Judge: Yolanda Orozco, Case: 20STCV45622, Date: 2022-10-05 Tentative Ruling
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Case Number: 20STCV45622 Hearing Date: October 5, 2022 Dept: 31
DEMURRER TO PLAINTIFF’S FAC IS SUSTAINED WITHOUT LEAVE TO AMEND
BACKGROUND
On November 30, 2020, KND Development 53, doing business as Kindred Hospital South Bay, (“Plaintiff”) filed this Complaint.
On April 29, 2022, this Court sustained a demurrer to the Complaint for causes of action for (1) Fraudulent Misrepresentation, (2) Constructive Fraud; and (3) Civil Conspiracy on the basis that the Complaint as pled was barred by the exclusivity provision of the Workers’ Compensation Act (WCA). (Min. Or. 04/29/22.)
The First Amended Complaint (FAC) asserts claims against Intact Insurance Group USA, LLC d/b/a OneBeacon; Atlantic Specialty Insurance Company; Homeland Insurance Company of New York; Great West Casualty Company; Forward Aire, Ink. f/k/a Towne Air Fright (collectively “Defendants”) and Does 4 to 20.
The FAC alleges causes of action for:
1) Fraudulent Misrepresentation
2) Fraudulent Concealment
3) Civil Conspiracy
4) Violation of the Unfair Competition Law (UCL)
5) Breach of Written Contract against OneBeacon
6) Breach of Written Contract against Atlantic
On July 18, 2022, Defendants filed a demurrer to Plaintiff’s FAC.
On September 06, 2022, Plaintiff filed opposing papers. Defendants filed a reply on September 12, 2022.
Defendant Great West Casualty Company filed a Joinder to Defendants’ demurrer.
LEGAL STANDARD
A demurrer can be used only to challenge defects that appear on the face of the pleading under attack or from matters outside the pleading that are judicially noticeable. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.)¿ “To survive a demurrer, the complaint need only allege facts sufficient to state a cause of action; each evidentiary fact that might eventually form part of the plaintiff’s proof need not be alleged.”¿ (C.A. v. William S. Hart Union High School Dist. (2012) 53 Cal.4th 861, 872.)¿ To test the sufficiency of the cause of action, the demurrer admits the truth of all material facts properly pleaded.¿ (Aubry v. Tri-City Hospital Dist. (1992) 2 Cal.4th 962, 966-967.)¿ A demurrer “does not admit contentions, deductions or conclusions of fact or law.”¿ (Daar v. Yellow Cab Co. (1967) 67 Cal.2d 695, 713.)¿¿
MEET AND CONFER REQUIREMENT
Before filing a demurrer, the demurring party is required to meet and confer with the party who filed the pleading subject to demurrer, in person or telephonically, to determine whether an agreement can be reached through a filing of an amended pleading that would resolve the objections to be raised in the demurrer. (Code Civ. Proc. (CCP) § 430.41.)
Defense counsel asserts he met and conferred with Plaintiff’s counsel by telephone and email on June 27, 2022, but no resolution was reached. (Alikin Decl. ¶ 2.) Thus, the meet and confer requirement is met.
REQUEST FOR JUDICIAL NOTICE
The Court notes that “‘[t]aking judicial notice of a document is not the same as accepting the truth of its contents or accepting the interpretation of its meaning.’ [Citation.] While courts take judicial notice of public records, they do not take judicial notice of the truth of matters stated therein. [Citation.] ‘When judicial notice is taken of a document,…the truthfulness and proper interpretation of the document are disputable.’ [Citation.]” (Herrera v. Deutsche National Trust Co. (2011) 196 Cal.App.4th 1366, 1375; see also People v. Castillo (2010) 49 Cal.4th 145, 157 [reiterating that the “ ‘the taking of judicial notice of the official acts of a governmental entity does not in and of itself require acceptance of the truth of factual matters which might be deduced therefrom, since in many instances what is being noticed, and thereby established, is no more than the existence of such acts and not, without supporting evidence, what might factually be associated with or flow therefrom’ ”].
Defendants request the Court take Judicial Notice of the following:
1. October 1, 2014 Application for Adjudication of Claim with the California Workers’ Compensation Appeals Board, a true and correct copy of which is attached hereto as Exhibit 1 DEFENDANTS’ DEMURRER TO FAC BATES NOS. 1-12.
2. April 3, 2019 4600 Designation Notice designating KND as the workers’ compensation claimant’s treating physician, a true and correct copy of which is attached hereto as Exhibit 2, DEFENDANTS’ DEMURRER TO FAC BATES NOS. 13-17.
3. Plaintiff’s September 18, 2020 Audit Complaint Form filed with the Department of Industrial Relations, Division of Workers’ Compensation by Plaintiff for Intact’s alleged “Failure to pay for medical treatment and unsupported denial of liability for a claim,” a true and correct copy of which is attached hereto as Exhibit 3, DEFENDANTS’ DEMURRER TO FAC BATES NOS. 18-43.
4. Plaintiff’s November 19, 2021, Petition to Expedite Resolution of Case-in-Chief (WCAB Case No. ADJ9658870), a true and correct copy of which is attached hereto as Exhibit 4, DEFENDANTS’ DEMURRER TO FAC BATES NOS. 44-59.
5. Plaintiff’s December 28, 2021, Petition for Reconsideration of Order Approving Compromise and Release (WCAB Case No. ADJ9658870), a true and correct copy of which is attached hereto as Exhibit 5, DEFENDANTS’ DEMURRER TO FAC BATES NOS. 60-71.
6. Plaintiff’s February 3, 2022, [Second] Petition for Reconsideration of Order Approving Compromise and Release (WCAB Case No. ADJ9658870), a true and correct copy of which is attached hereto as Exhibit 6, DEFENDANTS’ DEMURRER TO FAC BATES NOS. 72-104.
7. February 7, 2022 Report and Recommendation on Petition for Reconsideration by Workers Compensation Administrative Law Judge George Reny, a true and correct copy of which is attached hereto as Exhibit 7, DEFENDANTS’ DEMURRER TO FAC BATES NOS. 105- 111.
8. The Court’s Ruling dated April 29, 2022 sustaining Defendants’ Demurrer to Plaintiff’s Complaint, a true and correct copy of which is attached hereto as Exhibit 8, DEFENDANTS’ DEMURRER TO FAC BATES NOS. 112-120.
9. February 1, 2022 Order Approving Compromise and Release and Award by Workers Compensation Administrative Law Judge George Reny, a true and correct copy of which is attached hereto as Exhibit 9, DEFENDANTS’ DEMURRER TO FAC BATES NOS. 121- 194
Defendants’ request for Judicial Notice is GRANTED pursuant to Evidence Code sections 451 and 452 subdivision (d)(2).
ALLEGATIONS IN THE FAC
Plaintiff Kindred is a long-term acute care hospital, which provides care and treatment to “the sickest of the sick” and those admitted as patients require intensive treatment for an extended period. (FAC ¶¶ 9-10.) Once admitted, a patient cannot be discharged in the absence of a safe discharge option, this makes the care provided by Plaintiff very expensive. (FAC ¶¶ 10, 23) For this reason, Kindred alleges that insurance companies stand to save significant amount of money if they can create reasons not to pay Kindred for the care it provides. (FAC ¶ 23.)
On April 4, 2019, a Kindred representative, Tina Solis (“Solis”), contacted OneBeacon, an entity holding itself out as the workers’ compensation insurer for the Patient’s employer, Forward Air, in order to verify the existence of an insurance coverage and obtain preauthorization of the care and treatment to be provided. (FAC ¶ 20.) This preauthorization information is relied on by Kindred to determine if a patient should be admitted. (FAC ¶ 21.) Plaintiff alleges that on April 3, 2019, by telephone, a OneBeacon representative, Jennie Fleming (“Fleming”), confirmed to Solis that the Patient’s employer had workers’ compensation insurance through OneBeacon and that the Patient’s admission to Kindred was authorized. (FAC ¶¶ 24, 25.)
Fleming also allegedly advised Solis that OneBeacon would access the Coventry network, which in turn accesses Multiplan contract rates, to price the claim. (FAC ¶ 26). Plaintiff is a party to the contract with MultiPlan, wherein Kindred agrees to provide care and treatment to MultiPlan customers. (FAC ¶ 5.) MultiPlan in turn enters into contracts with payors like OneBeacon, in which OneBeacon agrees to compensate contracted providers for care of their members at the rates set in the providers’ respective contracts with MultiPlan. (FAC ¶ 6.) In reliance that these contracts are to be construed together and are the custom and practice of the healthcare industry, Fleming’s representation meant that Kindred could expect to be paid according to its contract with MultiPlan at 75%of billed charges. (FAC ¶¶ 6, 26.) In reliance on OneBeacon’s representation, Kindred admitted the Patient and provided care and treatment to him. (FAC ¶ 28.)
However, OneBeacon did not pay Kindred’s claims for the Patient’s care and on July 22, 2019, Plaintiff received a denial notice on behalf of OneBeacon’s agent, CareWorks, stating the claim would not be paid because the Patient was not subject to a workers’ compensation policy. (FAC ¶ 31.) This was contrary to OneBeacon’s prior representations of being responsible for the Patient’s workers’ compensation benefits and that the admission was authorized and Kindred would be paid pursuant to its MultiPlan contract.
OneBeacon’s denial notice included the same workers’ compensation claim number that appeared on Kindred’s claims and Fleming’s letter authorizing the admission on behalf of OneBeacon which states:
“This is an occupational accident policy. This is not a workers’ compensation policy. This policy does not provide coverage for employees of any company. As the claimant has filed a workers’ compensation claim and has claimed to be an employee there are not other benefits under this policy.”
(FAC ¶ 32, claim number OAB102926)
OneBeacon refused to pay for the Patient’s treatment provided by Kindred because the policy was an occupational accident policy and not a workers’ compensation policy, despite the representation Fleming made to Kindred that OneBeacon was administering workers’ compensation benefits for the Patient. Kindred would continue to receive notices from OneBeacon (called “OA Notices), that because the Patient had claimed to be an employee, the Patient had an occupational accident policy and Kindred would not be reimbursed. (FAC ¶¶ 34, 26.)
Plaintiff asserts that occupational accident policies apply to injuries sustained by independent contractors and unlike workers’ compensation policies, are not subject to the protections or procedures of the California Workers’ Compensation Act. (FAC ¶ 33.) Plaintiff asserts that OneBeacon obstructed Kindred’s efforts to discharge the Patient by refusing to authorize his transfer to a lower-level care facility. (FAC ¶ 37.) Unable to discharge the Patient, Kindred had no choice but to continue providing care for more than three years. (Id.)
Plaintiff asserts that for the first time since this suit was filed, OneBeacon asserts that the Patient’s industrial injury was actually covered by multiple insurance policies and that Atlantic, a wholly owned subsidiary of OneBeacon, allegedly underwrote an occupational policy accident covering Forward Air’s employees, while Homeland, a wholly owned subsidiary of Atlantic, allegedly wrote a contingent liability policy to Forward Air, which Plaintiff believes meant that Homeland would defend and indemnify Forward Air in the event an individual covered by the occupational accident policy filed a workers’ compensation claim. (FAC ¶¶ 40-41.)
According to the FAC, OneBeacon alleges Great West issued a separate workers’ compensation policy to Forward Air and Atlantic stipulated before the Workers’ Compensation Appeals Board (WCAB) that it would administer and pay benefits under this policy and would indemnify Great West for amounts previously paid, even though the stipulation specifically refers to OneBeacon, not Atlantic. (FAC ¶¶ 40-42, see also Defendants RJN Ex. 3, Bates No. 27.) Therefore, Kindred believes and alleges that OneBeacon stipulated to liability under Great West workers’ compensation policy to avoid any appearance that the Patient has been misclassified as an independent contractor by Forward Air. (FAC ¶ 41.) OneBeacon now contends that Atlantic administered both a workers’ compensation policy and an occupational accident policy covering the same employees, while its wholly owned subsidiary underwrote a contingent liability policy that would defend and indemnify Forward Air against workers’ compensation claims made by individuals classified as independent contractors. (FAC ¶ 43.)
According to the FAC, Atlantic held an undisclosed dual role that facilitated the Defendants’ conspiracy to defraud Kindred, as such information was withheld at the time the Patient was admitted and even after Kindred received OA Notices. (FAC ¶ 43.) Plaintiff further alleges that the policies administered by OneBeacon and its subsidiaries for the benefit of Forward Air were a key element of the Defendants’ scheme. (FAC ¶ 44.) Either OneBeacon or its subsidiary administered a workers’ compensation policy, which allowed OneBeacon to authorize the Patient’s admission into Kindred to receive treatment. (Id.) Yet when Kindred sought payment pursuant to this express authorization, OneBeacon relied on the occupational accident policy underwritten by its subsidiary to issue the OA Notices “advising” Plaintiff that no workers’ compensation coverage was available for the Patient and that the Patient had forfeited benefits by claiming to be an employee. (FAC ¶ 44.) In this manner, OneBeacon intentionally concealed the existence of multiple policies pertaining to the Patient until Kindred filed this suit, in an effort to induce Kindred to forfeit its right to payment (FAC 45-46.)
In addition, Plaintiff alleges that One Beacon is falsely claiming that it disclosed the fact that the Patient had multiple policies in a 2015 stipulation and order signed before the WCAB in 2015. (Defendants RJN, Bates No. 27.)
Plaintiff also alleges that OneBeacon only recently began to take the position that the only reason Kindred received the OA Notices was because Kindred submitted its claims under the wrong policy. (FAC ¶ 47.) Plaintiff alleges that OneBeacon intentionally concealed this information to induce Kindred to abandon its efforts to obtain payment. (Fac ¶ 28.) Had Kindred been notified about the multiple policies, it would have rectified any such alleged issue. (FAC ¶ 48.) OneBeacon never advised Kindred how its claim submissions, utilizing the claim number provided by OneBeacon upon authorization, were under the wrong policy. (Id.) Therefore Defendants’ inconsistent positions and revelations were calculated and timed to thwart Kindred from obtaining payment.
OneBeacon and its OA notices failed to advise Kindred that it had submitted under the wrong policy or that multiple policies existed for the Patient. (FAC ¶¶ 49, 50.) OneBeacon simply denied payment despite holding itself out as responsible for the Patient’s workers’ compensation benefits and then later claiming there were no benefits available. (FAC ¶ 50.) Therefore, due to Defendants’ actions, Kindred suffered damages in excess of $6.5 million. (FAC ¶ 8.)
DISCUSSION
Great West Casualty Company (“Great West”) joins the Defendants’ demurrer to the FAC.
The demurrer is based on the assertions that:
1) The FAC is barred in civil court by the workers’ compensation exclusivity doctrine and Plaintiff is required to exhaust its administrative remedies before the Workers’ Compensation Appeals Board (WCAB) before pursuing claims in civil Court.
2) The FAC lacks the specificity required to sustain claims that sound in fraud.
3) The FAC fails to state sufficient facts to sustain a cause of action for breach of contract and violations of the UCL.
I. Workers’ Compensation Act (WCA) Exclusivity Doctrine
Defendants argue that Kindred’s claims are barred by the workers’ compensation “exclusivity doctrine,” which provides that where an exclusive remedy is provided by the Workers’ Compensation Act (WCA), recovery for those injuries is limited to the remedies therein. (See Cal. Labor Code § 3602.)
The Workers Compensation Act is the exclusive remedy of the employee or his or her dependents against the employer. (American Cargo Express, Inc. v. Superior Court (2017) 16 Cal.App.5th 145, 154.) “The Legislature has extended the protection of these exclusive remedy provisions to workers' compensation insurance carriers by defining the term “employer” to include “insurer.” (§ 3850, subd. (b).) Thus, these insurers “retain immunity from lawsuit as the ‘alter ego’ of the employer.’” (Charles J. Vacanti, M.D., Inc. v. State Comp. Ins. Fund (2001) 24 Cal.4th 800, 813 (“Vacanti”).)
“The superior court and [Workers’ Compensation Appeals Board] WCAB do not have concurrent jurisdiction over any given action—depending on the injuries claimed, one entity will lack jurisdiction to grant any relief whatsoever. (Citation.) ‘“The only point of concurrent jurisdiction of the two tribunals is jurisdiction to determine jurisdiction; jurisdiction once determined is exclusive, not concurrent.’ (Citation.)” (California Ins. Guarantee Assn. v. San Diego County Schools Risk Management etc. (2019) 41 Cal.App.5th 640, 652.)
“Where the alleged injury is “collateral to or derivative of” an injury compensable by the exclusive remedies of the WCA, a cause of action predicated on that injury may be subject to the exclusivity bar.” (Vacanti, supra, 24 Cal.4th at 811.) To determine if the Court has jurisdiction over controversies alleged in the FAC, the Court must determine “whether the alleged acts or motives that establish the elements of the cause of action fall outside the risks encompassed within the compensation bargain.” (Id. at 811-812.) “Where the acts are a normal part of the employment relationship, or workers’ compensation process, or where the motive behind the acts does not violate a fundamental policy of this state, then the cause of action is barred.” (Id. at 812 [internal citations omitted].)
If the injury arises out of the course of the employment and the injury caused a disability or need for medical treatment, then then “the workers' compensation system subsumes all statutory and tort remedies otherwise available for such injuries. (Citation). Where the alleged injury is neither collateral to nor derivative of an injury that satisfies both of these conditions, then it is not subject to exclusivity. (Citation.).” (Vacanti, supra, 24 Cal.4th at 813-814.) “Causes of action seeking to recover ‘[e]conomic or contract damages incurred independent of any’ workplace injury are also exempt from workers' compensation exclusivity. (Citation). Indeed, only injuries “to the worker's person, as opposed to his property,” are compensable. Thus, courts have refused to bar spoliation of evidence or fraud claims where the alleged injury—the loss of a prospective lawsuit against a third party—was not collateral to or derivative of an injury to the worker's person.” (Id. at 814 [italics original].)
In Vacanti, the plaintiffs were medical service providers who provided medical services to employees with workers’ compensation claims and medical management companies under contract to the medical groups. (Vacanti, supra, 24 Cal.4th at 807.) The defendants were workers’ compensation insurance carriers. (Id. at 808). Plaintiffs alleged that in 1991, defendants schemed to put plaintiffs out of business by delaying payments or refusing to pay for services. (Id.) In deciding that the WCAB had exclusive jurisdiction, the California Supreme Court stated:
“In this case, plaintiffs seek to recover the economic damage to their businesses resulting from the failure to receive full and timely payment on their lien claims before the WCAB. These damages arise out of the alleged mishandling of plaintiffs' lien claims. Plaintiffs concede that their underlying lien claims sought to recover compensation for medical services provided to workers injured in the course of their employment. Thus, the alleged injury underlying all of plaintiffs' causes of action is collateral to or derivative of a compensable workplace injury and falls within the scope of the exclusivity provisions.”
(Id. at 815.)
In upholding that certain claims were barred by the exclusivity doctrine of the WCA, the California Supreme Court in Vacanti reasoned that the plaintiffs were lien claimants and that “[t]he rights of lien claimants ‘derive from’ the rights of injured employees. (Citation.) Therefore, plaintiffs stand in the place of the employees with respect to claims for workers' compensation benefits, and plaintiffs' rights cannot exceed employees' rights. Because employees are limited to WCA remedies for all injuries caused by wrongful delays or refusals to pay (Citation), plaintiffs are limited to the same.” (Vacanti, supra, 24 Cal.4th at 816.) Here, Plaintiff Kindred does not deny that it is a lien claimant seeking payment on a policy purported to be issued under a workers’ compensation policy.
The, the California Supreme Court in Vacanti confirmed that the WCA section provided exclusive remedies for the mishandling of workers compensation claims. (Vacanti, supra, 24 Cal.4th at 817, citing Labor Code §§ 4603.2, 4622 and 5814.) “[T]he Legislature enacted sections 4603.3 and 4622 in order ‘to ensure that the bills of medical providers were promptly paid, and that protests or objections to the bills were promptly raised and adjudicated.’” (Id. citing American Psychometric Consultants, Inc. v. Workers' Comp. Appeals Bd. (1995) 36 Cal.App.4th 1626, 1640.)
Here, Plaintiff does not deny that it has submitted lien claims to the WCAB pursuant to the OneBeacon policy. In fact, Defendants’ have provided evidence that Plaintiff has submitted lien claims to the WCAB. (RJN Ex. 3, 9.) Orders by the WCAB, are proper subject to Judicial Notice on demurrer especially when issues of this Court’s jurisdiction to adjudicate this proceeding is at issue. Accordingly, this Court finds that the WCA exclusivity doctrine applies.
II. Exceptions to the WCA’s Exclusivity Doctrine
The fact that an insurer may try to delay or deny payments to a medical provider is “a risk reasonably encompasses within the compensation bargain” by the Legislature such that the WCA exclusivity remedies apply to bar the causes of action. (See Vacanti, supra, 24 Cal.4th at 819-820.) Exemptions to the exclusivity principle outlined in Vacanti include (1) conduct having a “questionable relationship” to the employment, (2) conduct “beyond the normal role of an insurer in a compensation scheme intended to protect the worker”, and (3) conduct “so extreme and outrageous” that the defendant is “in effect stepped out of its role as” an insurer precludes the application of workers’ compensation exclusivity. (Id at 820.) “Thus, insurer actions “closely connected to the payment of benefits” fall within the scope of the exclusive remedy provisions.” (Id. at 821.)
“Only when the entity commits tortious acts independent of its role as a provider of workers’ compensation benefits may an employee,” or a lien claimant standing in the shoes of the employee, “maintain a private cause of action under Unruh.” (Vacanti, supra, 24 Cal.4th at 822, referencing Unruh v. Truck Insurance Exchange (1972) 7 Cal.3d 616.) To assert such an exception to the WCA exclusivity principle, the pleading must clearly describe the “specific conduct and the outrageous and extreme perfidious nature” of such acts. (Unruh, supra, 7 Cal.3d. at 387.) “[S]ubjective characterization that the acts of the carrier or its agents are ‘fraudulent, deceitful and intentional’ will not suffice . . . [T]here must be factual allegations identifying the particular acts or circumstances which distinguish the tort of outrageous conduct from the ordinary nonperformance of the insurer's statutory duty to provide benefits.” (Jablonski v. Royal Globe Ins. Co. (1988) 204 Cal.App.3d 379, 387.)
Here, the fact that Kindred asserts OneBeacon intentionally concealed information regarding the workers’ compensation policy of the Patient, is a cause of action that falls within the exclusive jurisdiction of WCAB because Kindred is asserting to be a lien claimant seeking payment for services rendered under a workers’ compensation policy. Issues with the claims process of workers compensation claims are the type of issues the Legislature intended Labor Code sections 4603.3 and 4622 to exclusively address. Moreover, the fact that OneBeacon failed, either negligently or purposefully, to identify Kindred the correct policy under which it could seek reimbursement, such conduct is not so outrageous as to take Plaintiff’s claims outside the jurisdiction of the WCA. (See also Mottola v. R. L. Kautz & Co. (1988) 199 Cal.App.3d 98 [exclusive provision of the WCA barred civil action against claims adjuster for damages bases on delay and failure to pay benefits arising from an industrial injury.].)
Therefore, the Court finds that FAC does not fall under any exception to the WCA.
III. Claims under OneBeacon’s Occupational Accident Policy
To the extent that Kindred seeks compensation for services rendered under the policy as an occupational accident policy, such claims may not be subject to the WCA exclusivity and OneBeacon may be barred from asserting that the policy was a workers’ compensation policy rather than an occupational accident policy under the theory of estoppel. In Edward Carey Construction Co., the Appeal Court explained that the plaintiff was not required to exhaust its administrative remedies before pursuing the civil action for claims not subject to the WCA. (See Edward Carey Construction Co., supra, 194 Cal.App.4th at 664 [ “‘the insurer and its supports cite many statues.’ None, however, support an exhaustion requirement.”].)
While the WCAB has sole jurisdiction to hear and adjudicate Kindred’s payment of claims under a workers’ insurance policy, the same cannot be said when Kindred seeks compensation under an occupational accident policy not subject to the WCA exclusivity doctrine. Defendants have not alleged that an occupational accident policy under which Kindred provided services and seeks compensation, remains subject to the jurisdiction of the WCAB.
However, it appears that Plaintiff has submitted a lien claim to the WCAB. Therefore, Kindred may be judicially estopped from asserting that policy is an occupational accident policy when it has represented to the WCAB that its lien/policy is subject to workers’ compensation policy. (See RJN Ex. 3, 9.)
“The concept of judicial estoppel prevents a party from asserting a position in a judicial proceeding that is contrary or inconsistent with a position previously asserted in a prior proceeding. The purpose is to protect the integrity of the judicial process and not the parties of the lawsuit.” (International Engine Parts, Inc. v. Feddersen & Co. (1998) 64 Cal.App.4th 345, 350.)
The WCAB has not determined that Kindred’s lien based on OneBeacon’s policy is not reimbursable given that the case before the WCAB is still pending (WCAB Case No. ADJ9658870).Until the WCAB denies Kindred compensation for its services and treatment of the Patient, Kindred cannot assert that the Defendants conspired to defraud it or conceal its right to payment because it appears that the WCAB may still reimburse Kindred as a lien claimant. Therefore, any such allegations are not yet ripe, absent a finding by the WCAB that Kindred is not entitled to compensation as a lien claimant.
Unlike the defendants in Jablonski, the Defendants here did not outright deny that a workers’ compensation claim existed, but rather submitted OA Notices to Kindred that the policy for the Patient was an occupational accident policy, not a workers’ compensation policy. (FAC ¶ 32.) Moreover, the OA Notices put Kindred on notice that the employee had filed a workers’ compensation case. (Id. [“As the claimant has filed a workers’ compensation claim and has claimed to be an employee there are no other benefits under this policy.”].) Moreover, Defendants’ represent that Kindred has submitted a lien claim to the WCAB, something Plaintiff has not denied.
All of Plaintiff’s actions arise out of the same operative facts, OneBeacon’s representations that Patient had a workers’ compensation policy, and such conduct can be linked to “a normal insurer action during the claims process.” (See Vacanti, supra, 24 Cal.4th at 826.) If the WCAB determines that Kindred’s lien is not compensable, then WCA exclusivity doctrine may not apply, and then Plaintiff may be able to seek compensation for economic damages in civil court. Since Plaintiff appears to have taken the position that it is a lien claimant under the Patient’s worker compensation policy, this Court lacks jurisdiction over this case at this time.
IV. Jurisdiction to Stay the Action Pending Adjudication Before the WCAB
This Court has the discretion to stay this action “and solicit an agency’s views” when primary jurisdiction applies. (See Villanueva v. Fid. Nat’l Title Co. (2021) 11 Cal. 5th 104, 126 at fn. 12.)
“If the Legislature establishes a scheme under which a court is prohibited from exercising discretion under the doctrine of primary jurisdiction, a court must honor the legislative scheme, and may not decline to adjudicate a suit on the basis that available administrative processes should first be invoked and completed. If, however, the Legislature does not preclude a court from exercising its discretion under the primary jurisdiction doctrine, a court may do so and, in appropriate cases, may decline to adjudicate a suit until the administrative process has been invoked and completed.”
(Farmers Ins. Exchange v. Superior Court (1992) 2 Cal.4th 377, 394.)
To the extent that Kindred seeks to assert claims for compensation for services under an occupational accident policy not subject to the WCA exclusivity doctrine, then Plaintiff is not required to exhaust its administrative remedies. (See Farmers Ins. Exchange, supra, at 396.) However, such issues are not yet ripe because the WCAB has not yet declined to compensate Kindred for services rendered, and the issue of whether Kindred is entitled to compensation as a lien claimant has not yet been adjudicated.
However, if Plaintiff is seeking compensation as a lien claimant under a workers’ compensation policy, then the WCAB has “exclusive jurisdiction” and “a party may only proceed administratively and thereafter may only challenge the results of any administrative outcome through administrative mandamus (Code Civ. Proc., § 1094.5) or such other means as the statutory scheme may specify.” (Villanueva, supra, 11 Cal.5th at 126 at fn. 12.)
This Court has taken Judicial Notice of Orders issued from the WCAB pertaining to Plaintiff’s lien claim since they were issued by a court of record of the United States. (See Evid. Code § 452 subd. (d)(2).) Regardless of the outcome of the case before the WCAB, this Court at the present does not have jurisdiction to hear this case when Plaintiff has submitted a lien claim pursuant to a workers’ compensation policy to the WCAB and all the causes of action alleged in the FAC fall under conduct relating to and arising from a policy/claim pending before the WCAB.
Since the case-in-chief before the WCAB is still pending, (WCAB Case No. ADJ9658870), Plaintiff’s FAC is barred by the exclusivity doctrine of the WCA.
The Demurrer is SUSTAINED WITHOUT LEAVE TO AMEND.
CONCLUSION
Defendants’ demurrer to Plaintiff’s FAC is SUSTAINED WITHOUT LEAVE TO AMEND.