Guzman Ayala: The Board Removed a Worker-Blame Finding but Still Denied a Delay Penalty

A missing settlement check can leave an injured worker waiting for money already promised. When the check went to an old address, the question is not simply who made a mistake: A penalty under Labor Code section 5814 depends on whether the delay was unreasonable in the circumstances.

In Guzman Ayala v. Lineage Logistics Services LLC, the WCAB denied a penalty after examining the initial payment, address error and replacement efforts. It also removed a finding that the worker contributed to the delay because the evidence did not establish that point. Granting reconsideration and replacing the order therefore did not result in a penalty award. Guzman Ayala explains the distinction and the substituted findings follow.

The new address appeared on the settlement

Ricardo Guzman Ayala’s case settled through a $42,500 Compromise and Release approved on April 2, 2025. The first page struck out his former street address and supplied another address by hand. The worker and his attorney signed before defense counsel signed.

The agreement conditionally waived penalties and interest if payment was made within 30 days of receipt of the approval order. The check went to the old address, which remained the official address of record. After counsel reported nonreceipt, the parties exchanged messages about the correct address, an affidavit and reissuing payment. Guzman Ayala recounts the settlement and communications.

The opinion describes different payment events: It quotes the judge’s report stating that payment was ultimately made on May 16, while its factual background records counsel’s May 20 confirmation that the check had been received. Those statements should be kept separate when comparing a check’s issue, replacement and receipt history. The quoted report appears in Guzman Ayala.

The payment term was one part of the reasonableness inquiry

Section 5814 addresses compensation that has been unreasonably delayed or refused. The panel applied Ramirez v. Drive Financial Services, 73 Cal.Comp.Cases 1324, 1328–1330 (2008) (en banc), which directs attention to the full circumstances rather than an automatic penalty for missing a payment term.

Relevant factors included the amount and length of the delay, whether an inadvertent mistake was promptly corrected, the history of payments, administrative practices, any applicable payment requirement, the worker’s conduct and the effect on the worker. The panel rejected the worker’s proposed burden-shifting approach and applied the discretionary, fact-specific inquiry. Guzman Ayala sets out the statute and the factors continue on the following page.

The replacement efforts supported denial of a penalty

The Board recognized that defense counsel had signed after the handwritten address change. It considered the defendant likely bound by that settlement term. But the section 5814 inquiry still required more than identifying a contractual address or payment requirement.

The panel viewed the wrong-address mailing as an inadvertent mistake. Once advised of nonreceipt, defense counsel investigated and worked with the worker’s attorney to reissue payment. The Board considered the replacement procedure, including the affidavit, in light of the check’s amount. It also noted timely attorney-fee payment and the absence of a history of delayed payments.

The worker supplied no evidence of the delay’s effects beyond the missed settlement timetable. These circumstances supported the finding that the delay was not unreasonable. Guzman Ayala explains the correction efforts; the worker-impact discussion appears on the following page.

The record did not justify blaming the worker

The Board disagreed with the judge’s finding that the worker’s delay in filing a formal address change contributed to the payment delay. Without testimony from the adjuster, the record did not show whether an earlier official update would have changed the check’s timing or how the handwritten change should have been handled.

The panel removed that finding rather than treating the worker’s conduct as determinative. It still concluded that the full record did not support a section 5814 penalty. Guzman Ayala gives that reasoning. The substituted findings and order denied the worker’s June 19, 2025 petition.

Document the missing payment and what it caused

This January 30, 2026 WCAB panel decision makes two evidence questions concrete: What the administrator did after learning of nonreceipt, and how the delay affected the injured worker. Neither question is answered by the check date alone.

Our guide to documenting the effects of a delayed payment develops the second task. For arranging replacement of returned mail, our separate settlement-check guide addresses the issue, mailing, return and reissue history.