EK HEALTH

by Steve Kline, Esq.
EK Health Services' Legal Counsel

Every Monday, I wake up to an email from Robin Kobayshi sending me the LexisNexis Workers’ Compensation eNewsletter (California Edition).  Thanks to a recent edition, I couldn’t resist the case below for this month’s article.

On May 27, 2011, a WCAB Panel decision was issued in the matter, Vadnais v Kraft Foods Nabisco, which were two separate claims originally heard at the Sacramento Board.  Mr. Vadnais sustained two different injuries.  One was a specific injury on February 19, 2002 to his left knee and the other was a cumulative trauma ending on February 11, 2001 to his shoulders.  The parties stipulated that the knee injury caused 53 percent disability in the sum of $49,342.50 and the shoulder caused 8 percent disability in the sum of $3,360.00.

Each stipulation indicated that said amounts were to be “less credit for such payments previously made.”  At the time of the stipulation, the defendant had made permanent disability advances for the knee injury in the amount $12,340.00 and $16,473.36 for the shoulder.  The defendant unilaterally applied the $13,113.36 overpayment on the shoulder as a credit to the remaining amounts due on the knee.

After a hearing, the WCJ issued a Finding & Award in March, 2011, finding that the unilateral payment based on the language of the stipulations was wrong.  He levied a sanction against the defendant $2500 for their not seeking credit through an earlier order. However, based on equitable considerations, he allowed them to take credit for $13, 113.33 overpayment against the knee’s permanent disability.  Did you notice the three-cent difference?

Well, the defendant did and they filed a Petition for Reconsideration.

To say that the WCAB Panel was miffed is to be kind.  This is still a family publication and we must keep it civil.   The Panel wrote, “Defendant’s petition for reconsideration does not reveal and we can not imagine, what ‘reasonable’ justification underlies its request for reconsideration of an award of a credit that is short by three cents.”

The WCAB Panel went on to explain to the defendants that the defendant could have asked the WCJ to correct a clerical error or if a petition became necessary to inform the WCAB that this was merely a correction of a clerical error, albeit trivial.

The Panel continued, “… it is difficult to understand in what sense defendant was ‘aggrieved’ by an error amounting to three cents.  To waste the Appeal Board’s time and resources over a three-cent error does an outrageous disservice, not only to us and our staff, but to the many deserving litigants awaiting our decisions on matters of consequence.”

The Panel granted the petition regarding the three cents.  However, there was a cost for this trifling:  The Panel issued a notice of intention to sanction the defendant, and their attorneys, $500 and ordered them to show good cause on why the sanctions should not be imposed.

One can only hope that reason prevailed at the law office and no further papers were filed.

The lessons to be learned are obvious and in many cases, trite.. But one that is not quite as clear is that care must be taken with our words.  This problem could have been solved early on with the stipulations indicating that the total amount of the advanced permanent disability payments were to be credited for both matters. Once the error was found, then seeking the administrative remedies of correcting clerical errors could have been attempted.  Of course, hindsight is 20/20 or in this case worth a total of $3000 in penalties and sanctions.

I just wonder:  was the three-cent principle worth it?

Thanks for your attention.