LES HALL, Applicant,
v.
VALLEY MEDIA And LEGION INSURANCE COMPANY, Defendants.
No. SAC 309589
California Workers Compensation Decisions
Workers’ Compensation Appeals Board State Of California
September 12, 2002
OPINION
AND DECISION AFTER RECONSIDERATION AND ORDER DISMISSING
PETITION FOR REMOVAL
On July
19, 2002, the Appeals Board (Board) granted defendant's
petition for reconsideration of the Order Approving
Compromise and Release (OAC&R) of May 1, 2002 in order to
further consider the facts and law of this case, complete its
deliberation and prepare an appropriate decision. We have
completed our deliberation and the following is our Decision
After Reconsideration. We will affirm the OAC&R but will
strike the provision in the OAC&R awarding penalties and
interest if payment is not made within 25 days of the
OAC&R.
Defendant,
Legion Insurance, administered by Cunningham & Lindsay,
contends that (1) the Workers' Compensation
Administrative Law Judge (WCJ) erred in not allowing
defendant to withdraw from the compromise and release
(C&R), arguing that subsequent to submission of the
C&R, defendant was placed in
rehabilitation,1 so that a mutual mistake of fact existed
as to defendant's ability to pay the lump sum settlement,
and (2) the WCJ, who has awarded penalties and interest to
applicant without giving defendant an opportunity to be
heard, has denied defendant due process. Defendant
alternatively seeks removal. We have received no answer from
applicant, who is unrepresented, in response thereto.
We have
considered the allegations of the Petition for
Reconsideration and the contents of the Report and
Recommendation of the WCJ. Based on our review of the record,
we agree with the WCJ that defendant has provided no evidence
demonstrating why it cannot pay the C&R proceeds.
Consequently, we will not set aside the OAC&R and will
not allow defendant to withdraw from the C&R.
Furthermore,
pursuant to our powers under Labor Code Sections 5906 and
5908(a) and our duty to develop the record (see Lundberg
v. Workmen's Comp. Appeals Bd. (1968) 69 Cal.2d 436
[33 Cal.Comp.Cases 656, 659]; King v. Workers' Comp.
Appeals Bd. (1991) 231 Cal.App.3d 1640 [56
Cal.Comp.Cases 408, 414]; Glass v. Workers' Comp.
Appeals Bd. (1980) 105 Cal.App.3d 297 [45 Cal.Comp.Cases
441]; Raymond Plastering Co. v. Workmen's Comp.
Appeals Bd. (1967) 252 Cal.App.2d 748 [32 Cal.Comp.Cases
287]), we are taking judicial notice of the March 28, 2002
Rehabilitation Order issued by the Commonwealth Court of
Pennsylvania, placing defendant Legion Insurance Company into
rehabilitation. We are also taking judicial notice of the
June 28, 2002 Order by which the Pennsylvania Court extended
the Stay Order to September 27, 2002. Although defendant has
not raised this issue, we find that the Commonwealth of
Pennsylvania has no jurisdiction over litigation pending
before the WCAB in the State of California, and that neither
the Rehabilitation Order nor the applicable Pennsylvania
statutes specify why it is not within the Rehabilitator's
discretion to make lump sum payments, such as C&Rs.
Lastly,
we find that the provision in the OAC&R awarding
penalties and interest if payment is not made within 25 days
of the OAC&R, is prejudicial to defendant because, under
Labor Code Section 5814, defendant has a right to a hearing
on the reasonableness of any delay. We further find that this
provision improperly attempts to re-write the C&R, as
drafted by the parties. Accordingly, we will strike that
portion of the OAC&R.
BACKGROUND
Applicant
sustained an industrial injury to his back on May 8, 2000. He
agreed to settle his case by way of a C&R for $35,000 and
signed the settlement papers on November 13, 2001. Defendant
filed the settlement papers on February 5, 2002. Paragraph 10
of the C&R provided that the "settlement includes
interest as provided by law for a period of (25) days from
the date of service by the Workers' Compensation Appeals
Board of the Order Approving Compromise and Release."
On
February 25, 2002, the WCJ wrote defendant informing it that
the C&R "will not be approved until you provide a
copy of the benefit notice letter required by Reg. 9812(g)(2)
advising the injured worker of the Qualified Medical
Evaluation." Having received no response from defendant,
the Board issued a notice of hearing on April 9, 2002,
indicating that this matter was scheduled for a May 1, 2002
Conference.2
On
March 28, 2002, the Commonwealth Court of Pennsylvania issued
an order placing defendant, Legion Insurance Company, into
rehabilitation, appointing the Insurance Commissioner of
Pennsylvania as the Rehabilitator and directing her to take
possession of the "assets, contracts and rights of
action of Legion, of whatever nature and wherever
located...." Paragraph 24(b) of the Rehabilitation Order
indicated that "[a]ll court actions, arbitrations and
mediations currently or hereafter pending against an insured
of Legion in the Commonwealth of Pennsylvania or...
