Home > Fraud > Court of Appeal – Defendant Insurer for Stolen Checks

Court of Appeal – Defendant Insurer for Stolen Checks

The Court of Appeal issued its opinion in the case of Barrett Business Services, Inc. v. Workers’ Compensation Appeals Board.  Generally, when there is some sort of authority in workers’ compensation, the applicants’ attorneys and defense lawyers perk our legal ears up and pay attention.  After all, this is a fairly rare thing.

But this case was an example of three levels of missing a point – the workers’ compensation Judge, the Workers’ Compensation Appeals Board, and the Court of Appeal all missed something – the unequal treatment of applicants and defendants.

To summarize the case – applicant filed a claim for various injuries sustained while employed by Barrett Business Services, Inc. and he moved several times during the life of the case.  When the matter came to settlement by way of compromise and release, the defense sent to applicant’s attorney the settlement documents for review having placed an old address on the form.

The applicant’s attorney, after supposedly reviewing the documents, signed for applicant in accordance with the power of attorney granted to him, and walked the documents through.  Defendant sent applicant’s attorney a check for $3,000, and to applicant’s old address sent a check for $17,000.  Someone else found and cashed the check with a cash-checking service while pretending (apparently applicant’s cousin was living at his old address).

Applicant complained that he never got his money – and now the question arises: who is responsible for the $17,000?

Relying on the uniform commercial code, the Court of Appeal affirmed the WCJ and the WCAB in finding that defendant must re-issue a check for $17,000 and seek a remedy from the cash-checking service that allowed the money to be pilfered.

Now, your frustrated blogger understands the position that defendant is not blameless – sure, the wrong address was used and defendant had notice of applicant’s new address.  But applicant’s attorney was on notice too – after all, it is only because applicant’s attorney noticed the new address to defendant that defendant was on notice.

In other words, there were mistakes made on both sides, but it is only defendant that bears the cost of these mistakes.  It was applicant’s attorney’s job to make sure the documents were correct before signing them, and yet he gets to keep his $3,000.

The proper course of action in this case would have been to order the applicant’s attorney to send applicant a check for $3,000.  Then applicant can enjoy a $14,000 check from the defense and a $3,000 check from his attorney.  Now, applicant’s attorney can join the defense in seeking compensation from the check-cashing service.

There was a mistake made by both sides in this case, and for some reason the defense must again bear all the costs.

Categories: Fraud
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