Lien claimant Basso Pharmacy filed a lien pursuant to Labor Code section 4903(b) on April 17, 2008. The parties stipulated that lien claimant paid an activation fee of $100.00 on December 28, 2015 They further stipulated that lien claimant did not file a lien declaration pursuant to section 4903.05(c)(1).

Lien claimant contends that it was not required to file a declaration pursuant to section 4903.05 because the lien was filed in 2008, and it was never subject to the declaration requirement in section 4903.05(c)(1)

The WCJ found that as a result, lien claimant’s lien was dismissed with prejudice by operation of law as of Monday, July 3, 2017. Basso Pharmacy’s petition for reconsideration was denied in the panel decision of Carrillo v Troon Golf Management -ADJ4642758 (January 2025).

On Reconsideration Basso argued that it could not have legally filed such a declaration because its lien met none of the seven distinct requirements set forth in the Code. It had no obligation at the time of the original lien filing to consider any of these requirements because they in fact did not yet exist.

Sections 4903.05 and 4903.06 were added by Senate Bill (SB) 863 in 2012 and became effective January 1, 2013. Section 4903.05 was amended in 2016 by SB 1160 to add subdivision (c), the declaration requirement. The declaration requirement was described as an “anti-fraud measure.” (Sen. Rules Com., Off. of Sen. Floor Analysis, Analysis of Sen. Bill No. 1160 (2015- 1016 Reg. Sess.), as amended August 29, 2016, p. 4.)

Lien claimants had until Monday, July 3, 2017 at 5:00 p.m., to file a lien declaration. (Henkel Corporation v. Workers’ Comp. Appeals Bd. (Hernandez) (2018) 3 Cal.Comp.Cases 1424, 1426 [2018 Cal.Wrk.Comp. LEXIS 64] (Appeals Bd. en banc) (writ den.); Rodriguez v. Garden Plating Co. (2017) 82 Cal.Comp.Cases 1390 [2017 Cal.Wrk.Comp. LEXIS 124] (Appeals Bd. en banc).)

The legislative intent for the amendment of section 4903.05 to add the declaration requirement was to impose that requirement on “all lien claimants.” Section 4903.05(c)(1) addresses the declaration requirement for those liens filed after January 1, 2017, and section 4903.05(c)(2) addresses the declaration requirement for those liens filed before January 1, 2017.

The the WCAB panel concluded that “we will not – and cannot upset the legislative intent of the declaration requirement as requested by lien claimant. It is a cardinal rule of statutory construction that courts will choose that interpretation which most nearly effectuates the purpose of the Legislature. (Code Civ. Proc., § 1859.) “‘Once a particular legislative intent has been ascertained, it must be given effect even though it may not be consistent with the strict letter of the statute.’ “

“Accordingly, lien claimant was subject to the requirement to file a declaration pursuant to section 4903.05(c)(2), and had until 5:00 p.m. on Monday, July 3, 2017 to do so. As a result, lien claimant’s lien was dismissed with prejudice by operation of law as of Monday, July 3, 2017 at 5:01 p.m.”