Case BriefPermanant Disability“All in all it was just a Brick in the Wall” – Who Needs Settlements Any Way

February 20, 20210

While we understand the need for judges to review settlements, the powers the Board has to weigh-in on the adequacy of a settlement appears to be becoming more elaborate via the virtual reality of reviewing settlement documents.

In Atkins v. Santa Barbara Metropolitan Transit District 2020 Cal. Wrk. Comp. P.D. LEXIS 366, the WCAB rescinded the WCJ’s Joint Order Approving Compromise & Release (OACR), finding good cause to set aside the OACR, where the parties entered into a C&R agreement to resolve the issues of injury AOE/COE, temporary disability, permanent disability, and future medical treatment for the sum of $17,500.00.

The WCAB found that the medical evidence in this case did not support a finding that the settlement amount was adequate, when the reporting of the orthopedic panel qualified medical evaluator revealed the possibility of right shoulder surgery, which could result in periods of temporary disability and/or permanent disability. The PQME report also did not address the applicant’s permanent disability for either shoulder.

Consequently, it was unclear from the record whether applicant had permanent disability resulting from his injuries, and, if so, the value of any indemnity owed for such disability. Since the settlement amount did not adequately account for potential costs of indemnity or future medical treatment posed by applicant’s claims, the OACR was set aside.

Adequacy

Per CCR 10700(b), the WCAB is required to inquire into the adequacy of all compromise and release agreements and also gives discretion to set the matter for a hearing to take evidence when necessary to determine whether the agreement should be approved. Further, per Labor Code Section 5001, no release of liability or compromise agreement is valid unless it is approved by the appeals board or referee.

If compensability is not disputed, a C&R will be considered adequate and must be approved if the settlement is properly executed and the amount of the settlement includes consideration for the following:

  1. Permanent and temporary disability is reasonably within the range of evidence based on the medical reports submitted;
  1. Medical treatment, when appropriate, based on a reasonable estimate of future medical expenses; and
  2. Any other issues included in the settlement, such as penalties or the right to reopen, in a reasonable amount.

Prerequisites for Setting Case for Adequacy

WCJ are instructed that routinely setting hearings on adequacy of C&Rs is not an appropriate alternative to careful review of the materials submitted with the settlement. However, if a WCJ concludes that a settlement submitted by mail or delivered on a walk-through basis might be inadequate, the judge must give notice to the parties of the reasons for the apparent inadequacy by serving them with an order suspending that identifies a substantial issue. Such an issue regarding the adequacy of a settlement, in light of the documentary evidence provided, might be:

  1. The amount paid in the C&R for permanent disability is not reasonably within the range of the medical evidence provided.
  2. The amount paid in the C&R for medical treatment is not reasonably within the range of the medical evidence provided.
  3. The period of temporary disability provided for in the settlement is outside the range of the medical evidence provided or cannot be verified.
  4. Lien claims have been left unresolved, and no good-faith effort to resolve them has been shown.
  5. The medical evidence provided is insufficiently developed on its face, making it impossible to define the range of evidence.
  6. In pro per cases only:
    1. The documentary evidence provided does not demonstrate that the defendant has provided the applicant with required notices, when relevant.
    2. The indemnity rate is less than maximum and either inconsistent with the earnings information provided or cannot be verified for a lack of earnings information.
  7. The settlement document has not been served pursuant to CCR 10702.
  8. Another issue of similar substantiality is identified that requires correction and/or consultation with the parties.

The parties must be given 30 days within which to address the problems identified by the WCJ and the judge may ask for additional medical examinations, diagnostic testing, or a supplemental report from an evaluator to address specific issues.   If the issues identified in the order suspending are not satisfactorily addressed by the parties within the specified time, the WCJ may set the case for a status conference on the issue of adequacy.

In conclusion, in pre-pandemic days, a WCJ would be presented with the settlement documents at the conference calendar, at trial, or through mail which would be “tasked” to the judge by EAMS. The parties would have an opportunity to explain the settlement and the facts to support it. Now, since settlement documents can be virtually walked through, make sure you upload in advance all supporting documentation including all QME/AME reports, denial letters, and any other documents to support the basis of your settlement. You will have an opportunity to explain the settlement “virtually” and get the approval. If you decide to e-file the settlement documents, make sure a cover letter supporting the settlement is included.

Feel free to contact the attorneys at M&F for any settlement walk-through questions!

By Sepideh Sepidehdam, Associate Partner, Van Nuys Office February 2021.

 

Leave a Reply

Your email address will not be published. Required fields are marked *

https://mulfil.com/wp-content/uploads/2021/02/LOGO-SITIO.png

Centralized Mail Center

1435 River Park Drive, Suite 300 Sacramento, CA 95815

Follow us:

Copyright © Mullen & Filippi 2021