WCAB Issues 2 (Sort of) New Decisions on Lien Activation Fees
Thursday, May 2, 2013 | 0
On April 25, the California Workers' Compensation Appeals Board issued one new and one “upgraded” decision regarding payment of lien activation fees under Labor Code § 4903.06.
On April 5, the WCAB had issued a significant panel decision in Figueroa v B.C. Doering Co.; Employers Compensation Insurance Co., the board ruled lien-filing fees must be paid prior to the start of a lien conference or the lien is subject to mandatory dismissal. In a decision issued today, the WCAB granted reconsideration on its own motion, rescinded the initial significant panel decision and reissued essentially the same decision with the identical holding as an en banc decision of the WCAB.
The difference in the level of authority is not window dressing. Significant panel decisions are considered persuasive but not binding on trial judges. An en banc decision of the WCAB however is binding on all trial judges and even the WCAB and therefore must be followed in deciding cases at a level lower than the Appellate Courts, hence the reference to “upgrading” the decision above. With the issuance of an en banc decision, trial judges are not allowed the leeway to issue a decision that is contradictory to the board’s opinion.
In a second move the WCAB has issued only its second significant panel decision on an issue of substantive law in the past five years (although it may actually now be the first since the above-referenced Figueroa has now been rescinded – it is all too confusing on that aspect). However, the decision in Mendez v Le Chef Bakery; Pacific Compensation Insurance Co., is not confusing at all and addresses another aspect of the lien activation fee statutory scheme. In this case, the lien claimant, Dr. Kevin Fatolomi, had filed a lien prior to 1/1/13, and therefore no lien activation or filing fee was required. A Declaration of Readiness to Proceed for a lien conference was also filed in April 2012 with a lien conference ultimately being held in July 2012. Unable to reach agreement, the matter was continued to a lien trial on Jan. 3, 2013.
At trial, defendant argued the lien activation fee was required for the lien claimant to proceed and not having been paid, the lien should be dismissed. The workers' compensation judge agreed and dismissed the lien on that basis. Dr. Fatolomi appealed the dismissal and the WCAB granted reconsideration for further study. The board noted this raises a different issue than what was determined in Figueroa:
“Of course, payment of a lien activation fee was not required with a DOR filed prior to January 1, 2013 or at a lien conference held prior to January 1, 2013. This is because section 4903.06 was not effective until that date. Therefore, Dr. Fatolomi was not required to pay a lien activation fee based on his April 30, 2012 DOR or based on the June 14 or July 20, 2012 lien conferences. However, because section 4903.06 applies to all cases that were not final as of its January 1, 2013 effective date (Stats. 2012, ch. 363, § 84), we emphasize that if Dr. Fatolomi’s pre-2013 DOR had triggered a lien conference (rather than a lien trial) in 2013, he would have been required to pay the activation fee prior to the lien conference, as discussed above.”
Given this different set of facts, the WCAB arrived at a different result based on the specific statutory language:
“The issue is thus whether Dr. Fatolomi was required to pay the lien activation based on the January 3, 2013 lien trial. We hold that he was not required to do so.
Once again, section 4903.06(a)(4) expressly applies only to “lien claimants that did not file the declaration of readiness to proceed and that remain a lien claimant of record at the time of a lien conference” and expressly states only that such lien claimants “shall submit proof of payment of the activation fee at the lien conference.” (Italics added.) Nowhere in section 4903.06 is the phrase “lien trial” used.
The board noted rules of statutory interpretation requires it to presume the Legislature was aware of different terms when it drafted statutory law:
Under the WCAB Rules, there is a clear and unambiguous distinction between a “lien conference” and a “lien trial” and, in interpreting section 4903.06, we must presume that the Legislature was aware of this distinction. (Vera v. Workers’ Comp. Appeals Bd. (2007) 154 Cal.App.4th 996, 1007 [72 Cal.Comp.Cases 1115] [it is presumed that, when enacting legislation, the Legislature was aware of relevant regulations]; see also Mountain Lion Foundation v. Fish & Game Com. (1997) 16 Cal.4th 105, 129.) WCAB Rule 10301(u) provides: “‘Lien conference’ means a proceeding held for the purpose of assisting the parties in resolving disputed lien claims pursuant to Labor Code section 4903 or 4903.1 or, if the dispute cannot be revolved, to frame the issues and stipulations in preparation for a lien trial.” (Cal. Code Regs., tit. 8, § 10301(u).).
"‘Trial’ means a proceeding set for the purpose of receiving evidence.” (Cal. Code Regs., tit. 8, § 10301(u).) "At a 'trial,' the evidence that is actually being offered and admitted is listed and identified and any testimony presented is transcribed and summarized." (Lab. Code, §§ 5313, 5700, 5701, 5703, 5704, 5708; Cal. Code Regs., tit. 8, §§ 10566, 10580.)
The WCAB also took note of the fact that the time frame for lien claimants to avail themselves of delaying in filing activation fees was coming to an end:
“We observe, however, that section 4903.06(a)(5) provides: 'Any lien filed pursuant to subdivision (b) of Section 4903 prior to January 1, 2013, and any cost that was filed as a lien prior to January 1, 2013, for which the filing fee or lien activation fee has not been paid by January 1, 2014, is dismissed by operation of law.'” (See also Lab. Code, § 4903.06(a)(1) [“The lien claimant shall pay a lien activation fee of one hundred dollars ($100) to the Division of Workers’ Compensation on or before January 1, 2014.”].) "Therefore, if a lien subject to the lien activation fee is not resolved or withdrawn by January 1, 2014, the lien activation fee must be paid by that date, or the lien will be dismissed by operation of law.”
Comments and Conclusions
This case is going to have very limited application as it only applies to lien trials set after 1/1/13 and before 1/1/14, where there was no lien conference after 1/1/13. By this time virtually every case where that could have happened has already gone to trial. The board’s interpretation of the filing-fee requirements being only required at a lien conference has been the discussion of groups considering a “clean up” bill after SB 863. However it seems very unlikely that anyone will be willing to use up “political capital” to amend the Labor Code to address this issue when the issue will be gone in another seven months or so.
We should also tuck back in the corners of our mind for later usage the final quote from the WCAB above. Even cases where there is a lien trial but no final decision as of 1/1/14 will be subject to the lien activation fee under section 4903.06(a)(1). If not paid prior to a decision becoming final, the lien will be subject to mandatory dismissal. It is my opinion even if the WCAB has issued an order on the lien and awarded benefits, as long as the award has not become final, the lien will still be subject to the activation fee and subject to dismissal after 1/1/14. This involves the Rule of Finality of Decisions that was so important in determining if the, then new, rules on apportionment under SB 899 would apply to existing cases.
Under the rules determining the finality of decisions, a decision is only final when the time for any appeal of the decision to the next level has not run where that appeal ultimately is filed. If however no appeal is filed, the decision becomes final when issued. Therefore if a decision comes out awarding a lien in a Mendez situation on December 15, 2013, and a Petition for Reconsideration is timely filed on 1/4/14, the decision is not final until the Petition is determined. If the fee has not been paid on 1/1/14, the lien is to be dismissed with prejudice. However if the award is not appealed, it becomes final with issuance (12/15/13); the lien is no longer a lien but an awarded benefit and the activation fee need not be paid.
It is not likely that we will see many of these situations, but even existing decisions awarding liens where the lien fee has not been paid because the award was prior to 1/1/13, can still be on appeal and, if pending on 1/1/14, the activation fee will come into play. Indeed if the defendant in Mendez were to file a Petition for Writ of Review; which was still pending on 1/1/14 and no activation fee was paid, the lien should be subject to dismissal. Of course if the lien claimant files the $100 fee, the lien will continue to be valid.
Copies of the new decision in Figueroa and the Mendez decision are attached hereto and also a link to the cases is embedded in the file names above.
Richard M. "Jake" Jacobsmeyer is a founding partner of the Shaw, Jacobsmeyer, Crain & Claffey workers' compensation defense firm in Oakland.
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