What the panel ordered
Findings of Fact rescinded; issue of Shatford Law's lien claim for attorney's fees deferred and remanded to WCJ for further proceedings.
Lien claimant (prior attorney) sought reconsideration of WCJ's finding that its attorney fee lien was time-barred for failure to object to a C&R or timely seek reconsideration of the OACR. WCAB granted reconsideration, rescinded the findings, and deferred the lien issue for further proceedings.
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.
Lien claimant was not required to object to the C&R or seek reconsideration of the OACR to preserve its lien rights; WCJ erred in finding the lien time-barred; issue deferred for further proceedings.
From the decision · page 7Based on the foregoing, as our Decision After Reconsideration, we rescind the WCJ's Findings of Fact and substitute new Findings of Fact, which defer the issue of lien claimant's lien for attorney's fees. This matter is returned to the WCJ for further proceedings consistent with this decision, and a new decision from which any aggrieved person may timely seek reconsideration.
The facts that decided it
What the panel treated as outcome-determinative, and which side it favoured.
Lien claimant filed application for adjudication and lien for attorney's fees, providing notice to defendant and current counsel before C&R approval.
Favours Applicant prevailed
Established that defendant and current counsel were on notice of the lien, so failure to object to C&R or OACR did not waive lien rights.
From the decision · page 4Here, lien claimant provided defendant notice of its potential lien when it filed applicant's application for adjudication on May 17, 2016 well before defendant submitted the proposed C&R and the WCJ approved it in November 2020. Yet, defendant did not resolve the lien, and the WCJ's OACR did not award lien claimant any attorney's fees or order that the awarded fees be held in trust. Thus, the lien claim remains unresolved.
WCJ did not review court file for unresolved attorney's fee lien before approving C&R and OACR did not address the lien.
Favours Applicant prevailed
Showed procedural error by WCJ, supporting remand for proper determination of lien claim.
From the decision · page 5simply failed to review the court file for the lien for attorney's fees prior to approving the C&R. In doing so, the WCJ did not fully consider adequacy of the C&R, and instead erroneously placed the burden on lien claimant to take even further action to provide notice of its lien by objecting to the proposed C&R and/or the OACR.3
Lien claimant was not a party to the C&R and thus not bound by its terms or the OACR approving it.
Favours Applicant prevailed
Supported finding that lien claimant's rights could not be waived by failure to object to a contract it was not party to.
From the decision · page 6Here, because lien claimant was not a party to the C&R, it clearly did not accept an offer to settle its lien claim via the agreement. Thus, as a matter of contract law, lien claimant was not contractually bound by the C&R, or, for that matter, the OACR, which approved the C&R's terms as drawn by the parties. (Crowley v. Maritime Corp. v. Boston Old Colony Ins. Co. (2008) 158 Cal.App.4th 1061, 1069 ["It goes without saying that a contract cannot bind a nonparty."].) The WCJ would have lien claimant insert itself as a party to the C&R, which would prohibit it from adjudicating, rather than settling, its lien claim. Such a requirement would violate lien claimant's due process rights, and we reject the WCJ's position to the contrary. (Cal. Code Regs., tit. 8, § 10702 ["No lien claim shall be disallowed or reduced unless the lien claimant has been given notice and an opportunity to be heard."].)
The rules the panel named
Authorities as the decision cited them, with how this panel applied each one.
Rocha v. Puccia Construction Co. (1982) 47 Cal.Comp.Cases 377; State Comp. Ins. Fund v. WCAB (Chester) (1971) 36 Cal.Comp.Cases 678; Sierra Pacific Industries v. WCAB (Lewis) (1979) 44 Cal.Comp.Cases 573
An applicant's attorney's appearance is tantamount to filing a lien claim, putting defendant on notice of a fee claim; defendant must retain sufficient funds to cover the attorney's lien or risk double liability.
Applied to find that lien claimant's appearance and lien filing provided sufficient notice to defendant, so failure to object to C&R or OACR did not waive lien rights.
From the decision · page 4First, it is well-settled that an applicant's attorney's appearance in a matter is tantamount to the filing of a lien claim because it puts the defendant (and, naturally, the WCJ) on notice that a fee will be claimed. (See, e.g., Rocha v. Puccia Construction Co. (1982) 47 Cal.Comp.Cases 377, 380 (Appeals Board en banc); State Comp. Ins. Fund v. Workmen's Comp. Appeals Bd. (Chester) (1971) 36 Cal.Comp.Cases 678 (writ den.); Sierra Pacific Industries v. Workers' Comp. Appeals Bd. (Lewis) (1979) 44 Cal.Comp.Cases 573 (writ denied).) In Lewis, the Appeals Board held that when an applicant's attorney appears, that attorney has a lien that attaches to any amount that is thereafter payable as compensation, and defendant(s) must retain sufficient funds from the compensation award to cover the attorney's lien. A defendant's failure to do so may subject it to double liability in order to pay the noticed, unresolved fee lien.
Cal. Code Regs., tit. 8, § 10759(a)
WCJ must inquire into adequacy and completeness of C&R agreements, including provision for lien claims, before approval.
Applied to find WCJ erred by not reviewing court file for unresolved attorney's fee lien before approving C&R.
From the decision · page 5In accordance with Labor Code section 5502, the workers' compensation judge shall have authority to inquire into the adequacy and completeness, including provision for lien claims, of Compromise and Release agreements...and to issue orders approving Compromise and Release agreements....
Shriver v. Kuchel (1952) 113 Cal.App.2d 421; Burbank Studios v. WCAB (Burbank) (1982) 134 Cal.App.3d 929; Cal. Code Regs., tit. 8, § 10702
A contract (C&R) cannot bind a nonparty; due process requires lien claimant be given notice and opportunity to be heard before disallowance or reduction of lien claim.
Applied to find lien claimant not bound by C&R or OACR as it was not a party; WCJ erred in holding otherwise.
From the decision · page 6Here, because lien claimant was not a party to the C&R, it clearly did not accept an offer to settle its lien claim via the agreement. Thus, as a matter of contract law, lien claimant was not contractually bound by the C&R, or, for that matter, the OACR, which approved the C&R's terms as drawn by the parties. (Crowley v. Maritime Corp. v. Boston Old Colony Ins. Co. (2008) 158 Cal.App.4th 1061, 1069 ["It goes without saying that a contract cannot bind a nonparty."].) The WCJ would have lien claimant insert itself as a party to the C&R, which would prohibit it from adjudicating, rather than settling, its lien claim. Such a requirement would violate lien claimant's due process rights, and we reject the WCJ's position to the contrary. (Cal. Code Regs., tit. 8, § 10702 ["No lien claim shall be disallowed or reduced unless the lien claimant has been given notice and an opportunity to be heard."].)
What proof carried it
The evidence the panel weighed, by kind.
Lien claimant filed application for adjudication and lien for attorney's fees, providing notice to defendant and current counsel; C&R and OACR did not resolve the lien; WCJ failed to review court file for unresolved lien before approving C&R.
From the decision · page 4Here, lien claimant provided defendant notice of its potential lien when it filed applicant's application for adjudication on May 17, 2016 well before defendant submitted the proposed C&R and the WCJ approved it in November 2020. Yet, defendant did not resolve the lien, and the WCJ's OACR did not award lien claimant any attorney's fees or order that the awarded fees be held in trust. Thus, the lien claim remains unresolved.
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