Author: WorkCompAcademy

In early 2025, California Governor Gavin Newsom requested a $6.2 billion emergency bailout for Medi-Cal, the state’s Medicaid program, to address a significant funding shortfall. This request was broken into two parts: a $3.4 billion loan from the general fund to cover costs through March 2025, followed by an additional $2.8 billion to sustain the program through June 2025. The shortfall stemmed from higher-than-expected costs, with total Medi-Cal spending projected to reach $188.1 billion for the 2025-26 fiscal year, an 84% increase over six years.

Several factors contributed to the overrun. Enrollment surged beyond projections, partly due to expanded eligibility for undocumented immigrants, which began in 2024 and cost an estimated $9.5 billion in 2024 alone, including $2.8 billion in unanticipated expenses. Other drivers included rising pharmacy costs and higher overall enrollment, partly due to pandemic-era policies that delayed eligibility reviews. About 15 million Californians, roughly half the state’s children, rely on Medi-Cal for healthcare.

The request sparked debate. Republicans, including Assembly Minority Leader James Gallagher and Senator Brian Jones, criticized the expansion to undocumented immigrants, arguing it strained the system and reduced access for legal residents. They called for an audit to investigate cost spikes, with some, like Assemblyman Bill Essayli, claiming the program was insolvent. Democrats, however, defended the expansion as a step toward universal healthcare, with Newsom himself stating it was “partially” responsible for the shortfall but aligning with his belief in universal coverage. He expressed openness to adjustments but ruled out reversing the expansion.

Bill Essayli is now currently serving as the interim United States attorney for the Central District of California, having been appointed to the position in April 2025. He previously served as a member of the California State Assembly from 2022–2025 until his appointment as interim U.S. attorney. On April 8, 2025, as United States Attorney, Essayli announced the formation of the Homelessness Fraud and Corruption Task Force, which will investigate fraud, waste, abuse, and corruption involving funds allocated toward the eradication of homelessness within the seven-county jurisdiction of the Central District of California. The Central District of California is comprised of approximately 20 million residents within the counties of Los Angeles, Orange, Riverside, San Bernardino, San Luis Obispo, Santa Barbara, and Ventura.

This task force will be comprised of federal prosecutors from the Major Frauds Section, the Public Corruption and Civil Rights Section, and the Civil Division’s Civil Fraud Section of the United States Attorney’s Office for the Central District of California. Assisting the U.S. Attorney’s Office will be the FBI, the United States Department of Housing and Urban Development Office of Inspector General (HUD-OIG), and IRS Criminal Investigation.

Despite voter-approved initiatives and billions of dollars spent on tackling this issue, homelessness remains a crisis, especially in Los Angeles County. Last month, a court-ordered audit found that homelessness services provided by the city and county of Los Angeles were “disjointed” and contained “poor data quality and integration” and lacked financial controls to monitor contracts for compliance and performance.

Newsom’s administration noted that tax revenues were holding up, with February 2025 collections $4.6 billion above projections, providing some fiscal cushion. However, the bailout adds pressure to California’s budget, already facing a proposed $7 billion reserve withdrawal for 2025-26. Critics worry about long-term sustainability, especially with potential federal Medicaid cuts looming under the Trump administration. Democrats, like Assemblymember Pilar Schiavo, argued the increased enrollment reflects successful coverage efforts, while Newsom’s team pledged to work with legislative leaders to curb long-term spending without gutting core services.

Plaintiff Sabrena Odom was and still is a tenured professor at Southwest College. She began as an adjunct, and in 2005 was hired full time, working 50/50 as an English instructor and as director of the Student Success Center, which offered tutoring and workshops to enable student learning.

Defendants are the District and Dr. Irvin, the alleged harasser. Dr. Irvin joined Southwest College in 2016 as vice president of student services. He had been an officer with the Los Angeles Police Department for 13 years, until he retired in 1998, 18 years before he joined Southwest College. After leaving the police department, he began a career in community counseling and worked at several community colleges in southern California. He earned his Ph.D. in 2007.

In October 2018, Odom filed a complaint for damages, alleging sexual harassment; failure to investigate and prevent sexual harassment; retaliation; and negligent hiring, supervision and retention, in violation of the Fair Employment and Housing Act (FEHA; Gov. Code, § 12940 et seq.), against defendants Los Angeles Community College District and Howard Irvin, then the vice president of student services at Los Angeles Southwest College, a community college in the District.

Plaintiff testified that the sexual harassment began in February 2017 and continued for about eight months. In early November 2017, plaintiff went to Denise Noldon, the interim president of Southwest College, and told her she was being sexually harassed by Dr. Irvin, had not complied with his wishes, and felt she was being retaliated against “with an attack against my program as well as my staff.” Plaintiff testified that nothing happened in response to her complaint.

During the summer of 2017, someone had slipped an article from The Los Angeles Times under her door, with the handwritten words, “Watch Out.” (There were actually two articles, one dated Feb. 25, 1998, and the other dated Oct. 30, 1997.) Plaintiff stated that the article “detailed Dr. Irvin’s past as an LAPD officer and his conviction of sexual assault. I was already uneasy around him, but after reading the article, I became frightened whenever he was around. I didn’t want to become a victim of his like the woman in the article. One day during a meeting with Dr. Irvin, I asked him if he carried a gun. His response was, ‘No, but I can get to it when I need it.’ Another time, I asked him the same question and he said, ‘Of course.’ “

During her trial testimony, plaintiff’s counsel asked plaintiff to explain more about The Times’s articles. Defense counsel objected on hearsay grounds. The court stated, “Well, the L.A. Times is not being admitted for the truth. What the L.A. Times article says is being admitted for her reaction, not admitted for the truth, so it’s overruled.”

Judge Robert S. Draper presided over a three-week trial in October 2022. There were more than 20 witnesses.Dr. Irvin’s criminal defense attorney testified Dr. Irvin was never convicted of any sex crime, and there was no evidence at trial to support plaintiff’s belief that he had been.

After deliberating for less than a day, the jury found in favor of plaintiff on each of her four claims. As to the District, the jury awarded plaintiff $8.5 million in noneconomic damages ($7 million for past mental suffering and emotional distress and $1.5 million for future mental suffering and emotional distress). As to Dr. Irvin, the jury awarded $1.5 million in noneconomic damages for past mental suffering and emotional distress. The jury found by clear and convincing evidence that Dr. Irvin acted with malice or oppression, but in the punitive damages phase of the trial, the jury declined to award any damages.

Defendants moved for partial judgment notwithstanding the verdict, or in the alternative for remittitur, based on excessive damages. “The hearing on defendants’ motions was held on February 15, 2023. The trial court made comments at the hearing, and later in chambers, reflecting his personal feelings and perspectives about societal and civil rights advances of Black Americans and the progress our society has made respecting women in the workplace since he was a college student and then a young attorney decades ago. At times during the hearing, Judge Draper appeared to become emotional and repeatedly described the personal effect the testimony had on him as a grandfather.”

The Court of Appeal reversed the judgment and ordered a new trial in the published case of Odom v L.A. Community College District – -B327997 (April 2025) “not for lack of substantial evidence, but for prejudicial errors in the admission of irrelevant and damaging “me-too” evidence from a witness who was not similarly situated to plaintiff, and for the equally prejudicial and erroneous admission of 20-year-old newspaper articles and other evidence of the alleged harasser’s misdemeanor convictions.”

The Court of Appeal also wrote “This is an unusual case, due to the significant arbitrary and prejudicial evidentiary rulings of the judge presiding over the trial. After the judgment was entered, defendants filed motions for a new trial (or in the alternative a remittitur) and for partial judgment notwithstanding the verdict (JNOV) (or in the alternative for remittitur). At the hearing on those motions, which were denied, the trial judge initiated extended, bizarre personal comments on racial matters with newly substituted defense counsel (the only Black woman in the courtroom), despite there being no racial issue of any kind in the case. Defendants filed a motion to disqualify the judge for cause and to void his rulings on the motions. After writ proceedings and referral to a neutral judge, the trial judge was disqualified and his rulings on the postjudgment motions were voided.”

“On this appeal from the judgment, we need not decide whether the trial judge’s prejudicially erroneous evidentiary rulings during the trial were motivated, in part, as defendants contend, by “persistent racial and gender bias.” It seems clear the judge’s rulings were motivated by personal opinions untethered to the rules of evidence. Whatever his motivations may have been, the judge admitted inflammatory evidence without consideration of the evidentiary rules, with undeniable prejudicial effect, thus preventing a fair trial. We accordingly reverse the judgment and order a new trial.”

During the post trial hearing, “Judge Draper made many inappropriate remarks, including comments using racial terms. For example, Judge Draper stated that plaintiff and Dr. Irvin came from the same neighborhood: ‘And I use the term that my wife says is not politically acceptable. I think they are politically acceptable, because I use terms like coal black and light brown because I don’t think those are bad terms.’ ”

Judge Draper’s statements at the hearing led to a motion by defendants on March 3, 2023, to disqualify him for cause. Judge Draper issued a lengthy “recusal order” finding there were no legal grounds for disqualification for cause but recusing himself from further proceedings in the case.

Defendants sought writ review, and this court directed the superior court to refer the disqualification motion to a neutral judge. On October 16, 2023, Orange County Superior Court Judge Cheri Pham disqualified Judge Draper, stating that the evidence defendants submitted “establishes that during the February 15, 2023 hearing, Judge Robert S. Draper made several irrelevant and inappropriate comments about race and gender. Defendants’ attorney was the only African American person in the courtroom. Under these circumstances, and on the record presented, a person aware of the facts might reasonably entertain a doubt whether Judge Draper would be impartial.” Judge Pham also observed that, in response to our alternative writ, Judge Draper had vacated his recusal orders, and there was no verified answer to defendant’s disqualification motion; so the judge was deemed to have consented to his disqualification.

Adan Alvarez was employed on June 11, 2015 as a mover by Victor Manuel Martinez, individually and doing business as Bob Williams Moving, and Justine Marie Martinez, individually and doing business as Tristar Moving, and claimed to have suffered injury to multiple areas. It was stipulated by the parties that the employer was uninsured.

After a trial, the WCJ found applicant failed to file a proof of claim in the bankruptcy proceeding against alleged employers Victor Manuel Martinez and Justine Marie Martinez. Applicant did not strictly meet the statutory conditions that would render the Uninsured Employers Fund (UEF) liable for payment, and is now enjoined from obtaining an award in a workers’ compensation proceeding enforceable against Victor Manuel Martinez and Justine Marie Martinez personally or the UEF. Therefore, the undersigned WCJ found good cause to dismiss applicant’s claim with prejudice.

The WCAB granted reconsideration, and reversed in the panel decision of Alvarez-1 v Bob Williams Moving – ADJ10037291 (January 2025).

Applicant argued in Alvarez1 that the trial court’s reliance in Ortiz v. Workers’ Comp. Appeals Bd. (1992) 4 Cal.App.4th 392 is misplaced because the employee in Ortiz, unlike applicant here, had an award of temporary disability and reimbursement for medical treatment. Applicant further argues laches because UEBTF participated in discovery and was aware of the bankruptcy court’s lifting of the automatic stay and applicant’s failure to file a proof of claim in the bankruptcy proceedings. Applicant contends UEBTF should have alerted applicant of the requirements set forth in Ortiz.

The Ortiz court stated: “Assuming the prerequisites to payment by the UEF have been met, if a findings and award in a workers’ compensation proceeding issues prior to a discharge of an employee’s claim in bankruptcy, the UEF would pay the award, become a creditor, and thus be able to file its own proof of claim in the bankruptcy proceeding.” And “The discharge in bankruptcy operates as an injunction prohibiting any proceeding against the employer for personal liability based on the award, however, including the UEF’s right to seek reimbursement pursuant to Labor Code section 3717.”

The WCAB panel noted “The Ortiz court, however, did not address whether an employee is required to file a proof of claim in the bankruptcy proceedings in this situation-when there is no workers’ compensation award before the discharge.” And it went on to find Slali v. Ruiz (2002) 282 B.R. 225 [67 Cal.Comp.Cases 634] instructive.

“In Ruiz, just as in this case, the employee did not file a proof of claim in the Chapter 7 bankruptcy proceedings of the employers. (Id. at p. 636.) The bankruptcy court entered discharges in favor of both employers as there were no assets to distribute. (Ibid.) The employee then petitioned for relief in the bankruptcy proceedings in order to pursue his workers’ compensation claims. (Ibid.) The bankruptcy court provided such relief and entered an order that (1) allowed the employee to pursue an award against the employers in his workers’ compensation case; (2) no personal liability on behalf of the employers to the employee would be created; (3) the employee would not be allowed to seek satisfaction of any award against the employers absent further orders from the bankruptcy court; (4) the employee’s claim remained open and pending before the WCAB and had not been resolved or decided; and (5) the employers’ participation in the litigation before the WCAB would not be affected by the bankruptcy order. (Ibid.)”

The bankruptcy court’s order was appealed to the United States District Court, which affirmed the bankruptcy court’s order.The District Court further explained that although it does not believe that the employee needed relief from the discharge injunction, it was prudent for the employee to seek such relief to serve as a clarification regarding the scope of the discharge injunction and avoid conflict between the workers’ compensation and bankruptcy proceedings. (Ruiz at p. 638.)

“Ruiz instructs us that a failure to file a claim of proof in the bankruptcy proceedings when an employee does not yet have a compensation award from which to file a proof of claim is not fatal. We, therefore, conclude that the trial court’s finding that applicant here is enjoined from pursuing his workers’ compensation claim was in error.”

The Uninsured Employers Benefits Trust Fund (UEBTF) Petition for Reconsideration of Alvarez-1 was denied in In Alvarez-2 v Bob Williams Moving ADJ10037291 (April 2025),

In Alvarez-2 UEBTF contends that the WCAB failed to appreciate the difference between a Chapter 7 asset bankruptcy and a Chapter 7 no asset bankruptcy. According to UEBTF, in the former, a creditor such as applicant is required to file a proof of claim in a bankruptcy proceeding and failure to do so enjoins applicant from later seeking payment from UEBTF. In the latter, a failure to file a proof of claim is not fatal as demonstrated in In re Manuel D. Slali (Bankr. C.D.Cal. 2002) 282 B.R. 225 [67 Cal.Comp.Cases 634]. UEBTF contends that the underlying bankruptcy proceeding here was a Chapter 7 asset bankruptcy and, therefore, applicant was required to file a proof of claim in order to later seek payment from UEBTF.\

UEBFT cites to Duncan v. Workers Compensation Appeals Bd. (1998) 63 Cal. Comp. Cases 309 [1998 Cal. Wrk. Comp. LEXIS 4510] to support its argument. In Duncan, the WCJ found that in order to reinstate a workers’ compensation award, applicant “must obtain a modification of the discharge order in bankruptcy allowing a personal judgment to be entered against the uninsured employer.” (Duncan, at p. 310.)

After reviewing Duncan, the WCAB concluded in Alvarez-2 that the “Duncan court simply held that in a no asset case, it was not necessary to seek modification of the discharge injunctions in the bankruptcy court. Duncan does not stand for the proposition that a failure to file a proof of claim in the bankruptcy proceeding, whether it be an asset or no asset proceeding, enjoins the employee from later seeing payment from UEBTF. As such, we affirm our January 3, 2025 Opinion allowing applicant’s workers’ compensation claim to proceed despite his failure to file a proof of claim in the underlying bankruptcy proceeding.

John Nemandoust, 70, and Annette Assil, 62, a Los Angeles couple, were sentenced after a California Department of Insurance investigation found they underreported more than $21 million in employee payroll for their delivery companies.

Nemandoust was sentenced to 60 days in county jail, while Assil was sentenced to 30 days. The pair were sentenced to 10 years of felony probation and also ordered to pay $2,254,748 in restitution for unpaid workers’ compensation insurance premiums.

The Department launched an investigation into A-1 Valley Services, Prompt Delivery, and Affordable Messenger, the three companies the couple owned, after receiving information that two of the companies were uninsured. The investigation revealed that between 2013 and 2017, the couple only obtained workers’ compensation coverage for Valley Services employees, while leaving Prompt Delivery and Affordable Messenger uninsured.

When employees from the uninsured companies sustained work-related injuries, they fraudulently filed claims under Valley Services’ policy, concealing the lack of coverage and misclassifying their workforce. Over the four-year period, at least 20 uninsured employees had claims improperly filed under Valley Services’ policy.

A forensic audit found that the companies’ combined gross payroll exceeded $25 million, while they only reported approximately $1.4 million to their insurance carrier—resulting in the $21 million payroll underreporting. This scheme allowed the couple to avoid paying approximately $3 million in workers’ compensation insurance premiums.

“By misleading their insurance carriers, these business owners created an unfair advantage over their competitors and put their employees at risk,” said California Insurance Commissioner Ricardo Lara. “This sentence ensures they are held accountable and must repay the stolen premiums.”

The Los Angeles County District Attorney’s Office prosecuted the case.