Brent Reynolds, sustained an injury on October 16, 2012 to his shoulder and wrist that arose out of and in the course of his employment as a sales representative for Hostess Brands.
The parties agreed to use Dr. Robert Fenton as an Agreed Medical Evaluator in Orthopedic Surgery. Defense counsel scheduled Dr. Fenton’s cross-examination to take place on August 15, 2016.
In May, Dr. Fenton transmitted a proposed deposition fee agreement to Defense counsel’s office, seeking Defendant’s acknowledgment and agreement to pay a $781.25 non-refundable deposit for the schedule cross-examination. Defense counsel executed this agreement on May 6, 2016, but did not copy opposing counsel when transmitting this now fully executed agreement back to Dr. Fenton. The deposition was eventually re-scheduled to October 31, 2016. The Defendant would ultimately pay the requested deposit, which Dr. Fenton would receive on or around October 19, 2016.
Applicant counsel requested that the October 31, 2016 cross-examination be re-scheduled. Dr. Fenton refused to waive his non-refundable deposit policy, and intended to charge the parties with an additional $781.25 for any re-scheduled deposition.
Around this time, Applicant counsel learned of the Defendant’s payment of a $781.25 non-refundable deposit, which he then objected to as being in excess of fee schedule. Applicant counsel then wrote a letter directly to Dr. Fenton on October 27, 2016, objecting to the cross-examination in its entirety, contending that Dr. Fenton was paid in excess of the fee schedule.
He further filed a Request to Strike Dr. Fenton and Petition for Costs, Sanctions, and Attorney’s Fees for Bad Faith Tactics, which in no uncertain terms accused Defendant of paying fees in excess of the fee schedule to attempt to sway Dr. Fenton to provide a more favorable opinion; Dr. Fenton was copied on this Petition.
In response, Defendant filed its own Petition for Costs and Sanctions on October 31, 2016 and its own Petition to Strike Dr. Fenton on November 2, 2016.
The WCJ ultimately ordered that Dr. Fenton be stricken as the agreed medical evaluator, but deferred action on the competing Petitions for Fees and Costs. The parties eventually settled the case via Stipulations with Request for Award based on a newly selected QME reporting.
After a trial on the unresolved issue of the competing Petitions for Sanctions, the WCJ concluded that Applicant counsel’s challenge of the AME Dr. Fenton’s cross-examination fees was not bad faith as he possessed the statutory right to challenge the same. However, the Applicant’s conduct in communicating his objections to Dr. Fenton were in violation of Labor Code section 4062.3.
The WCJ further found that the Defendant’s payment of the $781.25 deposit was not done in bad faith as the fee was not in excess of the medical-legal fee schedule. However, Defendant also violated Labor Code section 4062.3 for failing to serve opposing party with the cross-examination fee agreement.
As a result the WCJ ruled that “neither party acted with clean hands, and that both Defendant and Applicant’s respective Petitions for Costs and Fees are denied.” A Petition for Reconsideration filed by the Defendant was denied in the panel decision of Reynolds v Hostess Brands – ADJ9714303 (February 2023).
The Defendant challenged the finding that their May 6, 2016 communication with Dr. Fenton was ex parte. as being a nonsubstantial communication. They argued it was just administrative, and therefore did not violate Labor Code section 4062.3(f).
In support of this position Defendant argued that the communication about the QME fees is “currently part of the CA workers’ compensation culture,” and that a finding from the WCAB that these communications “must be copied on all parties would essentially require a re-ordering of our whole workers’ compensation system.”
However, in the WCJs view, a fee agreement for a scheduled cross-examination goes beyond what the Petitioner characterized as “simple messages or administrative tasks.”
Various statutory and regulatory protections are designed to prevent a provider from receiving excessive fees. They support the conclusion that communications with an agreed medical evaluator regarding the payment of or an agreement to pay fees/deposit for a cross-examination cannot be deemed a nonsubstantial matter, particularly in light of the parties’ statutory right to challenge such fees.
Dr. Fenton’s non-refundable deposit policy seemingly conflicts with Code of Civil Procedure section 2034.450(a). Despite this, Defendant paid the deposit, which Dr. Fenton received on October 19, 2016.
“It is unclear why Defendant did not challenge this restrictive deposit and cancellation policy given that the Code of Civil Procedure section 2034.450(a) allows parties to issue payment at the commencement of the cross-examination. And this further supports the importance of apprising the opposing party of any such fee agreement.”