This article will provide a brief summary of the environment for lien claims post SB 863.
SB 863 has changed the landscape regarding the litigation of liens. Even before its scheduled enactment on January 1st 2013, the effects of the bill were noted with a flood of lien claimants filing DOR’s in an attempt to avoid the $100 appearance fee authorized by Labor Code Section § 4903.06 and 8 Cal Code Regs § 10208(a). A $150 lien filing fee for all liens filed after January 1, 2013 was included in Labor Code Section § 4903.05. This has caused quite a bit of consternation among lien claimants, and subsequent attempts to skirt these regulations have been rebuffed by the WCAB.
We have witnessed multiple rulings which are signaling a shift in the WCAB’s handling of liens, providing additional teeth to the legislation enacted by SB 863. The Board has consistently found that lien claimants who do not pay the appearance fees timely will have their lien claims will have their liens dismissed with prejudice 1. Simultaneously, the Board has indicated an increased willingness to issue sanctions for lien claimants that fail to meet their burden of proof 2, as well as an increased willingness to sanction or even suspend non-attorney lien claimant hearing representatives who commit conduct that would be considered sanctionable if committed by an attorney 3.
Here is a quick summary of the rulings from relevant cases:
Jose Pedro Soto, and Sharon Meyer: Both cases involve the requirement for lien claimants to pay activation fees under § 10208(a). In Soto, the judge dismissed a multitude of liens when the lien claimants had not paid the activation fee prior to the appearance in court. He ruled that the fees must be paid prior to the appearance and the lien claimant must present evidence of payment of the activation or appearance fee at the hearing. The WCAB has agreed with this position. Therefore, lien claimants can no longer wait to pay the fee until after the hearing begins.
Meyer involved similar facts to Soto. However, the Meyer case goes a step further in finding that a lien will be dismissed with prejudice at the hearing and subsequent payment cannot cure this defect. The lien claimant in question attempted to make an equitable argument in their Petition for Reconsideration, stating that there was no substantial harm to defendants even though the appearance fee wasn’t paid until six days after the hearing. The WCAB found that lien claimant cannot subsequently pay the fee after the appearance.
Eliezer Figueroa v. Bc Doering Co: It is not often the WCAB designates a significant panel decision, but Figueroa appears to be the final word on lien fees. In Summary:
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- The lien activation fee must be paid prior to the commencement of a lien conference, which is the time that the conference is scheduled to begin, not the time when the case is actually called;
- If the lien claimant fails to pay the lien activation fee prior to the commencement of a lien conference and/or fails to provide proof of payment at the conference, its lien must be dismissed with prejudice;
- A breach of the defendant’s duty to serve required documents or to engage in settlement negotiations does not excuse a lien claimant’s obligation to pay the lien activation fee; and
- A Notice of Intent to dismiss issued by the WCAB is not required prior to dismissing a lien with prejudice for failure to pay the lien activation fee or failure to present proof of payment of the lien activation fee at a lien conference.
The Board has also signaled an increased willingness to sanction lien claimants who set a matter for trial without enough evidence to meet the burden of proof. Relevant cases include the Torres and Sanchez matters.
Tito Torres: This en banc decision goes into detail regarding the lien claimant’s burden of proof. It states that claimants who set a matter for trial must be able to meet their minimum burden of proof with the evidence they provide. Failure to do so is considered bad faith and as such is sanctionable conduct.
Lorenza Lozano Sanchez: This case involved sanctions for a lien claimant that set a matter for trial with medical evidence that couldn’t possibly meet the minimum burden of proof. The lien claimant offered nothing but a medical bill, with no supporting evidence for the charges or that the costs were incurred as part of reasonable medical care.
Finally, the board has placed non-attorney representatives on a more equal footing with attorney representatives with regards to conduct that would be considered sanctionable if performed by an attorney. In Re Escamilla shows us that the board would be willing to suspend a non-attorney’s privilege to appear in cases where the lien claimant hearing commits actions that would be considered sanctionable if committed by an attorney.
These cases demonstrate that the WCAB has shown an increased willingness to hold lien claimants feet to the fire regarding issues such as lien appearance fees, lien claimant’s burden of proof issues, and hearing representative’s needs to hold themselves to a higher standard of conduct than would be imposed on an average non-attorney. Figueroa makes it very clear that lien claimants will not be allowed to avoid paying appearance fees. If the lien claimant doesn’t provide enough evidence to support the lien itself or fails to appear or pay the filing fee, push for a dismissal or litigate the matter. Between SB 863 and recent case law, the days where lien claimants can show up late with a bill and no supporting evidence of a lien are coming to an end. The old standard of offering 10% in order to avoid a costly lien trial no longer applies if lien claimants can potentially have costs imposed against them for setting a matter for trial without enough evidence to meet the burden of proof.
Alec T. Bradford is a Senior Partner and Managing Attorney of B&B’s San Diego office. Mr. Bradford has worked in the defense of workers’ compensation since becoming an attorney in 2010. He can be reached at abradford@bradfordbarthel.com or (619) 641-7942.
1 Jose Pedro Soto v. Marathon Industries,Inc. (2013) ADJ7407927;ADJ 7407928
Sharon Meyer v. Target Corporation (2013) ADJ4146782 (SBR0339338)
Eliezer Figueroa v. BC Doering Co.; Employer’s Compensation Insurance (2013) ADJ3274228 (AHM 0120365)
2 Tito Torres v. AJC Sandblasting and Zurich North America (2012) 77 Cal. Comp Cases 1338
Lorenza Lozano Sanchez v. In-n-out; Cannon Cochran Irvine (2013) ADJ3570671
3 In Re: Daniel Escamilla (2013) Misc. No. 254
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