2012-EB-4 (2012). TITO TORRES vs. AJC SANDBLASTING; and ZURICH NORTH AMERICA Defendants UNITECH DIAGNOSTICS LLC Lien Claimant.

• Court: California

California Workers Compensation Decisions 2012. 2012-EB-4 (2012). TITO TORRES vs. AJC SANDBLASTING; and ZURICH NORTH AMERICA Defendants UNITECH DIAGNOSTICS LLC Lien Claimant WORKERS' COMPENSATION APPEALS BOARD STATE OF CALIFORNIATITO TORRES,Applicant, vs. AJC SANDBLASTING; and ZURICH NORTH AMERICA, Defendants, UNITECH DIAGNOSTICS, LLC, Lien Claimant.Case Nos. ADJ909554 (LAO 0824849) ADJ1856854 (LAO 0837910)OPINION AND DECISION AFTER RECONSIDERATION (EN BANC)We granted the petition for reconsideration filed by Green Lien Collections on behalf of lien claimant, Unitech Diagnostics, LLC (Unitech). Thereafter, to secure uniformity of decision in the future, the Chairwoman of the Appeals Board, upon a majority vote of its members, assigned this case to the Appeals Board as a whole for an en banc decision.(fn1) While this decision does not annunciate any new legal principles, we deem it necessary to act en banc because of a number of lien claimants who persist in disregarding existing law as to their burden of proof and repeatedly proceed to trial on lien claims that are so lacking in evidentiary support and/or presented with such a total disregard of existing law as to be frivolous. These lien claimants overburden the system, waste the limited resources of the Workers' Compensation Appeals Board (WCAB) and squander valuable calendar time, which otherwise could be used to address the claims of injured workers. Therefore, we hold that:

(1) Labor Code sections 3202.5 and 5705(fn2) mandate that a lien claimant must prove by a preponderance of the evidence all elements necessary to establish the validity of their lien before the burden of proof shifts to the defendant. Keifer and Garcia,(fn3) insofar as they held that a lien claimant can establish a prima facie right to recovery simply by introducing a billing statement showing that services were provided to a worker in connection with a claimed injury, have been nullified by sections 3202.5 and 5705 and subsequent case law.

(2) Proceeding to trial without any evidence or with evidence that is utterly incapable of meeting its burden of proof is frivolous and constitutes bad faith within the meaning of section 5813 justifying an award of sanctions, attorney's fees and costs against the party or lien claimant, its attorney(s) or hearing representative(s), individually or jointly and severally.

In light of these holdings, we affirm the decision of the workers' compensation administrative law judge (WCJ) disallowing Unitech's lien claim because it failed to introduce any evidence that the employee sustained a compensable injury and that it rendered medical treatment that was reasonable and necessary. We also affirm the finding of the WCJ that by proceeding to trial without any evidence capable of establishing its lien claim, Unitech acted frivolously and in bad faith in violation of section 5813, meriting an award of sanctions, attorney's fees and costs. However, we rescind and defer the award of sanctions pending further proceedings before the WCJ to determine the amount of sanctions and whether they should be imposed against Unitech, Green Lien Collections and/or its hearing representative, Suzi Gonzalez, individually or jointly and severally. BACKGROUND Applicant claimed that he sustained industrial injuries to his spine and bilateral lower extremities on October 22, 2002 and February 20, 2003. Defendant Zurich denied applicant's claims and on March 2, 2005, the cases were settled by compromise and release (C and R). The C and R listed outstanding liens and provided for their disposition. Neither Unitech nor its lien was listed. On November 16, 2009, Green Lien Collections filed a notice of appearance on behalf of Unitech. On September 15, 2010, Green Lien Collections filed an original lien claim on behalf of Unitech together with a copy of an unsigned "Health Insurance Claim Form" from Unitech to Zurich North America (Zurich) dated July 15, 2003. At the August 19, 2011 lien conference, the parties prepared a pre-trial conference statement (PTCS) in which Unitech listed its trial exhibits, which included the health insurance claim form and two MRI reports. At the October 6, 2011 lien trial, the parties stipulated that applicant "claims to have sustained injury arising out of and in the course of employment" (italics added) and that Zurich was the employer's workers' compensation insurance carrier. The issues presented were:

"1. Liens [sic] of Unitech Diagnostics in the amount of $5,150, less amounts paid.

"2. Defendant is disputing the reasonableness and necessity of the services offered.

"3. Defense contends that the billing from Unitech exceeds the Official Medical Fee Schedule."

No witnesses testified and, despite having identified several exhibits in the PTCS, the only evidence offered by Unitech was a copy of an unsigned insurance form from Unitech addressed to Zurich, dated July 15, 2003.(fn4) This insurance form lists dates of service, procedure codes and treatment charges totaling $5,150.00 in addition to penalties of $704.03 and interest of $3,018.01 in a total amount of $8,904.04. (Lien Claimant Exhibit 1.) No written description of goods or services was included. At all proceedings, Suzi Gonzalez appeared as the hearing representative for Green Lien Collections. No evidence was offered by Zurich. In the October 6, 2011 Minutes of Hearing, the WCJ found that "there is no factual or legal basis for proceeding to trial" and issued a notice of intent (NIT) to impose $2,500 sanctions against Unitech, allowing 15 days to respond as to why sanctions should not be imposed. No...