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ReadyLink Healthcare is a nurse staffing company based in Thousand Palms, California. It contracts with registered nurses and other healthcare providers throughout the United States, and places them at hospitals, on a short-term basis.

SCIF and ReadyLink have been engaged in a multiyear, multijurisdictional dispute over the final amount of workers’ compensation insurance premium that ReadyLink owes to SCIF for the 2005 policy year, based on an audit of ReadyLink’s payroll for that year performed by SCIF. During the audit, SCIF determined that certain payments made by ReadyLink to its nurses, which ReadyLink characterized as per diem payments, should instead be considered to be payroll under the relevant workers’ compensation regulations. SCIF’s audit resulted in a significant increase in ReadyLink’s premium.

After 15 years of litigation attempting to collect additional premium from its insured, the State Compensation Insurance Fund was sent back essentially to square one to a trial court in Riverside. The convoluted litigation history is enough to give anyone a headache.

ReadyLink first challenged SCIF’s application of the regulations by filing an appeal of the audit to the Insurance Commissioner. The Commissioner approved SCIF’s application of the relevant regulation.

A trial court then rejected ReadyLink’s petition for a writ of administrative mandamus to prohibit the Insurance Commissioner from enforcing its decision, and an appellate court affirmed the trial court’s judgment.

While ReadyLink’s appeal from the trial court’s denial of its petition for a peremptory writ of administrative mandamus was pending, ReadyLink filed a putative class action lawsuit in federal district court against SCIF and the Insurance Commissioner.  (ReadyLink Healthcare, Inc. v. State Compensation Ins. Fund (9th Cir. 2014) 754 F.3d 754, 757).

The federal district court dismissed the case concluding that it was appropriate to decline to exercise supplemental jurisdiction over the remaining state-law claims. While ReadyLink’s federal appeal was pending, California’s Second District Court of Appeal issued its opinion in ReadyLink Healthcare affirming the trial courts ruling.

SCIF then filed the action underlying this current appeal in Riverside County Superior Court on January 13, 2015. SCIF alleged causes of action against ReadyLink for breach of contract, money due on an open book, and common count. The trial court ultimately granted SCIF’s motion for judgment on the pleadings, finding that the amount owed was precisely what was determined in the underlying administrative decision and appeals, the amount of $555,327.53, plus prejudgment interest of $571,606.99.

ReadyLink appealed the money judgment in favor of SCIF. The Court of Appeal reversed in the new published opinion of SCIF v ReadyLink Healthcare inc.

A review of ReadyLink Healthcare, supra, 210 Cal.App.4th 1166, demonstrated that the issues that remain to be decided in this collection action were not previously considered, let alone decided, in the appellate review from the writ proceeding.

The single issue before the ALJ was whether SCIF’s inclusion as payroll those amounts that ReadyLink paid to its employee nurses as per diems for the 2005 policy year complied with the California Workers’ Compensation Uniform Statistical Reporting Plan.

In its ruling on ReadyLink’s petition for a writ of administrative mandamus, the trial court did not suggest that the dispute involved other questions, such as the total amount of the premium owed by ReadyLink, or whether SCIF’s past conduct in relation to ReadyLink might provide a legal basis for ReadyLink to avoid having to pay the premium for the 2005 policy year as determined by SCIF.

The trial and appellate courts in the federal action did not consider, much less decide, the question of the amount of premium actually owed by ReadyLink for workers compensation insurance for the 2005 policy year.

Thus, the Court of Appeal’s review of the collateral proceedings between ReadyLink and SCIF makes clear that the trial court erred in concluding that the issues raised by SCIF’s collection action and by ReadyLink’s affirmative defenses to that action had been litigated and decided in a prior action.

The judgment of the trial court was reversed. The trial court’s order denying ReadyLink’s motions to compel further discovery was also reversed.