ADJ1866471 · February 2, 2024

The Appeals Board found that it never acquired jurisdiction over PSI because the formal service and notice requirements were not met, and therefore the prior award and stipulations involving PSI were void ab initio, leading to denial of the petition for reconsideration.

From the decision · page 2In seeking reconsideration of the Decision, UEBTF does not allege new evidence that the workers' compensation appeals board (WCAB) "acquired jurisdiction" over PSI and/or Robert Olguin, Jr., and Sandra H. Burke as officers of PSI (collectively referred to as PSI) as required under section 3715, subdivision (e) (section 3715(e)). (Lab. Code, § 3715(e).) Instead, UEBTF contends that because PSI was on "actual notice" of applicant's workers' compensation claim, the WCAB was somehow authorized to issue an award, approve a compromise and release, and record liens against PSI and Roberto Olguin, Jr., as employers of applicant. We disagree for the reasons set forth in the Decision.

PSI was not properly served with formal process and special notice as required by Labor Code sections 3715 and 3716 before the April 6, 2011 Award.

Favours Defendant prevailed

Because the Appeals Board never acquired jurisdiction over PSI, the prior award and stipulations involving PSI were void ab initio, leading to denial of the petition for reconsideration.

From the decision · page 2Also as stated in the Decision, UEBTF may only resolve claims for workers' compensation against uninsured employers through stipulated findings and award or compromise and release if the Appeals Board "has acquired jurisdiction over the employer." (Lab. Code, § 3715(e).) In order to acquire jurisdiction over such an employer, the requirements for formal service of process of an application for adjudication of claim and special notice of lawsuit, which include a detailed notice that a lien may be imposed are not optional, unless the employer makes a general appearance. (Lab. Code, § 3715-3716.) It is undisputed that PSI did not make a general appearance at any time prior to April 6, 2011.

Labor Code sections 3715-3716

The Appeals Board must acquire jurisdiction over an uninsured employer through formal service of process and special notice as required by Labor Code sections 3715 and 3716 before resolving claims against that employer.

The Appeals Board found that PSI was not properly served and did not make a general appearance, so jurisdiction was never acquired.

From the decision · page 2Also as stated in the Decision, UEBTF may only resolve claims for workers' compensation against uninsured employers through stipulated findings and award or compromise and release if the Appeals Board "has acquired jurisdiction over the employer." (Lab. Code, § 3715(e).) In order to acquire jurisdiction over such an employer, the requirements for formal service of process of an application for adjudication of claim and special notice of lawsuit, which include a detailed notice that a lien may be imposed are not optional, unless the employer makes a general appearance. (Lab. Code, § 3715-3716.) It is undisputed that PSI did not make a general appearance at any time prior to April 6, 2011.

Labor Code section 5804

Once a finding of employment becomes final, the Appeals Board lacks authority to find no employment upon a petition to reopen under Labor Code section 5804.

The Appeals Board held that the prior award involving PSI was void ab initio due to lack of jurisdiction, so section 5804 did not apply.

From the decision · page 2As set forth in the Decision, at the time the Stipulations were presented to the WCJ for review and approval, the Appeals Board had not "acquired jurisdiction" over PSI. Jurisdiction is, as conceded by UEBTF, a substantial issue. It is therefore quite unfortunate that the WCJ did not discover the lack of jurisdiction over PSI when conducting review of the Stipulations for adequacy. However, the Decision did not violate section 5804 given that the Award was issued without jurisdiction and, as a natural consequence, was void ab initio. In other words, the stipulation between applicant and UEBTF that PSI was applicant's employer was not issued as part of a final order of employment in this matter, and therefore cannot be relied on to apply section 5804.3

Labor Code section 5506

If a defendant fails to appear or answer, relief must be requested pursuant to Labor Code section 5506 and Code of Civil Procedure section 473.

The Appeals Board found that PSI was never a defendant in the proceedings, so section 5506 did not apply to PSI.

From the decision · page 3Next, given that the Appeals Board never acquired jurisdiction over PSI in this matter, PSI was never a defendant in these proceedings. If PSI was never a defendant in these proceedings, then it follows that section 5506 does not apply to PSI. (Lab. Code, § 5506 ["If the defendant fails to appear or answer..."].) Therefore, PSI was not required to request relief pursuant to the provisions of Code of Civil Procedure section 473 as required by section 5506. Even so, we note that the Petition for Dismissal filed by PSI on September 9, 2022 could be considered such a request given the informality of proceedings in workers' compensation. (Lab. Code, § 5709.)