RPNA attorneys Drew Pomerance, Vince Gannuscio, and David Ginsburg successfully persuaded the California Court of Appeal to reverse a judgment against a California healthcare staffing company because the Company had been denied due process in its attempt to defend itself against State Fund’s workers’ compensation premium audit and collection lawsuit. The dispute started over ten years ago when the Company employed different counsel to challenge one item of State Fund’s premium calculation. Unfortunately, the Company lost its challenge through the course of several decisions, including an earlier Court of Appeal decision and a Federal Ninth Circuit Court of Appeals ruling. State Fund then filed its collection action and obtained a judgment because the trial court ruled that the Company had already litigated and lost the issue of State Fund’s premium claim. The judgment was for over $1 million, which included over $500,000 in premium and over $500,000 in pre-judgment interest.
This is when the Company decided to hire RPNA to fight back through an appeal. Given the judgment in favor of State Fund, and the string of losses the Company had already suffered, RPNA faced an uphill battle. Our goal was to convince the Court of Appeal that our client had been denied due process because it had been precluded from asserting all of its defenses to the premium claim, and that the prior adverse decisions only pertained to one small discreet aspect of the premium calculation. Calling upon its three decades of experience successfully navigating workers’ compensation insurance premium disputes, RPNA briefed the issues, and presented its oral arguments telephonically due to the Court of Appeal COVID-19 protocols.
The Court of Appeal issued its decision this past Friday, and agreed with all of our arguments. The decision is an important one because it explains the differences in the issues that can be decided by a Department of Insurance administrative tribunal, on the one hand, and a civil court, on the other. It also establishes that an administrative ruling on a single component of a premium calculation will not necessarily result in a conclusive premium amount. Nor does it mean that the insurer can simply take a favorable ruling from the Dept. of Insurance, and automatically convert it to a civil court judgment. There are many components and factors that go into a premium calculation and the employer can certainly challenge or dispute those.
RPNA’s victory continues its 30-year pattern of success against California workers’ compensation carriers, including eight published appellate decisions establishing the rights of employers to seek redress against carriers engaged in the mishandling of workers’ compensation claims. Some of those decisions are cited by the Court of Appeal in the current decision.
RPNA is pleased to answer any questions you may have regarding the decision, which can be viewed here.