Barrett Business Services, Inc. v. Workers' Compensation Appeals Board

*599 Opinion

INTRODUCTION

In this proceeding we address the issue who must bear the loss when a stolen check with a forged indorsement is cashed and the payee never receives the check. A compromise and release of the workers’ compensation claim of applicant Rafael Rivas contained an incorrect address for Rivas. His employer, Barrett Business Services, Inc. (Barrett), sent a $17,000 check to Rivas at the incorrect address. Rivas never received the check, which was stolen and negotiated with a forged indorsement at a check-cashing service and was paid by Barrett’s bank. We hold that because delivery of the check to Rivas did not occur, issuance of the check did not discharge Barrett’s underlying obligation to Rivas and Barrett remains liable to Rivas on that obligation. Thus the workers’ compensation administrative law judge’s order and award correctly found that Barrett was liable to pay settlement proceeds of $17,000 to Rivas. Barrett petitioned to the Workers’ Compensation Appeals Board (WCAB) for reconsideration of that order and award. The WCAB denied reconsideration. Barrett filed a petition for writ of review of the WCAB order denying reconsideration. We granted Barrett’s…