ADJ9737864 · April 22, 2022

Lien claimant failed to provide an exhibit list as required by Labor Code section 5502(d)(3), resulting in exclusion of evidence and failure to meet burden of proof; sanctions imposed without proper notice were rescinded.

From the decision · page 1Lien claimant Citywide Scanning Service, Inc., seeks reconsideration of the Findings and Orders (F&O) issued on June 12, 2019, wherein the workers' compensation administrative law judge (WCJ) found as relevant that (1) lien claimant failed to establish its lien claim because it failed to offer admissible evidence in support thereof; and (2) lien claimant and its counsel, Amy Cosio, engaged in bad faith and frivolous actions designed solely to harass defendant by proceeding to trial in disregard of court rules and procedures, justifying Labor Code section 58131 sanctions and costs.

Lien claimant failed to provide an exhibit list in the pretrial conference statement as required by Labor Code section 5502(d)(3).

Favours Defendant prevailed

This failure led to exclusion of lien claimant's exhibits and failure to meet burden of proof on lien claim.

From the decision · page 2The WCJ entered the following into the minutes: LET THE MINUTES REFLECT that Lien Claimant's Exhibits 1 through 7 will not be admitted into the record based upon the objection by defendant of Labor Code Section 5502(d) (3) and the lack of a response by lien claimant; Lien Claimant's Exhibit 8 will be admitted into the record as evidence of service in response to objection by defendant that they were not previously served. (Id., p. 3:22-24.)

Sanctions and costs were imposed without notice or opportunity to be heard.

Favours Applicant prevailed

This violated lien claimant's due process rights and led to rescinding of sanctions and costs orders.

From the decision · page 4Here, the record reveals that the WCJ imposed sanctions and costs upon lien claimant without issuing a Notice of Intent or otherwise providing notice of the specific grounds upon which the court sought sanctions, reasoning that because defendant raised the issue of sanctions in the pretrial conference statement, lien claimant had adequate notice of the issue. (Report, p. 3.) However, we are unaware of any authority allowing the WCJ to impose sanctions without requisite notice on the grounds that the issue was raised separately by a party. We therefore conclude that the WCJ imposed sanctions and costs without notice and an opportunity to be heard and in violation of lien claimant's right of due process.

Labor Code section 5502(d)(3)

Evidence not disclosed in the pretrial conference statement shall be deemed inadmissible unless good cause is shown.

The lien claimant failed to provide an exhibit list as required, leading to exclusion of evidence.

From the decision · page 3As to the first alternative, we observe that section 5502(d)(3) requires that evidence not disclosed in the pretrial conference statement shall be deemed inadmissible unless it was not previously available or could not have been discovered through the exercise of due diligence. (§ 5502(d)(3).) A party that has failed to disclose evidence in accordance with section 5502(d)(3) may nevertheless seek relief from the consequences of its failure by utilizing a procedure substantially similar to Code of Civil Procedure section 473. (See Fox v. Workers' Comp. Appeals Bd. (1992) 4 Cal.App.4th 1196, 1205§ 1206.) Specifically, the party may seek relief "from a judgment, dismissal, order, or other proceeding taken against him or her through his or her mistake, inadvertence, surprise, or excusable neglect." (Code of Civil Procedure section 473(b).) Such relief, however, is discretionary, not automatic. (See Fox, supra, 4 Cal.App.4th at 1205§ 1207.)

Labor Code section 5813

WCJ may impose sanctions for bad faith actions or tactics after notice and opportunity to be heard.

Sanctions imposed without notice were rescinded for violating due process.

From the decision · page 3Before we turn to lien claimant's contention that the WCJ should have found that it (and its representative) acted with reasonable justification in proceeding to trial, we observe that section 5813 authorizes the WCJ to impose sanctions and costs for bad faith actions or tactics "after written

Lien claimant failed to provide an exhibit list in the pretrial conference statement as required by Labor Code section 5502(d)(3), leading to exclusion of exhibits.

From the decision · page 2The WCJ entered the following into the minutes: LET THE MINUTES REFLECT that Lien Claimant's Exhibits 1 through 7 will not be admitted into the record based upon the objection by defendant of Labor Code Section 5502(d) (3) and the lack of a response by lien claimant; Lien Claimant's Exhibit 8 will be admitted into the record as evidence of service in response to objection by defendant that they were not previously served. (Id., p. 3:22-24.)

Lien claimant's representative did not provide evidence of mistake or excusable neglect to justify failure to disclose exhibits.

From the decision · page 3Here, the record does not contain a declaration of lien claimant's representative attesting to any mistake, inadvertence, surprise, or excusable neglect that could demonstrate good cause to excuse lien claimant's failure to disclose evidence by way of the exhibit list. In the absence of such a declaration, we are unable to discern grounds to grant lien claimant relief from its failure to provide the exhibit list and the WCJ's consequent decision to sustain defendant's section 5502(d)(3) objection.

Sanctions were imposed without notice or opportunity to be heard, violating due process rights.

From the decision · page 4Here, the record reveals that the WCJ imposed sanctions and costs upon lien claimant without issuing a Notice of Intent or otherwise providing notice of the specific grounds upon which the court sought sanctions, reasoning that because defendant raised the issue of sanctions in the pretrial conference statement, lien claimant had adequate notice of the issue. (Report, p. 3.) However, we are unaware of any authority allowing the WCJ to impose sanctions without requisite notice on the grounds that the issue was raised separately by a party. We therefore conclude that the WCJ imposed sanctions and costs without notice and an opportunity to be heard and in violation of lien claimant's right of due process.