The Court Of Appeal indicates who must bear the loss for a stolen check

This is a very significant case for workers’ compensation principles.

This is a published decision of the Court of Appeal. The applicant was employed as a laborer when he injured his back. The applicant authorized his attorney to sign legal documents on his behalf. The applicant moved several times during the pendency of the claim.

The applicant attorney settled the claim and signed the Compromise and Release (C&R) on behalf of applicant. The C&R had an incorrect address for the applicant. The settlement was approved with the incorrect address.

The employer mailed a check to the applicant to the incorrect address listed on the C&R. The check was fraudulently endorsed and cashed at a check cashing store. The applicant never received the check.

The case went to Trial before a Workers’ Compensation Judge (WCJ) on the issue of nonpayment. The WCJ ordered the defendant to issue a new payment. The defendant filed a Petition for Reconsideration which was denied.

The Appellate Court looked at the Uniform Commercial Code and determined the payee never became the holder of the check. Therefore, the issuer of the check remains liable to the payee. The employer had to issue a new check to the applicant.

Case: Barrett Business Services, Inc. v. WCAB, Rivas

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

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