Friday, November 16, 2012

CA Lien Claimants: Are You Surprised?

The California Workers' Compensation Appeals Board (WCAB) is short of commissioners and staff, so it has not spent time in the last year going through the extraordinary judicial process of releasing citable case law where all commissioners weigh in on a case - that takes a lot of time, energy, and commissioners.

This week, though, the WCAB exercised its judicial powers and not only made case law by which the rest of the litigating interests in the system can follow, but took the opportunity to highlight why lien claimants have brought themselves to such high contempt in the community and why so much of SB 863 is all about constricting lien claim activity.

In fact the WCAB acknowledged that its decision in Torres v. AJC Sandblasting et al., Nos. ADJ909554 and ADJ1856854, did not establish any new principles of law, but said it felt it necessary to act en banc as a warning to all those lien claimants who "persist in disregarding existing law as to their burden of proof and repeatedly proceed to trial on lien claims that are so lacking in evidentiary support and/or presented with such a total disregard of existing law as to be frivolous."

Tito Torres allegedly suffered to his spine and lower extremities in 2002 and 2003. His employer's insurance carrier, Zurich North America, settled his claims in 2005 by compromise and release that listed various outstanding liens and provided for their disposition. Lien claimant Unitech was not included in this list..

Over four years later, Green Lien Collections filed a lien claim on behalf of Unitech.

At a lien hearing, Zurich disputed the reasonableness and necessity of the services Unitech allegedly offered to Torres and contended that the amounts billed by Unitech exceeded the Official Medical Fee Schedule.

The only evidence offered by Unitech in support of its lien was an unsigned "Health Insurance Claim Form" purportedly sent by Unitech to Zurich on July 15, 2003.

This form listed dates of service, procedure codes and treatment charges totaling $5,150 in addition to penalties of $704.03 and interest of $3,018.01 for a total lien amount of $8,904.04.

The workers' compensation judge (WCJ) determined that there was no factual or legal basis to proceed to a trial on the lien and issued a notice of intent to sanction Unitech $2,500. Unitech did not respond to the notice.

The WCJ thereafter ordered that Unitech take nothing on its lien and said that the company's decision to assert a claim supported only by an insurance form was a frivolous waste of the court's time. He directed Unitech to pay a $750 sanction and Zurich's attorney fees.

Unitech filed a timely petition for reconsideration. Unitech argued that putting its bill into evidence established its entitlement to payment and that the burden of proof was on Zurich to refute the validity of its claim. Since Zurich did not submit any evidence to rebut the reasonableness and necessity of Unitech's services, Unitech insisted that it was entitled to have its lien awarded and that the award of sanctions should be rescinded.

The WCAB not only said that Green Lien Collections/Unitech needed a lesson in evidence and judicial procedure, but disagreed with the WCJ's order of sanctions and attorney fees. Apparently the WCAB didn't feel the WCJ went far enough, remanding the case back to him to consider whether a) $750 in sanctions was adequate, b) whether the hearing representative (identified in the opinion as Suzi Gonzalez, who appeared at all of the hearings on the case) and the collection agency (Green Liens Collections) should also be held in contempt and sanctioned individually, joint or severally.

That lien claimants/bill collectors in California workers' compensation feel as though they are being unfairly targeted with recent legislation and other unwanted attention is simply a reflection that this group of people not only create unwanted friction within the system (FOUR YEARS TO SEEK PAYMENT ON AN ALLEGED OBLIGATION?!) but have not professional standards of quality whatsoever.

This case is representative of what has been an issue in California for some time - collections activities that resort to simple bullying without any substance whatsoever.

We sell education at WorkCompCentral. I see, hear, and read about the stories of our students. It is embarrassing to me how many times hearing representatives, and collections agents, for lien claimants simply have NO idea of what the law is. No idea. These people are either too lazy, too cheap, or just plain too stupid to figure it out.

It takes a massive restructuring of the law, SB 863, and big publicized sanction cases, to bring some order to the system. There certainly are some very professional lien claimant representatives and collection agents. They know what they're doing and they will survive the reform because they stay educated and practice to professional standards.

The rest of the collections population needs to understand: it's not business as usual any more.

I commend WCJ Craig Glass, the trial judge in this case, and the WCAB commissioners, for taking a stand, doing their jobs and restoring order to the court room and the system.

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