On September 4, 2024, the Appeals Board issued en banc orders which consolidated multiple cases pending on removal and ordered the parties to produce supplemental pleadings in those cases. Upon a unanimous vote of its members, the Appeals Board issues this decision as an en banc decision.

In each of the underlying cases, applicant’s attorney, Patrick C. Gorman, seeks either removal or disqualification of the entire Redding and Eureka district offices as relates to a dispute over the division of attorney’s fees between Mr. Gorman, and applicant’s former attorney, Steven D. Riley.

Their dispute appears centered upon a contract for the sale of a law practice from Mr. Riley to Mr. Gorman. In each of these cases, the Appeals Board seeks additional information, particularly on the issue of jurisdiction as relates to the contractual claims alleged.

Current attorney for applicants, Patrick C. Gorman, alleges that WCJs at those offices have approved attorney’s fees where it is alleged that former attorney for applicants, Steven D. Riley, failed to file a proper disclosure in compliance with Labor Code section 4906.

These matters involve an alleged course of conduct that appears to have occurred across five (5) cases involving the current attorney for applicants, Mr. Gorman, and the former attorney for applicants, Mr. Riley.

None of these matters have proceeded to a hearing on the merits of the issues raised in the disqualification petitions. The Appeals Board takes judicial notice of the Electronic Adjudication Management System (“EAMS”) files in each of these cases.

Based on the allegations in the pleadings submitted the WCAB wrote “it appears that the two attorneys entered into a contract for sale of a law firm from Mr. Riley to Mr. Gorman. It appears that the contract provided that the attorneys would thereafter split all fees in half for all cases transferred to Mr. Gorman. It appears that Mr. Gorman argues grounds to either invalidate the contract, or otherwise request that no fees be awarded to Mr. Riley for the cases transferred. Mr. Gorman represents that this same issue may exist across hundreds of cases.”

“It appears that Mr. Riley alleges that Mr. Gorman is in breach of their contract to split fees. In response to this alleged breach, Mr. Riley has filed attorney’s fee liens in the cases where Mr. Gorman has not paid pursuant to the contract.”

The WCAB ordered that current attorney for applicants, Mr. Gorman, and former attorney for applicants, Mr. Riley, meet and confer and provide supplemental pleadings. (Cal. Code Regs., tit. 8, § 10964.) Pleadings shall be verified under the penalty of perjury and may be joint as to any issues where they agree. Pleadings shall include a response to the following issues:

1. The attorneys shall advise the Appeals Board as to whether they can reach a mutual resolution of their dispute, and barring a resolution, whether they can agree on how they wish to proceed, either through mediation, arbitration, or litigation.
2. If the attorneys wish to proceed through litigation, they must clearly identify the stipulations and the issues, including any legal basis to support a conclusion as to disposition of each issue and the appropriate jurisdiction for consideration of each issue.
3. Do the attorneys agree that they are bound by the contract for the sale of the law practice? If not, please explain the basis for any contrary position.
4. Does either attorney seek to rescind the contract for the sale of the law practice? If so, explain the legal basis for the position and identify the proper venue to consider the issue.
5. If the attorneys agree that they are bound by the contract for the sale of the law practice, please address the following issues:
– – a. whether they agree that the Appeals Board has jurisdiction to hear the issue of the liens for attorney’s fees;
– – b. whether they agree that the Appeals Board has jurisdiction to hear the issue of any split of the attorney’s fees between them; and
– – c. whether they agree that the terms of the contract should be considered by the WCAB in deciding any split of attorney’s fee?
– – d. if the attorneys do not agree that the Appeals Board has jurisdiction please explain the basis for such disagreement and explain in which court jurisdiction exists to hear their dispute.
6. If the attorneys do not agree that they are bound by the contract for the sale of the law practice, do they agree that any issue as to splitting of attorney’s fees before the WCAB should be deferred pending resolution of the issue of whether the contract should be rescinded, modified, or upheld?

“We encourage the attorneys to review the State Bar guidelines on attorney civility and professionalism as they meet and confer to resolve this dispute, and to consider the State Bar rules as to the division of attorneys’ fees. If the parties agree upon a disposition, they may file a joint letter to that effect.

“Upon receipt of the supplemental pleadings, the WCAB will consider the responses and take further action as necessary.”