Woodland Hills personal injury lawyer Barry P. Goldberg is regularly consulted on all things “Uninsured and Underinsured” California for California car accident cases. These consultations are by both accident victims searching for answers and by personal injury attorneys trying to make sense of the jumble of laws which make up the Uninsured and Underinsured substantive and procedural laws. Since the applicable statutes were essentially enacted piecemeal, the answers are not always obvious.
In fact, the topic of this article “Preserving the Statute of Limitations for Uninsured Motorist Cases with a Workers’ Compensation Claim” was prompted by a hit and run accident victim attempting to handle his own claim. The accident victim, who was also injured on the job, was able to locate the applicable statute, Insurance Code §11580.2, but the answer to the question was not obvious. Being a resourceful person, he was also able to locate my Article published in February 2013, “Effectively Preserving the Statute of Limitations in California Uninsured Motorist Cases.” That Article has generated more client calls and inquiries from practicing lawyers, save one dealing more with Uninsured Motorist Arbitration procedure, “The Strange Case of the Uninsured or Underinsured Motorist Arbitration” published in 2011 in the Advocate Magazine.
In my original Article, I do not really discuss the impact of a Workers Compensation claim on an Uninsured or Underinsured Motorist case. In fact, the most common issues with Workers Compensation claims regard calculating a set-off of the amounts paid by the Comp carrier as impacting the calculation of damages in the Uninsured or Underinsured Motorist claim and arbitration. What I did discuss in my Article was that a declaration (discussing Workers Compensation) was absolutely required in a formal Demand in order to preserve the statute of limitations. See, Allstate Ins. Co. v. Gonzalez (1995) 38 Cal.App.4th 783. (The Demand process carries several advantages to the alternative of filing a lawsuit before the expiration of the limitations period. Particularly, in the “hit and run” context.)
As Stated in Gonzalez: “Any demand or petition for arbitration shall contain a declaration, under penalty of perjury, stating whether (i) the insured has a workers’ compensation claim; (ii) the claim has proceeded to findings and award …; and (iii) if not, what reasons amounting to good cause are grounds for the arbitration to proceed immediately.” (Original Italics.) In view of what the statute required, the attorney’s letter was found not a proper demand. (Id. at 792.)
I further stated: “It is absolutely imperative that every demand for arbitration be accompanied by a proper declaration under penalty of perjury even though the adjuster obviously knows workers compensation is not implicated and has been actively discussing settlement. Otherwise, the demand is not in compliance with what the statute requires.”
My Article, regrettably, does not answer the relatively straight-forward question of whether you can effectively preserve the statute of limitations when a workers’ compensation claim is open. The Statute provides little guidance and is seemingly inconsistent. On the one hand §11580.2(f) provides, in pertinent part:
If the insured has or may have rights to benefits, other than nonoccupational disability benefits, under any workers’ compensation law, the arbitrator shall not proceed with the arbitration until the insured’s physical condition is stationary and ratable. In those cases in which the insured claims a permanent disability, the claims shall, unless good cause be shown, be adjudicated by award or settled by compromise and release before the arbitration may proceed.
On the other hand:
Any demand or petition for arbitration shall contain a declaration, under penalty of perjury, stating whether (i) the insured has a workers’ compensation claim; (ii) the claim has proceeded to findings and award or settlement on all issues reasonably contemplated to be determined in that claim; and (iii) if not, what reasons amounting to good cause are grounds for the arbitration to proceed immediately.
Therefore, while it is clear that the arbitration cannot go forward, you cannot effectively preserve the statute of limitations by providing the required declaration concerning Workers’ Compensation!
To solve this inconsistency, I recommend that the Demand for Arbitration contain a declaration truthfully identifying the status of the workers’ comp claim and stating, in effect, that the approaching statute of limitations amounts to sufficient “good cause” for the arbitration to proceed immediately. The Demand should also state that the insured is willing to “stay” the actual arbitration until the workers comp case has been concluded. Most importantly, the Demand should state that the insured requires a written confirmation from the insurer that it has accepted the Demand and that it concedes that the statute of limitations has been satisfied in all respects.
Since the relationship of insured to insurer is “first-party,” a warning should also be included that an unreasonable failure to concede that the limitations has been satisfied, will result in the insured unnecessarily filing a lawsuit prior to the limitations period. (In the case of the “hit and run”, the lawsuit will be against DOE defendants only.) In addition, the insured should state that such an unreasonable action will raise the costs of litigation and cause economic and other damages. The insured should state that he or she intends to collect for such damages in a separate action against the insurer at the conclusion of the arbitration, if necessary. In essence, a veiled threat of a first party bad faith action.
It is my opinion that most insurers will readily agree to provide the written acknowledgement that the statute of limitations has been effectively satisfied and the arbitration will be stayed. Given the “land mines” in this transaction and the devastating possibility of the uninsured motorist claim being barred, it is recommended that injured insureds seek experienced Uninsured and Underinsured Motorist counsel well before the limitations period expires.