The Claimant Died during the Pendency of a Litigated Claim. Can I Close My File Now?
There is no shortage of fact scenarios in a workers’ compensation practice that appear clear and simple to administer at first blush. However, after a short course of research and investigation, they are never as clear as you originally thought or may have been told. One scenario seemingly simple arises when a claimant passes away due to non-industrial reasons during the case litigation. In such a situation, it is obvious that there will be no further exposure for TTD or future medical.
So…“Can I go ahead and close my claim?” –No! Before administratively closing your claim, there is a variety of issues and concerns that need to be addressed.
LABOR CODE §4700
The death of an injured employee does not affect the liability of the employer for compensation. However, neither temporary nor permanent disability payments may be made for any period of time subsequent to the employee’s death. On the employee’s death, accrued and unpaid compensation is payable (1) to his or her dependents; or (2) if there are no dependents, to the personal representative of the deceased employee or the heirs or other persons entitled to the compensation, without administration. All that is necessary to effect the payment is an order by the WCAB.
Under Labor Code §4700, the death of an injured employee does not deprive the WCAB of jurisdiction to determine any accrued and unpaid compensation that may be owed to the injured employee’s dependents, or, if there are no dependents, to the personal representative or heirs or other persons entitled thereto. (See CNA Insurance Companies v. Workers’ Comp. Appeals Bd. (1997) 62 Cal.Comp.Cases 1143 (writ den.).)
Simply stated, you still have to pay to the employee’s dependants, heirs or others entitled what was accrued and owing to the claimant by the time of his or her death.
DEPENDENTS, REPRESENTATIVES, HEIRS OR OTHER PERSONS ENTITLED
Assuming a claimant with accrued and unpaid benefits owing passes away, a dependant, representative, heir or other entitled person (in that order) would have to step up and request to be joined in the Applicant’s case as a claimant to the unpaid benefits. The burden is on that claiming dependent or heir to prove the liability for, and extent of, the benefits claimed owing.
In the alternative, and assuming the dependant claims the death was caused by the original industrial injury, that dependant can file a separate claim for death benefits and pursue the claim for accrued benefits in the death case.
Such a dependant or representative’s claim is separate and distinct from the injured employee’s claim for injuries. Even the employee’s failure to file a timely application on the injury claim may not affect the dependent’s rights to prosecute. (See Plant Maintenance v. Workers’ Comp. Appeals Bd. (1997) 60 Cal. Comp. Cases 358 (writ denied) [“Nowhere does the law demand that the worker must have filed an application while he or she was still alive in order for a dependent’s right to those benefits to accrue after the worker’s death.”].) So even where the decedent employee failed to timely file an application, the claimant dependent may not be foreclosed from bringing the claim for the accrued benefits.
What if the injured employee left no dependents or heirs? When the deceased employee leaves no surviving dependent, personal representative, heir, or other person entitled to the accrued and unpaid compensation referred to in §4700, the accrued and unpaid compensation shall be paid by the employer to the Department of Industrial Relations. (See Labor Code §4706.5(b).)
I have had at least one case where the decedent left no known dependent or other person eligible to prosecute a claim unpaid benefits. In that case, the WCJ required that I publish the Petition for Dismissal in a “publication of general circulation” to place all potential claimants on notice of the dismissal request before granting the order.
AOE/COE OR NATURE AND EXTENT AT ISSUE
The Labor Code is clear that unpaid and accrued benefits are owed upon the death of a claimant. But what is the rule when the issue of AOE/COE is yet to be determined and/or the extent of benefits are uncertain?
As indicated above, following the death of the applicant, the WCAB retains jurisdiction to make a determination after trial on contested matters including AOE/COE, body parts injured, TTD periods, nature and extent of PD, past medical care and liens. The applicant’s entitlement to disability does not need to be determined before the date of death. The disability may be rated after death and any accrued benefits up through the date of death would be due and payable. (Subsequent Injury Fund v. Industrial Accident Commission (1957) 151 Cal.App.2d 147, 22 Cal. Comp. Cases 118.)
In Alexander v. Superior Court of California (2013) 2012 Cal. Wrk. Comp. PD Lexis 346, the injured worker asserted a claim of injury to her respiratory, internal system and headaches due to her employment as a court mediator. Applicant died before adjudication of her injury claim. The court allowed the case to go to trial on the issue of AOE/COE despite the absence of the injured worker. The defendant complained that such a trial violated its right to due process as it was prevented from cross-examining the employee. However, the court recognized that the “AOE/COE” issue was purely a medical issue and so the testimony by the injured worker was immaterial as would be the defendant’s cross exam.
While the WCAB retains jurisdiction for trial on the issues, in a case involving issues of fact, and not just concerning a pure medical issue, the applicant’s representatives have a steep burden to prove the injury without the injured worker’s testimony. In such a situation, the applicant’s deposition transcript (if one exists) would likely be offered in place of live testimony.
APPLICANT’S ATTORNEY’S FEES
When an applicant dies during the litigation and there are no accrued and unpaid benefits, there are no funds from which to pay the applicant’s attorney’s fees. Typically, a claims administrator will withhold an estimated 15% of the PD in anticipation of an Award and Order of Attorney’s Fees. However, that may not always be the case. One can envision a situation where an applicant’s attorney commences representation after the estimated PD award has been fully or substantially advanced. The attorney fee is valued based on the accrued benefit only. Accordingly, if only half of the PD award accrues before the applicant passes, the attorney fee is based on only that half accrued. Of course in most cases, the fee is commuted and paid from the far end based on a stipulation and/or an order. In that case, the fee is earned and paid in the amount commuted despite the fact that a portion of the Award may not have yet accrued.
A fee for an employee’s attorney in a workers’ compensation case is ordinarily payable as a lien against compensation to the injured employee. (Price v. Worker’s Comp. Appeals Bd. (1992) 10 Cal.App.4th 959, 964 [12 Cal.Rptr.2d 831, 57 Cal. Comp. Cases 743].) When no compensation has accrued at the time of the award, the WCAB may commute enough payments off the ‘far end’ of the award to equal the attorney fee. (Labor Code §5100.)
However, if all benefits were properly adjusted and paid, there is no fund from which to pay attorney fees. There is no ‘far end’ of a valid permanent disability award that can be commuted and there have been cases holding that in such circumstances, no fee is awarded. (Price, supra, at 966.)
It is a long standing workers’ compensation practice to commute the applicant’ attorney’s fees from the end of an award. However, if for whatever reason there is no such commutation order and no accrued and unpaid benefits, there is no fee to award.
There are several issues to confirm and resolve before closing down a claim following an applicant’s passing. One would be prudent to review the claim and ensure all accrued benefits have been timely paid. Assuming after review, the claims administrator concludes that all accrued benefits are paid, it is appropriate to close the claim. If the case is litigated, the administrator should publish a Petition for Dismissal in a “publication of general circulation” for the requisite number of weeks. Once that service is perfected, he/she can request an Order of Dismissal.