A California appellate court ruled that an injured worker could not proceed with his civil action against his employer and its insurance carrier for alleged misconduct during the negotiations to settle his comp claim because the Workers' Compensation Appeals Board had exclusive jurisdiction over the matter.
Case: Valdez v. Clarendon National Insurance Co., No. B278542, 11/29/2017, unpublished.
Facts and procedural history: Alejandro Valdez suffered debilitating injuries in an accident while working for T&T Improvements in November 2006.
T&T was owned by Tim Tilton and had a workers’ compensation insurance policy with the Clarendon National Insurance Co.
After Valdez filed a workers’ compensation claim, he entered into settlement negotiations with T&T's counsel, Alex Kidd.
According to Valdez, he was told that the claims adjuster had "final funding authority” for the settlement and that Kidd needed to get the “green light” on the verbal agreement he had reached with Valdez to resolve the entire comp claim.
Two days later, Kidd allegedly told Valdez that “QBE” would not consent to the deal. Valdez requested clarification as to the identity of the insurance carrier responsible for his claim, and Kidd indicated that it was Clarendon.
About a week later, Kidd informed Valdez that he was authorized to enter into a stipulation that Valdez was permanently and totally disabled, but he could not enter into a resolution for Valdez’s claim for future medical care.
In January 2016, Valdez filed suit against T&T, Tilton and Clarendon. He also named QBE Americas Inc. and the QBE First Insurance Agency as defendants, asserting the QBE entities owned or controlled Clarendon.
Valdez contended that the defendants were liable for promissory fraud, since Kidd had induced him to enter into stipulation of permanent and total disability by falsely promising a resolution of his claims for ongoing and future medical care.
He also claimed that the defendants had concealed or misrepresented the identity of the insurance carrier with liability for his claim.
Valdez further argued that the oral agreement he had reached with Kidd ought to be enforceable, and that the defendants breached the terms of the agreement.
The defendants demurred to all of Valdez’s claims, and a trial judge sustained the demurrer.
Analysis: The 2nd District Court of Appeal noted that Valdez’s causes of action against the defendants were based on acts related to the attempted settlement of his claim for ongoing and future medical expenses.
The court said the acts were “intrinsic to the workers’ compensation claims process,” and as such, the Workers’ Compensation Appeals Board had exclusive jurisdiction over them.
The court further determined that Valdez had failed to establish that any of the limited exceptions to the WCAB’s exclusive jurisdiction were applicable to his case.
The court noted that claims of conspiracy fall outside the scope of the WCAB’s jurisdiction but said Valdez’s allegations that the defendants had conspired to conceal the identity of the insurance carrier were insufficient, since no faces were alleged as to the formation and operation of the alleged conspiracy and there was no damage alleged to have resulted.
While the court acknowledged that a worker can proceed with a civil action against his employer if the employer fails to secure the payment of workers’ compensation for his injuries by being insured against such liability, the court said this exception was inapplicable to Valdez, since T&T had comp coverage.