ADJ10179447 — California WCAB decision

What the panel ordered

Petition for Reconsideration denied.

Petition for Reconsideration filed by defendant Baron HR, LLC, challenging arbitrator's Findings and Order re Coverage dated March 28, 2023.

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What was disputed, and how it came out

Each issue the panel decided, with the reasoning it gave. An outcome is what this panel did on this record — not a rule, and not a prediction.

Jurisdiction / venueDefendant prevailed

Petitioner Baron HR, LLC failed to prove insurance coverage under the Hartford/Bison Data Systems policy and failed to provide evidence of coverage for Countrywide Payroll, resulting in denial of coverage and affirming uninsured status.

From the decision · page 3Defendant Baron HR, LLC, has filed a timely and properly verified petition for reconsideration arbitrator's Findings and Order re Coverage dated March 28, 2023. The arbitrator offers the following Report and Recommendation in response thereto.

The facts that decided it

What the panel treated as outcome-determinative, and which side it favoured.

Petitioner failed to produce the purported transportation insurance policy despite arbitrator's direction, leading to inference that such policy never issued.

The rules the panel named

Authorities as the decision cited them, with how this panel applied each one.

Labor Code §5705

Burden of proof to establish insurance coverage under Labor Code §5705 lies with the petitioner.

Petitioner Baron HR, LLC failed to meet this burden by not producing substantial evidence of coverage.

From the decision · page 51. BTR Has Failed to Meet its Burden of Proving that The Hartford/BDS Policy Affords it or BDS Coverage of Applicant's Claim.

California Insurance Code §1730(c)

A PEO's service agreement is invalid for coverage purposes if intended to avoid an employer's appropriate experience rating under Insurance Code §1730(c).

Petitioner failed to prove the Hartford policy was not intended to avoid experience rating modification.

From the decision · page 5First, Petitioner contends that the finding that it is uninsured is erroneous, because the Hartford policy (Exhibit Y-3), which names BDS, alone, as the uninsured, was not intended by BHR, to avoid the ultimate sentence of § 3602(d)(1). That provision invalidates a PEO 's service agreement for purposes of coverage, if the contract is intended to avoid, " an employer's appropriate experience rating as defined in Insurance Code § 1730(c)"

California Commercial Code §2210(1)

Under California Commercial Code §2210(1), delegation of contractual duties does not relieve the delegating party of liability.

BHR retains liability for coverage failure despite delegation to BDS.

From the decision · page 7Moreover, under the California c Commercial Code § 2210 (1), a party may perform his or her duty under a contract through delegation to another, by a contract with another party. That provision further states "No delegation of performance relieves the party delegating of any duty to perform or any liability or breach." This means that, if BHR delegated to BDS its obligation to secure coverage for applicant under BHR/VBC contract (Exhibit X-1) via the BHR/BDS contract (Exhibit Y). BHR nevertheless retains liability to VBC for any failure by BDS to secure coverage. Therefore, Petitioner retains liability for failing to secure coverage for this claim, whether or not it lacked the intent to avoid the experience rating modification.

ADJ10179447 · June 20, 2023

What the panel ordered

What was disputed, and how it came out

The facts that decided it

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The rules the panel named

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