As the new school year starts, we are reminded that while intellectual discovery is important, sometimes what you really need is simple common sense. In this edition of the Bulletin, we explore some recent decisions that remind us of that principle.

You actually can settle a voucher, sometimes 

As we all know, for dates of injury starting Jan. 1, 2013, if an employer does not offer permanent regular, modified or alternative work to an injured worker with permanent disability, the employer is required to issue a $6,000.00 supplemental job displacement voucher. The voucher cannot be settled for cash. However, what happens when there is a dispute over whether the applicant is actually entitled to the voucher, especially when the whole case is denied? A Workers' Compensation Appeals Board panel has now answered that question in the case Beltran v. Structural Steel Fabricators.

In Beltran, the defendant had denied the claim based on the post-termination defense, and the parties agreed to a settlement with a Thomas finding, which included resolution of the voucher. When they presented the settlement to a judge for approval, the judge, strictly interpreting the rule that you cannot settle a voucher, amended the settlement terms to exclude settlement of the voucher from the agreement. Defendant sought reconsideration, asserting that the judge had exceeded her authority.

On reconsideration, the WCAB panel agreed with defendant that, where there is a good faith dispute about whether there is a compensable claim, the voucher can be settled. The panel pointed out that this is essentially the same situation that arose in the Thomas case. When Thomas was decided, a different version of vocational rehabilitation benefits was at issue, and similar to the current rule, settlement of liability for vocational rehabilitation was prohibited. The Beltran panel noted that, in Thomas, the board found that there is a policy favoring settlement of disputed cases. If settlement of vocational rehabilitation (now voucher) is not allowed, it is impossible to settle those cases. As a result, “where there is a genuine doubt or question as to the validity of the claim, which if resolved against the applicant would result in a denial of all benefits” (quoted from Thomas), you can settle the voucher.

This is a common-sense rule, and we are pleased that the WCAB panel confirmed that the Thomas rule does in fact apply to settlement of the supplemental job displacement voucher for 2013 and later cases. But how far does the rule extend? Beltran, like Thomas, involved a situation where there was a complete denial of the claim. The Thomas rule is often used to resolve disputed issues where a claim is accepted in part, but liability is denied for other parts of the claim. It seems logical that, in cases where the claim is accepted but there is a factual dispute over whether the applicant is entitled to the voucher, settlement of the voucher should also be allowed per Thomas and Beltran.  

When to draw the line

Although true workers’ compensation fraud is fairly rare, it does happen. If an applicant is convicted of workers’ compensation fraud, the insurer or employer who was defrauded is entitled to restitution for money paid as a result of the fraud. However, in a recent unpublished decision, the Court of Appeal found that there are limits on how much you can reasonably expect to be repaid.

The case is titled The People v. Sparkle Sky Bivens. Ms. Bivens filed a claim for workers’ compensation benefits, defended by State Compensation Insurance Fund. The adjuster handling the claim became suspicious when Bivens failed to attend medical appointments, and hired an investigator. Instead of assigning one investigator, the investigation company assigned a team of four. Ultimately, the investigators were able to obtain surveillance video showing Bivens doing activities she claimed to be unable to do. SCIF submitted the video to a doctor, who determined Bivens' “disability claims were unjustified.” SCIF then stopped paying disability benefits and reported her to the district attorney. Bivens was ultimately convicted of workers’ compensation fraud and ordered to repay SCIF the $4,000 in benefits she obtained through fraud. SCIF objected to the restitution order, asserting that it should have also been reimbursed for the $34,154.70 in investigation costs incurred to establish the falsity of her workers’ compensation claim. The trial court found that request was unreasonably high, noting that the amount SCIF incurred was more than 8.5 times the amount Ms. Bivens stole. The Court of Appeal affirmed the decision, finding that the amount expended by SCIF was unreasonable, and SCIF was entitled only to a restitution amount that would make SCIF “reasonably whole.”

This is a difficult situation because the reality is that it does cost money to investigate fraud claims, and we think a defendant placed in that position should be able to recover that cost. However, the lesson we get from this case is that, when deciding how vigorously to defend a claim, it is important to exercise common sense and evaluate whether the expected result justifies the expenditures.

Mullen & Filippi LLP is a workers' compensation defense law firm in California. This article is republished from the firm's blog with permission.