Due Process and Adjudication of Accrued Benefits
Glory Nanez v. Pasadena Unified School District, ADJ11381920; ADJ11381922 (WCAB June 13, 2025)
In Glory Nanez v. Pasadena Unified School District, ADJ11381920; ADJ11381922 (WCAB June 13, 2025), the Workers’ Compensation Appeals Board delivered an important reminder that procedural discipline in California workers’ compensation proceedings is not merely technical—it is constitutional. The decision underscores that even in an administrative system designed for efficiency, fundamental due process principles remain paramount. When a Workers’ Compensation Judge adjudicates issues that were not identified for trial, the resulting award—even if substantively reasonable—cannot stand without affording the parties proper notice and an opportunity to be heard.
The case arose from claims filed by Glory Nanez against her employer, Pasadena Unified School District, which was permissibly self-insured and administered by LWP Claims Solutions. The parties proceeded with an Agreed Medical Evaluator, Richard Siebold, M.D. On March 10, 2025, the Workers’ Compensation Judge issued Findings, Award, and Order determining that Nanez had not reached permanent and stationary status before her death and therefore was not entitled to permanent disability indemnity. However, the decision went further. The WCJ reclassified disability indemnity payments previously made as temporary disability and awarded $26,239.84 in accrued temporary disability benefits, less attorney’s fees withheld for applicant’s counsel.
The defendant petitioned for reconsideration, arguing that the award of accrued temporary disability and associated attorney’s fees violated due process because those issues had not been identified at the pre-trial conference or listed in the Minutes of Hearing. The Appeals Board agreed in part. While affirming the remaining findings, it granted reconsideration as to accrued temporary disability and attorney’s fees and deferred those issues for further proceedings.
Although workers’ compensation proceedings are intended to be streamlined and efficient, the Appeals Board reiterated that constitutional due process requirements apply with full force. As the Court of Appeal explained in Rucker v. Workers’ Comp. Appeals Bd., a fair hearing requires notice of the issues, the opportunity to present evidence, and the right to cross-examine adverse witnesses. In Nanez, accrued temporary disability was not identified as a disputed issue in the pre-trial conference statement or in the Minutes of Hearing. The defense prepared and tried the case on the issues as framed—principally permanent disability and general entitlement to benefits. By adjudicating accrued temporary disability sua sponte, the WCJ deprived the defendant of notice that liability for that category of benefits was at stake.
The Appeals Board made clear that even where temporary disability and permanent disability issues overlap factually or legally, that relationship does not excuse the requirement that the issue be formally noticed. Administrative efficiency and equitable considerations cannot override the constitutional requirement that parties have a meaningful opportunity to be heard before liability is imposed. Because the defendant lacked notice that accrued temporary disability would be adjudicated, the award on that issue could not stand.
The Board also addressed the limits of a Workers’ Compensation Judge’s authority to develop the record. Labor Code section 5701 permits a WCJ to “inquire into the matters at issue,” and section 5906 authorizes the WCAB to remand or reopen proceedings to complete the evidentiary record. However, the decision emphasizes that these statutory powers are bounded by due process. While the WCJ may have intended to resolve the matter efficiently by addressing accrued temporary disability in the same decision, the proper course—once it became apparent that the issue required adjudication—was to provide notice and reopen proceedings, not to decide the issue without affording the parties an opportunity to litigate it. Accordingly, the Board deferred the temporary disability and attorney’s fee issues for further development.
The Appeals Board also examined the treatment of the AME’s report. The WCJ had determined that Dr. Siebold’s report did not constitute substantial medical evidence, and the Board agreed with that assessment. The decision addressed medical-legal cost liability under Labor Code section 4062.3(h), explaining that responsibility for medical-legal expenses rests with the requesting party and that reimbursement is appropriate only where the report is admissible and material. By deferring cost issues rather than ordering reimbursement, the Board reinforced the principle that a report lacking substantial evidentiary value cannot serve as the basis for shifting medical-legal costs.
The Board further referenced the 2024 amendment to Labor Code section 5909, clarifying reconsideration timelines and underscoring the Legislature’s continued emphasis on procedural fairness within the adjudicatory framework. Although the amendment did not control the outcome of the due process analysis, its inclusion reflects the broader statutory context in which fairness and orderly procedure remain central.
For practitioners, the practical implications of Nanez are significant. First, precision in framing issues at the pre-trial conference is critical. Any issue that may result in liability—whether temporary disability, permanent disability, penalties, or fees—must be clearly identified. Second, judicial efficiency cannot substitute for procedural safeguards. Even closely related issues cannot be adjudicated unless they are properly noticed. Third, when an issue emerges post-trial, the appropriate remedy is to seek to reopen the record under sections 5701 or 5906 rather than risk reversal on reconsideration. Finally, the decision provides useful guidance on medical-legal cost disputes, reinforcing the importance of ensuring that AME reports meet the substantial evidence standard before seeking cost shifting.
Ultimately, Glory Nanez v. Pasadena Unified School District reaffirms that due process remains the cornerstone of California’s workers’ compensation system. The system’s administrative character does not diminish the constitutional requirement that parties receive notice and an opportunity to be heard on the issues that determine their liability. By deferring the improperly noticed issues rather than allowing them to stand, the Appeals Board preserved the integrity of the adjudicatory process. For both applicant and defense practitioners, the decision serves as a cautionary reminder that careful issue framing and procedural vigilance are indispensable to sustaining awards on review.
This article was written by: Charles Leath, Associate Attorney | Mullen & Filippi LLP, Fresno, CA
