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When should a claim be dismissed for lack of appearance?
In the case of Nunez v. Petrochem Insulation, Inc., 2016 Cal. Wrk. Comp. P.D. LEXIS --, applicant alleged a CT injury ending in 2009. In April 2011 there was a “stipulation” signed in court that applicant did sustain injury, but apparently not finally determining nature and extent. This was based on an AME report. (See Weatherall v. Worker’ Comp. Appeals Bd. (2001) 66 Cal. Comp. Cases 798 (writ denied) (parties are generally bound by their stipulations, and must demonstrate some good cause grounds to try to disavow them).
Applicant was subsequently charged (and arrested) for various penal crimes related to perjury and misrepresentation concerning the claim of injury. The insurance carrier then sought almost $400,000 in restitution. The matter was scheduled for Trial on January 2016. Applicant did not appear.
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Defendant, in March, filed a petition for dismissal because of applicant’s failure to prosecute the claim pursuant to WCAB Rule 10852. In response to this the Judge issued a notice of intent indicating that “applicant has failed to prosecute his claim in a timely manner” and that the claim would be dismissed without prejudice in 10 days absent good cause. Applicant’s attorney timely objected to the Order stating that they did wish to prosecute the case. The matter was rescheduled for Trial on June 2, 2016. At that time, the Judge dismissed the case because of applicant’s failure to appear.
Applicant’s attorney filed a Petition for Reconsideration stating that Labor Code Section 5700 does not mandate that an applicant testify at his Trial. Applicant was unavailable because he was in Mexico but he would be agreeable to attending by audio and video. Applicant’s attorney requested a Trial on the merits. Defendant responded that credibility was crucial on this case and this could most ideally be determined by an appearance at Trial. The Judge had properly dismissed the claim based on the Notice of Intention. Upon Reconsideration, the Honorable Commissioners focused on the fact that the original notice of intention had highlighted that applicant had failed to prosecute the claim. There had not been a notice of intention that the claim would be dismissed absent a personal appearance. They sent the matter back to the Judge for further litigation.
Analysis of the Law:
This case brings up many interesting and important legal doctrines worthy of review. Labor Code Section 5803 does allow continuing jurisdiction to the WCAB to alter any order. One exception to that may be under Labor Code Section 5804 when an employer subsequently wants to deny employment. (See Rodgers v. Workers’ Comp. Appeals Bd. (2003) 68 Cal. Comp. Cases 975 (writ denied). Labor Code Section 5903 allows for a Petition based on a finding that “an order, decision, or award was procured by fraud.” Thus, when there is an allegation of fraud, the Board likely retains some jurisdiction despite an earlier Stipulation. (In this case, jurisdiction appears to be a non-issue in that the original stipulation was not final as to all issues and so jurisdiction was effectively retained.)
Another question is denying a claim after it is already been admitted. Labor Code Section 5402 provides a rebuttable presumption of injury. “The presumption of this subdivision is rebuttable only by evidence discovered subsequent to the 90 day.” Case law has interpreted this provision to be limited to instances when the newly discovered evidence was not “readily discoverable” within the timeframe for denial. (See James v. Workers’ Comp. Appeals Bd. (1997) 55 Cal. App. 4th 1053, 62 Cal. Comp. Cases 757). One other limitation worthy of noting is that the newly alleged fraud must be “extrinsic”. Generally the introduction of perjured testimony is deemed intrinsic fraud. (In this case, the carrier will need to be careful to present evidence not readily attainable during the timeframe to deny the claim.)
Concerning the crucial question as to whether an applicant must attend his own Trial or not, Labor Code Section 5700 states that, “either party may be present at any hearing, in person, by attorney, or by any other agent, and may present testimony pertinent under the pleadings.” This Labor Code Section appears to be very explicit in that testimony need not mandatorily occur by the applicant himself.
On the other hand, there is 8 California Code of Regulations Section 10562 which provides the Judge the option under subsection (a) as follows: “Where a party served with notice of Trial fails to appear either in person or by attorney or representative, the Workers Compensation Judge may dismiss the application after issuing a 10 day notice of intention to dismiss…” This Code Section appears to provide the Judge discretion to order an applicant to appear and to dismiss the claim should he fail to do so. (The Board did implicitly accept that the Judge had the power to order the applicant to “appear.”)
Finally, there is some Constitutional law that likely should be addressed. The Fifth Amendment allows someone not to testify in a criminal proceeding to avoid self-incrimination. The privilege may be invoked even in a civil hearing (and certainly a workers’ compensation claim) if the “chain of evidence” from such testimony would likely lead to criminal self-incrimination. (See Hoffman v. United States, 341 U.S. 479, 486-487 (1951)).
However, then there is the additional consideration of “negative inferences.” “The Fifth Amendment does not forbid adverse inferences against parties to civil actions when they refuse to testify in response to probative evidence against them.” Baxter v. Palmigiano, 425 U.S. 308, 318 (1976). (In the instant case, Applicant’s attorney states in his Petition that he does not object to testimony proceeding, but obviously if criminal prosecution is at stake, he will need to advise his client and also be aware of potentially negative inferences.)
In Workers’ Compensation, as in other areas of the law, it is always important to know who has the burden of proving what. The applicant has the burden of proving injury. His refusal of testimony may create under certain circumstances a negative inference making it easier to find no injury. On the other hand, obtaining restitution would demand proving deliberate fraud, a burden upon the defendants. This would mean that the absence of the ability to cross-examine the witness would definitely interfere with their ability to prove their case.
1. The practitioner should be aware that allegations of fraud can be raised at any time. A carrier can also deny a claim after having admitted it. However, they should be well aware of the legal provisions stated above in attempting to do so.
2. An applicant need not testify at his own Trial. However, the Judge does have some discretion to order an appearance at Trial. Practitioners should consider the burden of proof, issues of credibility, and ramifications and inferences which may be drawn from silence.
3. The Code of Regulations does allow for a claim to be dismissed based on lack of appearance at Trial. It is extremely crucial that the notice of intention state precisely what is required and what will occur absent compliance.
Read the Nunez noteworthy panel decision.
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