ADJ10037291 · April 1, 2025

The Appeals Board found that failure to file a proof of claim in the bankruptcy proceedings does not enjoin the applicant from pursuing a workers' compensation claim against the Uninsured Employers Benefits Trust Fund, contrary to UEBTF's argument, based on case law including Ortiz and Slali.

From the decision · page 3Turing to the merits, UEBFT cites to Duncan v. Workers Compensation Appeals Bd. (1998) 63 Cal. Comp. Cases 309 [1998 Cal. Wrk. Comp. LEXIS 4510] to support its argument that a proof of claim must be filed in a Chapter 7 asset bankruptcy proceeding while a proof of claim is not necessary in a Chapter 7 no asset bankruptcy proceeding. While that may be true, contrary to UEBTF's argument, failure to file a proof of claim in either an asset or a no asset proceeding does not enjoin an employee from later seeking payment from UEBTF.

Applicant failed to file a proof of claim in the bankruptcy proceeding against the alleged employers.

Favours Applicant prevailed

This fact was central to the dispute over whether the applicant could pursue a workers' compensation claim enforceable against the defendants or the Uninsured Employers Benefits Trust Fund.

From the decision · page 7applicant, [], while allegedly employed on June 11, 2015, as a mover, at Palos Verdes, California, by Victor Manuel Martinez, individually and doing business as Bob Williams Moving, and Justine Marie Martinez, individually and doing business as Tristar Moving, claims to have sustained an injury arising out of and in the course of employment to his head, bilateral arms, bilateral upper extremities, bilateral lower extremities, ribs, right leg, right elbow, right hand, and right hip. Pursuant to the parties' stipulation, at the time of the above injury the alleged employer was uninsured. Applicant concedes he failed to file a proof of claim in the bankruptcy proceeding against alleged employers Victor Manuel Martinez and Justine Marie Martinez.

The bankruptcy court's order in Slali allowed the employee to pursue an award against the employers despite failure to file proof of claim.

Favours Applicant prevailed

This precedent supported the conclusion that failure to file a proof of claim does not enjoin pursuit of a workers' compensation claim.

From the decision · page 12on behalf of the employers to the employee would be created; (3) the employee would not be allowed to seek satisfaction of any award against the employers absent further orders from the bankruptcy court; (4) the employee's claim remained open and pending before the WCAB and had not been resolved or decided; and (5) the employers' participation in the litigation before the WCAB would not be affected by the bankruptcy order. (Ibid.)

Labor Code section 5909

A petition for reconsideration is deemed denied unless acted upon within 60 days from the date a trial judge transmits a case to the appeals board.

The Appeals Board must act on a petition for reconsideration within 60 days of transmission of the case to the Appeals Board.

From the decision · page 2Former Labor Code section 5909 provided that a petition for reconsideration was deemed denied unless the Appeals Board acted on the petition within 60 days from the date of filing. (Lab. Code, § 5909.) Effective July 2, 2024, Labor Code section 5909 was amended to state in relevant part that:

Labor Code section 5909(b)(2)

Service of the Report and Recommendation shall constitute notice of transmission to the parties.

Service of the Report and Recommendation provides notice to the parties of the transmission of the case to the Appeals Board.

From the decision · page 2(2) For purposes of paragraph (1), service of the accompanying report, pursuant to subdivision (b) of Section 5900, shall constitute providing notice.

Failure to provide notice of transmission of case to parties as required by Labor Code section 5909(b)(1)

From the decision · page 3Here, according to our review of the record, we did not receive a Report and Recommendation by a workers' compensation administrative law judge, and no other notice to the parties of the transmission of the case to the Appeals Board was provided by the district office. Thus, we conclude that the parties were not provided with the notice of transmission required by Labor Code section 5909(b)(1). While this failure to provide notice does not alter the time for the Appeals Board to act on the petition, we note that as a result the parties did not have notice of the commencement of the 60-day period on January 29, 2025.