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Workers' Compensation

California: Third-Party Actions; Employer’s Claim for Credit; Application of MICRA

In an interesting panel decision, the WCAB held that defendant was barred from obtaining a third-party credit pursuant to Medical Injury Comprehensive Reform Act of 1975 (MICRA).

Lexis Advance users: Read the Quintanilla panel decision online.

Here’s our headnote for the Quintanilla panel decision:

Third-Party Actions—Employer’s Claim for Credit—Application of Medical Injury Comprehensive Reform Act as Bar to Credit—WCAB rescinded WCJ’s award of third-party credit in amount of $184,547.28 against defendant’s workers’ compensation liability for injuries suffered by applicant on 8/3/2012 while working as nurse, and, relying on Graham v. W.C.A.B. (1989) 210 Cal. App. 3d 499, 258 Cal. Rptr. 376, 54 Cal. Comp. Cases 160, held that defendant was barred from obtaining third-party credit pursuant to Medical Injury Comprehensive Reform Act of 1975 (MICRA), codified in Civil Code § 3333.1, when applicant’s civil lawsuit against third party Mission Hospital Regional Medical Hospital, which was resolved via settlement, stated claim for professional negligence under Civil Code § 3333.1, and WCAB found substantial evidence that settlement of civil action was “demonstrably reduced” to reflect collateral source contributions, where applicant produced declaration and sworn testimony from her civil attorney that he agreed to reduced settlement based on his belief applicant’s civil action would be subject to MICRA, which would include general damages cap and reduction of special damages due to MICRA’s exception to prohibition against introducing evidence of collateral source payments, applicant also produced correspondence contemporaneous with civil action clarifying that carrier chose not to assert its lien at time of civil settlement, which explained why there was no deduction from lien from civil action settlement amount, and defendant offered no evidence rebutting evidence produced by applicant, and WCAB noted that contrary to WCJ’s conclusion, it was not necessary that MICRA settlement agreement allocate amount of settlement for general damages and amount for special damages in order for Civil Code § 3333.1 to bar subrogation.

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