How Do You Rebut The Presumption After 90 Days?

A recent appellate decision has analyzed for the first time how you can rebut the presumption of compensability under Labor Code section 5402 when you miss the 90 day rejection.

State Fund did not deny liability in this case until four months after the claim was filed. At the MSC they did not list the adjuster as a witness to explain why the claim was not properly denied. Therefore, the adjuster was precluded from testifying at trial. SCIF’s medicals were also obtained after the 90 days. They were admitted into evidence. However, without explanation as to why they were not obtained during the 90-day investigation period.

The Court discussed the meaning of “rebuttable presumption” under Labor Code section 5402. There can be a presumption affecting the burden of producing evidence or a presumption affecting the burden of proof. The Court decided 5402 is a presumption affecting the burden of proof. Once the underlying facts are established the defendant employer/carrier has the burden of proving the applicant does not have a compensable injury.

The Court addressed once the presumption is applied what evidence may be admitted on behalf of the defendant to rebut the presumption. This evidence must be discovered subsequent to the 90-day period. Since there were no appellate decisions on this issue the Court looked at Board panel decisions.

A number of panel decisions would preclude evidence by the defendant to rebut the presumption that could have been obtained with reasonable diligence within the initial 90-day period. What constitutes “reasonable diligence” is to be decided on a case by case basis.

The Court also indicated that it would follow the Board’s opinion that the presumption does not operate as a bar against the admission of evidence that might rebut compensability. “An applicant’s testimony at hearing may rebut the presumption”.  The Board has reasoned that such testimony could not reasonably have been discovered in the 90-day period. (I guess they forgot about depositions of the applicant.) The Board also stated that other witnesses at trial or by deposition on behalf of the applicant may rebut the presumption. In this case SCIF never exercised reasonable diligence in investigating this claim.

The Court also discussed Rodriquez v. WCAB ( a previous issue of COMPENSATION NEWS). Remember it is the rejection of the claim that has to occur within the 90-day period. A formal denial does not have to be mailed to the applicant. You will need to prove at trial that the claim was rejected within the 90-day period. Here SCIF could not do that because the adjuster was not listed at the time of the MSC to testify.  The thing to remember from all this is all hope is not lost if a denial is not sent within the initial 90-days. A good attorney may be able to salvage what looks like a certain presumption. Make sure you have one!

Case: SCIF V. W.C.A.B. (Welcher)

Harvey Brown
3501 Jamboree Rd. Suite 602
Newport Beach, CA 92660

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