Garcialara: Vacating a Workers’ Comp Settlement Approval Was Not a Final Order

Can an insurer appeal when a workers’ compensation judge vacates an approved settlement? In Juan Garcialara v. Sistone, Inc., No. ADJ20538666 (Cal. WCAB Oct. 30, 2026), the Appeals Board said not yet: an order vacating approval of a Compromise and Release so the worker’s challenge can be heard is an interim order, not a final one. The Board dismissed the insurer’s petition for reconsideration and denied removal, leaving the trial judge to decide on a new record whether the $40,000 settlement is adequate and should be enforced.

The panel was Commissioners José H. Razo and Craig L. Snellings and Deputy Commissioner Lisa A. Sussman.

A $40,000 release that reached past the medical reports

Juan Garcialara claimed a cumulative injury from February 2024 to February 2025 to his neck, back, shoulders, feet and eyes, against Republic Indemnity Company; Insurance Company of the West was joined for part of that period. In January 2026 he added silicosis.

On June 16, 2026, an executed $40,000 Compromise and Release (C&R) was filed and served on every party except Garcialara. It purported to resolve a long list of body parts and systems, including silicosis, the lungs and the respiratory system. It was walked through for approval that day with only Republic’s counsel present. The medical record was two orthopedic qualified medical evaluator reports covering only the neck, left shoulder, right hand, low back and left leg, with no maximum medical improvement date or permanent impairment discussion.

The judge approved the C&R that day and designated defense counsel to serve the approval order on all parties. No proof of service was filed.

The worker challenged the approval, and the judge vacated it

On July 17, 2026, Garcialara substituted new counsel and filed his own petition for reconsideration. His new attorney filed a petition to set aside or, alternatively, for reconsideration. It alleged that although he had told his former attorney about a silicosis diagnosis and asked for an evaluation, he was advised to sign settlement documents he did not understand, and that the C&R was inadequate.

On July 21, the judge vacated the approval under WCAB Rule 10961(b), which lets a judge, after a timely petition for reconsideration, rescind an entire order and start further proceedings. (The opinion’s opening dates that order July 22.)

Republic argued three points: the order issued before it could respond, denying due process; neither petition was timely, because it had emailed the approval to Garcialara’s former attorney on June 18, 29 days before he filed; and he had shown no good cause, because he had not shown he has silicosis. It asked the Board to reinstate the approval or stay the order until a hearing.

Why the insurer could not get reconsideration yet

Reconsideration lies only from a final order, one that determines a substantive right or liability or decides a threshold issue. Interim procedural and evidentiary rulings do not qualify. The Board found the vacating order was of that interim kind: “The decision does not determine any substantive right or liability and does not determine a threshold issue.” According to the judge’s report, the approval was rescinded so Garcialara’s set-aside petition could be heard. “Once the WCJ has issued a new decision, either party may seek reconsideration.”

Removal, an extraordinary remedy the Board rarely grants, failed for a related reason. WCAB Rule 10955(a) requires substantial prejudice or irreparable harm and a showing that reconsideration after a final decision would not be an adequate remedy. Republic will be able to seek reconsideration after the judge rules, and if settlement money had already been paid, the Board said, Labor Code section 4909 gives the defendant a remedy.

An unserved approval order did not start the 20-day clock

The Board also rejected the timeliness argument. Under Labor Code section 5903, a petition for reconsideration is due 20 days after service of a final order. The Board explained that an email is not service without a fully executed proof of service, and that “it appears that service was never properly completed.” Defense counsel filed no proof of service, and WCAB Rule 10629(c) requires service on the injured worker even when represented; nothing showed Garcialara was ever served.

When an order is defectively served, the Board said, the time to petition runs from receipt. Because Republic admitted the order was not properly served, Garcialara’s petition was timely. And as the judge had pointed out, Labor Code sections 5803 and 5804 leave the trial judge authority to vacate the approval. “Thus, the Order was appropriate.”

The record could not show the settlement was adequate

WCAB Rule 10700(b) requires the Board to inquire into the adequacy of every C&R and every Stipulations with Request for Award. The Board quoted its June 24, 2026 en banc decision in Gaines v. ABM Aviation Inc.: “A workers’ compensation settlement is only enforceable after approval by the Workers’ Compensation Appeals Board.” In approving one, the judge must decide whether it is valid and adequate to protect the worker and the public interest.

This C&R settled far more body parts than the orthopedic reports covered. Silicosis, the Board observed, may have a different injury date, exposure or liability period than the orthopedic injury, should have been evaluated separately and had no medical evidence behind it; other body parts might need other specialists. The record lacked treating reports, benefit printouts, benefit notices and a wage statement. According to the C&R, no temporary disability had been paid, and the Board noted Garcialara still had five years to obtain a full 104 weeks of it, though his injury date under Labor Code section 5412 was not established. Its conclusion about adequacy: “Ultimately, there is no record upon which to determine whether the C&R was adequate.”

What was decided and what goes back to the trial judge

The Board dismissed Republic’s petition to the extent it sought reconsideration and denied it to the extent it sought removal. (The order dates the petition July 21, the facts section July 27.)

Under the October 30 decision, the parties “must create a record on the issues of whether the settlement is adequate; should be enforced; or whether further discovery should take place.” That is also where each side is heard: “At that time, they will have an opportunity to raise any other issues and make any objections.” Whether good cause exists to set the C&R aside, whether $40,000 was adequate and whether further discovery, including on silicosis, is needed were left for that proceeding, and any aggrieved party may seek reconsideration once the judge rules.

Our reading: For a worker, a vacated approval means the settlement is not yet enforceable, and the next step is medical evidence on every body part the release would close, plus the benefit and wage records the Board found missing. For a defendant, a filed proof of service, including service on the worker, comes before any argument that a challenge was late. Our guide to reopening a stipulated award or a Compromise and Release explains what each settlement form closes; our Lopez Lopez analysis covers an employer’s challenge that was also sent back for a hearing.