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California: The Difficulty With Overpayments

May 21, 2018 (1 min read)

Recently, a split panel of commissioners with the Workers’ Compensation Appeals Board (WCAB) allowed a temporary disability overpayment from monies that had accrued as a direct consequence of defendant’s failure to properly pay an earlier award of temporary disability (Morehouse v. Anthony Indrieri, d/b/a Orlando Electric and Air, 2018 Cal. Wrk. Comp. P.D. LEXIS --). Indeed, defendant underpaid a prior award of temporary disability (TD) in the case by more than $60,000 and then requested that it be allowed to deduct an asserted TD overpayment that occurred after applicant was deemed permanent and stationary of approximately $13,000. The panel noted in its decision that the defendant had acknowledged the underpayment at the time of the trial on the overpayment which was, in fact, inaccurate. Defendant never acknowledged the massive underpayment of TD benefits until after the TD overpayment issue was submitted for decision.

This case highlights the difficulty in trying to evaluate the likelihood of prevailing on an overpayment issue before the WCAB. The majority in Morehouse cited the case authority that indicates the allowance of a credit is discretionary and not a legal entitlement. The majority also cited Maples v. Workers’ Comp. Appeals Bd. (1980) 111 Cal. App. 3d 827 [45 Cal. Comp. Cases 1106], yet then proceeded to allow the credit against a fund of money that should not have been available to the defendant at the time the overpayment issue was litigated.

In conclusion, it could argued that the facts in Morehouse strongly favored the disallowance of a claimed TD overpayment. Perhaps the take-away from cases like Morehouse is that when attempting to assess the likelihood of prevailing on a claimed overpayment before the WCAB, the outcome may likely be very difficult to predict.

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