Maria Elana Mendez settled her claims against Le Chef Bakery and Pacific Compensation Insurance by a compromise and release in 2010.

On April 30, 2012, Dr. Fatolomi filed a medical-legal lien claim and concurrently filed a DOR requesting a lien conference. A lien conference was held on June 14, 2012 and continued to July 20, 2012. (before SB 863 became law) The parties filed a pretrial conference statement, and the case was scheduled for a December 12, 2012 trial, which was continued to January 3, 2013.

Dr. Fatolomi did not pay a lien activation fee prior to the January 3, 2013 lien trial. The WCJ concluded that, under WCAB Rule 10582, Dr. Fatolomi’s filing of a DOR “activated” his lien and that the intent of section 4903.06 is that, beginning January 1, 2013, a lien claimant must pay an activation fee whenever it uses the WCAB to collect on its lien, regardless of whether the first appearance in 2013 is at a lien conference or lien trial. Therefore, the WCJ dismissed Dr. Fatolomi’s lien with prejudice for failure to pay the fee.

Dr. Fatolomi filed a petition for reconsideration contending that Labor Code section 4903.06 does not require payment of a lien activation fee prior to a lien trial and, therefore, his lien should not have been dismissed. The WCAB in a significant panel decision agreed and reversed the dismissal in the case of Maria Elana Mendez vs Le Chef Bakery and Pacific Compensation Insurance.

Payment of a lien activation fee was not required with a DOR filed prior to January 1, 2013 or at a lien conference held prior to January 1, 2013. This is because section 4903.06 was not effective until that date. Therefore, Dr. Fatolomi was not required to pay a lien activation fee based on his April 30, 2012 DOR or based on the June 14 or July 20, 2012 lien conferences. However, because section 4903.06 applies to all cases that were not final as of its January 1, 2013 effective date (Stats. 2012, ch. 363, § 84), the WCAB emphasized that if Dr. Fatolomi’s pre-2013 DOR had triggered a lien conference (rather than a lien trial) in 2013, he would have been required to pay the activation fee prior to the lien conference. Under the WCAB Rules, there is a clear and unambiguous distinction between a “lien conference” and a “lien trial.”

The panel concluded that a lien claimant is not required to pay a lien activation fee prior to a 2013 lien trial where: (1) the declaration of readiness (DOR) is filed prior to January 1, 2013; (2) the lien conference takes place prior to January 1, 2013; and (3) the lien trial takes place in 2013, without any intervening 2013 lien conference.

However the panel observed that section 4903.06(a)(5) provides: any lien filed pursuant to subdivision (b) of Section 4903 prior to January 1, 2013, and any cost that was filed as a lien prior to January 1, 2013, for which the filing fee or lien activation fee has not been paid by January 1, 2014, is dismissed by operation of law. Therefore, if a lien subject to the lien activation fee is not resolved or withdrawn by January 1, 2014, the lien activation fee must be paid by that date, or the lien will be dismissed by operation of law.