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State Farm Insurance, American Casualty Company of Reading v. Workers' Compensation Appeals Board and Carl James

January 26, 2011


W.C.A.B. Nos. ADJ1145938 and ADJ312755

The opinion of the court was delivered by: Kitching, J.


PROCEEDING to review a decision of the Workers' Compensation Appeals Board. Annulled and remanded with directions.


State Farm Insurance Company (State Farm) petitions for writ of review pursuant to Labor Code section 5950*fn1 of the Workers' Compensation Appeals Board's opinion and order denying reconsideration of a joint supplemental findings and award. In that award, the Workers' Compensation Appeals Board (WCAB) found that lien claimant Carl Pearson, husband of applicant Francisca Apparicio, provided Apparicio with attendant care services 24 hours every day from July 24, 2003, and that Pearson was entitled to compensation for those services at $30 per hour. The total reimbursement to Pearson was $1,520,640. We conclude that Apparicio and Pearson's ex parte communications to a medical examiner violated the prohibition against ex parte communications in workers' compensation regulations. That violation requires disqualification of the medical examiner and the striking of the medical examiner's reports and testimony. We also conclude that the award of compensation to Pearson for caregiver services was unreasonable, was not authorized by section 4600, subdivision (a), and was not supported by substantial evidence. We annul the opinion and order denying reconsideration and order the matter remanded with directions to disqualify the medical examiner, to strike reports and opinions of the medical examiner, to select a new medical examiner, and to conduct proceedings to redetermine and recalculate compensation to be awarded lien claimant Pearson.


Francisca Apparicio, employed as a legal assistant by State Farm, sustained injury to her psyche, lumbar spine, and right upper extremity, and developed fibromyalgia. Apparicio made a claim for an injury to her back and bilateral extremities occurring on August 20, 1999. Apparicio made a second claim for a continuous trauma injury from 1993 to January 4, 1995, for her right arm, shoulder, back, fibromyalgia, and for a psychiatric sequela. On August 17, 2006, a stipulated award was entered for industrial injury to psyche, lumbar spine, right upper extremity and fibromyalgia, causing 100 percent permanent disability and a need for future medical treatment. Jurisdiction was reserved over Pearson's lien claim for his attendant care of and transportation services for Apparicio.

On December 6, 2006, the worker's compensation administrative law judge (WCJ) disallowed the lien claim on the ground that Pearson failed to provide substantial medical evidence of the kind and amount of services Apparicio reasonably required. Pearson's petition for reconsideration was granted, however, and on October 12, 2007, the WCAB ordered the WCJ to develop the record regarding the services and the level of attendant care required by Apparicio.

Following the WCAB's decision, the parties could not agree on a medical expert to address issues identified by the WCAB. On December 19, 2007, the WCJ ordered the parties to have Dr. Donna Barras, M.D. conduct an evaluation and to provide an expert opinion on Apparicio's past and present life care needs, including the nature of home care services and the hours per day they were required.

Without giving notice to State Farm, counsel for Apparicio and Pearson contacted Dr. Barras and provided her with several medical reports. Dr. Barras reviewed those reports and other information, conducted a three-hour evaluation of Apparicio, and prepared an April 18, 2008, report describing Apparicio's condition and her medical, medication, nursing, equipment, and housing needs and their expected costs. Dr. Barras's report valued licensed vocational nursing (LVN) services provided by Pearson at $35 per hour. State Farm deposed Dr. Barras on August 7, 2008.

State Farm moved to strike Dr. Barras's report based on its allegations that Apparicio's counsel set up the evaluation without notice to State Farm, provided Dr. Barras only with unilaterally selected records, and did not explain to her the nature of the services which the WCJ appointed her to provide.

On January 27, 2009, trial occurred on the need for attendant care and transportation services, liability for self-procured medical expenses (including caregiver services and transportation services), Pearson's lien claim for caregiver and transportation services rendered to Apparicio, the nature of life care Apparicio required, and State Farm's motion to strike Dr. Barras's report.

The WCJ addressed State Farm's motion to strike in a February 17, 2009, order which vacated the submission and directed further augmentation of the record. The WCJ found that Dr. Barras was not made aware of the purposes for which she was appointed, which included a retroactive analysis of the extent to which lien claimant Pearson's services were reasonable and necessary, and found that Pearson unilaterally submitted documents to Dr. Barras for consideration. The WCJ also found an ambiguity in Dr. Barras's report that required clarification. The WCJ did not find that these issues tainted Dr. Barras's opinion or required it to be stricken, and instead determined that a supplemental opinion from Dr. Barras could rectify these problems. The WCJ therefore vacated the January 27, 2009, order submitting the matter for decision, ordered the parties to jointly submit to Dr. Barras all documents previously submitted into evidence at all hearings and all other medical reports and records in their possession, and ordered that Dr. Barras receive all prior findings and awards, minutes of hearings, and summaries of evidence. The WCJ ordered Dr. Barras to prepare a supplemental report addressing the nature of services reasonably required, determining whether they were more appropriately Certified Nurse's Assistant services or LVN services, and estimating the reasonable number of hours per day Pearson would have been required to provide services in the past.

Dr. Barras served a supplemental report dated May 29, 2009, and the matter was re-submitted for decision. On August 26, 2009, the WCJ's joint supplemental findings and award, and opinion on supplemental decision, found: (1) because of her injuries, Apparicio required a life care plan as described by Dr. Barras's April 18, 2008, plan; (2) lien claimant Pearson had provided attendant care services to Apparicio 24 hours per day from July 24, 2003; (3) the value of Pearson's services, in the capacity of an LVN, was $30 per hour, for which Pearson was entitled to reimbursement at $720 per day from July 24, 2003, until implementation of the life care plan by professionals at the employer's expense.

State Farm petitioned for reconsideration and moved to vacate the findings and award. State Farm argued, inter alia, that Dr. Barras's reports and opinion should be stricken because ex parte communication with Apparicio and Pearson tainted her reports, that Dr. Barras's reports did not constitute substantial medical evidence because she failed to review complete medical records, and that in her deposition testimony Dr. Barras admitted she lacked knowledge of California workers' compensation procedures.

State Farm also argued that the WCJ's finding regarding reimbursement of Pearson for caregiver services was excessive and unreasonable. Specifically, State Farm argued that Pearson's claim for caregiver services was not reasonably necessary to relieve or cure the effects of Apparicio's injury; that Pearson unreasonably asserted entitlement to reimbursement for services provided 24 hours per day, seven days per week; and that $30 per hour for caregiver services was excessive and unreasonable, because Pearson provided only 2.75 hours of medical services each day and the balance of services involved cooking, cleaning, paying bills, and non-medical errands, which were not reimbursable as medical care at $30 per hour. State Farm also argued that Pearson failed to meet his burden of proof under sections 5705 and 3202.5.*fn2

On November 23, 2009, the WCAB filed its opinion and order denying reconsideration of the WCJ's August 26, 2009, joint supplemental findings and award. The WCAB found that by education, licensure, and experience Dr. Barras was qualified to provide expert opinion regarding the level of attendant care Apparicio required and the value of services Pearson provided, and found that Dr. Barras's reporting was substantial evidence. The WCAB found that the WCJ's decision regarding the hourly rate Pearson was to be paid for services he provided was reasonably based on credible evidence.

The WCAB rejected State Farm's contention that the "taint" of Dr. Barras's reporting because of Pearson and Apparicio's unilateral contacts required that Dr. Barras's reporting be disregarded. The WCAB found that State Farm had a full opportunity to provide Dr. Barras with all relevant information, and deposed Dr. Barras about her qualifications, the information she considered in preparing her April 18, 2008, report, and its content and method of preparation. The WCAB found no substantive evidence that initial contact by Apparicio caused Dr. Barras's reporting to be biased or insubstantial or required that it be disregarded.

The WCAB addressed State Farm's contention that Dr. Barras was not qualified to provide expert opinion on the level of attendant care Apparicio required and the services Pearson provided. The WCAB quoted Dr. Barras's deposition testimony, found that her extensive work experience acquainted her with the needs of persons with disabilities, and determined that her education, licensure as a medical doctor, and personal and professional experiences qualified her to serve as an expert witness.

The WCAB found that the record did not support the assertion that Dr. Barras did not review a complete medical history, and concluded that Dr. Barras was fully informed of Apparicio's diagnosis when she prepared her reports.

With regard to State Farm's contention that the extent and level of care found by the WCJ was excessive, the WCAB concluded that the WCJ's determination was based on Dr. Barras's credible and substantive reporting, whose accuracy State Farm did not dispute. Based on Dr. Barras's testimony, the WCAB concluded that Apparicio's condition and medications required that she be monitored and assisted 24 hours per day, seven days per week, and found that the evidence supported the WCJ's conclusion that the hourly compensation due lien claimant Pearson was near the $35 hourly rate that State Farm would otherwise have had to pay an LVN to provide 24-hour care. The WCAB stated that services provided by the applicant's spouse did not relieve a defendant from the obligation to pay for those services, and the care Pearson provided by monitoring and managing Apparicio's health care needs qualified as medical care under section 4600. Therefore the WCAB concluded that Pearson was entitled to be reasonably compensated at the rate such services would command if provided by another. Based on Dr. Barras's testimony that an LVN would be compensated at $35 an hour, and because State Farm offered no evidence to challenge that $35 hourly rate, the WCJ's adjustment of the rate to $30 per hour was ...

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