Interest Calculation Clarified in Uninsured Employer Restitution Order

Sacramento, CA - Robert Reagan, III died on July 26, 2016, while operating Ian Czirban’s bulldozer at the Soberanes wildfire in Monterey County. Reagan was ejected from the bulldozer and crushed to death by it.

Shortly after Reagan’s death, Morgan K., Reagan’s partner and the mother of their two children, discovered that Czirban did not have workers’ compensation insurance.

Attorney Thomas Tusan filed claims with the Uninsured Employers’ Benefits Trust Fund for death benefits. The case resulted in a Compromise and Release Agreement $310,218.80 for death benefits and funeral expenses, less $47,557.43 in professional fees and cost reimbursement to Mr. Tusan.

The trial court in the related criminal action convicted Czirban of a number of crimes including misdemeanor failure to secure payment of workers’ compensation insurance. Czirban was placed on felony probation for three years, and the issue of victim restitution was reserved.

Czirban appealed the judgment of conviction, which was affirmed in the published case of People v Czirban (Czirban I, - 2021) 67 Cal.App.5th 1073 .

While that appeal was pending, the trial court ordered Czirban to pay, as a condition of his probation, victim restitution in the amount of $70,667.56 to Morgan K..

The Court of Appeal reversed the award of $22,485 in interest in the new unpublished case of People v Czirban CA6 H048989 ( Czirban II - April 2022).

Czirban contends on his second appeal that (1) the trial court abused its discretion by ordering him to pay attorney fees because the Labor Code explicitly prohibits the payment of attorney fees out of a survivors’ benefit; (2) the order for payment of attorney fees as a condition of probation is unreasonable, irrationally calculated, and based on an erroneous legal standard; and (3) the trial court abused its discretion when determining the interest award. The Court of Appeal found no merit to issues 1 and 2.

In its restitution order, the trial court ordered Czirban to pay Morgan $22,485.13 in interest. The trial court calculated that figure based on $46,352 in attorney fees, $1,205.43 in costs, and $625 in unpaid wages that Czirban had promised to Reagan.

Because the earliest date Morgan could have incurred an economic loss for either the fees or costs was 2020 (not at the time of Reagan’s death), the trial court committed an error of law when it aggregated the unpaid wages, attorney fees, and costs and calculated interest using a loss date of Reagan’s death for all three categories.

The trial court did not err in setting the loss date for the unpaid wages as the date of Reagan’s death.

Source: WorkCompAcademy.com

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