Tensions Between Attorneys, Lien Claimant Representatives Symptom of Larger Problem

Tuesday, August 1, 2017 | 4

High-profile provider fraud arrests and new laws that place greater restrictions on filing liens in California's workers' compensation system may be taking a toll on relationships among the professionals who appear before the Workers' Compensation Appeals Board.

Hearing representative Dan Escamilla on Friday filed a petition seeking sanctions against defense attorney Zareh Zatikyan of Tobin Lucks for alleged harassment. The petition accuses Zatikyan of using his cellphone to take a video of Escamilla's colleague, Zoila Webster, while she spoke on the telephone with a supervisor.

Escamilla said in an interview that his petition is a symptom of the growing tension between courtroom adversaries. He said that every time word gets out that another provider allegedly bilked millions from California's workers' compensation system, when lawmakers pass another law to rein in liens, or another good doctor flees the system and leaves a shiftier doctor in his place, the atmosphere in the courtroom during lien proceedings grows a bit more strained.

"It's a tough business for lien representatives and lien attorneys," Escamilla said. "I think the defense bar has a very dim attitude toward us, and a lot of us are viewed as kind of unwelcome players in the whole industry. And the level of respect is commensurate with their dim view of us."

Escamilla, a shareholder with the Legal Service Bureau in Santa Ana, said he's working on another petition for sanctions against an attorney who made him wait two hours in a courtroom to start proceedings that could have taken 20 minutes. 

A colleague from another firm, the Rocklin-based Westshore Medical Billing and Lien Management, said a recent email she received from a defense attorney threatening costs and sanctions if her client did not withdraw his liens represents a situation that "happens all the time."

Igor Kleyman, an associate attorney at the defense firm Sacks & Zolonz who once worked as a lien attorney himself, said it's more complicated than that.

"There may be some feelings that liens are a drain on the system, that this is a waste of time. If there are delays, that could create some resentment. But for the most part, I think it would be a false statement to say there's a culture within the boards that there's no respect owed to hearing representatives," Kleyman said. "When you go to the board, my experience is that you have professional decorum.

"It's a small field, and you're going to be dealing with the same people over and over again," he continued. "I think that prevents you from treating every lien claimant as a personal attack against you or your client. On this day, the lien claimant may be trying to collect on a bill that you see as completely fraudulent, but the next day, you may be dealing with the same lien claimant, and they may have the upper hand, and you're going to have to work with them."

He said that it's easy for Escamilla, who wasn't at the June 28 lien proceeding, to say that the attorney's actions reflect a "culture of disrespect." But frustration during lien proceedings often mounts for perfectly legitimate reasons. 

When defense attorneys have evidence that a lien does not need to be satisfied, and that evidence is ignored while the hearing representative pushes for further proceedings, that can irk the attorney, Kleyman said. Compounding the frustration is the fact that the defense attorney has no proper place to direct his annoyance, given the fact that most hearing representatives are answering to their bosses, who are "looking at it as a numbers game" and directing the representative to pursue the lien at all costs. 

The representatives get frustrated, too, Escamilla said. He can understand defense attorneys' frustration with the lien process, given its historical ties to provider fraud. But many liens are legitimate, and the system's pushback against them — coupled with delayed, denied and reduced payments — causes many good doctors to leave the system. 

Those who are left have to fight in court to prove that their liens are legitimate, and they don't want to accept "nuisance-value settlements" or reduced settlements that usually bring in about 10% of the originally requested amount.

Employers and carriers, on the other hand, want the liens dismissed or reduced.

Escamilla and his colleague, Lori Milas, say they'll play hardball to get what they want. Then the hearing representative will file a petition for sanctions, accusing the attorney of acting in bad faith, and the attorney will file a cross-petition accusing the hearing representative of the same thing.

Meanwhile, Escamilla and Kleyman both say, most judges couldn't care less about the whole affair.

"In a lot of these cases, both parties are sanctioned because the court doesn't want to deal with our complaints," Escamilla said. 

"The judges don't want to deal with this. They don't have time," Kleyman said. "When you've got a calendar of 30 conferences, you're not going to have time to go on an issue-by-issue analysis with every lien."

California has attempted to rein in the number of liens in the system in recent years. The state implemented a $100 activation fee on liens filed before Jan. 1, 2013, and a $150 filing fee for all liens filed after that date. The fees were challenged in court but ultimately upheld.

The state also passed a bill, SB 1160, that blocks providers from collecting on liens if they are charged with medical or insurance fraud. That requirement, which became law as Labor Code Section 4615, has also been challenged in court. Last month, U.S. District Judge George Wu issued a tentative decision indicating he is "inclined" to prohibit enforcement of the lien-stay provision. 

Wu cited fears that the statute "affords no due process for lien holders." He will hold another hearing Aug. 24 before he makes a final decision about whether to issue an injunction that would forbid Division of Workers' Compensation from staying liens until the case is resolved.

In the meantime, Escamilla's petition for sanctions will move forward at the WCAB. He is asking for legal costs of $750 and punitive sanctions of $2,500 against Zatkiyan, who works in Tobin Lucks' Los Angeles office.

"The act of videotaping Ms. Webster at the calendar window was a culmination of the unprofessional conduct exhibited by Zatikyan throughout the course of these proceedings," the petition alleges.

Zatikyan could not be reached for comment on Monday.

Escamilla himself has previously been on the receiving end of a petition for sanctions. In 2013, the WCAB ruled en banc to suspend him from its proceedings for 90 days for disregarding its rules and regulations, resulting in sanctions issued against him on 11 occasions.

CORRECTION: An earlier version of this story incorrectly stated Daniel Escamilla's position with the Legal Services Bureau.