State Comp. Ins. Fund v. Workers' Comp. Appeals Bd.

Larry R. Borges was rounding up cattle for his employer on April 5,1988, while driving an all-terrain vehicle. He ran into a cable and suffered injuries to his head, neck, arms, chest and spine. Shortly thereafter, Borges began receiving workers’ compensation benefits for his industrial disability from his employer’s carrier, State Compensation Insurance Fund (SCIF).

Borges also filed an action in the superior court against the landowner on whose land he was injured. The civil case eventually was settled for $57,500.

By the time of the settlement, SCIF had paid Borges more than $46,000 in workers’ compensation benefits. As a consequence, it applied for a lien on Borges’s recovery, pursuant to Labor Code section 3856, subdivision (b). SCIF agreed to release its lien in the civil action for $17,000, provided that its right to a credit against further claims for workers’ compensation benefits was in no way compromised. After deducting SCIF’s lien and Borges’s attorney’s fees and costs, Borges received a net recovery in the civil action of $22,435.57.

In June 1995, four and one-half years after the civil case settled, the workers’ compensation judge (WCJ) made a finding…