WCAB Issues Notice of Intent to Suspend Lien Claimant

Friday, August 28, 2015 | 1

The California Workers' Compensation Appeals Board, sitting en banc, on Thursday issued notice that it intends to suspend the privilege of a lien claimant and its hearing representative from appearing before any administrative law judge for 90 days.

Professional Lien Services and its representative, Mike Traw, drew the ire of a judge two years ago for "bad faith and frivolous conduct" in pursuing a trial on the issues of penalty and interest when it did not offer evidence at the trial adequate to meet its initial burden of proof, according to the WCAB decision.

The judge sanctioned the company $1,000 and ordered it to pay a fee award to the defendant in the amount of $2,355, within 20 days.

After the 20-day deadline had come and gone, WCAB Deputy Commissioner Rick Dietrich sent PLS a letter demanding payment.

Traw responded by letter, saying the company believed payment did not need to be made “until all our legal remedies are exhausted.” He also stated PLS had petitioned for reconsideration of the sanction order.

Dietrich replied that the WCAB had no record of a petition being filed and he reiterated the demand for payment.

PLS never responded to the second letter from Dietrich, nor did it respond to the defendant's repeated requests for payment.

Since payment still has not been made, the WCAB on Thursday said it appeared PLS and Traw were willfully disobeying the 2013 sanction order.

"The failure to comply with an order or regulation of the WCAB, including an order to pay a sanction, is an interference with the judicial process that provides good cause for suspending or removing the privilege of appearing before the WCAB," the board said.

Accordingly, the WCAB said it intended to exercise its authority under Labor Code Section 4907(a)(2) to suspend the company and Traw from making appearances at any board hearing office for 90 days, unless they could show good cause for the board to relent.

If payment is still not made before the 90 days is up, the board said it would maintain the suspensions until the sanction order is satisfied.

Business records show PLS was established in 2007 and is based in Covina. Phone calls to the number listed were not returned Thursday afternoon.

Reid L. Steinfeld, general counsel for the Grant & Weber collections company, said based on his reading of the en banc decision, this was "a straightforward situation." He said the WCAB's decision was not surprising.

"I do not know why PLS was seeking penalty and interest, and I really can't speak to whether PLS did act in bad faith," he said, but "it is apparent that they did something to trouble the court and then they failed to follow through by either paying the money or seeking reconsideration."

Under the circumstances presented, "I don't see how anyone can argue with this result," Steinfeld said.

He added that he believed the board was "trying to send a clear message to all litigants that if you do not follow the rules or follow through based upon a court order there will be consequences."

Stanley B. Johnson, a lien claim representative and president of the California Lien
Professionals Association, agreed.

Once a sanctions order becomes final, "whether the representative was fairly sanctioned is no longer the question," he said. "You have to comply, otherwise suffer the consequences described in Labor Code Section 4907."

What concerned him, Johnson said, was that "it seems that when it comes to lien issues, the past few years, we have only seen en banc decisions against lien claimants." He said he's seen other cases involving liens which he thought had been worthy of en banc treatment, but he has not seen the full board address any disputes that resulted in favorable outcomes for lien claimants.

Michael Land, the owner of Elite Lien Services, said he also shares the impression that the "entire industry is very anti-lien claimant and lien rep right now."

This case, he said, is the first he has heard of anyone getting suspended since the WCAB first flexed its Section 4907 muscle by suspending Daniel Escamilla, a hearing representative for the Legal Service Bureau, two years ago.

Escamilla drew a 90-day suspension for having repeatedly violated board regulations, misrepresented facts and filed frivolous petitions, wasting the time and resources of the administrative courts and other parties, in 11 separate cases between 2003 and 2013, according to the board.

Although Escamilla apparently had a long history of run-ins with the board, Land said it wasn't shocking to him that the board wanted to suspend PLS too, since the fact remained that it hadn't paid the sanction order.

Thus, he said, the decision wasn't especially worrisome to him, and the lesson he said lien claimants should take from it is simply "play by the rules."

To read the board's decision, click here.