Donna Yee Sanchez vs. Permanente Medical Group, and Athens Administrators (Adjusting Agent), Natalie Piatt vs Eureka Union School District;

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WORKERS’ COMPENSATION APPEALS BOARD 1 2 STATE OF CALIFORNIA 3 4 Case No. OAK 271713 DONNA YEE-SANCHEZ, 5 Applicant, 6 vs. 7 8 9 OPINION AND ORDER DISMISSING PETITION FOR REMOVAL PERMANENTE MEDICAL GROUP, and ATHENS ADMINISTRATORS (Adjusting Agent), Defendant(s). 10 11 12 13 14 Case No. SAC 304854 NATALIE PIATT, Applicant, OPINION AND DECISION AFTER RECONSIDERATION vs. 15 16 17 18 19 EUREKA UNION SCHOOL DISTRICT; CALIFORNIA INSURANCE GUARANTEE ASSOCIATION on behalf of CALIFORNIA COMPENSATION INSURANCE COMPANY, in liquidation, Defendant(s). 20 21 22 23 24 25 26 27 I. Introduction A. These two cases present some common issues regarding: (a) what the parties and the Workers’ Compensation Appeals Board (“WCAB”) can and cannot do before an application for adjudication of claim (“application”) has been filed; and (b) what the parties and the WCAB can do to remedy pre-application abuses once an application is ultimately filed. Because of these 1 common issues, we have consolidated the two cases for purposes of issuing a joint opinion. (See 2 Lab. Code, §133; cf., Cal. Code Regs., tit. 8, §§10590-10592.) 3 We conclude: 4 (1) Except for injuries sustained from January 1, 1990 to December 31, 1993, the 5 WCAB has no jurisdiction over any aspect of a workers’ compensation claim 6 until an application for adjudication of claim (and not just a claim form) has 7 been filed. (See Lab. Code, § 5500.) Therefore, prior to the filing of an 8 application, the WCAB cannot conduct any hearings or issue any orders, and a 9 party cannot invoke the WCAB’s judicial process to conduct compelled 10 discovery (e.g., noticing a deposition, subpoenaing a witness to a deposition, 11 or subpoenaing medical records and other documents). 12 (2) Nevertheless, prior to the filing of an application (but after the filing of a 13 claim form), the parties may engage in non-compelled pre-application 14 investigation. Thus, for example, a defendant may request that an injured 15 employee attend an examination by a qualified medical evaluator (“QME”), 16 request that the injured employee execute a release of medical records, request 17 that the injured employee provide various documents, or interview the injured 18 employee or other potential witnesses. Similarly, an injured employee may 19 request information from a defendant, or interview potential witnesses. If, 20 however, a party or non-party fails to comply with any such request(s), the 21 injured employee or defendant cannot seek to compel compliance unless an 22 application has been filed. 23 (3) After an application has been filed, there are remedies potentially available to 24 address pre-application abuses. These remedies might include: (a) monetary 25 sanctions under Labor Code section 58131 against an injured employee or a 26 1 All further undesignated statutory references are to the Labor Code. 27 YEE-SANCHEZ, D & PIATT, N 2 1 defendant for unlawful pre-application discovery efforts (e.g., noticing a 2 deposition, subpoenaing a witness to a deposition, or subpoenaing medical 3 records and other documents); (b) evidentiary sanctions against an injured 4 employee or a defendant for unlawful pre-application discovery efforts; (c) 5 monetary sanctions under section 5813 against a defendant for breaching a 6 statutory duty to file an application, pursuant to section 4061(m)2 and section 7 4063; (d) section 4650(d) and/or section 5814 penalties against a defendant for 8 delays in paying benefits occasioned by a failure to comply with a statutory 9 duty to file an application; and (e) liability by the defendant for section 10 4064(c)3 attorney’s fees the injured employee may incur in connection with 11 the application, if the defendant was the party that ultimately filed the 12 application. 13 (4) A defendant is not required to file an application under section 4061(m) and 14 section 4063 if it is paying permanent disability indemnity in accordance with 15 the report(s) of either the treating physician, the panel QME, or the agreed 16 medical examiner (“AME”). B. 17 18 In Yee-Sanchez v. Permanente Medical Group (Case No. OAK 271713), defendant, 19 Permanente Medical Group (“PMG”), filed a petition pursuant to section 5310 and Board Rule 20 10843 (Cal. Code Regs., tit. 8, §10843), requesting that the Appeals Board remove this matter to 21 itself and rescind the May 10, 2002 order issued by the presiding workers’ compensation 22 administrative law judge (“PWCJ”). 23 In that order, the PWCJ had directed PMG to file an application with the WCAB pursuant 24 to the provisions of section 4061(l) [now, section 4061(m)] and section 4063, because PMG had 25 26 2 Formerly, section 4061(l). 27 3 Formerly section 4064(b). YEE-SANCHEZ, D & PIATT, N 3 1 not paid permanent disability indemnity in accordance with the report of John K. Hightower, 2 D.C., the QME selected by the unrepresented injured employee, Donna Yee-Sanchez (“Yee- 3 Sanchez”), from a three-member panel.4 4 In its petition for removal, PMG asserts, in substance: (1) it was not required to file an 5 application, because it had paid permanent disability indemnity in accordance with the opinion of 6 the treating physician, John Duong, D.C.; and (2) even if it were assumed that it had not paid 7 permanent disability indemnity in accordance with Dr. Duong, it cannot be ordered to file an 8 application. In Piatt v. Eureka Union School District (Case No. SAC 304854), defendant, the 9 10 California Insurance Guarantee Association (“CIGA”), filed a petition seeking reconsideration of 11 the Findings and Order issued by the workers’ compensation administrative law judge (“WCJ”) 12 on August 29, 2002. In that decision, the WCJ found that CIGA had engaged in bad faith actions 13 or tactics that were frivolous or solely intended to cause unnecessary delay, and she imposed 14 section 5813 sanctions of $500.00 against it. In her opinion, the WCJ stated that sanctions of 15 $500.00 were imposed because CIGA had engaged in several “bad faith” or “frivolous” actions, 16 including: 17 (“Piatt”), and of the panel QME, William C. McKean, D.C., before the filing of an application, 18 which was necessary to invoke the WCAB’s jurisdiction; (2) taking the deposition of the panel 19 QME without first obtaining a WCAB order; (3) requesting a new panel QME without 20 attempting to utilize the original panel QME to resolve the dispute; (4) unilaterally directing Piatt 21 to be re-evaluated by the panel QME, without first filing an application and obtaining an order 22 from the WCAB; and (5) attempting to have Piatt re-evaluated by the panel QME (or by a new 23 QME) after trial, when discovery had closed. (1) taking the depositions of the unrepresented injured employee, Natalie Piatt 24 In its petition for reconsideration, CIGA contends, in substance: (1) due process entitles a 25 defendant to take the deposition of an injured employee following the filing of a claim form, and 26 27 4 See Lab. Code, §4061(d). YEE-SANCHEZ, D & PIATT, N 4 1 “[i]t is commonplace after a [claim form] is filed that depositions take place;” (2) there is no 2 requirement that an application must be filed in order to have an unrepresented employee re- 3 evaluated by a panel QME; (3) section 4062 allows a defendant to object to a treating physician’s 4 determination regarding the extent and scope of medical treatment at any time during the life 5 span of the injured employee’s workers’ compensation case, including when discovery has been 6 closed after a mandatory settlement conference (“MSC”), because an objection under section 7 4062 is not an attempt to conduct discovery; and (4) there is no requirement that a defendant 8 obtain a WCAB order before deposing a panel QME. II. 9 Background 10 11 We shall turn initially to a pertinent history of each case. 12 A. 13 Yee-Sanchez v. Permanente Medical Group (Case No. OAK 271713) 14 Yee-Sanchez, who has never been represented by counsel, sustained an admitted 15 industrial injury to her neck and right upper extremity on January 11, 1999 while employed by 16 PMG. Although there is no claim form in the WCAB’s file, it appears she filed a claim form 17 with PMG shortly after her injury. 18 Dr. Duong was Yee-Sanchez’s primary treating physician and, on October 19, 2000, he 19 issued a “final comprehensive report” that found her to be medically permanent and stationary 20 with various factors of disability. 21 PMG objected to Dr. Duong’s assessment of Yee-Sanchez’s permanent disability and 22 requested that she select a panel QME. (See Lab. Code, §4061(d).) She selected Dr. Hightower 23 from a QME panel and, on December 4, 2000, Dr. Hightower issued a report finding her to be 24 medically permanent and stationary with various factors of permanent disability. 25 On December 14, 2000, the Disability Evaluation Unit (“DEU”) issued a summary rating 26 determination opining that the factors of permanent disability in Dr. Hightower’s report rated at 27 YEE-SANCHEZ, D & PIATT, N 5 1 66%. (See Lab. Code, §4061(j)5.) 2 On January 5, 2001, PMG requested that the Administrative Director reconsider the 3 DEU’s summary rating determination (see Lab. Code, §4061(l)6), but this request was ultimately 4 denied. 5 6 Thereafter, PMG noticed depositions for Yee-Sanchez, Dr. Duong, and Dr. Hightower. It also issued two deposition subpoenas to Dr. Hightower. 7 In multiple letters to PMG, Yee-Sanchez objected to the taking of any depositions. 8 However, PMG responded by a letter stating that, if she failed to appear for her deposition, it 9 would file a petition to compel with the WCAB. 10 Following this letter from PMG, Yee-Sanchez sent a letter to the PWCJ, objecting to all 11 depositions and noting that PMG had not yet filed an application. Nevertheless, PMG went 12 forward with Dr. Hightower’s deposition (although, apparently, it never took the depositions of 13 Yee-Sanchez or Dr. Duong). In response to Yee-Sanchez’s letter to him, the PWCJ set a pre-trial conference, even 14 15 though no application had yet been filed. 16 Prior to the conference, PMG requested that the DEU issue a consultative rating of Dr. 17 Duong’s October 19, 2000 report. (See Lab. Code, §4061(j).) The DEU’s consultative rating 18 opined that the factors of permanent disability in Dr. Duong’s October 19, 2000 report rated at 19 31%. 20 Thereafter, the conference before the PWCJ took place. At the conference, the PWCJ 21 noted that no application had been filed, but he indicated that a WCAB case number had been 22 administratively assigned in order for proceedings to occur. The WCJ also noted that PMG’s act 23 of deposing Dr. Hightower, the panel QME, might have been legally invalid because PMG had 24 not filed an application contesting the QME’s opinion. However, the PWCJ took no action at 25 26 5 Formerly, section 4061(i). 27 6 Formerly, section 4061(k). YEE-SANCHEZ, D & PIATT, N 6 1 that time, but instead suggested that the parties attempt to reach an informal resolution. 2 Efforts by Yee-Sanchez and PMG failed to informally resolve her claim, so she wrote to 3 PMG, again requesting that it file an application. PMG did not do so. Instead, it asked the DEU 4 to issue a consultative rating of the transcript of Dr. Hightower’s February 21, 2001 deposition. 5 On December 27, 2001, PMG wrote the PWCJ, advising that it was continuing to make 6 permanent disability advances based on the DEU’s 31% consultative rating of Dr. Duong’s 7 October 19, 2000 report, but that these advances would soon cease. 8 On January 9, 2002, Yee-Sanchez filed a declaration of readiness and a letter to the 9 PWCJ regarding the issues of her permanent disability, PMG’s discovery efforts, and PMG’s 10 failure to file an application. The letter also raised the issue of sanctions against PMG under 11 section 5813. 12 13 Subsequently, the DEU issued a consultative rating opining that the transcript of Dr. Hightower’s February 21, 2001 deposition rated at 32%. 14 Yee-Sanchez then sent another letter to the PWCJ, again objecting to PMG’s discovery 15 efforts in light of its failure to file an application and again raising the issue of sanctions under 16 section 5813. 17 18 On May 10, 2002, the PWCJ issued the order at issue here, directing PMG to file an application pursuant to section 4061(l) and 4063. 19 On May 24, 2002, PMG filed its petition for removal. Yee-Sanchez answered the 20 petition, again raising PMG’s failure to file an application for adjudication of claim, as well as 21 raising various other objections. 22 On January 17, 2003, PMG filed a request to withdraw its petition for removal. 23 B. 24 Piatt v. Eureka Union School District (Case No. SAC 304854) 25 Piatt, who has never been represented by counsel, sustained an admitted industrial injury 26 to her cervical spine and both wrists on June 23, 1997, while employed by Eureka Union School 27 District (“EUSD”). EUSD was insured by the now-insolvent carrier, California Compensation YEE-SANCHEZ, D & PIATT, N 7 1 Insurance Company (“Cal Comp”), whose “covered claims” are the liability of CIGA. 2 (Hereafter, Cal Comp and CIGA will be collectively referred to as “CIGA.”) Although there is 3 no claim form in the WCAB’s file, it appears that Piatt filed a claim form with EUSD shortly 4 after her injury. 5 Piatt’s primary treating physician was Ronald J. Simms, D.C., and, on April 8, 1998, he 6 issued a report finding her to be medically permanent and stationary with various factors of 7 disability. 8 Thereafter, Piatt saw Dr. McKean, whom she selected from a QME panel (apparently, at 9 CIGA’s request). On April 14, 1999, Dr. McKean issued a report declaring her to be medically 10 permanent and stationary with various factors of disability. 11 On August 20, 1999, Dr. McKean issued a supplemental report on the issue of permanent 12 disability. The DEU later issued a summary rating determination that the factors of disability set 13 forth in that report rated at 60%. (See, Lab. Code, §4061(j).) 14 15 Thereafter, CIGA noticed the depositions of both Piatt and Dr. McKean. Apparently, Dr. McKean’s deposition did not then go forward, but CIGA did depose Piatt. 16 In early 2001, CIGA sent two letters to Piatt asserting that Dr. McKean’s 1999 reports 17 were “stale.” Therefore, she saw Dr. McKean again, and he issued another report on May 9, 18 2001 addressing the issue of permanent disability. The DEU also issued a new summary rating 19 determination which, taking into consideration all three of Dr. McKean’s reports, again 20 concluded that they rated at 60%. 21 22 23 24 CIGA then took the deposition of Dr. McKean. Following this deposition, CIGA made a request to the Administrative Director to require Piatt to select a new panel QME. On August 29, 2001, Piatt filed an application for adjudication of claim and a declaration of readiness (DOR). The DOR specifically objected to CIGA’s request for a new QME. 25 At the ensuing MSC, the parties raised not only the issue of whether a new QME should 26 be appointed, but also other issues – including permanent disability and further medical 27 treatment. (See Cal. Code Regs., tit. 8, §10492.) YEE-SANCHEZ, D & PIATT, N 8 1 On November 30, 2001, the first day of trial took place. 2 On December 12, 2001, CIGA sent a letter to Dr. Simms, objecting to his weekly 3 treatment of Piatt and stating that it was requesting either that she return to Dr. McKean on the 4 issue of treatment or that she select a new panel QME. 5 On January 7, 2002, the trial was completed. 6 Subsequently, the WCJ issued a decision finding that Piatt’s permanent disability is 60%, 7 that she is in need of further medical treatment, and that no new QME is necessary. In her 8 opinion, the WCJ (on her own motion) stated that a further MSC would be set on the issue of 9 section 5813 sanctions against CIGA based on: (1) its taking of depositions before an application 10 had been filed; (2) its instruction to Piatt that she be re-evaluated by Dr. McKean, without a 11 WCAB order; and (3) its notification to Dr. Simms, after the commencement of trial, that it 12 would be requesting Piatt to either return to Dr. McKean or select a new QME. 13 14 An MSC and trial took place on the sanctions issues and, on August 29, 2002, the WCJ issued the order imposing sanctions of $500.00 against CIGA. 15 16 CIGA then filed its petition for reconsideration, and we granted reconsideration to further study the facts and law relevant to the petition. Piatt has not filed an answer. 17 18 /// 19 /// 20 /// 21 /// 22 /// 23 /// 24 /// 25 /// 26 /// 27 /// YEE-SANCHEZ, D & PIATT, N 9 1 III. 2 Discussion 3 A. 4 5 6 The WCAB Has No Jurisdiction Before An Application Has Been Filed And, Prior To The Filing Of An Application, The WCAB Cannot Conduct Any Hearings Or Issue Any Orders, Nor Can The Parties Invoke The WCAB’s Judicial Process To Conduct Compelled Discovery. 7 Section 5500 provides, in relevant part: 8 “…[E]xcept where a claim form has been filed for an injury occurring on or after January 1, 1990, and before January 1, 1994, the filing of application for adjudication and not the filing of a claim form shall establish the jurisdiction of the appeals board and shall commence proceedings before the appeals board for the collection of benefits.” (Lab. Code, §5500 [emphasis added].) 9 10 11 12 13 Thus, except for injuries sustained from January 1, 1990 to December 31, 1993, it is beyond 14 dispute that the WCAB has no jurisdiction over any aspect of a workers’ compensation claim 15 until an application, and not merely a claim form, has been filed. (Gangwish v. Workers’ Comp. 16 Appeals Bd. (2001) 89 Cal.App.4th 1284, 1288, fn. 3 [66 Cal.Comp.Cases 584, 586, fn. 3]; 17 Aubry v. Workers’ Comp. Appeals Bd. (Amores) (1997) 56 Cal.App.4th 1032, 1036, fn. 2 [62 18 Cal.Comp.Cases 870, 873, fn. 2]; Cal. General Tire v. Workers’ Comp. Appeals Bd. (Talbott) 19 (2002) 67 Cal.Comp.Cases 1336, 1339 (writ den.); Banks v. Workers’ Comp. Appeals Bd. (1999) 20 64 Cal.Comp.Cases 1457, 1458 (writ den.).)7 21 Therefore, if no application has been filed, the WCAB lacks jurisdiction to set or hold any 22 hearings, or to issue any orders, including an order directing a party to file an application. If a 23 PWCJ or WCJ somehow becomes aware of problems relating to an unrepresented employee’s 24 workers’ compensation claim prior to the filing of an application, the only recourse available is 25 26 27 7 Although sections 5300 and 5301 establish the scope of the WCAB’s jurisdiction, they do not (in the face of the specific language of section 5500) give the WCAB jurisdiction over any claim for workers’ compensation benefits, or any right or liability relating thereto, where no application has been filed. YEE-SANCHEZ, D & PIATT, N 10 1 to refer the employee (or both parties) to an Information and Assistance Officer. (See Lab. Code, 2 §5450 et seq.) The Information and Assistance Officer may then advise the employee of his or 3 her rights, including the need to file an application. Such a referral to the Information and 4 Assistance Officer may result in a limited tolling of the statute of limitations, under the 5 appropriate circumstances. (See Lab. Code, §5454.) 6 Because the WCAB has no jurisdiction absent the filing of an application, a party cannot 7 invoke the WCAB’s judicial process to notice and take a deposition (or to issue a subpoena) 8 unless an application has been filed.8 It is only the jurisdiction and authority of the WCAB that 9 permits depositions, subpoenas or other forms of compelled discovery to be undertaken in 10 workers’ compensation matters. (Wyche v. Blood Bank of America (1993) 58 Cal.Comp.Cases 11 42, 43, fn. 2 (Appeals Board en banc); Moran v. Bradford Building, Inc. (1992) 57 12 Cal.Comp.Cases 273, 283 (Appeals Board en banc); see also, Lab. Code, §§133, 5300, 5301, 13 5710(a); Cal. Code Regs., tit. 8, §§10348, 10530, 10532, 10536.) 14 B. 15 After An Application Has Been Filed, There Are Remedies Potentially Available To Address Pre-Application Abuses, Including Monetary And/Or Evidentiary Sanctions, Section 4650(d) And/Or Section 5814 Penalties, And Section 4064(c) Attorney’s Fees. 16 17 18 Of course, once either party files an application, remedies are available to the parties or to 19 a PWCJ or WCJ for addressing significant problems (or outright abuses) that might have 20 occurred prior to the application’s filing. First, if it is the defendant that ultimately files the application, and if the employee is 21 22 23 24 25 26 27 8 We reiterate that section 5500 does not apply to injuries sustained during the period of January 1, 1990 through December 31, 1993, i.e., “window period” injuries. Former Board Rule 10406 (Cal. Code Regs., tit. 8, §10406 [deleted effective January 1, 2003]) did provide for pre-application discovery for “window period” injuries. This, however, was because the claim form (not the application) was the jurisdictional document for those injuries. (See former Lab. Code, §5401(c); see also, Gangwish v. Workers’ Comp. Appeals Bd., supra, 89 Cal.App.4th at p. 1288, fn. 3 [66 Cal.Comp.Cases at p. 586, fn. 3]; Aubry v. Workers’ Comp. Appeals Bd. (Amores), supra, 56 Cal.App.4th at p. 1036 & fn. 2 [62 Cal.Comp.Cases at p. 873 & fn. 2]; Wyche v. Blood Bank of America, supra, 58 Cal.Comp.Cases at p. 43, fn. 2; Moran v. Bradford Building, Inc., supra, 57 Cal.Comp.Cases at p. 283; Castillo v. Workers’ Comp. Appeals Bd. (1995) 60 Cal.Comp.Cases 751 (writ den.).) YEE-SANCHEZ, D & PIATT, N 11 1 unrepresented, then the defendant may be liable for any attorney’s fees incurred by the employee 2 in connection with the application. (Lab. Code, §4064(c); see Ford v. Lawrence Berkeley 3 Laboratory (1997) 62 Cal.Comp.Cases 153, 158-159 (Appeals Board en banc).) 4 Second, if a defendant breached its statutory duty to file an application (see discussion, 5 infra), or if either party attempted to compel discovery in the absence of WCAB jurisdiction, it 6 might be appropriate to impose a monetary sanction. (Lab. Code, §5813; Cal. Code Regs., tit. 8, 7 §10561.) And, if a party and/or its counsel engaged in multiple and separate bad faith or 8 frivolous actions, multiple sanctions might be appropriate. (See Clabaugh v. Fremont Ins. Co. 9 (2001) 29 Cal. Workers’ Comp. Rptr. 153, 3 WCAB Rptr. 10,192 (Board panel) and Clabaugh v. 10 Fremont Ins. Co. (2002) 4 WCAB Rptr. 10,077 (Board panel), writ and rev. den. sub nom. 11 Hershewe v. Workers’ Comp. Appeals Bd. (2002) 67 Cal.Comp.Cases 1198, 4 WCAB Rptr. 12 10,259 [Appeals Board imposed $6,000.00 in sanctions jointly and severally against defendant, 13 defendant’s attorney, and defendant’s attorney’s law firm, plus $24,000.00 in attorney’s fees 14 against defendant, for multiple acts of sanctionable conduct].) 15 Third, if a defendant has breached its statutory duty to file an application (see discussion, 16 infra), or if it attempted to compel discovery in the absence of WCAB jurisdiction, the defendant 17 may be subject to section 4650(d) and/or section 5814 penalties for any delays in paying benefits 18 occasioned by its failure to file an application and/or its abuse of the discovery process. (Ford v. 19 Lawrence Berkeley Laboratory, supra, 62 Cal.Comp.Cases at pp. 157, 159, cf., Peterson v. 20 Employment Development Dept. (1995) 60 Cal.Comp.Cases 1206, 1210 (Appeals Board en 21 banc), writ den. sub nom. Peterson v. Workers’ Comp. Appeals Bd. (1995) 61 Cal.Comp.Cases 22 1081.)9 23 community that such penalties may be warranted if a defendant breaches its statutory duty to file 24 an application. Both Ford and Peterson have given clear warnings to the workers’ compensation Fourth, if a party attempted to utilize the WCAB’s judicial process to conduct discovery 25 26 27 9 The defendant may also be subject to audit penalties. (Cal. Code Regs., tit. 8, §10111.1.) YEE-SANCHEZ, D & PIATT, N 12 1 before an application was filed, then that party may be subject to evidentiary sanctions once an 2 application has been filed, possibly including but not necessarily limited to: (1) excluding the 3 improperly discovered material from evidence; and/or (2) precluding some (or all) related post- 4 application discovery efforts. (Lab. Code, §133; Cal. Code Regs., tit. 8, §§10348, 10353; cf., 5 Code Civ. Proc., §2023(b)(3).) 6 7 8 C. Before The Filing Of An Application (But After The Filing Of A Claim Form), A Party Can Engage In Non-Compelled Pre-Application Investigation, But A Party Cannot Seek To Compel Compliance With Its Investigation Efforts Until An Application Has Been Filed. 9 10 We emphasize, however, it is only compelled discovery purporting to invoke the 11 WCAB’s jurisdiction and authority by utilizing the WCAB’s judicial process that is proscribed 12 prior to the filing of an application. (This would include, but not necessarily be limited to, 13 noticing a deposition, subpoenaing a witness to a deposition, or subpoenaing medical records and 14 other documents.) Non-compelled pre-application investigation efforts that do not invoke the 15 WCAB’s judicial process are generally permissible and, indeed, are often necessary in order to 16 permit a defendant to determine liability after a claim form is filed. (See, Lab. Code, §5402.) 17 Accordingly, after the filing of a claim form, but before the filing of an application, a 18 defendant may request that the injured employee attend a QME examination (see, Lab. Code, 19 §§4060(c) & (d), 4061(c) & (d), 4061(a) & (b))10 and it might notify the employee that, if he or 20 she fails to attend, it may seek a WCAB order compelling attendance. (See, Lab. Code, §4053.) 21 If, however, the injured employee fails to voluntarily attend and the defendant then elects to 22 petition the WCAB to compel the employee’s attendance, the defendant must first file an 23 application, if one has not been filed already. (Lab. Code, §5500.) 24 25 26 27 10 Also, either party may informally write to an agreed medical examiner (“AME”) or a QME, with copies to the other party, although there are limitations on correspondence with an AME or with a panel QME selected by an unrepresented employee. (Lab. Code, §4062.2.) A party may even informally request that the injured employee be re-evaluated by an AME or a QME, at least if new issues arise. (See, Lab. Code, §§4061(h) [formerly, 4061(g)], 4062(c), 4067.) YEE-SANCHEZ, D & PIATT, N 13 1 Similarly, a defendant may (among other things) request that the injured employee 2 execute a release for medical records, request that the injured employee provide various 3 documents (such as wage information), or interview the injured employee (or other potential 4 witnesses). Correspondingly, an injured employee may request information from a defendant, or 5 interview potential witnesses. Yet, if a party or non-party fails to voluntarily comply with an 6 injured employee or a defendant’s request, and the employee or defendant then elects to request 7 an order from the WCAB, an application must first be filed, if none was filed previously. (Lab. 8 Code, §5500.) D. 9 10 11 A Defendant Is Not Required To File An Application Under Sections 4061(m) And 4063 If It Is Paying Permanent Disability Indemnity In Accordance With The Report(s) Of Either The Treating Physician, The Panel QME, Or AME. 12 13 In assessing whether a defendant has breached a statutory duty to file an application, we 14 observe that section 4061(m) provides, in relevant part: “If a comprehensive medical evaluation 15 from the treating physician or an agreed medical evaluator or a qualified medical evaluator 16 selected from a three-member panel resolves any issue so as to require an employer to provide 17 compensation, the employer shall commence the payment of compensation or promptly 18 commence proceedings before the appeals board to resolve the dispute.” (Lab. Code, 19 §4061(m).)11 Similarly, section 4063 provides: “If a formal medical evaluation from an agreed 20 medical evaluator or a qualified medical evaluator selected from a three member panel resolves 21 any issue so as to require an employer to provide compensation, the employer shall commence 22 the payment of compensation or file an application for adjudication of claim.” (Lab. Code, 23 §4063.) Thus, where either the treating physician, the AME, or the panel QME issues an opinion 24 25 26 27 11 Of course, the panel QME process only applies where the injured employee is unrepresented (Lab. Code, §4061(d)) and where injury to at least one body part is accepted as compensable by the defendant. Lab. Code, §4060(a).) YEE-SANCHEZ, D & PIATT, N 14 1 that would require the payment of permanent disability indemnity, the defendant must either 2 (1) promptly commence payment of permanent disability indemnity in accordance with at least 3 one of those physician’s opinions or (2) promptly file an application with the WCAB to resolve 4 the permanent disability dispute. (Lab. Code, §§4061(m), 4063; see Ford v. Lawrence Berkeley 5 Laboratory, supra, 62 Cal.Comp.Cases at p. 157.) 6 disability indemnity in accordance with at least one of these reporting physician’s opinions, but 7 fails to file an application, it has breached its statutory duty. (Id.) If a defendant fails to pay permanent 8 We recognize that, in Ford, there were permanent disability opinions both from the 9 treating physician and a panel QME, yet, the Appeals Board indicated that the defendant was 10 obliged to either pay permanent disability indemnity in accordance with the panel QME (not the 11 treater) or file an application. (Ford v. Lawrence Berkeley Laboratory, supra, 62 12 Cal.Comp.Cases at p. 157.) Ford, however, involved the pre-1993 version of section 4061(k) 13 [now, section 4061(m)], which referred only to the opinions of the panel QME or the AME; that 14 is, the section did not contain any reference to the opinion of the treating physician.12 15 Accordingly, any suggestion in Ford that a defendant cannot rely on the treating physician’s 16 report, but must pay permanent disability indemnity based on the panel QME’s report, is no 17 longer applicable or germane. 18 We also recognize that section 4061(m) essentially provides that the defendant must pay 19 based on either the treating physician, the AME, or the panel QME’s reports, unless it files an 20 application. Section 4063, however, essentially provides that the defendant must pay based on 21 either the AME or the panel QME’s reports, unless it files an application. That is, section 4063 22 does not refer to the opinion of the treating physician. 23 When construing a statute, however, the fundamental purpose is to determine and 24 effectuate the Legislature’s intent. (DuBois v. Workers’ Comp. Appeals Bd. (1993) 5 Cal.4th 382, 25 26 27 12 Former section 4061(k) provided, in relevant part: “If a formal medical evaluation from an agreed medical evaluator or a qualified medical evaluator selected from a three-member panel resolves any issue so as to require an employer to provide compensation, the employer shall commence the payment of compensation or file an application for adjudication of claim.” YEE-SANCHEZ, D & PIATT, N 15 1 387 [58 Cal.Comp.Cases 286, 289]; Nickelsberg v. Workers’ Comp. Appeals Bd. (1991) 54 2 Cal.3d 288, 294 [56 Cal.Comp.Cases 476, 480]; Moyer v. Workmen’s Comp. Appeals Bd. (1973) 3 10 Cal.3d 222, 230 [38 Cal.Comp.Cases 652, 657]. ) The words of the statute must be construed 4 keeping in mind the statutory purpose, and statutes relating to the same subject must be 5 harmonized, both internally and with each other, to the extent possible. (Chevron U.S.A., Inc. v. 6 Workers’ Comp. Appeals Bd. (Steele) (1999) 19 Cal.4th 1182, 1194 [64 Cal.Comp.Cases 1, 8-9]; 7 Walnut Creek Manor v. Fair Employment & Housing Com. (1991) 54 Cal.3d 245, 268; Dyna- 8 Med, Inc. v. Fair Employment & Housing Com. (1987) 43 Cal.3d 1379, 1386-1387; Moyer v. 9 Workmen’s Comp. Appeals Bd., supra, 10 Cal.3d at pp. 230-231 [38 Cal.Comp.Cases at p. 657].) 10 Thus, a statutory provision must be considered in light of the entire statutory scheme of which it 11 is part. (DuBois v. Workers’ Comp. Appeals Bd., supra, 5 Cal.4th at p. 388 [58 Cal.Comp.Cases 12 at pp. 289-290]; Gee v. Workers’ Compensation Appeals Bd. (2002) 96 Cal.App.4th 1418, 1427 13 [67 Cal.Comp.Cases 236, 242]; American Psychometric Consultants, Inc. v. Workers’ Comp. 14 Appeals Bd. (Hurtado) (1995) 36 Cal.App.4th 1626, 1639 [60 Cal.Comp.Cases 559, 568].) A 15 statute will not be read literally if that would be contrary to the apparent legislative intent. 16 (Chevron U.S.A., Inc. v. Workers’ Comp. Appeals Bd. (Steele), supra, 19 Cal.4th at p. 1192 [64 17 Cal.Comp.Cases at p. 7]; Lungren v. Deukmejian (1988) 45 Cal.3d 727, 735; General Accident 18 Ins. Co. v. Workers’ Comp. Appeals Bd. (Loterstein) (1996) 47 Cal.App.4th 1141, 1146 [61 19 Cal.Comp.Cases 648, 651].) 20 In accordance with these principles of statutory construction, we will read sections 21 4061(m) and 4063 in harmony to provide that a defendant must file an application, unless it is 22 paying permanent disability indemnity based on the AME, the panel QME, or the treating 23 physician. Such a construction not only reconciles the differences in the statutory language of 24 section 4061(m) and 4063 (with the former expressly allowing a defendant to pay in accordance 25 with treating physician, but the latter not expressly allowing this), it also makes both sections 26 consistent with the presumption of correctness afforded to the treating physician’s opinion by 27 section 4062.9, as it read at all times relevant here. In light of this express statutory presumption YEE-SANCHEZ, D & PIATT, N 16 1 (and in light of the express reference to the treating physician in section 4061(m)), we cannot 2 read section 4063 in isolation, and we cannot conclude it was the Legislature’s intention to 3 require a defendant to file application where it is paying permanent disability indemnity in 4 accordance with the treating physician’s report(s).13 5 We reiterate, therefore, that a defendant breaches its statutory duty to file application only 6 if it fails to pay permanent disability benefits based on any one of the following physicians: the 7 treating physician, the panel QME, or the AME. 8 IV. 9 Disposition 10 A. 11 Yee-Sanchez v. Permanente Medical Group (Case No. OAK 271713) In Yee-Sanchez, we will dismiss the petition for removal based on the following 12 13 alternative reasons. 14 As mentioned above, PMG filed a request to withdraw its petition for removal. Although 15 PMG did not specify the reason, it appears the request may have been made because, according 16 to the allegations of a recent letter from Yee-Sanchez, PMG has already filed an application. 17 Assuming that PMG has in fact filed an application, this would render the WCJ’s May 10, 2002 18 order directing it to file one moot. Therefore, this is one basis upon which to dismiss PMG’s 19 petition for removal. 20 There is, however, some question of whether an application has actually been filed. No 21 application is found in the WCAB’s file and the WCAB’s on-line database does not reflect the 22 13 23 24 25 26 27 Our discussion above relates only to the issue of how section 4061(m) and 4063, when read together, affect the duty of a defendant to pay permanent disability indemnity or file an application for injuries sustained between January 1, 1993 and December 31, 2003. We do not now reach the question of how the 2002 amendments to section 4062.9 (which, for injuries on or after January 1, 2003, makes the presumption of correctness applicable only to treating physicians who were “predesignated prior to the date of injury”) might affect our analysis of the relationship between sections 4061(m) and 4063. We also do not now reach the question of how section 4063, by itself, may affect the duty of a defendant to pay benefits or file an application where the compensation in question might not be covered by section 4061(m) (e.g., temporary disability indemnity). YEE-SANCHEZ, D & PIATT, N 17 1 filing of an application. Of course, an application may have been filed, but then associated with 2 another injured employee’s file due to clerical error. If an application was not actually filed, 3 however, then we must alternatively dismiss PMG’s petition for removal for lack of jurisdiction. 4 (Lab. Code, §5500.) 5 6 Although we are dismissing PMG’s petition for removal, we will make the following observations. 7 As we have already observed, the WCAB lacks jurisdiction to issue any orders before an 8 application is filed. (Lab. Code, §5500.) Therefore, the PWCJ here was without authority to 9 order PMG to file an application, and his order was void ab initio. In the absence of an 10 application, the PWCJ was limited to referring Yee-Sanchez to the Information and Assistance 11 Office, so it could inform her of the need to file an application. (See Lab. Code, §5450 et seq.) 12 Further, consistent with our discussion above, it appears (without actually deciding the 13 issue) that PMG did not breach its statutory duty to file application. (Lab. Code, §§4061(m), 14 4063.) That is, although PMG was not paying permanent disability indemnity in accordance with 15 the DEU’s 66% summary rating of the December 4, 2000 report of the panel QME, Dr. 16 Hightower, PMG was apparently paying permanent disability indemnity in accordance with the 17 DEU’s 31% consultative rating of the October 19, 2000 report of the treating physician, Dr. 18 Duong.14 Therefore, because a defendant need not file an application if it is paying based on 19 either the treating physician, the panel QME, or the AME (where an AME can be and is 20 utilized), it is likely there was no breach of sections 4061(m) and 4063 here. 21 On the other hand, it appears (without actually deciding the question) that PMG far 22 overstepped the bounds of proper and non-compelled investigation and ventured far into the 23 realm of unquestionably unlawful pre-application discovery. 24 absence of an application giving the WCAB jurisdiction over any aspect of the matter (see, Lab. 25 Code, §5500), it appears that PMG repeatedly purported to invoke the WCAB’s jurisdiction by 26 27 14 That is, notwithstanding the Of course, this consultative rating would not be admissible in evidence in proceedings before the WCAB. (Cal. Code Regs., tit. 8, § 10166(b).) YEE-SANCHEZ, D & PIATT, N 18 1 noticing the depositions of applicant, Dr. Duong, and Dr. Hightower, and also by twice 2 subpoenaing Dr. Hightower to appear for his deposition. Of course, as emphasized above, it is 3 only the jurisdiction and authority of the WCAB that permits depositions to be noticed and taken 4 (and subpoenas to be issued) in workers’ compensation matters. 5 Accordingly, once an application is filed (if one has not been filed already), the PWCJ (or 6 any other WCJ ultimately assigned to the case) should consider exercising the post-application 7 remedies discussed above, including but not limited to monetary and evidentiary sanctions, for 8 PMG’s apparent pre-application abuses of discovery. B. 9 10 Piatt v. Eureka Union School District (Case No. SAC 304854) 11 In Piatt, we will affirm the WCJ’s imposition of $500.00 in sanctions. 12 Section 5813 permits the WCAB to impose sanctions of up to $2,500.00 where a party 13 and/or its counsel engage in “bad-faith actions or tactics that are frivolous or solely intended to 14 cause unnecessary delay.” (Lab. Code, §5813.) Board Rule 10561 (Cal. Code Regs., tit. 8, 15 §10561) makes it clear that “[a] bad faith action or tactic is one which results from a willful 16 failure to comply with a statutory or regulatory obligation or from a willful intent to disrupt or 17 delay the proceedings of the [WCAB]” and that “[a] frivolous bad faith action or tactic is one that 18 is done for an improper motive or is indisputably without merit,” but that sanctions should not be 19 imposed where the party and/or its counsel “acted with reasonable justification or [where] other 20 circumstances make imposition of the sanction unjust.” 21 Here, CIGA took the depositions of both Piatt and Dr. McKean prior to the filing of an 22 application. As discussed extensively above, these actions were indisputably without merit and 23 were utterly without justification because CIGA was purporting to utilize the WCAB’s judicial 24 process at a time when the WCAB lacked jurisdiction. (Lab. Code, §5500.) The $500.00 in 25 sanctions is warranted on this basis alone. Indeed, CIGA’s conduct in this regard was so 26 egregious, we believe that the imposition of sanctions well in excess of $500.00 might well have 27 been appropriate. YEE-SANCHEZ, D & PIATT, N 19 1 Because we conclude that the imposition of $500.00 in sanctions was fully justified solely 2 on the ground of CIGA’s entirely unlawful acts of taking two depositions before any application 3 was filed, we need not and will not reach CIGA’s remaining contentions. 4 For the foregoing reasons, 5 IT IS ORDERED that the petition for removal filed by Permanente Medical Group in 6 Yee-Sanchez v. Permanente Medical Group (Case No. OAK 271713), be, and it hereby is, 7 DISMISSED. 8 /// 9 /// 10 /// 11 /// 12 /// 13 /// 14 /// 15 /// 16 /// 17 /// 18 /// 19 /// 20 /// 21 /// 22 /// 23 /// 24 /// 25 /// 26 /// 27 /// YEE-SANCHEZ, D & PIATT, N 20 1 IT IS FURTHER ORDERED, as the Decision After Reconsideration of the Appeals 2 Board in Piatt v. Eureka Union School District (Case No. SAC 304854), that the Findings and 3 Order issued by the workers’ compensation administrative law judge on August 29, 2002 be, and 4 it hereby is, AFFIRMED. 5 WORKERS’ COMPENSATION APPEALS BOARD 6 7 /s/ William K. O'Brien_________________________ 8 9 I CONCUR, 10 11 12 /s/ James C. Cuneo_______________________ 13 14 15 /s/ Janice J. Murray______________________ 16 17 18 19 DATED AND FILED AT SAN FRANCISCO, CALIFORNIA April 29, 2003 20 21 22 SERVICE BY MAIL ON SAID DATE TO ALL PARTIES AS SHOWN ON THE OFFICIAL ADDRESS RECORD, EXCEPT LIEN CLAIMANTS. NPS/ncv 23 24 25 26 27 YEE-SANCHEZ, D & PIATT, N 21