Owner-Operator Trucker Is Independent Contractor

This newsletter usually only deals with cases that have gone to the appellate court. However, this case is so significant that it is presented before the appeal.

Even though this is a Superior Court case, the workers’ compensation case (LAO 75473) was joined with the Superior Court case by order of the Workers’ Compensation Appeals Board (WCAB), stipulation of the parties and order of the Superior Court.

This was a class action suit that was given to three judges for this decision.  The defendants in these cases were transportation services companies. The plaintiffs were owner-operators who drove trucks owned by the owner-operators for the trucking companies.

The trucking companies contracted with owner-operators who would haul for them and would enter into a Lease and Subhaul Agreement with Independent Contractor. It specifically states that the intent was to create and independent contractor relationship and not that of employee-employer.

Drivers who entered this agreement placed a decal on the side of the truck with the name of the company they were driving for and the ICC permit number under which the company operates.

The driver would report to a dispatch window to acquire a load to haul. The driver could accept or reject the load. A price list for the particular load would be available for the owner-operator to determine if they would accept or reject the load.

The owner-operator could provide a certificate that they had insurance coverage. The owner-operator could elect to obtain insurance for cargo loss, workers’ compensation, and liability and physical damage from the defendant. The owner- operator authorized the defendant to advance these costs which would then be subtracted at the time of settlement for the loads they hauled. Health insurance or other employee benefits were not supplied. There was a safety program which inspected the trucks.  The owner-operator was responsible for their own truck repairs. There was no withdrawal from checks for taxes or social security.

These judges reviewed the cases of Borello & Sons and SCIF V. BROWN. They found those cases provided little guidance. The judges looked at the issues of control, right to discharge at will without cause, distinct operation or business, supply of tools, etc, before determining they were independent contractors.


Interest On Medical Bills Begins 60 Days After Receipt

A recent appellate case answered the question as to when interest is due to a medical provider on a compensable work related injury.

The applicant had a pre-existing mass that was compressing his spine. The medical provider alleged that the alleged industrial injury aggravated this pre-existing condition. The medical care providers submitted numerous bills for surgeries and other treatment. The workers’ compensation insurance carrier denied liability for the surgeries and the treatment.

The applicant settled the main issues with the workers’ compensation carrier. The carrier did not resolve the liens at the time of the settlement with the applicant. Boehm & Associates submitted a lien of $280,050.54 on behalf of several providers.  Apparently a trial was held and the workers’ compensation judge ruled that the carrier was not responsible for the pre-existing condition. A Petition for Reconsideration was filed by the lien claimant. The Workers’ Compensation Appeals Board ruled that the work related injury caused the aggravation of the pre-existing condition and therefore the preexisting condition was covered under workers’ compensation.

The carrier then paid for treatment and paid interest only from the date of the appeals board decision Boehm sought payment of interest pursuant to Labor Code section 4603.2, subdivision (b).  They were seeking payment from the time of the actual billing. Another hearing was held on this issue and the workers’ compensation judge ruled 4603.2 did not apply. A petition for reconsideration was filed and the appeals board denied reconsideration.

The appellate court looked at the section 4603.2, subdivision (b), and analogized this section with the prejudgment interest in a civil action.  The carrier argued that section 5800 was applicable. This section states that interest is due from the date of the award. The appellate court intimated that the carrier was making interest on the money they had in reserves during the pendency of the litigation therefore they should not complain about having to pay interest once it was found to be liable for treatment.

The parties never cited 9792.5 of title 8 of the California Code of Regulations, but the appellate court relied on this rule. This section deals with the rule of payment 60 days after the employer accepts liability for the injury. The appellate court found that interest is due from the due date and the due date is 60 days after the employer receives the bill.

The carrier could have avoided this appellate decision by negotiating settlement with the lien claimant.


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