed notice of representation must be filed with the WCAB no later than “at or before the time of any hearing.”

If there is no fully executed 10774.5 notice of representation timely filed and served, the attorney or hearing representative has no legal standing to act on behalf of the lien claimant at a WCAB hearing. Among other things, that means that a person appearing at a WCAB hearing has no legal standing to enter an appearance, to address the court, to make or oppose motions, to file any document or to complete any forms, such as a Pre-Trial Conference Statement. Cal. Code Regs., tit. 8, § 10774.5 subdivision (e) (5) provides: “If no fully executed notice of representation or change of representation has been filed at or before the time of any hearing: (A) the lien claimant shall be deemed not to be represented even if a representative who purportedly has assumed representation appears; and (B) if the lien claimant does not otherwise appear at the hearing, it shall be subject to all of the consequences of a failure to appear.”

  • A failure to comply with Rule 10744.5 may constitute a bad faith action or tactic warranting the imposition of sanctions pursuant to Lab. Code, § 5813. Cal. Code Regs., tit. 8, § 10561 subdivisions (b) and (e) provide, in part: “(b) …Violations subject to the provisions of Labor Code Section 5813 shall include but are not limited to the following: (3) Failure to timely serve documents … (4) Failing to comply with the Workers' Compensation Appeals Board's Rules of Practice and Procedure, with the regulations of the Administrative Director… (e) Notwithstanding any other provision of these rules, for purposes of this rule and Labor Code section 5813: (1) a lien claimant may be deemed a “party” at any stage of the proceedings before the Workers' Compensation Appeals Board; and (2) an “attorney” includes a lay representative of a party or lien claimant.
  • There can be no “local rule” exception to the enforcement of WCAB Rule 10774.5. Lab. Code, 5500.3 subdivision (a) provides: “The appeals board shall establish uniform district office procedures, uniform forms, and uniform time of court settings for all district offices of the appeals board.  No district office of the appeals board or workers' compensation administrative law judge shall require forms or procedures other than as established by the appeals board.  A workers' compensation administrative law judge who violates this section may be subject to disciplinary proceedings.”
  • A failure to comply with the notice of representation requirement of WCAB Rule 10774.5 therefore cannot constitute good cause for a continuance. Lab. Code, § 5502.5 provides: “A continuance of any conference or hearing required by Section 5502 shall not be favored, but may be granted by a workers' compensation judge upon any terms as are just upon a showing of good cause. When determining a request for continuance, the workers' compensation judge shall take into consideration the complexity of the issues, the diligence of the parties, and the prejudice incurred on the part of any party by reasons of granting or denying a continuance.”

NOTE: Many workers’ compensation judges will allow lien claimant representatives to fully participate at hearings notwithstanding their noncompliance with Rule 10774.5. It is up to the client to decide on a case-by-case basis whether to pursue enforcement of Rule 10774.5 by way of a petition for removal.

PRACTICE POINT: No DWC-1 Claim Form?

by: Clifford D. Sweet, III January 15, 2019

Some clients overlook potential issues which arise when the applicant's attorney has failed to file a DWC-1 Claim Form.

If there is no claim form, then there is no right to a Section 4650(d) automatic penalty. Lab. Code, § 5401 subdivision (d) provides in part: "The claim form shall be filed with the employer prior to the injured employee's entitlement to late payment supplements under subdivision (d) of Section 4650…..”

If there is no claim form, the employee may not seek a Section 4060, 4061 or 4063 QME panel. Lab. Code, § 5401 subdivision (d) also provides in part: "The claim form shall be filed with the employer….. prior to the injured employee's request for a medical evaluation under Section 4060, 4061, or 4062."

If there is no claim form, the employee is not entitled to a Section 5402 presumption of liability. Lab. Code, § 5402 subdivisions (b) provides: “If liability is not rejected within 90 days after the date the claim form is filed under Section 5401, the injury shall be presumed compensable under this division.” (Emphasis added.)

If there is no claim form, the employee is not entitled to Section 5402 medical treatment up to $10,000 prior to denial of the claim. Lab. Code, § 5402 subdivision (c) provides: “Within one working day after an employee files a claim form under Section 5401, the employer shall authorize the provision of all treatment, consistent with Section 5307.27, for the alleged injury and shall continue to provide the treatment until the date that liability for the claim is accepted or rejected. Until the date the claim is accepted or rejected, liability for medical treatment shall be limited to ten thousand dollars ($10,000).” (Emphasis added.)

Congratulations to Robert Heller for his great result on this case:

July 5, 2018

Reliance insured O-Corp, a tech services company, for worker’s compensation. O-Corp contracted with J-Corp to provide a ten year contract doing computer work. Injured Worker, an O-Corp employee, fell while physically at J-Corp and filed a worker’s comp case against O-Corp and Reliance. Four years later, California Insurance Guarantee Association (aka CIGA) took over for Reliance which went bankrupt. CIGA said Hey, J-Corp, you are IW’s special employer because O-Corp placed her to work at J-Corp. Therefore, your insurance carrier should cover her injury! Under the Insurance Code, if there is “other insurance,” CIGA is out.

Went to trial on the issue of whether J-Corp was the IW’s special employer. Three witnesses testified. The trial judge found that there was no “direction and control” over the IW by J-Corp so there was no special employment relationship between the IW and J-Corp. Because there was no special employment, J-Corp’s work comp carrier was home free.

This was a particularly sweet victory because CIGA usually prevails when it goes to trial on the issue of "special employment" and "other insurance".

PBW attends the Sports Group Meeting

January 15, 2019

Pearlman, Brown & Wax is proud of our Sports Law attorneys who attended the Sports Group Meeting on January 11, 2019. Our Sports Law attorneys meet quarterly for a full-day review of case law updates and legal trends as we continue to further enhance our expertise in workers' compensation sports law in California.

Congratulations to Robert Heller for his great result on this case:

July 5, 2018

Reliance insured O-Corp, a tech services company, for worker’s compensation. O-Corp contracted with J-Corp to provide a ten year contract doing computer work. Injured Worker, an O-Corp employee, fell while physically at J-Corp and filed a worker’s comp case against O-Corp and Reliance. Four years later, California Insurance Guarantee Association (aka CIGA) took over for Reliance which went bankrupt. CIGA said Hey, J-Corp, you are IW’s special employer because O-Corp placed her to work at J-Corp. Therefore, your insurance carrier should cover her injury! Under the Insurance Code, if there is “other insurance,” CIGA is out.

Went to trial on the issue of whether J-Corp was the IW’s special employer. Three witnesses testified. The trial judge found that there was no “direction and control” over the IW by J-Corp so there was no special employment relationship between the IW and J-Corp. Because there was no special employment, J-Corp’s work comp carrier was home free.

This was a particularly sweet victory because CIGA usually prevails when it goes to trial on the issue of "special employment" and "other insurance".

WCAB Lacked Jurisdiction

June 29, 2018

Meet Our New Partners

June 15, 2018

We proudly introduce our new partners.

Elliot F. Borska Becomes Workers’ Compensation Administrative Law Judge

November 20, 2017

PBW is pleased to announce that partner Elliot Borska has been appointed a workers’ compensation administrative law judge

Apportionment of Permanent Disability Related to Genetics and Heredity

by: Raymond F. Correio June 13, 2017

Apportionment of Permanent Disability Related to Genetics and Heredity: Is It A Causational Diversionary Red Herring

A Comprehensive Solution for Workers' Compensation and Employment Litigation

by: Forbes Magazine January 18, 2016

Pearlman, Brown & Wax, LLP is featured in the Leaders in Law section of Forbes Magazine's January 18th, 2016 edition.

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