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Employer still liable despite theft of workers compensation check: Court

Posted On: Mar. 23, 2012 12:00 AM CST

LOS ANGELES—An employer whose $17,000 check was stolen and forged still must pay the workers compensation claimant who never received the settlement, a California appellate court has ruled.

The case of Barrett Business Services Inc. vs. Workers' Compensation Appeals Board involves Rafael Rivas, a laborer who injured his lower back while working for Barrett in 2005.

Mr. Rivas changed addresses several times before his claim settled. He empowered an attorney to sign his legal documents, including a settlement.

Meanwhile, Barrett stopped using an outside adjusting service and moved its claims handling in-house. The address and claims administration changes resulted in Barrett mailing the $17,000 settlement check to Mr. Rivas at an out-of-date address.

A “Rafal Rivas” fraudulently endorsed the check and received cash from a check-cashing business.

In February 2011, an administrative law judge ruled that Barrett remained liable to Mr. Rivas because he never received the check.

Barrett then appealed to the Workers' Compensation Appeals Board, which denied his request to reconsider.

Barrett further appealed to California Court of Appeal for the 2nd District, arguing that by mailing the settlement check to Mr. Rivas at an address specified in a compromise and release agreement, it had fulfilled its obligation to the claimant.

On Thursday, however, the appellate court ruled that because delivery of the check to Mr. Rivas never occurred, issuance of the check did not fulfill Barrett's obligation. The court ruled that the administrative law judge was correct in ruling Barrett still owed the $17,000.