California appeals court reverses denial of comp award reduction

A California appeals court has reversed a lower court order that denied a municipality’s request to reduce an award to an injured worker because of a lien stemming from outstanding workers compensation payments.

The Court of Appeals of California, 5th District on Thursday found an error in a trial judge’s decision to deny a post-judgment order to the City of Firebaugh in a case involving an injured employee who sued the city and Hiller Aircraft Corp.

The plaintiff, Daquan Jones, won a special verdict in May 2021 in which the city and Hiller were found liable for $5.74 million in economic damages and the city individually liable for $750,000 in noneconomic damages.

Four days prior to the start of trial, QBE Americas Inc. paid $1.25 million in workers comp insurance payments on behalf of Mr. Jones. The city subsequently sought to have the trial judgment awarded to Mr. Jones reduced based on the amount of the comp payments.

A trial judge denied the city’s motion, finding it failed to meet its burden showing evidence of the amount of the lien that it proposed to use to reduce the judgment amount, as the total lien amount is unknown because Mr. Jones continues to incur medical expenses and the comp claim remains open.

In reversing the order, the appeals court said while the trial judge can deny the city’s motion for judgment reduction, it applied the wrong legal standard when it previously did so.