Lien claimants are winning statutes of limitations disputes thanks to a recent trend of panel decisions pertaining to Section 4903.5 of the California Code, according to a Southern California attorney.

California Workers' Compensation panels have been interpreting in favor of lien claimants who failed to file an official lien within the statute of limitations mandated by Section 4903.5 of the California Labor Code, said Jon Brissman, a lien claimants' attorney from Colton, Calif.

He said originally workers’ compensation attorneys may have viewed Section 4903.5 as “defense oriented.” However, the statute has been benefiting lien claimants because Workers' Compensation Appeals Board (WCAB) panels have been interpreting the section in ways that have made it easier to establish a lien, he said.

Brissman said that recent rulings have held that:

    * "Defendant's receipt of a contemporaneous bill establishes a lien regardless of whether a lien was filed with the WCAB [relying on language in 4904].
* Defendant's knowledge of services provided triggers defendant's duties to lien claimants under (WCAB rules) 10886, 10888 and 10890, regardless of whether the lien is listed in the Official Address Record.
* Defendant's failure to serve the settlement documents on a provider tolls the operation of 4903.5."

Brissman added, "Apparently, 4903.5 applies only to medical providers of which defendants have no knowledge at the time the case-in-chief settles. Those stealth providers, who would have had no rights prior to 4903.5, were given specific time frames in which an initial lien filing was permissible."

He cited several panel decisions, which are below (click on the website near each decision’s name for the panel opinion):

    * Balcon v. SCIF, http://www.workcompcentral.com/pdf/2008/misc/Balcon.pdf
* Loc Tran v. Viet Nguyen Trucking, http://www.workcompcentral.com/pdf/2008/misc/LocTran.pdf
* Picos v. SCIF, http://www.workcompcentral.com/pdf/2008/misc/Picos.pdf
* Barajas v. Don Steve Chevrolet, http://www.workcompcentral.com/pdf/2008/misc/Barajas.pdf
* Chablet v. Staff Management, http://www.workcompcentral.com/pdf/2008/misc/Chablet.pdf

The panels making these rulings include conservative panelists, Brissman said, before adding, "This isn’t a liberal construing of the code."

"As far as I know, no one had ever been able to put them together to be able to show a judge that the board panels are consistent on their rulings on this," he said. Brissman said that these interpretations could lead to defense attorneys presenting less statute of limitations defenses, and potentially increase the use of laches defenses. He added that panels are still strongly encouraging lien claimants to file timely liens in workers’ compensation cases.

York McGavin, a durable medical equipment supplier who frequently consults with lien claimants in a variety of court challenges, said that he has "yet to lose on this issue." He noted that out of the five cases Brissman provided, the Loc Tran decision describes all of the factors involved in interpreting the statute of limitations.

"When we serve a bill on a defendant, and they object to it, they are aware that we have an outstanding balance," McGavin said. He cited Title 8, Section 10301 of the California Code of Regulations, which defines a lien claimant as "any person claiming payment under the provisions of Labor Code Section 4903 or 4903.1."

McGavin added, "That means that as soon as we claim payment, we automatically become a lien claimant, just by the virtue of claiming. The statute of limitations doesn't start rolling until all three of the conditions are met. That would mean 12 months from date of service, five years from date of injury, or six months from when the case was resolved. Of course, if we're never apprised of a case being resolved, the statute of limitations is tolled until we are apprised."

He said that he has frequently urged defense attorneys to notify all providers of service in a case.

James Pettibone, a managing partner for the Laughlin, Falbo, Levy & Moresi defense firm, said these cases appear to void the intended effect of Section 4903.5.

"The service of a bill may have the same effect as the filing of a lien," he said. "It gives the lien claimants little or no incentive to file a lien with the WCAB. As a result, the WCAB would have no notice of a lien until the lien claimant decides to have their lien adjudicated. The lien claimant's rights appear to be preserved as long as a bill has been served on the defendants before the compromise and release (agreement) is approved."

Pettibone said these panel decisions undermine the purpose of the statute of limitations, which was created to promote finality.

"This section was established to eliminate situations where a lien claimant demands payment years after a case has been closed," he said. "These decisions may well prevent adjusting agencies from closing their files and force the parties to litigate issues such as notice to defendants, the service date of bills, and the authenticity of documents. This litigation could take place long after the witnesses are available and relevant documents have been destroyed."

-- By John P. Kamin, WorkCompCentral