Bertha Perez sustained injury to her back while working for World Variety Produce as a produce packer on August 27, 2010. On May 1, 2011, she underwent surgery, and lien claimant, Monrovia Memorial Hospital, provided the employer’s carrier, Zurich North America, with an invoice for $67,497.95.
Pursuant to the recommendations made by its bill review company, Zurich paid $15,857.48. Monrovia Memorial Hospital filed its lien for the balance of its invoice.
On May 6, 2015, a WCJ ordered lien claimant and defendant to forward all relevant documentation and/or evidence as to the value of the lien claimant’s services to a jointly selected bill review expert, Stelzner and Kyle Consulting.
On March 14, 2016, the matter proceeded to a lien conference and the parties set the matter for trial. Over the next few years a number of hearings took place regarding the issues surrounding the lien of Monrovia Memorial Hospital.
On September 18, 2018, defendant filed a Petition for Restitution/Reimbursement in which it alleged that “[r]ather than provide the information to IBR as directed by the Court, the lien claimant submitted the billing again to defendant which accidentally paid it in full.” Zurich requested reimbursement for the $51,640.47 check issued to Monrovia Hospital on May 16, 2018 for unjust enrichment. On October 26, 2018, the matter proceeded to trial on defendant’s claim for restitution and defendant’s petitions for sanctions, costs and fees.
On January 3, 2019, the WCJ issued Amended Findings and Orders, ordering lien claimant to pay restitution in the sum of $51,640.00 as well as sanctions, costs and attorneys’ fees under section 5813 and WCAB Rule 10561. Lien claimant sought reconsideration of the WCJ’s January 3, 2019 Amended Findings and Orders. On March 25, 2019, the WCAB granted reconsideration based upon a lack of substantial evidence to support the WCJ’s findings.
Because the WCJ did not admit any exhibits or testimony during the October 26, 2018 trial, the WCAB panel was unable to determine whether lien claimant would be unjustly enriched if it retained the disputed payment or whether sanctions were justified. Thus it rescinded the WCJ’s decision and returned the matter to the trial level for further proceedings.
The matter appeared again for trial on September 23, 2019, at which time the parties submitted exhibits and testimony. On November 8, 2019, the WCJ issued the disputed F&O, finding that, pursuant to the IBR calculation issued on November 12, 2015, the reasonable value of lien claimant’s services was $15,857.48, which defendant had previously paid.
The WCJ also ordered that lien claimant pay defendant $51,640.00 in restitution as a result of unjust enrichment. The WCJ also found that lien claimant and its representative employed bad faith, frivolous litigation tactics in violation of section 5813 and WCAB Rule 10561 warranting sanctions in the amount of $2,500.00 payable to the WCAB. The WCJ also awarded defendant costs and fees to be determined by subsequent court order.
After this second Petition for Reconsideration was filed by Monrovia, the November 8, 2019 F&O was affirmed in the panel decision of Perez v World Variety Produce –ADJ7447035 (May 2024).
In its Petition for Reconsideration, lien claimant contends that the WCJ erred by 1) awarding restitution to defendant, as there is no evidence of unjust enrichment, and 2) awarding sanctions, costs, and fees, as there is no evidence that it engaged in bad faith or frivolous conduct in violation of section 5813 or WCAB Rule 10561. Both assertions were rejected by the WCAB panel.
“Restitution is an equitable remedy which has primarily been utilized by courts to prevent unjust enrichment. Under certain circumstances it has been held that administrative tribunals such as the [WCAB] may appropriately employ equitable remedies. Such use by the Board would seem particularly justified, for example, when fraud has been charged and proven.” (American Psychometric Consultants, Inc. v. Workers’ Comp. Appeals Bd. (Hurtado) (1995) 36 Cal.App.4th 1626, 1645-1646 [60 Cal.Comp.Cases 559], citations omitted.)
In this case, the WCJ found that lien claimant engaged in improper conduct leading to unjust enrichment, where it circumvented defendant’s typical processes for handling disputed lien claims. Specifically, the WCJ found that lien claimant intentionally bypassed defendant’s internal procedures by demanding payment from its medical review department, rather than its claims department, and that lien claimant knew or should have known that the resulting payment in full was made in error, particularly where the bill amount was still being litigated.
Here, the WCJ found that sanctions should issue as a result of lien claimant’s willful failure to comply with the court’s May 6, 2015 Findings and Order requiring it to forward all documentation showing the value of its services for IBR for roughly three years.