Tag: 2024 News

Anna Nicole Smith was an American model, actress and television personality. On February 8, 2007, Smith was found dead at the Seminole Hard Rock Hotel and Casino in Hollywood, Florida. Broward County Medical Examiner and Forensic Pathologist Dr. Joshua Perper announced that Smith died of “combined drug intoxication” with the sleeping medication chloral hydrate as the “major component.”

Dr. Perper claimed that Dr. Khristine Elaine Eroshevich, an Encino psychiatrist had issued 11 prescriptions to Smith. Eroshevich was with Smith when she checked into the Florida hotel, where she later died. More than 600 pills – including about 450 muscle relaxants – were missing from prescriptions that were no more than five weeks old.

Eroshevich also is the teal party in interest and lien claimant who seeks payment for services rendered to workers’ compensation claimants in approximately 1,100 lien claims. Much of the history in this case appears in a 2020 Opinion and Decision After Reconsideration in her consolidated cases.

On September 23,2009, Dr. Eroshevich was charged with six felony counts. On October 28,2010, and after more than two months of trial, Dr. Eroshevich was found guilty by a jury of Count 7, conviction for prescription fraud.

On October 12, 2011, The Medical Board of California, Department of Consumer Affairs issued an accusation against Dr. Eroshevich seeking disciplinary action pursuant to Business and Professions Code section 2236, based on her conviction for “a crime substantially related to the qualifications, functions, or duties as a physician and surgeon.”

On January 19, 2012, the California Attorney General and Dr. Eroshevich entered into a Stipulated Settlement and Disciplinary Order (Medical Board Stipulation) based on the First and Sixth cause for discipline. The Stipulation contains the following reservation: “The admissions made by Respondent herein are only for the Pgrpgse.s of this proceeding, or any other proceedings in which the Medical Board of California or other professional licensing agency is involved, and shall not be admissible in any other criminal or civil proceeding.”

On May 6,2016, the Medical Board terminated probation and reinstated Dr. Eroshevich’s license based on good cause pursuant to Business and Professions Code section 2307 and California Code of Regulations, title 16, section 1360.2.

On February 16,2018, the Chief Judge of the Department of Workers’Compensation issued a Consolidation and Order Staying Liens.On March 14, 2018, lien claimant filed a response to the Consolidation Order requesting that her suspension from the workers’ compensation system be vacated.

This matter went to trial on September 10, 2019. The WCJ admitted into evidence the parties exhibits and found as follows: Dr. Eroshevich was convicted of four felony counts that were reduced to one misdemeanor; Dr. Eroshevich stipulated to a determination by the Medical Board of California based on certain acts in workers’ compensation claims such that her medical license was suspended after a stay of revocation; Dr. Eroshevich was suspended from participating in the Workers’ Compensation system pursuant to an order issued on November 29,2017; and that Dr. Eroshevich filed liens in each of the cases involved in this consolidated matter.

The WCJ further found that lien claimant failed to meet the burden of proof required to rebut the presumption of Labor Code3 section 139.21(9). Erosevich’s Petition for Reconsideration was granted, and the WCAB rescinded the F&O, and returned this matter to the trial level for further proceedings consistent with this decision.in Tang (1) v Solar Link International, Dr. Khristine Eroshevich Real Party In Interest -SAU6852145 (April 2020).

Following remand, another Findings of Fact & Order after Remand by the Workers’ Compensation Appeals Board (F&O), issued on September 22, 2020 by a workers’ compensation administrative law judge (WCJ). The WCJ found in pertinent part that lien claimant was convicted of a misdemeanor for fraudulently prescribing a controlled substance in violation of Health and Safety Code section 11173, subdivision (a) (11173(a)); that this conviction was the only basis for the WCJ’s determination; and, that lien claimant failed to meet the burden of proof required to rebut the presumption set forth in Labor Code2 section 139.21, subdivision (g) (section 139.21(g)); and, therefore, all liens and underlying bills for service and claims for compensation from lien claimant arise from the conduct set forth in the Order of Suspension of lien claimant pursuant to section 139.21, subdivision (a)(1)(A)(iv) (section 139.21(a)(1)(A)(iv)). And that lien claimant’s liens be dismissed with prejudice and that lien claimant shall have no right to payment on all underlying bills for service and claims for compensation within the jurisdiction of the workers’ compensation system.

Sometime after the September 22, 2020 Finding of Fact & Order, the WCAB again granted the Petition for Reconsideration filed by lien claimant Kristine Eroshevich, M.D., Ph.D. “in order to study further the legal and factual issues raised therein.” . It was arguably what is referred to as a Grant-and-Study Order.

Then the Court of Appeal issued three different published opinions indicating that Grant-and-Study orders are not compliant with the Labor Code, and that the WCAB lacks jurisdiction to grant reconsideration if its fully reasoned grant of reconsideration did not occur within 60 days. See Earley v. Workers’ Comp. Appeals Bd. (2023) 94 Cal.App.5th 1 – Zurich American Ins. Co. v. Workers’ Comp. Appeals Bd. (2023) 97 Cal.App.5th 1213 – And recently Mayor v. Workers’ Compensation Appeals Bd A169465 (August 2024).

Nearly 4 years after the September 22, 2020 Findings of Fact & Order after Remand the WCAB issued its “Opinion and Decision after Reconsideration” on August 30, 2024 in the case of Tang (2) v Solar Link International, Dr. Khristine Eroshevich Real Party In Interest -SAU6852145 (August 2024), and affirmed the F&O in part, but amended the Findings of Fact and the Orders to find that lien claimant did rebut the section 139.21(g) presumption; that lien claimant’s lien claims are not dismissed with prejudice; and, that adjudication of the merits of lien claimant’s lien claims are deferred pending decision by the workers’ compensation administrative law judge pursuant to section 139.21, subdivision (i), whether to adjudicate the liens or to transfer the liens back to the district offices having venue over the cases in which the liens were filed.

In 1996 Saul Fox and Dexter Paine formed Fox Paine & Company (FPC), a private equity management firm. Fox’s relationship with Paine deteriorated, and a business deal “fell apart,” resulting in the first of what would become a litany of litigation.

In December 2007, the Delaware lawsuit was settled, in a settlement agreement that was to effect a “complete divorce” between the Fox parties and FPC and the Paine parties.

Whatever the peace envisioned, it was short-lived, as in January 2008 Paine filed a pleading involving the settlement agreement. This was the first in a series of fights that would last for the next five years, as the Fox parties and Paine parties (including several former FPC directors and officers) became embroiled in lawsuits, arbitration proceedings, writs, and an appeal stemming from the August 2007 lawsuit and its settlement (the Fox-Paine litigation).

The Fox-Paine litigation ended with a settlement agreement in August 2012, which agreement represented it “resolved all outstanding issues among” Fox and Paine and “effectively put an end to the Fox-Paine Litigation.” However, there was more litigation to come.

In addition to other litigation in non-California jurisdictions, in 2017, eight plaintiffs sued several defendants including three excess insurers, which insurers provided $40 million in excess coverage in four layers of $10 million each. There were four causes of action, breach of contract, declaratory relief, breach of the covenant of good faith and fair dealing, and aiding and abetting breaches of fiduciary duty. The three excess insurers each filed demurrers,

The trial court overruled the demurrer of the first level excess insurer, but sustained the demurrers of the two other excess insurers without leave to amend, and entered judgments for them. Plaintiffs appealed.

The Court of Appeal affirmed in the published case of Fox Paine & Co., LLC, et al. v. Twin City Fire Insurance Co. et al.  -A168803 (September 2024).

Plaintiffs’ first cause of action is breach of contract. Excess insurance ‘refers to indemnity coverage that attaches upon the exhaustion of underlying insurance coverage for a claim.’

The Court of Appeal reviewed case law that established that the interpretation of an insurance policy is a question of law. And if contractual language is clear and explicit, it governs.

The trial court order addressed the question of exhaustion as to all three of the excess insurers, in a lengthy analysis. Following that analysis, the trial court sustained the demurrers of St. Paul and Liberty Mutual without leave to amend. This was correct. The St. Paul policy is triggered only if the “total amount of” underlying limits “has been paid.” And Liberty Mutual’s policy “only provides coverage” when the underlying limit of liability “is exhausted” by the underlying insurers “paying or being held liable to pay.” Such language demonstrates that the St. Paul and Liberty Mutual policies did not attach and no obligations arose. Hence, there was no breach of contract.

The trial court order addressed the question of exhaustion as to all three of the excess insurers, in a lengthy analysis. Following that analysis, the trial court sustained the demurrers of St. Paul and Liberty Mutual without leave to amend. This was correct.

Plaintiffs’ second cause of action was styled “declaratory judgment,” more accurately called “declaratory relief.” As noted, it is this cause of action it reads “the trial court erred in holding that plaintiffs had to establish actual exhaustion…”

Code of Civil Procedure section 1060 provides in pertinent part that declaratory relief is proper as to a contract “in cases of actual controversy relating to the legal rights and duties of the respective parties.” , Code of Civil Procedure section 1061 goes on to state that a court “may refuse to exercise the power” to grant declaratory relief “in any case where its declaration or determination is not necessary or proper at the time under all the circumstances.”

The Court of Appeal concluded that Code of Civil Procedure sections 1060 and 1061 both demonstrate that declaratory relief is not appropriate in this case.

“Even if plaintiffs had established the existence of an actual controversy – and they have not – the trial court had discretion to dismiss the declaratory relief cause of action if a declaration was not necessary or proper at the time under the circumstances.”

Plaintiffs’ third argument is that there was “no reason to dismiss plaintiffs’ other, unrelated tort causes of action,” referring to their claims for violation of the covenant of good faith and fair dealing and aiding and abetting breaches of fiduciary duty.

“Plaintiffs are wrong. There was good reason to dismiss these causes of action, as neither stated a claim.”

“It is clear that if there is no potential for coverage and, hence, no duty to defend under the terms of the policy, there can be no action for breach of the implied covenant of good faith and fair dealing because the covenant is based on the contractual relationship between the insured and the insurer.”

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.”

The U.S. Department of Veterans Affairs announced that VA hospitals outperformed non-VA hospitals in two major independent, nationwide reviews for patient satisfaction and care quality:

– – Patient Satisfaction Survey: VA outperformed non-VA hospitals in the most recent Centers for Medicare & Medicaid Services Hospital Consumer Assessment of Healthcare Providers and Systems star ratings, with 79% of VA facilities receiving a summary star rating of 4 or 5 stars compared to 40% of non-VA hospitals. This represents the ninth consecutive quarter in which VA facilities have outperformed non-VA counterparts.
– – Hospital Quality Ratings: In this year’s CMS Overall Hospital Quality Star Ratings, more than 58% of VA hospitals included received 4- or 5-star ratings compared to 40% of non-VA hospitals. This is only the second year VA hospitals have been included in this review, and VA has outperformed non-VA health care in both years.

These findings come at a time when Veteran trust in VA outpatient care has reached an all-time record high of 92%, based on a survey of more than 440,000 Veterans. Additionally, these findings are consistent with a recent systematic review that found that VA health care is consistently as good as – or better than – non-VA health care.

The new quality assessment reviewed – in a report by Military.com – of U.S. hospitals by the Centers for Medicare and Medicaid Services said that despite the drop in overall scores from last year, VA Under Secretary for Health Dr. Shereef Elnahal told reporters that the ratings were “great news” for veterans and the VA employees who treat them.

This year, 35 VA hospitals earned a five-star quality rating, one more than last year, and 15 of the 35 also earned five stars on CMS’ patient survey ratings. “Veterans [are] able to see how VA hospitals are comparing to other options they may have in the civilian sector,” Elnahal said. “[If] they have Medicare or private health insurance, they can get care at both options. What this will allow is for them to compare, including — if they qualify for community care, as supported by VA — choices in the civilian sector.”

The new star ratings, which can be found on the Care Compare website, mark the second year the VA was included in the database by CMS, a federal agency within the Department of Health and Human Services. The agency gave star ratings to 109 VA facilities, with the remaining VA hospitals or medical centers not being rated, either because they don’t meet qualification thresholds or the level of metrics needed to assess them. In addition to the 35 VA hospitals that earned five stars, 27 earned four stars, 23 earned three stars, 14 earned two stars and 10 earned one star — up from nine last year but with fluctuations on the one-star list.

The facilities receiving the lowest ratings were the VA Southern Arizona Health Care System in Tucson; Bay Pines VA Health Care System and West Palm Beach VA Medical Center in Florida; Overton Brooks VA Medical Center in Shreveport, Louisiana; VA New Jersey Health Care System; Syracuse VA Medical Center and VA New York Harbor Health Care System in New York; VA Pittsburgh Health Care System; Providence VA Medical Center in Rhode Island; and VA Caribbean Health Care System in San Juan, Puerto Rico.

New to the one-star list were the VA medical centers in Tucson, New Jersey, Syracuse and New York Harbor Health Care. Those that received one star on last year’s list but have since increased their ratings include the James J. Peters VA Medical Center in The Bronx, New York; New Mexico VA Health Care System in Albuquerque; and the Memphis VA Medical Center, Tennessee, all of which are now two-star facilities.

In Southern California, VA San Diego Healthcare System received five stars, while the remainder were all three stars. In Northern California Palo Alto VA Medical Center, VA N California Healthcare System in Mather, were also rated five starts, with two others rated at three.

A one-star rating signifies that the facilities performed well below the average for specific measurements, such as death rates for patients with heart failure, surgical complications and pneumonia; readmission rates for certain ailments; hospital-acquired infections; patient satisfaction; and more.

The data for this year’s star ratings was collected between July 2019 and March 2023, according to the VA.

Among the criticisms of the rankings from advocacy groups and industry associations such as the American Association for Physician Leadership, is that they don’t take into account the socioeconomic status of patients or the surrounding community, which may not have access to routine health care and have worse health outcomes for acute and chronic conditions.

Balfour Beatty Construction, LLC was hired by a local school district to construct a two-story classroom building at an elementary school. In June 2017, Balfour Beatty hired ABI as a subcontractor to perform concrete, framing, and structural steel work on the project and agreed to pay ABI over $700,000 for its work.

When ABI began its work on the project in August 2017, it had a workers’ compensation insurance policy issued through State Compensation Insurance Fund. In December 2017, State Fund sent ABI a notice of cancellation, informing ABI that its 2017 2018 workers’ compensation policy would be canceled in January 2018 if ABI did not pay approximately $33,000 in outstanding premiums. ABI received the notice, but failed to pay, and its policy was canceled. ABI refused to pay outstanding insurance premiums charged on a prior policy, since ABI believed (correctly as it turns out) it was being overcharged

As a result of the policy cancellation, ABI’s contractor’s license was suspended by operation of law on January 25, 2018, due to ABI’s “failure . . . to . . . maintain workers’ compensation insurance coverage.” (Bus. & Prof. Code, §7125.2.) The Contractors’ State License Board gave ABI notice of the license suspension on January 29 and informed ABI that its contractor’s license would be suspended if ABI failed to submit a valid insurance certificate or exemption certificate within 45 days. (See § 7125.2, subd. (b) [requiring registrar to give notice of license suspension].) ABI did neither. In mid-March, the Board sent ABI a letter notifying ABI that its license had been retroactively suspended effective January 25 under section 7125.2.

Mr. Vo, ABI’s principal,filed an “Exemption from Workers Compensation” form with the Board in early April 2018, declaring under penalty of perjury that ABI does not need workers’ compensation insurance because it does “not employ anyone.” This was false. As Vo later admitted at trial, ABI had at least nine employees working on the project at the time. Vo nonetheless decided to falsely claim the exemption because ABI was heavily invested in the project and he did not want to lose money. Upon receipt of the exemption form, the Board reinstated ABI’s license effective April 5, 2018.

As for the construction project, Balfour Beatty refused to pay ABI for its work. Accordingly, in May 2019, ABI sued Balfour Beatty and several construction bonding surety companies for fraud, breach of contract, quantum meruit, recovery against bonds, and statutory penalties. Balfour Beatty cross-complained against ABI and Vo for fraud, express indemnity, and equitable indemnity. Balfour Beatty also asserted as its 31st affirmative defense that ABI “was not properly licensed at all times as required by Business and Professions Code section 7031,” and as a result “is barred from recovering payment for any labor, materials or equipment furnished to the project.”

Several years into that litigation, ABI settled its old premium dispute with its workers’ compensation insurer and had the canceled policy retroactively reinstated as part of the settlement. ABI then applied to the Contractors’ State License Board for retroactive reinstatement of its contractor’s license, asserting that ABI’s failure to file a certificate of workers’ compensation coverage had been “due to circumstances beyond [its] control,” in that the policy had been canceled “unbeknownst to” ABI. The Board accepted ABI’s representation and retroactively reinstated its contractor’s license under Bus. & Prof. Code, § 7125.1.

In November 2022, the trial court held a bench trial on the bifurcated issue of Defendants’ 31st affirmative defense – ABI’s failure to be duly licensed. During trial, State Fund’s underwriting manager admitted that State Fund had overcharged ABI for premiums, that State Fund generally does not cancel a policy for nonpayment of a bill until the dispute over the bill is resolved, that State Fund should not have canceled ABI’s 2017-2018 policy, and that ABI’s license suspension occurred because of the way State Fund handled the dispute.

The trial court found in favor of Defendants on the 31st affirmative defense, concluding ABI was “not ‘a duly licensed contractor at all times during the performance’ of the contract” and therefore “may not ‘bring or maintain’ this action ‘or recover’ compensation for its work.” Defendants filed a motion for attorney fees under Civil Code section 1717 and the subcontract’s prevailing party fee provision, and also filed motions to tax costs. After granting the motions in part, the trial court entered an amended judgment in favor of Defendants and against ABI, which included an award of over $270,000 in costs and over $1.55 million in attorney fees to Defendants.

The Court of Appeal affirmed in the published case of American Building Innovations v. Balfour Beatty Construction -G062471 (Sept 2024).

This appeal involves the interplay of several statutes and what circumstances are “beyond the control of the licensee” for purposes of retroactive license reinstatement. In this case ABI was fully aware it was unlicensed and uninsured, and nevertheless continued its work.

The Court of Appeal concluded section 7031 does indeed bar ABI’s current claims. A suspended contractor’s license can be retroactively reinstated under Bus. & Prof. Code, § 7125.1 only if “the failure to have a certificate on file was due to circumstances beyond the control of the licensee.” (Id., subd. (b).)

In this case, the lapse in coverage was not beyond ABI’s control. The record “demonstrates the policy cancellation occurred because ABI chose not to pay billed insurance premiums. ABI learned of the policy cancellation days after it took effect, yet ABI did not procure replacement coverage until years later when it settled the premium dispute with its insurer”.

“The insurer’s retroactive reinstatement of the policy following that settlement was essentially meaningless because it occurred long after the statute of limitations ran on any workers’ compensation claims, rendering the coverage illusory.”

“As the prevailing party in that action, Defendants are entitled to attorney fees; the fee award must therefore be affirmed.”