ADJ11008738 · October 20, 2025

Defendant's failure to timely serve and file proof of service was found to be inadvertent and not in bad faith, thus sanctions were not warranted.

From the decision · page 5the MOH from the April 28, 2025 lien conference until July 11, 2025, a review of the record does not show defendant's conduct rose to the level of bad faith that is needed to impose sanctions under section 5813. Specifically, defendant contends "on May 5, 2025, the day the Minutes were received via email, the inbox experienced a high volume of message over 250 emails. The relevant

Defendant failed to timely serve and file proof of service for the Minutes of Hearing from April 28, 2025 lien conference until July 11, 2025.

Favours Applicant prevailed

This failure was found to be an inadvertent clerical oversight, not bad faith, leading to rescission of sanctions.

From the decision · page 5the MOH from the April 28, 2025 lien conference until July 11, 2025, a review of the record does not show defendant's conduct rose to the level of bad faith that is needed to impose sanctions under section 5813. Specifically, defendant contends "on May 5, 2025, the day the Minutes were received via email, the inbox experienced a high volume of message over 250 emails. The relevant

WCJ improperly relied on defendant to serve notice of hearing for July 7, 2025 lien conference instead of WCAB.

Favours Applicant prevailed

This procedural error meant no willfulness or prejudice was found to justify sanctions.

From the decision · page 4The WCJ explained in her Report that lien claimant was deprived of due process when defendant requested the WCJ issue a NOI to dismiss the lien claimant despite defendant's failure to serve lien claimant with a notice of hearing. (Report, at p. 7.) However, per WCAB Rule 10750, unless the WCJ specifically delegates a party to serve a notice of hearing, service of notice of hearing must be by the WCAB. In determining whether a party received notice of the hearing, the WCJ must inquire as to whether they received the official communication from the WCAB.

Labor Code section 5813

Sanctions may be imposed under Labor Code section 5813 for bad-faith actions or tactics that are frivolous or solely intended to cause unnecessary delay.

Sanctions are designed to punish litigation abuses and control calendars; defendant's conduct did not rise to bad faith.

From the decision · page 5The Appeals Board is authorized to impose sanctions, costs and attorney's fees under section 5813, against a person who engages in "bad-faith actions or tactics that are frivolous or solely intended to cause unnecessary delay." (Lab. Code, § 5813.) Sanctions under section 5813 are designed to punish litigation abuses and to provide the court with a tool for curbing improper legal tactics and controlling their calendars. (Duncan v. Workers' Comp. Appeals Bd. (2008) 166 Cal.App.4th 294, 302.) Accordingly, sanctions are similar to penalties under section 5814, in that they are designed to have both remedial and penal aspects. (See Ramirez v. Drive Financial Services (2008) 73 Cal.Comp.Cases 1324 (Appeals Board En Banc).)

WCAB Rule 10421

Sanctions under WCAB Rule 10421(b) include failure to timely serve documents unless due to mistake, inadvertence or excusable neglect.

Defendant's failure to timely serve and file proof of service was inadvertent and excusable, thus sanctions were not warranted.

From the decision · page 5WCAB Rule 10421, subdivision (b), authorizes sanctions for a party who has committed "[b]ad faith actions or tactics that are frivolous or solely intended to cause unnecessary delay including actions or tactics that result from willful failure to comply with a statutory or regulatory obligation, that result from a willful intent to disrupt or delay the proceedings of the Workers' Compensation Appeals Board, or that are done for an improper motive or are indisputably without merit." (Cal. Code Regs., tit. 8, § 10421(b).) Subdivision (b) provides a comprehensive but non- exclusive list of actions that could be subject to sanctions. As applicable here, violations subject to sanctions, pursuant to WCAB Rule 10421(b), include:

WCAB Rule 10750

Service of notice of hearing must be by the WCAB unless specifically delegated to a party by the WCJ.

WCJ improperly relied on defendant to serve notice of hearing; no willfulness or prejudice found to warrant sanctions.

From the decision · page 4The WCJ explained in her Report that lien claimant was deprived of due process when defendant requested the WCJ issue a NOI to dismiss the lien claimant despite defendant's failure to serve lien claimant with a notice of hearing. (Report, at p. 7.) However, per WCAB Rule 10750, unless the WCJ specifically delegates a party to serve a notice of hearing, service of notice of hearing must be by the WCAB. In determining whether a party received notice of the hearing, the WCJ must inquire as to whether they received the official communication from the WCAB.

Defendant's explanation of inadvertent clerical oversight due to high volume of emails, and timely filing after notice of sanction.

From the decision · page 5the MOH from the April 28, 2025 lien conference until July 11, 2025, a review of the record does not show defendant's conduct rose to the level of bad faith that is needed to impose sanctions under section 5813. Specifically, defendant contends "on May 5, 2025, the day the Minutes were received via email, the inbox experienced a high volume of message over 250 emails. The relevant