Universal Psychiatric Med. Center v.
WCAB
Filed 6/21/13
Universal Psychiatric Med. Center v. WCAB CA2/3
NOT
TO BE PUBLISHED IN THE OFFICIAL REPORTS
California
Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or
relying on opinions not certified for publication or ordered published, except
as specified by rule 8.1115(b). This
opinion has not been certified for publication or ordered published for
purposes of rule 8.1115.
IN THE COURT OF APPEAL OF THE STATE
OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION THREE
UNIVERSAL PSYCHIATRIC MEDICAL CENTER, INC.,
Petitioner,
v.
WORKERS’ COMPENSATION APPEALS BOARD et al.,
Respondents.
B242370
(W.C.A.B. No. ADJ3099625)
PROCEEDING
to review a decision of the Workers’ Compensation Appeals Board. Annulled and remanded with directions.
Dawn
M. Coulson and Michael B. Wilson for Petitioner.
No
appearance for Respondent Workers’ Compensation Appeals Board.
Heggeness,
Sweet, Simington & Patrico and Clifford D. Sweet III for Respondents
Insurance Company of the West, Explorer Insurance Company, and The Travelers
Companies, Inc.
Goldman,
Magdalin & Krikes and Eleen Y. Vallejo for Respondent
American All Risk Loss Administrators.
Fabiano,
Castro, Siefkes & Clem and Denise Lloyd Clem for Respondents
California Insurance Guarantee Association, Safeco Insurance, and Cintas
Corporation.
_____________________
Champion Medical Group, a California
Corporation doing business as Universal Psychiatric Medical Center, Inc.
(Universal), was one of many lien claimants represented by Premier Medical
Management Systems, Inc. (Premier).
Universal assigned some of its liens to Premier for purposes of
collection. As part of a plea bargain that resolved criminal charges against
two of Premier’s executives, Premier dismissed the lien claims of 109 entities,
Universal’s included. The workers’
compensation administrative law judge (WCJ) upheld the dismissal of Universal’s
claim over its objections and the Workers’ Compensation Appeals Board (WCAB)
denied Universal’s petition for reconsideration without issuing an opinion of
its own.
The
fundamental flaw in the WCJ’s reasoning is that the WCJ analyzed and addressed
issues that were common to most of the lien claimants, whom the parties have
chosen to designate collectively as the Premier Providers, and that the WCJ
ignored the facts that were unique to Universal’s case. That is, the WCJ validated the resolution of
the global case involving over 100 Premier Providers but failed to address
Universal’s case. As it turns out, there
is evidence that Universal did not
authorize Premier to dismiss its liens.
Concomitantly, the entire body of evidence on which the WCJ relied to
find that Universal did authorize Premier to dismiss its liens is irrelevant to
Universal, however relevant it may be to the Premier Providers. In fact, there is evidence that Universal
cannot be included in the class of Premier Providers.
If
the evidence is irrelevant, and is hence inadmissible,
the decision of the WCAB cannot be, and is not, supported by
remand with directions to vacate the dismissal of Universal’s liens. (Lab. Code, § 5952, subd. (d).)
PROCEDURAL HISTORY
Civil Actions Against Premier and the Role of the Law Firm of Riley &
Reiner
In
2002, the California Insurance Guarantee Corporation Association initiated a
proceeding against Premier in which it alleged that Premier engaged in billing
fraud, fee splitting and the unauthorized practice of medicine. A number of other like actions were filed
which were consolidated in 2004, with Idahirma
Yero et al. v. Elite Personnel, California
Insurance Guarantee Association et al. as the lead case. Premier retained the law firm of Riley &
Reiner to represent it, as well as the Premier Providers.
In
2006, the WCJ ordered the law firm of Riley & Reiner to indicate in writing
which of the lien claimants it represented.
2006 that seem to be repetitive. The
third document, a letter dated October 17, 2006, listing multiple lien
claimants, identifies 109 of them as represented by Riley & Reiner. Universal, more correctly Champion Medical
Group, is listed in this letter as one of the lien claimants represented by
Riley & Reiner.
On
March 14, 2008, the WCJ ruled that the letter of October 17, 2006 reflected
which lien claimants were represented by Riley & Reiner. The court ruled that this letter was accurate
and required no supporting documentation.
This letter was to play an important role in the ensuing proceedings.
Universal
claims that it was not informed about any of the foregoing proceedings and was
also uninformed of the WCJ’s identification of the entities who were
represented by Riley & Reiner.
Criminal Charges, the Plea Bargain and the Stipulated Dismissals
At
some point, two of Premier’s executives, David Wayne Fish (Fish) and Birger
Greg Bacino (Bacino), as well as Premier itself, were criminally charged with
filing false and fraudulent claims, filing false tax returns and unlawfully
receiving compensation for the referral of clients. Fish and Bacino entered into a plea bargain
in 2010 under which they agreed to dismiss with prejudice lien claims filed by
the Premier Providers that were listed in the October 17, 2006 letter generated
by Riley & Reiner.
On
or about September 24, 2009, a STIPULATION AND ORDER FOR DISALLOWANCE AND
DISMISSAL WITH PREJUDICE OF REQUESTS FOR THE ALLOWANCE OF LIENS (hereafter
Stipulation) was filed by Fish and Bacino, acting on behalf of Premier and the
Premier Providers. The Stipulation
provided that Premier and the Premier Providers undertook to dismiss with
prejudice liens filed between August 28, 1998 and October 15, 2004. The Stipulation used the letter of October
17, 2006 filed by Riley & Reiner to identify the lien claims that were
being dismissed. As noted, Champion
Medical Group doing business as Universal was one of the 109 Premier Providers
identified in the October 17, 2006 letter.
Also
on September 24, 2009, the WCJ entered an order dismissing the liens of the
listed Premier Providers.
Efforts to be Excluded from the Dismissals; Universal’s Evidence
On
October 14, 2009, Universal filed a petition for reconsideration from the order
dismissing the liens.
name="_ftnref4" title="">[4] The petition contended that Universal was not
a Premier Provider; that Universal only hired Premier to perform billing and
collection services; that the petition was brought on behalf of Universal by
Innovative Medical Management (Innovative) who was representing Universal in
the lien claims that were dismissed on September 24, 2009; that it was a
violation of due process to dismiss the liens without a hearing; and that the
WCJ acted in excess of his jurisdiction.
On
October 21, 2009, the WCJ set aside the dismissal order as to 26 lien
claimants, leaving the September 24, 2009 order in effect as to the balance of
the 83 remaining claimants, which at that time included Universal.
On
November 4, 2009, the WCJ granted Universal’s petition for reconsideration and
vacated the dismissal order as to Universal’s liens and those of another lien
claimant and set for a hearing the issue whether the dismissal order was valid. On December 3, 2009, the WCJ vacated the
dismissal as to another claimant and reaffirmed the previous order vacating the
dismissal of Universal’s liens.
On
or about February 11, 2010, Insurance Company of the West, Explorer Insurance
Company and The Travelers Companies, Inc. filed a motion to be heard by the WCJ
who had dismissed the liens. The motion
contended that Champion Medical Group doing business as Universal was
represented, and had been represented, solely by Riley & Reiner and that
assertions to the contrary were false.
This motion sought sanctions and we will refer to it as the Sanctions
Motion.
On
March 24, 2010, the law firm of Epps Yong & Coulson filed a notice that it
represented Innovative as well as Champion Medical Group doing business as
Universal.
On
March 30, 2010, attorney Raymond L. Riley filed a declaration under penalty of
perjury in the Sanction Motion proceedings that stated neither Riley &
Reiner, nor attorney Riley personally, ever represented Champion Medical Group
doing business as Universal. The
declaration states that Champion never authorized Premier or Riley & Reiner
to “disallow†its liens.
On
April 5, 2010, Dr. Stuart Zubrick filed a declaration under penalty of perjury
that he is the owner and a director of Champion Medical Group doing business as
Universal and that Premier did not have the authority to dismiss Universal’s
lien claims. The declaration states that
Premier had been hired only to handle a portion of Universal’s lien
claims. Innovative handled the balance. The declaration avers that Dr. Zubrick
learned in September 2009 that Premier had disposed of Universal’s liens
without the knowledge, authority or consent of Universal and that Dr. Zubrick
had informed Innovative that Premier was no longer authorized to represent
Universal in any way.
According
to Dr. Zubrick, “Universal was never a Premier Provider,†as Universal was at
all times an independent medical provider who only hired Premier to perform
billing and collection services. The
declaration also states that at no time did Universal retain or hire Riley
& Reiner to act as its counsel.
Finally, the declaration states that nothing in Universal’s agreement
with Premier gave Premier the authority to dispose of Universal’s liens.
Apparently,
the Sanctions Motion was heard on April 30, 2010. On May 6, 2010, Dr. Zubrick filed a
declaration stating that “. . . in order to make the record
clear and in response to the Court’s direction,†and without admitting that
Riley & Reiner ever represented Universal, Champion Medical Group doing
business as Universal was serving notice that it was dismissing Riley &
Reiner. While the record does not
reflect how the WCJ ruled on the Sanctions Motion, in light of the tenor of Dr.
Zubrick’s declaration of May 6, 2010, it is reasonable to assume that it was
denied.
The
WCJ set the matter of the dismissal of the liens, which included Universal’s,
for a hearing, which took place on December 8, 2010.
current counsel, Epps, Yong and Coulson.
The WCJ received evidence in the form of declarations, letters and
documents , including another declaration by Dr. Zubrick, which is discussed
below. No witnesses were called to
testify.
Dr.
Zubrick filed another declaration on December 1, 2010 which was similar to his
prior declaration of April 5, 2010, with the difference that the
Universal-Premier physician agreement was attached to this declaration. This declaration states that Premier was
never given the authority to retain counsel on Universal’s behalf, or to waive
and dispose of Universal’s lien claims.
The declaration also avers that the agreement reflected in the
Stipulation was made without the knowledge, authority or consent of Universal.
The
WCJ issued his opinion denying the requests to have the dismissals vacated on
February 10, 2011. This opinion is
discussed in the next section.
RULINGS BY THE WCJ AND WCAB
The WCJ’s opinion,
32 pages long, addresses, among other issues, the question whether Premier,
i.e., Fish and Bacino, had the authority to dismiss liens of the Premier
Providers. The opinion defines Premier
Providers as the parties “named in the Premier consolidation,†which means the
lien claimants listed in the October 17, 2006 letter of Riley &
Reiner. The opinion refers only to the
Premier and the Premier Providers and never mentions Universal by name.
At
the outset there is a substantial question whether any of the WCJ’s opinion
applies to Universal. To begin with,
Universal contended and still contends that it was not a Premier Provider. It supported this contention with Dr.
Zubrick’s declaration, which in turn draws support from attorney Riley’s
declaration that neither his firm nor he personally ever represented Universal. There is simply nothing in the record that
refutes Riley’s unequivocal statement that he never represented Universal. If in fact Universal was never a Premier
Provider, the WCJ’s opinion simply does not apply to Universal.
The
wider background to this is that it appears that Premier acted for a great
number of lien claimants as a business agent.
But what was true of lien claimants who were also Premier Providers was
not necessarily true of Universal. The
evidence is that Universal, while assigning a number of liens to Premier for
collection, never engaged Premier as a business agent as the Premier Providers
did.
The
balance of the WCJ’s opinion confirms that the WCJ addressed Premier’s
relationship to the Premier Providers, but failed to address Premier’s
authority, or lack of authority, over Universal’s liens.
The
WCJ gave 10 reasons why Premier had the power to dismiss liens of the Premier
Providers with prejudice. As it turns
out, none of these reasons apply to Universal.
The WCJ’s findings are set forth in italics.
1. The
provisions of the agreement between Premier and the Premier Providers dealing
with collection gave Premier the requisite authority to dismiss the liens. As we explain in the next section, the
collection agreement between Universal and Premier did not, as a matter of law,
give Premier the power to dismiss Universal’s liens.
2. The
Premier-Premier Provider agreements, taken as a whole, gave Premier the right
to dismiss Premier Provider liens.
But this was not true of Universal; Dr. Zubrick declared under penalty
of perjury that the only services Premier rendered Universal were billing and
collection on a portion of its liens.
Innovative handled the rest. In
fact, Dr. Zubrick specifically stated that Universal was not a Premier
Provider, but rather an independent medical provider, an assertion that is
consistent with the circumstance that it used two agents to collect on its
liens.
3. Riley
& Reiner represented that they served as counsel for the Premier Providers. But attorney Riley declared under penalty of
perjury that neither he or his form ever represented Universal.
4. Riley
& Reiner represented the Premier Providers for five years without any
Premier Provider claiming to the contrary.
Since, in fact, Riley & Reiner did not represent Universal, there
was hardly a need for Universal to protest that they were not represented by
Riley & Reiner.
5. In 2004
and 2005, Riley & Reiner stipulated to the dismissal of a number of liens
involving Zenith Insurance Company.
Since it was not shown that any of these liens were Universal’s, this is
immaterial.
6. Some of
the liens were asserted in Premier’s name, which suggests that Premier had
broad powers over these liens. Since
it was not shown that any of Universal’s liens were such liens, this is
immaterial.
7.
The
Stipulation averred that Fish and Bacino had the authority to dismiss liens of
the Premier Providers. We address
this point in the next section.
8. The
fact that Premier, in some cases, was to receive 50 percent of the collected
lien supports the conclusion that Premier could dismiss the liens. We do not think that, as a matter of law, a
50 percent recovery means that Premier had enough control over the lien to
dismiss it.
9. The
agreements between Premier and the Premier Providers did not require Premier to
obtain consent before dismissing a lien.
This is discussed in the next section.
10. Premier
Providers had failed to show that Premier’s authority over the liens of the
Premier Providers was ever challenged.
Once Universal became aware that its liens had been dismissed, it
energetically challenged Premier’s right to dismiss its liens.
As
noted, the WCAB adopted the WCJ’s findings and conclusions and denied
reconsideration without issuing an opinion of its own.
While
it is clear that the WCJ opinion applies to Premier and the Premier Providers,
it is equally clear that it does not apply to Universal.
UNIVERSAL’S CASE
Universal’s
case is composed of two separate bodies of evidence: 1) There is the agreement between Universal
and Premier, and 2) There are the declarations of Dr. Zubrick and attorney
Riley.
1. The Agreement
The
agreement between Premier and Universal that is attached to Dr. Zubrick’s
second declaration has three paragraphs under the “Billing and Collectionâ€
section of the agreement. The first
paragraph provides for and references the fee schedule used by Universal. The second paragraph provides that billings
are to be made in Universal’s name and states that Premier is to provide
“billing and collection†services to Universal but that Premier “shall not be
required to take any extraordinary action in this regard, including
litigation.†The third paragraph states
that all sums collected by Premier on behalf of Universal are to be deposited
in the “Clinic Account.†This paragraph
goes on to state: “[Premier] is hereby
appointed by [Universal] as [Universal’s] true and lawful attorney-in-fact with
full power to (a) take possession of and endorse in the name of [Universal] for
the purposes of deposit in Clinic Account, any notes, checks, money orders,
insurance payments, and any other documents received in payment or any part
thereof; (b) facilitate normal billing follow-up and provide for all collection
procedures.â€
The
foregoing is the totality of the provisions of the agreement that addresses
billing and collections. We will refer
to the foregoing provisions collectively as the
The
agreement’s collections provisions do not address the authority to dispose of
lien claims. That is, the collections
provisions do not deal with the authority to settle, compromise, dismiss or
litigate lien claims. In fact, the
second paragraph appears to relieve Premier even of the responsibility to
litigate lien claims. Indeed, the
authority that the collections provisions confer on Premier is quite limited,
i.e., Premier was authorized to endorse and deposit payments and engage in
“normal billing follow-up.†Thus, whatever the collections provisions may be in
the Premier Providers-Premier agreements, the collections provisions before us
do not, as a matter of law, empower
Premier to dismiss Universal’s claims.
As
noted by the WCJ, it is true that there is nothing in the collections
provisions that required Premier to obtain authority to settle or dismiss lien
claims. However, the absence
of such a provision does not mean that Premier had such authority. Deriving authority from the fact that
authority is not mentioned in the collections provisions does
not follow. It is also true that
Premier claimed it had such authority, which means that the burden of proof on
this issue was with Premier; it was not up to Universal to prove that Premier
had no such authority.
name="_ftnref6" title="">[6]
2. The Declarations
While
the collections provisions are silent on Premier’s authority over Universal’s
lien claims, Dr. Zubrick’s declarations are quite clear and unambiguous on the
issue of authority. According to Dr.
Zubrick, Premier had no authority to dismiss Universal’s lien claims. The only services Premier rendered Universal
were billing and collection.
There
is the matter of the Riley declaration filed in the Sanctions Motion
proceedings. While the Sanctions Motion
proceedings were initiated after the order dismissing the liens, they took
place months before the final hearing on December 8, 2010. The Sanctions Motion was heard and decided by
the same WCJ who dismissed the liens. The
WCJ apparently ignored the Riley declaration in deciding that Universal’s liens
would not be reinstated.
name="_ftnref7" title="">[7] A declaration under penalty of perjury by a
lawyer that he did not, and had not, represented a given client is surely
highly probative. Given that it fully
supported Dr. Zubrick’s declarations, the Riley declaration is critically
important evidence.
Even
though Fish and Bacino were not a part of Universal’s case, this appears to be
the appropriate place to comment on their declarations.
Fish
and Bacino represented that they had authority to dismiss the liens of the
Premier Providers. The utility and
relevance of these declarations are questionable since it cannot be said that
Universal was a Premier Provider.
Moreover, even if Universal is to be classed as a Premier Provider,
Fish’s and Bacino’s assertions are flatly contradicted by attorney Riley, who
was surely a competent witness on what parties he did, and did not, represent.
The evidence that
allegedly supports the finding that Premier had the authority to dismiss
Universal’s liens is evidence that pertains to Premier Providers. However,
there is no substantial evidence that Universal was a Premier Provider. But even more importantly, none of the
reasons given by the WCJ that Premier had authority to dismiss liens of the
Premier Providers apply to Universal. As
an example, while the WCJ concluded that the collections provisions of the
agreements between the Premier Providers and Premier gave Premier the authority
to dismiss liens, we find that, as a matter of law, the collections provisions
of the Universal-Premier agreement do not empower Premier with the right to
dismiss Universal’s claims. Other
examples are that Premier’s services to Universal were limited to billing and
collection on a portion of its liens, while Premier appears to have acted as a
business manager for the Premier Providers; and Riley & Reiner represented
the Premier Providers, and did not represent Universal.
Thus,
the body of evidence on which the WCJ relied to show that Premier had the power
to dismiss Universal’s liens is, in one word, irrelevant.
It
is axiomatic that if there is no relevant
evidence to support a decision, that decision is not supported by substantial
evidence.
On
the other hand, there is l evidence that supports the conclusion that Universal
did not authorize Premier to dismiss its liens, or that Premier did not have
such authority. The declarations by Dr.
Zubrick and attorney Riley are factual, clear and unequivocal and there is the
Universal-Premier agreement itself which does not give Premier the right to
dismiss Universal’s liens.
There
is nothing in the record that impugns in any way the body of evidence on which
Universal relies. The only reference to
Universal’s case is the WCJ’s passing mention that some of the Premier
Providers waited until the order of dismissal was entered on September 24, 2009
to object on the ground that Premier did not have authority to dismiss the
liens. Premier ceased doing business in
October 2004. For the next five years,
Universal had very little cause to concern itself with Premier, in that its
liens were being handled by Innovative.
It is not surprising that it was only when it learned that its liens had
been dismissed that Universal acted to reverse that decision, when it did act
with dispatch, filing a timely petition for reconsideration.
Since
the WCAB’s decision is not supported by substantial evidence, it follows that
the WCAB’s decision must be set aside (Lab. Code, § 5952, subd. (d)) and that
it must vacate the order dismissing Universal’s liens.
RESPONDENTS’
CONTENTIONS
Several answers have been filed in response to the
petition.
One
of the respondents contends that Universal failed to introduce evidence that Premier was without
authority to dismiss its lien claim.
There are two reasons why this argument is without merit.
First,
as noted, it was Premier’s burden to prove that it had authority and not
Universal’s burden to prove the negative.
Second, the declarations of Dr. Zubrick squarely controvert the
claim that Premier had authority to dismiss Universal’s liens. December 8, 2010 was the first and only
hearing on Universal’s request to be excluded from the order of September 24,
2009. Universal presented two declarations
by Dr. Zubrick at that hearing. Thus, it
is not true, as one of the answers asserts, that Universal “did not offer the
testimony of a single witness at trial.â€
The
next assertion is that the Universal-Premier agreement made Premier Universal’s
attorney-in-fact for “ ‘all collection procedures.’ †One of the respondents purports to quote to
this effect from the Universal-Premier
agreement. It turns out that the
agreement actually states: “[Premier] is
hereby appointed by [Universal] as [Universal’s] true and lawful
attorney-in-fact with full power to (a) take possession of and endorse in the
name of [Universal] for the purposes of deposit in Clinic Account, any notes,
checks, money orders, insurance payments, and any other documents received in
payment or any part thereof; (b) facilitate normal billing follow-up and provide
for all collection procedures.†The
quoted provision is far more limited in scope than making Premier attorney-in-fact “for all
collection procedures.†In fact, all
this provision empowers Premier to do is to actually collect and deposit the
collections.
Respondents
also contend that at no time prior to September 24, 2009 did Universal
challenge that Premier had the authority to compromise and dismiss its
lien(s). However, it was only on and
after September 24, 2009 that the issue of Premier’s power to dismiss
Universal’s lien became relevant. Thus,
Universal’s inaction prior to September 24, 2009 is not a material
circumstance.
Finally,
respondents contend that the WCJ’s findings of fact are conclusive and not
subject to review in this court.
name="_ftnref8" title="">[8] It is also true, however, that we are
empowered to determine whether the order
or decision of the WCAB is supported by substantial evidence. (Lab. Code, § 5952, subd. (d).) For the reasons stated, we conclude that the
WCAB’s decision is not supported by
DISPOSITION
The
decision of the Workers’ Compensation Appeals Board denying Universal’s
petition for reconsideration is annulled and the case is remanded to the
Workers’ Compensation Appeals Board with directions to grant the petition for
reconsideration and to enter an order vacating the dismissal of Universal’s
liens and to conduct such further proceedings as are consistent with this
opinion.
KITCHING,
J.
We concur:
KLEIN,
P. J.
CROSKEY,
J.
determine, based upon the entire record which shall be certified by the appeals
board, whether:… (d) The order, decision, or award was not supported by substantial
evidence.†(Lab. Code, § 5952, subd.
(d).)
