Millbauer & UEF - WCAB Guidance on the Uninsured

Saturday, January 3, 2004 | 0

Attorneys that have had the great misfortune of filing a case against an uninsured employer in the past have had to deal with what seemed like the never ending bureaucratic nightmare of the Uninsured Employers Fund (UEF). In its best permutation, it would seem that both the applicant and the defense attorney would at least be frustrated attempting to secure UEF participation. In its worst encounter, though, including the UEF would result in interminable delay and never ending frustration. Will the frustration end now that the WCAB has called UEF litigation tactics "dilatory" and a "gross contravention of its duties"?

What happened in the case of Milbauer vs. Boostan (68 CCC XXX, 12/18/03) should not have to happen to anyone, but it did, which is why the Board felt compelled to issue some guidelines for the future. It took applicant over 8 years just to get a determination that he had the correct employer, and then UEF objected. Applicant went 8 years without any financial or medical assistance and stiff faced the prospect of further delays in getting relief. The Board finally stepped in and said the legal shenanigans must come to an end.

Milbauer suffered a horrendous injury. The employer was uninsured for comp. Applicant's attorney made extraordinary efforts to secure action against the employer. UEF pretty much sat on the side-lines, appearing at the various hearings on the case but never taking any affirmative action to ensure that the correct employer was joined in the proceedings. Ultimately applicant secured an Award for benefits against what it thought was the correct legal entity, which UEF would have to pay. UEF finally objected and filed for reconsideration late, arguing that the correct employer had not been joined. Worse, though, UEF didn't offer any evidence as to who the correct employer was!

The WCAB could have simply denied UEF's petition as untimely, but brought its own motion to open the case up for reconsideration, so upset was the Board at UEF's actions (or inactions as the Board noted in its opinion).

After chastising UEF, the Board decided that it was a good time to tell everyone, including UEF, what the proper procedure is to ensure the correct employer is joined so as to avoid unnecessary delays in getting benefits to an injured worker. The Board has thus set for specific duties for the UEF because of the unique resources it has available:

Where the Injured Worker is Represented by an Attorney

1) The attorney for the injured worker must first make a "good faith effort" to secure the correct legal identity of the employer which includes contacting UEF for assistance (to take advantage of their database accesses).
2) The attorney should request a priority conference on the issue of employer identity and the UEF should be joined. UEF shall then appear at the conference and "assist the employee and the WCAB in determining the correct legal identity of the employer". If the parties can agree on the employer's identity, then a stipulation regarding that fact should be submitted to the WCJ for approval.
3) If the correct legal identity of the employer cannot be determined at the priority conference then the employee and UEF must come up with a discovery plan to obtain this information, and the WCJ shall continue the conference or conferences, as needed, to allow the employer to be joined into the proceedings. UEF is provisionally ordered to appear continuously and is also ordered to assist the employee obtain the correct identity - all to occur within a reasonable time, not to exceed six months.
4) If the parties are still unable to agree on the correct legal identification of the employer, then the WCJ should either issue a notice of intention to determine the identity based on the evidence thus submitted, or set the matter for trial and thereafter make a formal determination. Even if UEF is not joined as a party to the trial, it will be afforded the same rights as a party to present evidence and conduct cross-examination. UEF can thereafter petition for reconsideration if it doesn't like the result.

Where the Injured Worker is Unrepresented

1) The injured worker may request a status conference on the issue of correct legal identity of the employer.
2) UEF is added to the address record and ordered to appear at the conference so scheduled.
3) At the conference if the injured worker and UEF agree on the correct legal identity, then a stipulation regarding that fact shall be submitted to the WCJ on that fact.
4) If the identity cannot be agreed upon at the conference, then continuances ensue, not to exceed six months, until the correct identity is determined or a factual hearing has occurred as in cases where the employee is represented. In any case, the employee would have to serve the application and the Special Notice of Lawsuit on the employer before UEF could be formally joined and before the statutory requirements for UEF's liability are met.

UEF Disputes Identity If after all that, UEF still disputes the legal identity of the employer, then a conference shall take place (priority if the employee is represented, status if the employee is unrepresented) and if there is no stipulation on that issue, the WCJ may either issue a Notice of Intention based on admitted evidence or set the issue for trial and, thereafter, issue a formal finding to be served on UEF.

The Board in Milbauer served notice to UEF and its attorneys that operating outside of the proscribed procedure will constitute "bad faith", and "they are hereby expressly warned that sanctions and attorney's fees under section 5813 and Rule 10563 may well be imposed against them."

-------------------

The views and opinions expressed by the author are not necessarily those of workcompcentral.com, its editors or management.