American Psychometric Consultants, Inc. v. Workers' Comp. Appeals Bd.

• Decision Date: 21 July 1995
• Docket Number: Nos. B081157,B081241 and B083331,s. B081157
• Citation: 43 Cal.Rptr.2d 254,36 Cal.App.4th 1626
• Court: California Court of Appeals
• Parties: , 95 Cal. Daily Op. Serv. 5766, 95 Daily Journal D.A.R. 9743 AMERICAN PSYCHOMETRIC CONSULTANTS, INC., Petitioner, v. WORKERS' COMPENSATION APPEALS BOARD, Cheesecake Factory et al., Respondents. APEX MEDICAL GROUP, Petitioner, v. WORKERS' COMPENSATION APPEALS BOARD, Parker Painting et al., Respondents. PACE MEDICAL GROUP, Petitioner, v. WORKERS' COMPENSATION APPEALS BOARD, Circle Delivers, Inc., et al., Respondents.

Page 254

43 Cal.Rptr.2d 254

36 Cal.App.4th 1626, 95 Cal. Daily Op. Serv. 5766,

95 Daily Journal D.A.R. 9743

AMERICAN PSYCHOMETRIC CONSULTANTS, INC., Petitioner, v. WORKERS' COMPENSATION APPEALS BOARD, Cheesecake Factory et al., Respondents.

APEX MEDICAL GROUP, Petitioner, v. WORKERS' COMPENSATION APPEALS BOARD, Parker Painting et al., Respondents.

PACE MEDICAL GROUP, Petitioner, v. WORKERS' COMPENSATION APPEALS BOARD, Circle Delivers, Inc., et al., Respondents.

Nos. B081157, B081241 and B083331.

Court of Appeal, Second District, Division 7, California.

July 21, 1995.

As Modified July 26, 1995.

As Modified on Denial of Rehearing Aug. 16, 1995.

Review Denied Nov. 22, 1995.

Martha P. Hoffman, Cary David Abramowitz, Leland L. Whitney, Fred L. Fong, Elwood Lui, Christine A. Samsel, and Jones, Day, Reavis & Pogue, Kenneth L. Heisz, Valensi, Rose & Magaram, Los Angeles, for petitioners.

Carlyle R. Brakensiek, Mark Freifeld, Catherine I. Hanson, Susan L. Ballard, John E. McDermott, John C. Kirkland, and Cadwalader, Wickersham & Taft, Los Angeles, as amici curiae, on behalf of petitioners.

Jack H. Davidson, Krimen, Klein, Da Silva, Daneri & Bloom, Louis Harris, San Francisco, Nouskajian & Cranert, James W. Ewert, Diane B. Link, S. Pasadena, Horvitz & Levy, and Christina J. Imre, Encino, for respondents.

Finnegan, Marks & Hampton, Michael A. Marks, and Bennett M. Lieber, San Francisco, CA, as amici curiae, for respondents.

LILLIE, Presiding Justice.

In each of the three workers' compensation cases before the court, the workers' compensation judge (WCJ) granted a request by an employer/carrier for restitution of medical-legal fees paid by the employer/carrier more than two years earlier to a medical lien claimant. In each case the Workers' Compensation Appeals Board (Board) upheld the restitution order. We annul the orders.

After the several petitions for review of these orders were filed in this court, we asked the Board to specify the statutory or other authority upon which it relied in approving restitution in one of the cases, American Psychometric Consultants, Inc. v. Workers' Compensation Appeals Board (Hurtado), No. B081157 (APC). On September 1, 1994, the Board responded in detail concerning its statutory and other authority but also advised the court that it had somewhat changed its position on the restitution issue and wished us to remand the APC matter for further Board consideration.

Despite the Board's change of position, the petitioner in APC and amici curiae California Society of Industrial Medicine and Surgery, FWHC Medical Group, Inc., and Veritas Medical Group, strongly urged the court to issue a writ of review and consider the restitution issue because of its importance in the post-reform workers' compensation community. Since the court had been presented with several petitions by different medical lien claimants contending that the restitution orders were improper, we decided to consolidate the cases involved as a matter of judicial economy and issue one opinion on the restitution issue. Pending oral argument, we also granted requests by the California Self-Insurers' Association, the California Workers' Compensation Institute, and the California Medical Association to discuss the issues involved in these matters as amici curiae.

FACTUAL AND PROCEDURAL HISTORY

APC (Hurtado)

Applicant Antonio Hurtado, born June 4, 1958, was employed as a busboy by defendant Cheesecake Factory, insured by defendant Republic Indemnity Insurance Company. On March 19, 1991, applicant filed two industrial claims, alleging a specific injury to his low back from a slip and fall in the Cheesecake Factory kitchen on March 16, 1991, and further alleged continuous "psychiatric, internal and musculoskeletal" trauma due to stress during the course of his employment with the same employer from December 1, 1990, to March 18, 1991.

Three days after he filed the claims, on March 22, 1991, applicant Hurtado sought psychological examination and evaluation for medical-legal purposes at a clinic of APC, the present medical lien claimant. ¹ On April 10, 1991, an initial medical-legal "psychological assessment" report issued, signed by clinical psychologist Barbara Kalb, Ph.D., stating that she had been assisted in her evaluation of applicant Hurtado by psychological assistant David Leonelli, Ph.D. (The Kalb-Leonelli report is not in the Board record. It was provided by defendants as exhibit A in their reply filed September 14, 1994, to the brief submitted by the Board on September 1, 1994.)

According to the report, applicant was interviewed at APC with the assistance of a Spanish-speaking interpreter. The report indicated applicant felt under pressure on the job, related he was frequently insulted and experienced discrimination because he was Mexican, and declared "[The employer] would treat us like animals." He also admitted to having suicidal thoughts. The report set forth in some detail the results of psychological testing of applicant. He was diagnosed as having experienced "Major Depression, Single Episode, Unspecified." Further psychiatric care was recommended.

APC billed defendant carrier $3,261.92 for medical-legal services incurred by applicant. Defendant Republic did not contest the bill as unreasonable or unnecessary within the 60-day period permitted in Labor Code section 4622. Instead, after review by Consolidated Medical Care, Inc., which analyzed the billing in depth and recommended the appropriate payment, defendant Republic paid APC $2,426.88 on May 17, 1991, which APC accepted as payment in full.

On April 20, 1992, defendants took applicant's deposition. ²

On October 29, 1992, some seventeen months after defendants had paid APC, defendants sought restitution/reimbursement of payment, claiming that it had paid APC pursuant to a "mistake of fact," that the sums paid had not been due APC because (1) the services had been rendered by APC only three days after applicant had filed his claim so that it was not a "contested claim" within the meaning of Labor Code section 4620, and (2) Drs. Kalb and Leonelli had not complied with Labor Code section 4628, subdivisions (a) and (e). ³

APC did not appear at the August 6, 1993, hearing where the matter was submitted. On September 17, 1993, the WCJ issued a joint order of restitution, finding that defendant Republic had paid APC $2,426.88 "under a mistake of fact. Applicant denies ever seeing Dr. Kalb of Lien Claimant." He ordered reimbursement "plus legal rate of interest from date of receipt of payment."

APC petitioned for reconsideration, contending that APC had requested payment of the lien in good faith, and had accepted payment from defendant Republic after negotiation (reduction). APC argued the matter was settled and should not now be reopened to permit restitution. ⁴

The WCJ recommended denial of reconsideration, on the ground that APC's petition for reconsideration had not been verified. In the event the Board waived verification, the WCJ recommended that "this matter be remanded back to this trial judge with the additional issues of contempt citation against APC and/or Dr. Kalb and imposition of civil penalties for the fraudulent generation of medical evidence." There was no discussion of the basis, statutory or otherwise, upon which he had ordered restitution. ⁵

On November 29, 1993, the Board issued its opinion denying reconsideration, noting Dr. Kalb's report conflicted with her admission she had not personally examined applicant Hurtado, and that the report also conflicted with applicant's deposition. ⁶ APC then sought relief in this court, by timely, verified petition for writ of review, contending anew its transaction with defendants had been conducted in good faith, had resulted in payment by defendants without objection, and further asserted that the equitable principles set forth in City of Hope, supra, applied herein and precluded restitution.

Apex Medical Group (Gonzalez)

Applicant Jose Gonzalez, born October 23, 1960, was employed as a painter/blaster by defendant Parker Painting, insured by defendant State Compensation Insurance Fund (SCIF). On July 18, 1990, applicant sustained an injury to his abdomen from sandblasting equipment on the job. Defendants admitted the injury, and applicant was treated by Steven Davis, M.D., and H.A. Najafi, M.D. Applicant underwent surgery on November 20, 1990, and was released by Dr. Najafi to return to work in January 1991. Defendant employer paid temporary disability benefits from August 2, 1990, to December 20, 1990.

Applicant obtained counsel and signed a claim form on December 5, 1990, which was received by defendant employer on December 12, 1990. From December 10, 1990, to April 1991, Apex Medical Group, to whom applicant had been referred by his attorney, evaluated applicant for medical-legal purposes, including neurological evaluation and reevaluation, and billed defendants for these expenses. Defendants did not protest these billings as "unreasonable" or "unnecessary," but paid a total of $2,934 to Apex in June and October 1991. Apex claimed an additional $1,406 was due.

On February 9, 1993, applicant and defendants stipulated to permanent disability of 9.75 percent, a total of $4,095. The agreement of the parties recited the lien of Apex was to be adjusted. Defendants resisted payment of the additional amount Apex claimed due, and petitioned for restitution of the approximately $3,000 which had already been paid. The basis upon which restitution was sought was that at the time Apex rendered the services, there had been no disputed claim, and the services were neither "reasonable" nor "necessary."

Hearing was held on August 20, 1993, and a representative appeared for Apex. Among other things, Apex contended defendants had not complied with Labor Code sections 4622 and 4625, which required protest of billings for medical-legal expenses within 60 days as a prerequisite to...