THE IMPORTANCE OF THE SCOPE OF A COMPROMISE AND RELEASE
In Jaime Estrela v. Permanente Medical Group 2023 WL 6061161 (Cal.W.C.A.B.), the Workers’ Compensation Appeals Board found that a subsequent claim by Applicant (alleging the same body parts) was not a duplicate claim that was settled by way of Compromise and Release (C&R).
In this matter, Applicant alleged a specific injury dated June 26, 2019, to the nervous system, including psych and stress. She was evaluated by psychological QME Dr. Kimmel who issued a report suggesting the injury may have been more accurately characterized as a cumulative injury.
The parties entered into a settlement via C&R dated April 13, 2021, that read, “THIS SETTLEMENT RESOLVES ALL INJURIES SUSTAINED TO PSYCHE/STRESS/NERVOUS SYSTEM BY THE APPLICANT REGARDLESS OF [sic] PLED AS A CT OR SPECIFIC INJURY THROUGH THE DATE OF THIS AGREEMENT.” An Order Approving Compromise and Release (OACR) was issued on April 14, 2021.
Following the OACR, Applicant claimed a cumulative injury from June 25, 2018, to June 25, 2019, to her nervous system, including psych, stress and nervous system. The defendant asserted it was barred by the language in the prior C&R.
The issues at trial were whether the C&R covered the events alleged in the cumulative injury, whether the cumulative injury claim was a duplicate pleading, and whether the applicant is entitled to additional discovery in the cumulative injury claim.
After the trial, the judge issued a Findings and Order concluding that applicant’s cumulative trauma injury claim was settled by way of an earlier C&R agreement and ordered a take nothing with respect to her cumulative injury.
Applicant claimed that the C&R only resolved the specific injury and not the cumulative injury. The Appeals Board agreed with the applicant, rescinding the Findings and Order, and in its place substituted Findings of Fact, finding that Applicant’s specific injury was settled by way of C&R and the cumulative injury was not a duplicate of the earlier specific injury.
The Appeals Board held that legal principles governing C&R agreements are the same as those governing other contracts. A contract must be interpreted as to give effect to the mutual intention of the parties at the time of contracting. To determine the intent of the parties, the Appeals Board looked at the plain language of the agreement.
In the C&R, the specific injury case number was listed, and the cumulative injury was not listed or described in the C&R. Therefore, the Appeals Board concluded there was no basis for assuming the parties intended to include the cumulative injury in the settlement. Accordingly, the Appeals Board found Applicant’s claimed cumulative injury was not duplicate of the specific injury case settled by way of C&R.
By Kimberly Galindo, Esq., Associate Attorney, Los Angeles Office, February 2024
DEFENDANT’S DUE PROCESS RIGHTS VIOLATED BY ORDER COMPELLING CLAIMS ADMINISTRATOR’S DEPOSITION; APPEALS BOARD CONFIRMS CLAIMS ADMINISTRATORS ARE PARTIES SUBJECT TO DEPOSITION
In Vallejo v. Department of Developmental Services, 2024 WL 125976 (ADJ10691132), (decided January 4, 2024), the applicant alleged multiple specific injuries to various body parts. The claims handler sent a letter to the AME requesting clarification of the dates of injury and the AME’s apportionment opinion, copying applicant’s counsel on the correspondence. A few weeks later, defense counsel wrote to the AME inquiring whether a cumulative trauma injury existed, again copying applicant’s attorney.
Prior to noticing the claims adjuster for deposition or issuing a subpoena, applicant’s counsel petitioned the Board for an order “requiring SCIF to produce [the claims adjuster] for deposition” as well as for SCIF to produce the person most knowledgeable (PMK) regarding SCIF’s overall adjuster training on the issue of California Labor Code (LC) section 4062.3 and Maxham v. CA Dept. of Corrections (2017) 82 Cal. Comp. Cases 136. The WCJ’s order was voidable providing defendant objected, demonstrating “good cause” within 15 days. Applicant’s counsel asserted the communications with the AME were improper as ex parte and prejudicial. Defendant challenged the WCJ’s voidable order, asserting the communication was not ex parte; the LC set forth no specific remedy if it was; no prejudice resulted from the request to the AME; deposition of the adjuster was unnecessary and burdensome; and lastly, the Board had authority to fashion a remedy if it disagreed. After trial on the WCJ’s discovery order, the WCJ issued a Findings and Order determining that Applicant demonstrated good cause to permit the deposition of both the PMK and the claims adjuster, deeming his previous order final.
Defendant filed a petition for removal, asserting irreparable harm, particularly where the WCJ permitted the deposition prior to the creation of a proper record establishing the necessity and merits of the deposition.
Before the Appeals Board, Defendant’s main argument was procedural: Applicant failed to first notice the claims adjuster’s deposition or issue a subpoena, the mandatory procedural prerequisite which ensures the parties’ due process rights to secure an accurate record. The Appeals Board agreed, rescinding the Joint Findings and Orders, concluding that Applicant failed to follow the mandatory procedural steps as set forth in LC section 5710, which include issuance of a subpoena or notice of deposition prior to seeking intervention by the Board.
While the Appeals Board did not specifically rule on the merits of whether Applicant could depose the adjuster, it reiterated that the Appeals Board has historically considered the claims adjuster a party to an industrial action and subject to deposition. Further, the court noted that prior to determination of whether the adjuster may be deposed, the WCJ should first determine whether the claims administrator’s communications with the AME were impermissible ex parte communications, defined by Maxham and Black’s Law Dictionary as a communication that is “from one party only, usually without notice to or argument from the adverse party.” (Black’s Law Dict. (7th ed. 1999) p. 597. Col 2.) The Board panel rescinded the WCJ’s order compelling the testimony of the adjuster and the PMK and remanded the matter for further development of the record regarding whether the defense communications with the AME were ex parte in violation of LC section 4062.3(f) followed by proper noticing of the deposition.
This case is a reminder that claims administrators are parties to an industrial action subject to deposition and that one must first notice a deposition before petitioning the WCAB for an order to compel deposition testimony.
Lara E. Anderson, Esq., Associate Attorney, Sacramento Office, March 2024
