Parker, Kern, Nard & Wenzel
Legal Updates


New Lien Regulations: Petition to Dismiss for Lack of Prosecution

By
Megan L. Lucchesi

The Administrative Director has enacted new regulations to help resolve outstanding lien claims. However, it is likely these new regulations will result in increased WCAB hearings.

Beginning August 1, 2012, lien claims can be dismissed for lack of prosecution pursuant to 8 CCR 10582.5. A lien claimant has 180 days after the claim has been resolved, or after a lien conference has been taken off calendar, to file a Declaration of Readiness to Proceed (DOR). If they do not, you can file a Petition to Dismiss for Lack of Prosecution.

The guidelines are similar to those in dismissing the underlying claim for the same reason. Defendant must provide the lien claimant and their representative 30 days notice of their intent to petition. After the 30 day period, you may pursue the petition to dismiss. The petition must include evidence of the 30 day notice, a declaration on the billings received from the lien claimant and whether good faith payment has been issued or why payment has not issued and evidence that lien claimant was served with the medical reporting. Evidence of the date in which the claim was resolved must also be included in the petition. If the claim was resolved by settlement documents, the settlement documents as well as a proof of service must be included. If the claim was resolved because applicant chose not to proceed with the claim, you must show evidence of the last activity on the claim and last indemnity payment. The WCJ will then issue the standard 30 day notice of intent to dismiss and if there is no objection from the lien claimant, the lien will be dismissed.

This section will apply to all liens regardless of when they were originally filed. The only exceptions are the liens of EDD, the California Victims of Crime Prevention, child or spousal support or liens for living or burial expenses.

Lien conferences can now lead directly to trials. Pursuant to 8 CCR 10770.1, lien conferences require all unresolved lien claimants to appear regardless of whether their lien was listed on the DOR. The lien claimant or representative must be prepared to outline any dispute and have authority available to resolve their lien. If a lien claimant fails to appear at the conference, a 10 day notice of intent to dismiss their lien may be issued. If there is no resolution, the liens can be set for trial directly unless there is good cause to continue or take off calendar. If the lien trial can be submitted solely on documentary evidence without the need for witnesses, the matter can be submitted for a decision at the lien conference. The WCJ will document the exhibits as part of the Minutes of Hearing and the matter submitted for decision. If the matter is taken off calendar for good cause, a DOR cannot be filed for another hearing within 90 days of the last hearing.

Again, this section will apply to all liens regardless of when they were originally filed. The only exceptions are the liens of EDD, the California Victims of Crime Prevention, child or spousal support or liens for living or burial expenses.

In speaking with the Administrative Director Rosa Moran, she confirmed this procedure also applies to constructive notice liens. If you have medical billings that have not yet resulted in liens, they too can be dismissed if you follow the same procedure.

Its not certain this additional avenue for lien dismissal will be effective. In my cases, I obtain notices of intent to dismiss when lien claimants fail to appear. If I don’t receive a timely objection, I walk them through for orders of dismissal. Petitioning for lack of prosecution seems to lead to the same result through more procedural requirements. However the Administrative Director did make clear that these petitions will be approved unless there is good cause. The Administrative Director has plans to meet with the various WCJs throughout the State in ensure that only lien claims with legitimate good cause are bounced. Without evidence of legitimate good cause, the petition to dismiss should be approved.