California Labor Code § 5814

Determinative passage · p.10(Lab. Code, § 5814(a).) As we stated in our en banc opinion in Ramirez v. Drive Financial Services (2008) 73 Cal.Comp.Cases 1324, 1331 (Appeals Bd. en banc), “[S]ection 5814(a) … provides that a penalty is payable only ‘[w]hen payment of compensation has been unreasonably delayed or refused.’ (Emphasis added.) A delay or a refusal to pay is not ‘unreasonable’ if the defendant had ‘genuine doubt from a medical or legal standpoint as to [its] liability.’ (Kerley v. Workers’ Comp. Appeals Bd. (1971) 4 Cal.3d 223, 230 [36 Cal.Comp.Cases 152].)” While defendant did delay payment of TTD after January 9, 2026, the delay was not unreasonable as it was based on the conclusions by the AMEs in this case that applicant had become permanent and stationary. AME Dr. Woodcox stated that applicant became permanent and stationary on December 16, 2024, in his Initial Comprehensive Agreed Medical Evaluation of January 15, 2025, and confirmed that it was “more than likely” applicant reached maximum medical improvement MMI in his reevaluation report of January 8, 2026. (Jt. Ex. 101, p. 22; Jt. Ex. 102, p. 30.) AME Dr.

The WCAB found the delay in payment after January 9, 2026, was not unreasonable due to reliance on AME opinions, so the 25% penalty was rescinded but a 10% increase under section 4650(d) was awarded.

Determinative passage · p.4(Lab. Code, § 5814 (a).) In Ramirez v. Drive Financial Services (Ramirez) (2008) 73 Cal.Comp.Cases 1324, 1328-

The WCJ considered the factors including amount and length of delay, inadvertence, history of payments, and effect on the employee to determine no unreasonable delay occurred.

Determinative passage · p.11to the attorney's fee commutation described in the 2011 Award. Defendant's legal doubt is evident in its letter to applicant's counsel dated January 11, 2024, wherein it advanced the legal assertion that the commutation extended in perpetuity absent any specific agreement to the contrary. (Ex. B, Letter to Applicant's Counsel, dated January 11, 2024.) Defendant's position in this respect is further reflected in its trial briefing and in its Answer. Moreover, given the WCJ's thoughtful analysis and ultimate conclusions supporting defendant's position, the record clearly sets forth genuine legal doubt as to defendant's liability for the monies withheld pursuant to the original commutation calculations. Accordingly, defendant has met its burden of establishing genuine legal doubt as to its liability in this regard, and we decline to award penalties under section 5814, or attorney's fees under section 5814.5.

Defendant's genuine legal doubt regarding liability for withheld monies precludes penalties and additional attorney fees.

Determinative passage · p.6As for medical delays, applicant made no specific claims and provided no specific evidence that her medical treatment was delayed. I have no evidence from the applicant of a specific treatment that was delayed, and the proof of said delay is her burden of proof. I therefore have no bases to impose a penalty on medical treatment. She did provide testimony that her surgery itself took a while to perform. She testified about it initially being authorized around October 8, 2019 and not actually being performed until September 9, 2021. (See MOH/SOE Part 2 of Trial, Pages 3-4, Lines 15-13). However, no further specifics were given about this and there is no corroborating documentary evidence of any such delay. The surgery was authorized by the defendant from the outset, so they never took any action to delay the actual performance of the surgery. The COVID pandemic caused a delay, so that already was not defendant's fault.

No penalty imposed for alleged medical or PD payment delays due to lack of evidence or statute of limitations.

Determinative passage · p.4With regard to the issue of Labor Code section 5814 penalties, the parties and the WCJ should further examine the issue of whether an insurer may be penalized for the acts of its insured prior to receiving notice of the claim. (See generally DuBois v. Workers' Comp. Appeals Bd. (1993) 5 Cal.4th 382 [58 Cal.Comp.Cases 286] [UEF claims]; Carver v. Workers' Comp. Appeals Bd. (1990) 217 Cal.App.3d 1539 [55 Cal.Comp.Cases 36].) To the extent that a carrier may be legally penalized, the WCJ should consider the application of section 5814's commandment that, "In any proceeding under this section, the appeals board shall use its discretion to accomplish a

The WCJ must use discretion to balance parties' interests in imposing penalties and identify exact delayed compensation for penalty calculation.

Determinative passage · p.6II. In the event an employer is found to have unreasonably delayed or refused medical treatment, the injured worker may seek penalties under section 5814 and attorney's fees "incurred in enforcing the payment of compensation awarded" under section 5814.5. (Lab. Code, § 5814.5.) As we stated in our en banc opinion in Ramirez v. Drive Financial Services (2008) 73

Applied to assess if defendant unreasonably delayed medical treatment and if penalties and fees are warranted.

Determinative passage · p.8In considering lien claimant's request for penalties, it is vital that we highlight the long- held recognition that any penalty under section Labor Code section 5814 belongs to applicant, rather than their attorneys or any lien claimant. (See, Vogh v. Workers' Comp. Appeals Bd. (1968) 264 Cal.App.2d 724, 728 [33 Cal.Comp.Cases 491] ["If the [Labor Code section 5814] penalty is appropriate, it applies to the compensation to which the applicant is entitled and it is payable to the applicant and not to the lienholder"]; see also Lab. Code, § 4902.) Accordingly, lien claimant does not have standing to seek penalties on his own behalf in connection with his petition for reimbursement of costs; any penalties assessed would be awarded to applicant.2 If a trier of fact subsequently found that an award of penalties was appropriate, any claim by cost petitioner for costs and fees falls under Labor Code section 5814.5.

Penalties belong to the applicant, and lien claimant does not have standing to seek penalties on his own behalf.

Determinative passage · p.10The length of the delay is considerable since the award became final upon denial of review by the California Supreme Court on October 2, 2024, and remains unpaid. (Exh. 7, Supreme Court Order petition for review denied, EAMS 78475965, 10/2/24.) The delay was an intentional, solitary incident unrelated to any claims processing or legitimate business needs. The delayed payment was following a judicial award that would generally allow for payment to be made within 30 days of the decision becoming final. (Report, at p. 11.) We agree with the WCJ's weighing of the considerations appurtenant to the question of unreasonable delay under section 5814 and attorney's fees under section 5814.5.

The Board affirmed the WCJ's findings that defendant unreasonably delayed payment of a final award, justifying penalties and attorney fees.