ADJ16728100 · October 6, 2025

The Cost Petitioner failed to prove bad faith by the defendants, which is required to impose sanctions and attorney fees under Labor Code section 5813 and CCR section 10545(h). The defendants paid the requested amount and a self-imposed penalty, and no evidence of unreasonable delay or bad faith was presented.

From the decision · page 1Cost petitioner contends, in pertinent part, that the discovery issues remain relevant and that defendant engaged in bad faith actions by unreasonably delaying payment.

Favours Defendant prevailed

This payment and penalty demonstrated corrective action and good faith, undermining the claim of bad faith by the Cost Petitioner.

Cost Petitioner failed to present evidence of unreasonable delay or bad faith by defendants.

Favours Defendant prevailed

Without evidence of bad faith, sanctions and attorney fees cannot be imposed under Labor Code section 5813 and related regulations.

From the decision · page 6The court addressed the issue of bad faith and unreasonable delay in the Opinion on Decision. It was noted that payments were made to the interpreter and the parties engaged in settlement negotiations up to and including at the trial. Defendants had issued payment, with its Explanation of Review and the self-imposed penalty. Further, CP failed to meet its burden of proof in showing bad faith but instead argued that it was the Defendant's burden to prove that their failure to comply with discovery was due to mistake, inadvertence or excusable neglect. CP also did not offer any evidence of the unreasonable delay of payments. No witnesses were offered, nor were the[re] any facts presented to suggest that the delay in payment was based on any reasonable action by Defendant's other than the dispute in payment rate requested based on the market rate question.

CCR section 10421

A finding of bad faith requires evidence of actions or tactics that are frivolous or solely intended to cause unnecessary delay, willful failure to comply with statutory or regulatory obligations, or improper motive without evidence of corrective effort.

The Cost Petitioner failed to meet the burden of proof to show bad faith by the defendants as required by this regulation.

From the decision · page 6A finding of bad faith requires evidence of the following (b) actions or tactics that are frivolous or solely intended to cause unnecessary delay include actions or tactics that result from a willful failure to comply with a statutory or regulatory obligation, that result from a willful intent to disrupt or delay the proceedings of the Workers' Compensation Appeals Board, or that are done for an improper motive or are indisputably without merit. CCR § 10421. The allegations of bad faith must be supported by substantial evidence with [sic] proves an improper motive, or a deliberately planned action meant to avoid a legally required course of action, without any evidence of corrective or remunerative effort. The time to present the evidence was during trial and having failed to present it, the WCJ ruled that the CP did not meet their burden of proof.

WCAB Rule 10545(h) (Cal. Code Regs., tit. 8, 10545(h))

Imposition of sanctions under WCAB Rule 10545(h) requires a finding of bad faith under Labor Code section 5813.

The panel agreed with the WCJ that defendant's conduct did not rise to the level of bad faith to impose sanctions.

Defendants paid the sum requested by the Cost Petitioner and a self-imposed penalty of $50.47, which was accepted by the Cost Petitioner.

No evidence of unreasonable delay or bad faith was presented by the Cost Petitioner to support sanctions or attorney fees.

From the decision · page 6The court addressed the issue of bad faith and unreasonable delay in the Opinion on Decision. It was noted that payments were made to the interpreter and the parties engaged in settlement negotiations up to and including at the trial. Defendants had issued payment, with its Explanation of Review and the self-imposed penalty. Further, CP failed to meet its burden of proof in showing bad faith but instead argued that it was the Defendant's burden to prove that their failure to comply with discovery was due to mistake, inadvertence or excusable neglect. CP also did not offer any evidence of the unreasonable delay of payments. No witnesses were offered, nor were the[re] any facts presented to suggest that the delay in payment was based on any reasonable action by Defendant's other than the dispute in payment rate requested based on the market rate question.