Author: WorkCompAcademy

Monterey County District Attorney announced that Monica Herrera, a 43-year-old resident of Newman, California and former owner of a licensed, Monterey County cannabis company, pled no contest on July 7, 2020 to felony payroll tax fraud and not having workers’ compensation insurance, a misdemeanor.

Herrera owned and operated Holistic Farms, LLC, pursuant to a California Temporary Cannabis Cultivation License and a Monterey County permit. The licensing and permits authorized Herrera to run her business at 2242 Alisal Road in Salinas, California.

During the course of a search warrant served on June 26, 2018 in an unrelated investigation, Monterey County District Attorney investigators discovered that Herrera had violated her license and permit conditions by relocating her cannabis processing operations to 2348 Alisal Road.

During that search, investigators interviewed multiple individuals who verified that they worked for Herrera as cannabis processors and that Herrera paid their wages in cash. Though Herrera had employees, investigators confirmed with public agencies that Herrera had never paid payroll taxes on employee wages to the California Employment Development Department and she did not have workers’ compensation insurance.

Herrera will be sentenced on August 25, 2020. The Court is expected to place Herrera on probation, order her to pay fines of as much as $30,000 and perform 300 hours of community service.

The Monterey County District Attorney also just announced that John Bresciani, a 65-year-old Salinas resident and owner of Pacific Coast Battery Service, Inc. (“PCBS”), pled no contest to defrauding his insurance carrier.

In September 2018, while investigating an insurance claim, Mr. Bresciani’s insurer determined that an injured worker had not been identified in prior policy years. In an ensuing investigation by the Monterey County District Attorney’s Workers’ Compensation Fraud Unit, Mr. Bresciani conceded that he had not truthfully reported the worker’s employment and had kept the employee “off book” by paying cash wages.

Felony criminal charges for insurance premium fraud were filed on December 11, 2019. Mr. Bresciani cooperated with the investigation and paid restitution to his insurance carrier for the $2,943.44 premium that should have been paid. He pled guilty to a misdemeanor charge and Judge Andrew Liu accepted the plea on July 8, 2020. Mr. Bresciani was placed on 3 years’ probation and ordered to pay a $5,000 fine.

The California Self-Insurers’ Security Fund supports businesses by helping lower their workers’ compensation costs and freeing up their working capital.

The program provides a financial backstop to replace security deposits required to collateralize self-insured workers’ compensation liabilities.

The CASISF Board of Trustees has approved and implemented the 2020/21 Alternative Security Program, which frees $6.5 billion in working capital and provides California self-insured businesses greater financial flexibility. Moreover, there has been no increase in the Security Fund’s general assessment from last year.

These continuing savings make the program and costs even more competitive for California self-insured businesses. “The Fund’s historically sound and rigorous credit monitoring practices have positioned the Fund to address the economic impacts of the coronavirus pandemic,” said Dan Sovocool, a partner at Nixon Peabody LLP and the Security Fund’s outside General Counsel. “The Fund continues to be a strong resource and partner for California’s self-insured employers.”

All employers in California are required to have workers’ compensation insurance to cover their employees in the event of work-related injuries or illnesses. Employers may satisfy this requirement by obtaining an insurance policy or gaining authority from the DIR’s Office of Self Insurance Plans (OSIP) to self-insure the businesses’ workers’ compensation liabilities.

Self-insured employers maintain a deposit equal to their estimated liabilities. Employers may post the deposit in cash, letters of credit, surety bonds, or securities. The use of these instruments limits the employer’s ability to use their cash or credit line. In contrast, the Security Fund’s ASP allows employer members to free up their cash or line of credit, allowing them to reinvest this capital back into their businesses. The ASP provides the member with a low-cost substitute for collateral with no balance sheet impact.

California currently has more than 3,500 private employers protecting more than 2.2 million workers representing a total payroll of nearly $113 billion through self-insurance workers’ compensation plans.

A self-insurance plan protects one of every eight California workers. Self-insured private employers in California represent large and midsized private companies and industry groups.

The California Self-Insurers’ Security Fund (CASISF) has been serving its members for 36 years since its founding on July 6, 1994. It is a member-driven non-profit organization with leadership by a volunteer Board of Trustees representing members serving members. The Security Fund is a strategic partner supporting California self-insured workers’ compensation programs.

The Department of Industrial Relations’ Office of Self-Insurance Plans (OSIP) has promulgated regulations that require public self-insured employers to submit reports with the information needed to evaluate the administrative cost, workers’ compensation expenditures, solvency and performance of public self-insured employer workers’ compensation programs.

These regulations became effective on July 1 and include the addition of the following new reporting forms:

— Joint Powers Authority Self-Insurer’s Profile and Financial Summary Report (Form J-1)
— Self-Insurer’s Profile and Financial Summary Report (Form P-1)
— Aggregate Claims Information (Form AR-2 Addendum)

The reporting forms for public self-insured employers are posted online. They must be submitted with the 2019-2020 annual report, which is due on October 1, 2020 and annually thereafter.

Employers who require additional time to comply with the regulations this year should contact OSIP Chief Lyn Asio Booz at LAsioBooz@dir.ca.gov to request an extension. Deferrals of up to 60 days may be granted to employers who can demonstrate that they may not be able to comply with their reporting requirement.

Daniel Brodie Howard suffered major injuries in an automobile accident while acting within the scope of his employment with Agra Tech, Inc. Hartford was Agra Tech, Inc.’s workers’ compensation carrier. He was hospitalized and in a coma. Thus the probate court appointed his brother, David Howard as conservator of his person and estate.

A civil tort action was filed against multiple parties to recover for the injuries. Hartford filed a complaint in intervention seeking to recover the workers’ compensation benefits it had paid as a result of conservatee’s accident.

In 2012, a WCJ found conservatee to be totally and permanently disabled and awarded permanent disability, medical care for life, and attorney fees.

On October 30, 2013, conservatee, Hartford, and Toyota, one of the tort defendants, signed a mediation agreement that called for Toyota to pay a specified sum to conservatee. In 2014, the probate court signed an order approving the compromise of the disputed claim against the other driver and Toyota and directed payments from the settlement proceeds for attorney fees and expenses, to Hartford (for medical and like expenses it had paid), and conservatee (for the balance of the settlement).

Numerous disputes arose between the parties over the distribution of funds, each of which were subsequently resolved.

Then, in 2016, conservatee filed a motion in the probate court to assess attorney fees, asking the probate court to order Hartford to “reimburse Conservatee $150,934.76 in costs and $179,605.48 in attorney’s fees as Hartford’s pro rata share of Conservatee’s costs and attorney’s fees in creating the Toyota settlement.” Conservatee stated the authority for the motion was labor code sections 3856, subdivision (b), and 3860, subdivision (e), and the “common fund” doctrine.

The probate court concluded that it lacked jurisdiction to consider conservatee’s claims because the underlying civil case had been dismissed with prejudice upon conservatee’s request. The court of appeal agreed and affirmed the order in the unpublished case of Conservatorship of Howard.

Conservatee’s motion to assess attorney fees did not revive the civil action or overcome the effect of the voluntary dismissal of that action. Upon dismissal of the civil action, the probate court no longer had jurisdiction to enter any further order distributing the settlement proceeds from the civil action.

Yosemite Community College District hired contractors to complete a remodeling project at the campus that included roof repair and replacement on several buildings. Kitchell CEM was the general contractor or program manager for the project. This included developing and implementing a program-wide safety program. Western Single Ply-Nevada was the roofing subcontractor. The plaintiff Ramon Mora was its employee.

In 2015 a 2×4, without the typical accompanying 2×6, was anchored to the edge of the roof to use as scaffolding. While Mora was on the 2×4 anchor board without a safety harness, the board gave way and he fell over 20 feet off the unprotected roof edge.

Mora filed a civil action that alleged General Contractor owed him a duty of care and breached that duty by failing to develop and implement a safety program that included fall prevention and protection measures.

The trial court sustained the General Contractor’s demurrer. The order stated (1) workers’ compensation was “the sole and exclusive remedy for employees who sustain injuries while performing work in the scope of their employment”; (2) General Contractor “did not have the requisite degree of control over the property to support a claim for Premises Liability”; and (3) the negligence allegations were insufficient to state a cause of action against General Contractor. The Court of Appeal reversed in the unpublished case of Mora v Kitchell CEM.

The Privette doctrine will bar causes of action by an independent contractor’s employee against a non-negligent hirer that did not affirmatively act. A hirer can be a landowner, general contractor, or any other entity that hires an independent contractor.

Plaintiff’s complaint alleges that Roofing Subcontractor “was a subcontractor hired to perform reroofing work at the SUBJECT PREMISES.” The complaint does not state who hired Roofing Subcontractor “to perform reroofing work.” Thus, on the face of the complaint, the hirer of Roofing Subcontractor is not clearly and affirmatively shown. Consequently, at the pleading stage, the Privette doctrine cannot be a bar to the complaint because the hirer is not identified.

It is worthy of note that this opinion will likely be of limited value to this plaintiff. The identical issues will be tested again after a motion for summary judgment. Such a motion can included undisputed facts that establish the defendant as the General Contractor, and thus protected by Privette. This appeal is the result of Mora’s sixth amended complaint, and Mora has undoubtedly had difficulty establishing his case thus far.