ADJ10179447 · June 20, 2023

Petitioner Baron HR, LLC failed to prove insurance coverage under the Hartford/Bison Data Systems policy and failed to provide evidence of coverage for Countrywide Payroll, resulting in denial of coverage and affirming uninsured status.

From the decision · page 3Defendant Baron HR, LLC, has filed a timely and properly verified petition for reconsideration arbitrator's Findings and Order re Coverage dated March 28, 2023. The arbitrator offers the following Report and Recommendation in response thereto.

Petitioner failed to produce the purported transportation insurance policy despite arbitrator's direction, leading to inference that such policy never issued.

Favours Defendant prevailed

This undermined petitioner's claim of coverage under the transportation policy and supported denial of coverage.

From the decision · page 4compensation coverage for Bison Data Systems, Inc. for at leased workers to BaronHR..." under purported policy number 60118504, on the date of applicant's injury. However credible witness testimony on the date of the arbitration March 23rd, 2023, never reported never rebutted, indicated that this COI was ingenuine, and prepared by someone who "no longer works" at BHR (Exhibit ZZ, p. 7). Cancel for BHR failed to produce the purported transportation policy at the arbitration trial (Exhibit Q)., despite this arbitrator's direction compelling him to do so by the March 3 arbitration, as set forth in his notice of arbitration dated January 16th, 2023. That resulted in the arbitrator drawing an inference that such a policy never issued.

Credible witness testimony established that the Certificate of Insurance was likely a forgery prepared by someone no longer employed at BHR.

Favours Defendant prevailed

This discredited petitioner's evidence of insurance coverage under the Hartford policy.

Petitioner failed to provide any evidence of insurance coverage for Countrywide Payroll despite eight years of opportunity to do so.

Favours Defendant prevailed

This failure justified the arbitrator's refusal to address coverage for Countrywide Payroll and supported denial of coverage.

From the decision · page 9It is not arbitrator's responsibility to prove coverage, but Petitioner's, under § 5705. Petitioner has failed to locate and provide substantial evidence of such coverage in the 8 years applicant's claim has been pending. Petitioner has failed to provide any evidence of Countrywide coverage. As trier of fact, the arbitrator must address coverage for alleged employers, including Countrywide Payroll, but he cannot do so if no evidence he's presented to him, and they are not a party to the Arbitration Submittal Orders. The error was Petitioner's, in failing to discover and produce such evidence before this arbitration proceedings commenced with the execution of those Orders.

Labor Code §5705

Burden of proof to establish insurance coverage under Labor Code §5705 lies with the petitioner.

Petitioner Baron HR, LLC failed to meet this burden by not producing substantial evidence of coverage.

From the decision · page 51. BTR Has Failed to Meet its Burden of Proving that The Hartford/BDS Policy Affords it or BDS Coverage of Applicant's Claim.

California Insurance Code §1730(c)

A PEO's service agreement is invalid for coverage purposes if intended to avoid an employer's appropriate experience rating under Insurance Code §1730(c).

Petitioner failed to prove the Hartford policy was not intended to avoid experience rating modification.

From the decision · page 5First, Petitioner contends that the finding that it is uninsured is erroneous, because the Hartford policy (Exhibit Y-3), which names BDS, alone, as the uninsured, was not intended by BHR, to avoid the ultimate sentence of § 3602(d)(1). That provision invalidates a PEO 's service agreement for purposes of coverage, if the contract is intended to avoid, " an employer's appropriate experience rating as defined in Insurance Code § 1730(c)"

California Commercial Code §2210(1)

Under California Commercial Code §2210(1), delegation of contractual duties does not relieve the delegating party of liability.

BHR retains liability for coverage failure despite delegation to BDS.

From the decision · page 7Moreover, under the California c Commercial Code § 2210 (1), a party may perform his or her duty under a contract through delegation to another, by a contract with another party. That provision further states "No delegation of performance relieves the party delegating of any duty to perform or any liability or breach." This means that, if BHR delegated to BDS its obligation to secure coverage for applicant under BHR/VBC contract (Exhibit X-1) via the BHR/BDS contract (Exhibit Y). BHR nevertheless retains liability to VBC for any failure by BDS to secure coverage. Therefore, Petitioner retains liability for failing to secure coverage for this claim, whether or not it lacked the intent to avoid the experience rating modification.

Credible witness testimony that the Certificate of Insurance was a forgery and the transportation policy never issued.

From the decision · page 4compensation coverage for Bison Data Systems, Inc. for at leased workers to BaronHR..." under purported policy number 60118504, on the date of applicant's injury. However credible witness testimony on the date of the arbitration March 23rd, 2023, never reported never rebutted, indicated that this COI was ingenuine, and prepared by someone who "no longer works" at BHR (Exhibit ZZ, p. 7). Cancel for BHR failed to produce the purported transportation policy at the arbitration trial (Exhibit Q)., despite this arbitrator's direction compelling him to do so by the March 3 arbitration, as set forth in his notice of arbitration dated January 16th, 2023. That resulted in the arbitrator drawing an inference that such a policy never issued.

Failure of petitioner to produce evidence of insurance coverage for Countrywide Payroll despite ample time for discovery.

From the decision · page 9It is not arbitrator's responsibility to prove coverage, but Petitioner's, under § 5705. Petitioner has failed to locate and provide substantial evidence of such coverage in the 8 years applicant's claim has been pending. Petitioner has failed to provide any evidence of Countrywide coverage. As trier of fact, the arbitrator must address coverage for alleged employers, including Countrywide Payroll, but he cannot do so if no evidence he's presented to him, and they are not a party to the Arbitration Submittal Orders. The error was Petitioner's, in failing to discover and produce such evidence before this arbitration proceedings commenced with the execution of those Orders.