“EXCLUSIVE REMEDY OF THE WCAB PREVAILS”
by Robert B. Hill

In a partially certified decision for publication, the 2nd District Court of Appeal overturned an earlier Superior Court decision, and denied the right of an evaluating physician to pursue recovery of his medical-legal expenses in a companion third party suit, holding that the physician (who had liens pending before the WCAB) was restricted to the exclusive jurisdiction of the WCAB.

In the matter of (Dr.) Richard Perrillo v. Picco v. Presley et al (2007) citation pending, a three judge panel reviewing this case unanimously concurred that the filing of liens before the WCAB invoked the WCAB as the exclusive remedy to the parties, and that an earlier Superior Court decision to the contrary (and which allowed recovery by the physician) was in error.

In this case, several individuals alleged that while employed in 1996 while working as employees of various companies at the Bechtel Group job site [Elk Hills Naval Petroleum Reserve No. 1], they had sustained injury due to Bechtel’s alleged toxic contamination of the site. The employees filed a combination of workers’ compensation cases against their respective employers, and in turn filed third party (civil) lawsuits against Bechtel. In some instances, the wives of these individuals were named as plaintiffs in the civil law suit.

These plaintiffs utilized as their medical forensic expert Dr. Cranford Scott, who concluded that the employees suffered from memory impairment, cognitive dysfunction, numbness or dizziness. This lead Dr. Scott to recommend a neuropsychiatric evaluation with Dr. Richard Perrillo who performed evaluations of the employees and some of the wives. In his civil testimony, Dr. Scott confirmed that these referrals were made strictly for the “workers’ compensation cases” as it would pertain to the employees. Dr. Scott also testified as to his own understanding that he would be reimbursed through the workers’ compensation cases as it would pertain to the employees, but with reference to the wives he would be reimbursed through the civil case.

Beginning in May 1998, Dr. Perrillo examined approximately 40 male employees and 21 wives. These plaintiffs signed civil liens (which according to the court record lacked completed execution by the attorneys), and the male employees also filed WCAB liens which were filed with the WCAB.

Ultimately, the civil case against Bechtel settled for $1.5 million, although not all of the original plaintiffs participated, either by reason of prior dismissal from the case or refusal to participate in the settlement. At this point, the plaintiff’s attorney contacted Dr. Perrillo wo see if would give up his civil liens in light of the “low” settlement amount. By this point, Dr. Perrillo’s bills were an estimated $307.000.00 for all cases combined; the amount of $53,000.00 (representing the amount of the bill incurred for examining the wives) was then deducted from the civil settlement and held in trust pending judicial determination of this issue.

As the civil litigation was commencing on the issue of Dr. Perrillo’s civil liens, 32 of the approximate 39 workers’ compensation cases had been resolved (for the most part in the favor of the employees), which included WCAB orders reserving jurisdiction over Dr. Perrillo’s liens and those of other medical providers.

A jury verdict at trial level before the Superior Court awarded Dr. Perrillo’s bill as against the plaintiff’s attorneys (on the basis of breach of contract) to include prejudgment interest (and less payment by one of the plaintiff attorneys) in the sum of $337,948,95, plus attorney fees of $557,182.50.

The Court of Appeal concluded that there was sufficient evidence to support an oral contract between the plaintiff’s attorneys and Dr. Perrillo as it pertained to the non-employee plaintiffs (primarily the wives) , even though the civil liens had not been fully executed by the attorneys, and as such awarded Dr.Perrillo his bill. The Court, however, remanded the issue of pre-judgment interest for further review by the trial court.

However, with reference to the employee plaintiffs, the Court was favorably persuaded that the exclusive jurisdiction of the WCAB as set out in Labor Code Section 5300(a), and the fact that the payment of medical-legal expenses are incidental to the employee’s recover of compensation, that with the filing of his liens in the workers’ compensation cases submitted Dr. Perrillo to that exclusive jurisdiction. The Court also noted that once these liens were filed, Dr. Perrillo could not withdraw his liens in an effort to avoid that exclusive jurisdiction and seek recovery through the civil court.

Interestingly, that portion of the decision pertaining to the WCAB exclusive jurisdiction was certified for publication, what the other portions (dealing with the status of dismissed plaintiffs, attorney fees, lien or contract liability in the civil case, and prejudgment interest) were non-certified.