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Client Presentations

GMK is continuing our personalized client training presentations held in our clients’ offices. We are now scheduling the remainder of our 2018 presentations for June through November.

Our training sessions are customized for our clients’ preferences with most presentations lasting 1 to 3 hours. Continuing education credits are available. Numerous topics have been prepared for training depending on your specific needs. The GMK topics list can be viewed here. GMK can also tailor a presentation on the topics of your choice. These training sessions provide face-to-face training with GMK attorneys. Get to know your GMK attorneys in person.

We have confirmed presentations for many of you already. But, if you have not yet signed up for GMK training, please do so now. Send an e-mail to Joy Tolladay to schedule your personalized training with GMK.

Summary of The People ex rel. Mahmoud Alzayat v. Gerald Hebb et al.

On December 19, 2017, the California Court of Appeal filed its opinion in the case of The People ex rel. Mahmoud Alzayat v. Gerald Hebb et al. The court published its decision, meaning that it is now binding precedent and may be cited and relied upon by other courts and parties.

Summary of The People ex rel. Mahmoud Alzayat v. Gerald Hebb et al.

Plaintiff Mahmoud Alzayat, on behalf of the People of the State of California, filed a qui tam action against his employer, Sunline Transit Agency, and his supervisor, Gerald Hebb. Alzayat alleged defendants violated the Insurance Frauds Prevention Act (IFPA). (Ins. Code § 1871 et seq.)

Alzayat’s job was to maintain bus stop infrastructure. He had previously suffered an industrial injury to his lumbar spine and was released back to work. On the specific date at issue, Alzayat needed concrete to anchor posts at a bus stop. To avoid reinjuring his back, Alzayat asked Hebb for permission to break down a 90-pound bag of concrete into lighter bags or to have another employee help him lift the 90-pound bag. Hebb refused his requests and ordered Alzayat to lift the 90-pound bag. Alzayat immediately felt pain in his lumbar spine and partially collapsed as he dropped the bag. Hebb asked Alzayat why he had dropped the bag and Alzayat complained that he had injured his back.

The following day, Alzayat filled out a workers’ compensation claim form. Hebb also filled out a report that Sunline used in making compensability decisions. In his report and subsequent deposition, Hebb denied both his conversation with Alzayat and that he witnessed Alzayat injure himself. Sunline, in relying upon Hebb’s representations, denied Alzayat’s claim.

Alzayat alleged that his supervisor’s false statements in his report and later deposition constituted a violation of Penal Code section 550 and formed predicate offenses for liability under the IFPA. Alzayat argued that his supervisor’s statements were material because a reasonable insurance carrier would consider them in its determination of whether to accept or deny a claim. Defendants argued that Sunline, a self-insured company, is not considered “insurance” for purposes of the IFPA. The Superior Court agreed and entered judgment for the defendants. The Court of Appeal reversed and held that self-insured risk pools are subject to the IFPA.

On remand, defendants argued that Alzayat’s lawsuit was barred based on the litigation privilege as Hebb’s statements were made in the context of a workers’ compensation proceeding. In addition, defendants argued that Alzayat’s lawsuit was barred by the exclusivity rule. Alzayat argued that the purpose of the IFPA was to combat workers’ compensation fraud. Accordingly, Alzayat argued that to permit the litigation privilege to immunize communications would frustrate the purpose of the IFPA. Alzayat also argued that the exclusivity rule did not bar his action under the IFPA. The Superior Court again agreed with defendants and dismissed Alzayat’s lawsuit.

Alzayat again appealed. On appeal, the Court of Appeal reversed and found in favor of Alzayat and held that the IFPA is an exception to the litigation privilege. To hold otherwise would potentially render the IFPA inoperable. The court recognized that a large amount of fraud under the IFPA will occur during or in contemplation of litigation. The court also held that the exclusivity rule does not apply to claims under the IFPA. The court found that civil actions arising from fraud and made unlawful by the Penal Code are allowable, notwithstanding the exclusivity rule. Moreover, the exclusivity rule was found to not apply as this case was brought as a qui tam lawsuit.

What is a “qui tam” action?

“Qui tam” is a phrase most commonly associated with whistleblower actions. In a qui tam action, the government is the real party in interest. In a nutshell, the action allows a private citizen to initiate an enforcement action against wrongdoers who cause injury to the public at large.

Penal Code section 550 and the IFPA

The IFPA was enacted to prevent workers’ compensation fraud.

Penal Code section 550 criminalizes making false claims for compensation or benefits including statements in support of or in opposition to a claim for benefits. An employer’s false report submitted in opposition to a claim for workers’ compensation benefits falls within the scope of Penal Code section 550.

What This Means for You

This case creates a new avenue of litigation for workers’ compensation applicant attorneys and plaintiffs’ civil litigation attorneys to seek substantial civil remedies arising out of normal workers’ compensation claims. Because of the potential monetary recovery available it would not be surprising to now see the expansion of litigation against employers whose employees believe that they were defrauded by employers that deny the compensability of their claims.

Consequently it is paramount that employers, whether insured or self-insured, their investigators and their claims administrators be extremely careful to make sure that investigations of work related injury claims are conducted fairly and without bias against employees making the claim. Although it was not an element of the facts in the Alzayat case, to prevent employer-side fraud it is perhaps wise for employers to consider whether or not to offer incentives to their management for not having work related injury claims although safety measures should always be encouraged and enforced.

Please contact GMK if you have any questions or need any guidance with regard to this new case.

Arin Scapa, Esq.

Seasons Greetings to ALL……

GMK has had a successful year in 2017 due to our partnership with you….our clients. We want to thank you for your business throughout 2017 and we look forward to a wonderful 2018.

In 2017, GMK was able to provide training to over 30 clients with over 1,300 participants. We were able to do this by personally coming to your offices. We want to give a special thank you to those clients that let us into your offices this year to meet and train your staff.

Our goal in 2018 is to offer the same personal training as we did in 2017. We will be reaching out to you in January to schedule the dates. GMK will also be offering Webinars throughout 2018 on current and relevant topics.

GMK appreciates your business……We wish you a happy, healthy and safe holiday season with your family.

Happy Holidays from all of us at…….

Goldman, Magdalin & Krikes, LLP

GMK's Joshua Mauras in the Community

Joshua Mauras, Associate Attorney at GMK has been appointed by the Orange County Board of Supervisors to the Orange County Visitors Association. Joshua was appointed to represent the First District which incorporates Santa Ana, Garden Grove, Westminster, Midway City, and a portion of Fountain Valley.

The Orange County Visitors Association’s purpose is to advocate for Orange County tourism related legislative initiatives, promote positive awareness and understanding of the Orange County brand through marketing efforts and serve as an information resource for government officials and travel industry professionals.

Joshua has been a Workers’ Compensation Attorney with GMK for 3 years in our Orange County Office specializing in all aspects of Workers’ Compensation defense. Joshua can be reached by email at or by telephone 714-256-5000.

Congratulations, Joshua on your appointment to the Orange County Visitors Association.

SAWW Increases for 2018

In 2018 the California State Average Weekly Wage (SAWW) will increase more than 3.6% for temporary total disability (TTD), permanent total disability (PTD) and other workers’ compensation benefits that are tied to SAWW increases. The SAWW is defined as the average weekly wage paid to employees covered by unemployment insurance as reported by the U.S. Department of Labor for California for the 12 months ending March 31 in the year preceding the injury.

Beginning with January 1, 2018 dates of injury and after, the new maximum weekly compensation rate will rise from $1,172.57 to $1,215.27 and the minimum weekly TTD/PTD rate will increase from $175.88 to $182.29.

The SAWW increases will also affect:

• TTD paid two years or more after the date of injury
• Life Pension and PTD payments for injuries on or after January 1, 2003
• Installment payments on death claims

What This Means for You:

GMK suggests that you diary your claims for January 1, 2018 or before that fit the criteria for the increase in benefits payments due to the rise in the SAWW. Discuss with your legal counsel the changes in benefit rates to insure correct adjustments in the payment of benefits to injured workers. Remember unpaid indemnity payments can result in penalties which only add to claim costs.

Paul J. Magdalin, Esq. - GMK Los Angeles Office

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