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Wendy Johnson was injured while employed by the Santa Ynez Valley Journal, who was insured by SCIF. Her case proceeded to trial in 2019.The WCJ issued a Findings & Award, finding Johnson was permanently totally disabled and allowing an attorney fee of 20%. SCIF sought reconsideration and the Appeals Board granted the petition for further study and the matter was referred to mediation.

As a result of the mediation, the parties entered into a Compromise and Release in the total amount of $685,000.00.

Paragraph 7 of the C&R provides that “The parties agree to settle the above claim(s) on account of the injury(ies) by the payment of the SUM OF: $685,000.00 The following amounts are to be deducted from the settlement amount: $25,300.00 for permanent disability advances through [June 26, 2013[;] $121,058.93, payable to WENDY THOMPSON FOR NON-SUBMIT MSA[;][and] $137,000.00 request as applicant’s attorney’s fee.”

The $137,000.00 attorney fee amounts to 20% of the settlement. Applicant and applicant’s attorney signed the C&R on October 12, 2022 and the attorney for defendant State Compensation Insurance Fund (SCIF) signed it on October 14, 2022.

The Appeals Board rescinded the August 14, 2019 Findings of Fact and Award and remanded this matter to the WCJ for consideration of the C&R. The WCJ issued an Order Approving Compromise and Release on October 24, 2022, approving the settlement terms agreed to by the parties, including the attorney fee of $137,000.00.

SCIF again filed a Petition for Reconsideration, arguing that the WCJ’s finding that an attorney’s fee of $137,000.00 is unreasonable and not supported by evidence. The WCAB denied reconsideration of the attorney fee award in the panel decision of Thompson v Santa Ynex Valley Journal – ADJ8004567 (January 2023).

In its Opinion Denying Reconsideration, the panel noted that a stipulation between the parties need not be supported by substantial evidence citing County of Sacramento v. Workers’ Comp. Appeals Bd. (Weatherall) (2000) 77 Cal.App.4th 1114, 1121 [65 Cal.Comp.Cases 1]),”

A stipulation is an agreement between opposing counsel … ordinarily entered into for the purpose of avoiding delay, trouble, or expense in the conduct of the action, and serves ‘to obviate need for proof or to narrow range of litigable issues in a legal proceeding.(Weatherall, supra, 77 Cal.App.4th at p. 1119.)

Stipulations are designed to expedite trials and hearings and their use in workers’ compensation cases should be encouraged. (Robinson v. Workers’ Comp. Appeals Bd. (Robinson) (1987) 194 Cal.App.3d 784, 791 [52 Cal.Comp.Cases 419].)

Stipulations are binding on the parties unless, on a showing of good cause, the parties are given permission to withdraw from their agreements. (Weatherall, supra, at p. 1121.)

While the Appeals Board has the authority to reject parties’ stipulations, this “discretion does not validate capricious decisionmaking.” (Weatherall, supra, 77 Cal.App.4th at p. 1119.)

The panel concluded by stating: “Permitting a party to subsequently withdraw from an agreement because they have changed their mind endangers the finality of approved settlements and undermines transactional stability in the workers’ compensation system and risks discouraging future settlements. Defendant here has not even alleged grounds in its petition that could constitute good cause to set aside the C&R.”