ADJ7447035 · May 20, 2024

The WCJ found lien claimant engaged in improper conduct circumventing defendant's internal processes, resulting in unjust enrichment; the WCAB agreed and affirmed restitution was warranted.

From the decision · page 6unjust enrichment, where it circumvented defendant's typical processes for handling disputed lien claims. Specifically, the WCJ found that lien claimant intentionally bypassed defendant's internal procedures by demanding payment from its medical review department, rather than its claims department, and that lien claimant knew or should have known that the resulting payment in full was made in error, particularly where the bill amount was still being litigated.

The WCJ found lien claimant willfully failed to comply with court orders and engaged in bad faith tactics causing delays; the WCAB affirmed sanctions and costs were justified.

From the decision · page 10Here, the WCJ found that sanctions should issue as a result of lien claimant's willful failure to comply with the court's May 6, 2015 Findings and Order requiring it to forward all documentation showing the value of its services for IBR for roughly three years.

Lien claimant circumvented defendant's routine procedures by demanding payment from medical review department instead of claims department, resulting in erroneous full payment while bill was disputed.

Favours Defendant prevailed

This improper conduct led to unjust enrichment and supported restitution order.

From the decision · page 11to prolonged noncompliance with a court order, lien claimant circumvented defendant's routine procedures for managing disputed claims by demanding payment from its medical review department, rather than its claims department; that lien claimant knew or should have known that this was a manipulative tactic used to obtain overpayments from defendant; and that full payment of its bill was made in error, given that the payment amount was in the process of being litigated. These tactics not only created confusion for defendant internally, but also clearly motivated defendant to submit additional filings, such as its petition for costs and sanctions for bad faith tactics and its petition for reimbursement, which cost it time and money. Lastly, lien claimant has failed to establish any good faith basis or reasonable justification for its actions.

Lien claimant willfully failed to comply with court's May 6, 2015 order to provide documentation to bill review expert for nearly three years.

Favours Defendant prevailed

This noncompliance justified sanctions and costs under Labor Code section 5813 and WCAB Rule 10421.

From the decision · page 10documents until September 15, 2016 and March 12, 2018, and that these documents still lacked information necessary to fully analyze the costs of the services rendered. (Transcript of Proceedings, September 23, 2019, pp. 25-27.) Thus, the record supports the WCJ's finding that lien claimant violated the court's May 6, 2015 Findings and Order, which is a sanctionable offense under section 5813 and WCAB Rule 10421(b)(4).

Labor Code section 5813

Applied to lien claimant's bad faith conduct and failure to comply with court orders.

WCAB Rule 10421

WCAB Rule 10421 provides for sanctions for failure to comply with WCAB orders, including discovery orders, unless excused by mistake or excusable neglect.

Applied to lien claimant's failure to comply with May 6, 2015 Findings and Order.

From the decision · page 9(4) Failing to comply with...any award or order of the Workers' Compensation Appeals Board, including an order of discovery, which is not pending on reconsideration, removal or appellate review and which is not subject to a timely petition for reconsideration, removal or appellate review, unless that failure results from mistake, inadvertence, surprise or excusable neglect.

Credible testimony of expert claims examiner Marcos Adrian Ferrando about lien claimant's improper conduct circumventing defendant's processes

From the decision · page 7Moreover, the evidence shows that the method of payment in this case was anything but "business as usual" between the parties. As explained by the WCJ, according to the credible testimony of the expert claims examiner assigned to the case, Marcos Adrian Ferrando, lien

Testimony that lien claimant did not provide required documentation to Stelzner and Kyle until much later than ordered, lacking necessary information

From the decision · page 10documents until September 15, 2016 and March 12, 2018, and that these documents still lacked information necessary to fully analyze the costs of the services rendered. (Transcript of Proceedings, September 23, 2019, pp. 25-27.) Thus, the record supports the WCJ's finding that lien claimant violated the court's May 6, 2015 Findings and Order, which is a sanctionable offense under section 5813 and WCAB Rule 10421(b)(4).