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California: Division of Attorney’s Fees

September 27, 2022 (3 min read)

A Board Panel recently addressed the division of attorney’s fees for the $180,000.00 fee that an applicant received pursuant to the parties’ Compromise and Release agreement. The Board Panel found that the WCJ properly divided the $180,000.00 fee between applicant’s former attorney and his current attorney ($30,000.00 to former attorney and $150,000.00 to current attorney) based on factors in Labor Code §§ 4903 and 4906 as well as criteria in WCAB’s Rules of Practice and Procedure. Read our headnote below.


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Michael Gutierrez, Applicant v. Alpha Fox Towing Company, State Compensation Insurance Fund, Defendants

W.C.A.B. Nos. ADJ1786826 (LAO 0772803)—WCAB Panel: Commissioners Snellings, Sweeney, Dodd

Workers’ Compensation Appeals Board (Board Panel Decision)

Opinion Filed September 23, 2022

Publication Status:  CAUTION:  This decision has not been designated as a “significant panel decision” by the Workers’ Compensation Appeals Board. Practitioners should proceed with caution when citing to this panel decision and should also verify the subsequent history of the decision, as these decisions are subject to appeal. WCAB panel decisions are citeable authority, particularly on issues of contemporaneous administrative construction of statutory language [see Griffith v. WCAB (1989) 209 Cal. App. 3d 1260, 1264, fn. 2, 54 Cal. Comp. Cases 145]. However, WCAB panel decisions are not binding precedent, as are en banc decisions, on all other Appeals Board panels and workers’ compensation judges [see Gee v. Workers’ Comp. Appeals Bd. (2002) 96 Cal. App. 4th 1418, 1425 fn. 6, 67 Cal. Comp. Cases 236]. While WCAB panel decisions are not binding, the WCAB will consider these decisions to the extent that it finds their reasoning persuasive [see Guitron v. Santa Fe Extruders (2011) 76 Cal. Comp. Cases 228, fn. 7 (Appeals Board En Banc Opinion)]. LexisNexis editorial consultants have deemed this panel decision noteworthy because it does one or more of the following: (1) Establishes a new rule of law, applies an existing rule to a set of facts significantly different from those stated in other decisions, or modifies, or criticizes with reasons given, an existing rule; (2) Resolves or creates an apparent conflict in the law; (3) Involves a legal issue of continuing public interest; (4) Makes a significant contribution to legal literature by reviewing either the development of workers’ compensation law or the legislative, regulatory, or judicial history of a constitution, statute, regulation, or other written law; and/or (5) Makes a contribution to the body of law available to attorneys, claims personnel, judges, the Board, and others seeking to understand the workers’ compensation law of California.

Disposition:  The Petition for Reconsideration is denied.

Attorney’s Fees—Division of Fees—WCAB, denying reconsideration, affirmed WCJ’s finding that $30,000.00 attorney’s fee allocated to applicant’s former attorney was to be paid by applicant’s current attorney from $180,000.00 fee he received pursuant to parties’ Compromise and Release (C&R) agreement, and that contrary to applicant’s attorney’s assertion, defendant was not separately liable for former attorney’s fee, when WCAB reasoned that although defendants are liable under Labor Code § 4903(b) for liens for reasonable expenses incurred by injured employees, such as medical treatment and medical-legal expenses, attorney’s fee liens under Labor Code § 4903(a) are liens against applicant’s compensation as defined in Labor Code § 3207, and, as such, amounts specified as attorney’s fees in C&R are payable from C&R proceeds; WCAB further found that WCJ properly divided $180,000.00 fee between applicant’s former attorney and his current attorney ($30,000.00 to former attorney and $150,000.00 to current attorney) based on factors in Labor Code §§ 4903 and 4906 as well as criteria in WCAB’s Rules of Practice and Procedure, giving consideration to applicant’s attorney’s violation of various WCAB rules by failing to notify applicant’s former attorney of applicant’s settlement, and his failure to take responsibility for contributing to unnecessary delay in these proceedings. [See generally Hanna, Cal. Law of Emp. Inj. and Workers’ Comp. 2d §§ 20.02[1], 20.03[1], 20.05; Rassp & Herlick, California Workers’ Compensation Law, Ch. 17, §§ 17.31, 17.32.]

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