Alonzo McClanahan claimed workers’ compensation benefits for an alleged industrial injury to his right shoulder that occurred on July 25, 2017, while working at Employer DPR Construction (DPR). At the time its workers’ compensation carrier was National Union Fire Insurance Company. DPR’s claims administrator denied the claim a few months later.
The following year, McClanahan sought board adjudication of his claim. (§ 5500; Cal. Code Regs., tit. 8, § 10455.) Dr. Hanley was originally designated as the qualified medical evaluator and prepared two reports in that capacity in 2018 (the Hanley reports). He was later replaced as the qualified medical evaluator by Dr. Foglar and then by Dr. McGahan.
After engaging in discovery, the parties participated in a mandatory settlement conference (§ 5502, subd. (d)), which was unsuccessful, so the matter was set for trial. The pretrial conference statement stipulated to Dr. McGahan as the qualified medical evaluator (§ 4062.2) and provided a list of exhibits, including reports by Dr. McGahan, but the Hanley reports were not included.
At trial, McClanahan testified that his right shoulder was injured on the morning of July 25, 2017, while working for DPR (the 2017 injury). Specifically, he was “moving like 200 2-by-4s, 20-foot long, from one place to another” for four or five hours when the area between his shoulder and neck started to get stiff. He told his foreman that he couldn’t lift anymore with his shoulder hurting, and when he got off a few hours later, he told his superintendent that his “shoulder up in [his] neck” was sore. The superintendent asked him if he wanted to make a report, but McClanahan declined because he didn’t think it was that bad.
But when McClanahan woke up the next day, his arm and shoulder were stiff. He went to a doctor that night who advised taking a few days off work because his shoulder may be overworked. McClanahan reported this to DPR, but he did not see a workers’ compensation doctor until August 10, 2017. In his view, DPR caused the delay.
Three DPR employees disagreed with McClanahan’s account. Both the foreman and the superintendent stated that McClanahan did not report an injury to them on July 25, 2017. And the DPR safety manager who prepared the incident report testified that to his knowledge, McClanahan did not report an injury to anyone on July 25, 2017. DPR’s evidence included the employee sign out sheet for July 25, 2017, that indicated McClanahan signed out at 3:00 p.m. and checked the box indicating he was not injured.1 The safety manager also testified he made several attempts to take McClanahan to the workers’ compensation clinic between July 27, 2017, and August 7, 2017, in accordance with DPR policy, but McClanahan never showed up.
In a deposition, McClanahan testified DPR was the first place he ever had right shoulder pain, but at trial he admitted he suffered an industrial injury below his right elbow in 2013, a few years before working for DPR (the 2013 injury), and felt pain in his right shoulder as a result. He also testified he never went to a doctor for right shoulder pain before July 2017, but medical records showed that he sought or obtained care for shoulder pain or strain several times between 2013 and 2015, had an MRI of his right shoulder in 2014, and was diagnosed with a right shoulder condition in 2015. The records also indicated that he sought treatment for impingement in the right shoulder after a tree branch fell on it in 2015, but McClanahan could not remember a tree ever falling on his shoulder.
According to Dr. McGahan’s evaluation, McClanahan sustained “an industrial injury to his right shoulder arising out of and caused by the industrial exposure of July 25, 2017.” Dr. McGahan found it clear that McClanahan had preexisting right shoulder pathology but concluded it was “medically probable that [McClanahan’s] work duties on July 25, 2017, contributed to a worsening of his right shoulder pain.” In a supplemental report, Dr. McGahan stated that if “McClanahan is not a credible witness, then this certainly would call into question the credibility of his claim. Under this circumstance, the incident of July 25, 2017, may simply represent an exacerbation of his prior industrial injury rather than aggravation.
Over DPR’s objection, the workers’ compensation judge (WCJ) admitted the Hanley reports because DPR had received them before the mandatory settlement conference. In the first report, Dr. Hanley noted that some of McClanahan’s providers were suspicious about the validity of his complaints. In a supplemental report, Dr. Hanley concluded the “red flags” in McClanahan’s history were no longer of concern.
Based on McClanahan’s “credible testimony, the treatment records, and the findings by QME Dr. McGahan,” the WCJ concluded that McClanahan sustained an injury to his right shoulder arising out of and in the course of employment on July 25, 2017.
After reconsideration, the WCAB affirmed the WCJ’s determination on August 22, 2024 in a two-to-one decision. The affirming board members found that McClanahan erred by omitting the Hanley reports from the pretrial conference statement but concluded the error was harmless for two reasons: (1) the WCJ did not rely on the Hanley reports to find the industrial injury; and (2) the WCJ retains the discretion to determine if evidence should be admitted into the record as a matter of due process.
The Court of Appeal agreed to hear the case, and after it’s review annulled the board’s decision and remanded for further proceedings in the unpublished case of DPR Construction v. Workers’ Compensation Appeals Board CA3 – C100254- (May 2025).
On appeal, Petitioners contend the board exceeded its powers in two ways: (1) by failing to state the reasons for finding McClanahan credible and (2) by admitting two medical reports that were not listed in the pretrial conference statement. The Court of Appeal disagreed with petitioners as to the first contention but agreed as to the second.
In workers’ compensation proceedings, discovery closes on the date of the mandatory settlement conference. ( at p. 1164; § 5502, subd. (d)(3).) If the claim is not resolved at the conference, the parties must file a pretrial conference statement noting the specific issues in dispute, listing the exhibits, and disclosing witnesses. (§ 5502, subd. (d)(3); Cal. Code Regs., tit. 8, § 10759, subd. (b).) Evidence not disclosed or obtained thereafter is not admissible unless the proponent can demonstrate it was not available or could not have been discovered by the exercise of due diligence before the settlement conference. (§ 5502, subd. (d)(3).)
The purpose of this requirement is two-fold: (1) to “eliminate the element of surprise in workers’ compensation proceedings” and (2) “ ‘ “ ‘to guarantee a productive dialogue leading, if not to expeditious resolution of the whole dispute, to thorough and accurate framing of the stipulations and issues for hearing.’ ” ’ ” (Telles Transport, Inc. v. Workers’ Comp. Appeals Bd. (2001) 92 Cal.App.4th 1159, at pp. 1164, 1167.) The board abuses its discretion when it relieves a party from the sanctions of section 5502 without that party showing good cause. (San Bernardino Community Hospital v. Workers’ Comp. Appeals Bd. (1999) 74 Cal.App.4th 928, 938.
Section 5502 establishes the “bounds of discretion in the [WCJ] for keeping discovery open after the mandatory settlement conference.” (County of Sacramento v. Workers’ Comp. Appeals Bd. (1999) 68 Cal.App.4th 1429, 1433.) “[D]isregard for the statutory procedural mechanisms for resolving workers’ compensation cases is inappropriate.” (Ibid.) Such disregard is not subject to harmless error analysis. (San Bernardino, supra, 74 Cal.App.4th at p. 938.)
