More Sanctions for Sloppy and Lazy Lien Claimants

It is no secret to anyone that your humble blogger loves cases where lien claimants get their comeuppance.  Such was the case in the relatively recent panel decision of Kathy Capone v. First Bank & Trust.

There, the case-in-chief had resolved and the issue of a lien was set for lien conference – lien claimant blew off the hearing date and blew the deadline by which to object to the Notice of Intention to Dismiss.  The workers’ compensation Judge ordered the lien dismissed and lien claimant filed a petition for reconsideration, arguing that (1) it didn’t get a call from the defendant on the day of the status conference; (2) the failure to appear was inadvertence; and (3) it is entitled to a hearing on the merits.

Now the comeuppance:

The WCJ initially pointed out that lien claimant’s petition is nothing more than a boiler plate “Points and Authorities” in which the contentions are generally irrelevant to the facts of the case.  As it turns out, the WCJ recently reviewed an almost identical P&A from the same lien claimant.

As to the claim of inadvertence, the WCJ describes this as “cavalier” and notes that the failure to appear is a pattern and recommends the penalty of $1,000.  Furthermore, citing California Code of Regulations section 10240, the WCJ noted that lien claimant could not have appeared by telephone, but even if it could, it should have notified the defendant of its intention not to appear and provided its telephone number.  Defendant has no obligation to spend all day at the Board staring longingly at its phone, wondering why lien claimant is playing hard-to-get.

In response to lien claimant’s petition for Reconsideration, the Workers’ Compensation Appeals Board adopted and incorporated the WCJ’s report, denied the petition, and noted that the WCJ may consider the question of sanctions.

To the handful of lien claimants who read this blog – you need not fear this treatment of your humble blogger’s scathing quips if you don’t waste defendant’s time with failures to appear or showing up to lien conferences without preparation or authority.  If you have just too many cases to keep track of, then (1) hire more people; or (2) take fewer cases.  As a defense attorney, I am not responsible for subsidizing a failed business model.

WCDefenseCA gives a hearty “Huzzah” to the WCJ for an excellent report – this is how the lien abuse of the workers’ compensation system gets pared down.

Using MORE Sanctions to Restrain Lien Claimants

Some time ago, your dedicated and consistent blogger reported on the tactic of using sanctions to restrain lien claimants. After all, if lien claimants want to leverage the cost of litigation to force a settlement, why not turn the tables and leverage the cost of sanctions to knock out baseless liens?

In California’s workers’ compensation system, defense lawyers and applicants’ attorneys agree – liens are not unlike a locust swarm plaguing the system.  The arm movement necessary to swat one only exposes the swatter to more, and all the while they ravage and consume all the green of the land.

It looks like this workers’ compensation lawyer is not just howling into the wind anymore.  In the case of Myra Campos v. Keiro Nursing Home, lien claimant Rift Interpreting filed a lien for interpreter services, but failed to appear at a lien conference and then insisted on proceeding to a lien trial without any apparent evidence to support the validity of its lien.

In fact, it appeared to the workers’ compensation Judge, the Workers’ Compensation Appeals Board, and now appears to your attorney-blogger, that lien claimant expected to use the cost of litigation, rather than the chance of prevailing on the merits, to leverage a settlement.

No doubt, in the past, this very tactic had worked to great success for Rift Interpreting and other lien claimants.  I have had lien claimants pull this stunt before, but to considerably less success than they were hoping for.

The WCJ not only disallowed the lien, but also held that “the activities undertaken by [lien claimant] were egregious and frivolous, warranting sanctions in the amount of $2,500.00 plus the per-capita share of reasonable value of the services rendered by defendant.”

The WCAB denied lien claimant’s petition for reconsideration, noting that lien claimant had not even remotely approached the burden set out in Guitron v. Santa Fe Extruders (2011, en banc), which required interpreter lien claimants to show that (1) that the services provided were reasonably required; (2) that the services were actually provided; (3) that the interpreter was qualified to provide the service; and (4) that the fees charged were reasonable.

Dear readers – don’t feed these lien claimants, even for tiny claims.  I remind you of the story of Three Billy Goats Gruff.  It appearing that the Appeals Board has grown tired of these extortion tactics, now is the time to collectively raise the cost of doing business on lien claimants and cut the cost of doing business in California.

Using Sanctions to Restrain Lien Claimants

A recent writ denied opinion highlights an important tool that is often neglected in curbing the costs of lien negotiation and settlement.  In Escamilla v. WCAB (2011 Cal. Wrk. Comp. Lexis 67; behind a Lexis pay wall), the Workers Compensation Judge’s award of sanctions and costs against a lien claimant and its hearing representative was upheld.

The essential facts are that the lien claimant was forced to wait for the lien hearing to begin, roughly 90 minutes, because the defense attorney was in a trial.  Ultimately the parties settled, including in the settlement all claims to penalties and interest.   A year later, the lien claimant filed a petition for cost and sanctions for that 90 minute wait.  After arriving late for a trial date, requesting and receiving a continuance, and arriving late for the second trial date, the WCJ denied the lien claimant’s petition, while also awarding almost $2,500 in costs to the defense attorney (pursuant to the defense attorney’s Labor Code § 5813 petition, among other penalties.

In this case, the attorney pursued a § 5813 petition and recouped the costs of his billed hours for his client.  But too often the remedy of § 5813 is not invoked.  Lien claimants have a very low operating cost, while defendants have to pay their adjusters and their attorneys.  This is effectively leveraged by lien claimants threatening “scorched earth” against defendants – pay us our Danegeld, even on an unreasonable claim, or we’ll cripple you with attorney fees.

§ 5813 gives defendants a chance to fight back, and to raise the cost of doing business on the lien claimants.  Without § 5813, the operating costs are limited to small amounts of time and boiler plate pleadings used repeatedly.  With § 5813, the lien claimant and its hearing representative suddenly find themselves paying the defendant’s attorney fees.  If used judiciously, § 5813 can stem the flow of unreasonable lien claims and provide some real leverage in negotiating a token settlement.

But, just like peeking inside a van parked by the river to claim the “free candy” promised in spray-paint on the van’s side, § 5813 comes with its own dangers.  A careless and knee-jerk habit of sanction filing will eventually get an attorney or even a defendant on the “ignore” list of the WCJ.

Lien Claimant Sanctioned for $40 Offer of “Compensation” to Applicant

Lien claimants.  As a workers’ compensation defense attorney, it’s always nice to see the workers’ compensation Judges and Workers’ Compensation Appeals Board take notice of wrongful behavior on their parts.  Thus, I bring to your attention the case of Gabriel Sanchez v. Enrichment Enterprises, Inc.  The case-in-chief is not the focus of today’s post.

The lien at issue was that of translating services allegedly provided at five medical appointments.  An interesting twist in the case is that applicant speaks English and apparently appeared in propria persona at one point without the assistance of a translator.  The lien being contested by the attorney for defendant, lien claimant decided to raise the stakes to collect.  And raise the stakes he certainly did.

It appears that Alberto Stambuk, the owner of Logos Language, stands accused of approaching the applicant at a status conference and offering him some sort of compensation if he would tell the WCJ that he needed the services provided by the translator.  In fact, if the applicant is to be believed, he was offered $40.00 and possibly lunch by Mr. Stambuk for his “assistance.”  Instead, lien claimant was sanctioned $2,500.

Your humble blogger is not one to side with applicants, but I can see where Mr. Sanchez is coming from with respect to interpreter services.  Mr. Sanchez probably exerted considerable effort to learn English as a second language and is probably quite proud of being able to communicate in English.  At the same time, there is absolutely no reason to have a total stranger in the room with you and your treating physician “translating” for you.

Ultimately, the sanctions were upheld and the Court of Appeal denied lien claimant’s petition for a writ of review.  Applause is deserved by the WCJ and WCAB for making sure this sort of behavior is detected, processed and punished.  At the same time, the defense was very fortunate in that the applicant appeared to be an honest person who was unwilling to lie to a WCJ for $40 and a meal.  It does not take much stretching of the imagination to picture a lien claimant offering more “compensation” to an applicant less ethical than Mr. Sanchez, and some agreement being reached.

Lien Attorney Sanctioned for Two Years of Delays

The Workers’ Compensation Appeals Board recently affirmed a workers’ compensation Judge’s award of sanctions and costs against an attorney representing lien claimants.  The WCJ had found a pattern of failing to appear or appearing late.

The case is that of Ramona Anaya v. Port Hueneme Unified School District.  The attorney for the lien claimant (recall, dear readers, that your humble blogger does not like to name names) apparently caused six of the eighteen delays in the case, providing various excuses of illness, vacation time, and other excuses.

Under Labor Code section 5813 and Code of Regulations section 10561(b)(1), the WCJ found that the long string of delays, which resulted in a lien trial finally happening on December 16, 2009 after being originally set for November 15, 2007.  That’s right, the delays added up and the lien trial had to wait two years from its original date.

Just so we’re not losing sight of the difficulties experienced by the self-insured employer in this case, the date of injury is January 25, 2002.  This means that for more than 10 years, this file has remained open and required the attention of an adjuster and an attorney to keep it current as it consumed hours, sunlight, desk space and, to some small extent, the good will and sunny disposition of the defense professionals connected with it.  As new files came in, this one lingered and added to the pile.  Two of those years can be attributed to this lien issue.

The WCJ found that, although the attorney appeared to have an excuse for every delay, section 10561 allowed for the imposition of sanctions upon the finding of a pattern of delay and non-appearance, even if justified.

The attorney fired back that the other 12 delays were not caused by her, and that the WCJs had all conspired to punish her and her clients in all of her cases.  The WCAB didn’t really address the conspiracy allegation, simply noting that it was made in the attorney’s briefs.

From what your humble blogger has observed, there is not so much a conspiracy against lien claimants as a widespread frustration with the effect they are consciously and collectively having on the workers’ compensation system.  Even applicants’ attorneys must recognize that money wasted on these liens is money out of their clients’ respective recoveries, and perhaps the age-old tactic of using lien claimants to drive up the costs to the defense of not settling has started to backfire.  After all, even the most useful scorpion eventually stings its master.

As to delays allegedly caused by the defense, the WCAB simply noted that “it is [not] relevant whether defendant caused any of the other continuances because defendant’s behavior is not at issue.”

The sanctions held up, as did the defense’s attorney costs.

Now, before my dear readers shake their heads at the calloused and insensitive writings of their cold-hearted blogger, allow him to say the following in his defense.  Everyone gets sick from time to time, scheduling conflicts arise, and continuances are needed here and there.  They can be frustrating and wasteful, but necessary at times.

But here, we’re looking at two years of delays before a trial finally happened – many of these delays were reported on the date of the hearing when they should have been noticed ahead of time to avoid unnecessary preparation and travel.  Even if these delays were the product of the lien-claimant’s attorney’s bad luck, it seems unreasonable that the defense must continue to suffer the effects of the attorney’s ill fortune.

The defense’s time was wasted.  The WCJ’s time was wasted.  And most of it could have been avoided with proper regard and diligence.