Court of Appeal rules on fraud conviction and still allows employee to collect benefits

This is a Certified case of the court of appeal

This is a very significant case for workers’ compensation principles.

The applicant injured his hand at work. The injury was admitted. The applicant was evaluated by a physician who indicated the applicant would not allow the doctor to perform grip or pinch strength tests on his hand.

The applicant had a psychiatric component and was on opiates. The applicant indicated that he could not use the hand.

The carrier obtained video surveillance. The surveillance saw him removing his sling after doctor visits and using the injured hand. He lifted a washing machine into the back of his car.

The physician reviewed the video and still awarded a whole person impairment.

The applicant was prosecuted for workers’ compensation fraud and was convicted and paid restitution.

The Workers’ Compensation Judge (WCJ) gave the applicant a 70 per cent award in spite of the fraud. The Workers’ Compensation Appeals Board (WCAB) agreed with the WCJ.

The court of appeal reviewed the fraud statutes 1871.4 and 1871.5. They also reviewed the Tensfeldt case. Entitlement to receive benefits after a conviction will require an industrial injury, medical evidence supporting an award not stemming from the fraud, and the claimant’s credibility is not destroyed. That was the case here so the award stood.


The Court Of Appeal indicates who must bear the loss for a stolen check

This is a very significant case for workers’ compensation principles.

This is a published decision of the Court of Appeal. The applicant was employed as a laborer when he injured his back. The applicant authorized his attorney to sign legal documents on his behalf. The applicant moved several times during the pendency of the claim.

The applicant attorney settled the claim and signed the Compromise and Release (C&R) on behalf of applicant. The C&R had an incorrect address for the applicant. The settlement was approved with the incorrect address.

The employer mailed a check to the applicant to the incorrect address listed on the C&R. The check was fraudulently endorsed and cashed at a check cashing store. The applicant never received the check.

The case went to Trial before a Workers’ Compensation Judge (WCJ) on the issue of nonpayment. The WCJ ordered the defendant to issue a new payment. The defendant filed a Petition for Reconsideration which was denied.

The Appellate Court looked at the Uniform Commercial Code and determined the payee never became the holder of the check. Therefore, the issuer of the check remains liable to the payee. The employer had to issue a new check to the applicant.


Exaggerated Complaints Can Be Viewed As Fraud

In a case of first impression a California appellate court has ruled that when a worker’s compensation applicant exaggerates about the level of pain the applicant is experiencing and knows this statement to be false, the applicant can be prosecuted for fraud.

The applicant sustained a work related injury to his back while working as a truck driver. The applicant received an award which included lifetime medical care. Seventeen year after the injury the applicant asked for in-home attendant care based on the request of a treating chiropractor. The carrier provided care and his girlfriend was designated his care giver.

Defendant eventually arranged an orthopedic exam, applicant showed up for the exam using a walker and told the physician he was experiencing severe pain and could not care for himself. The doctor could find no objective basis for the amount of pain the applicant was claiming. The carrier ceased paying for the in-home attendant care. The applicant asked for a hearing before the Worker’s Compensation Appeals Board (WCAB).

At the hearing the applicant described his level of pain and level of activity.  The girlfriend care giver described the level of care she provided with the use of a daily log she maintained.  Apparently the evidence showed significant discrepancies in the testimony.

The applicant was prosecuted for fraud under insurance Code section 1871.4  (a)(1). The applicant contended he did not violate this statute because his complaints about the level of pain were mere statements of opinion, rather than fact. The applicant contended that a conviction of fraud required misstatements or knowingly false statements of fact and not opinion.

The appellate court disagreed with the applicant. The court indicated that even if all the applicant did was exaggerate his complaints this was sufficient for a conviction.  The applicant was also prosecuted for perjury. The prosecution alleged the applicant made 13 false statements at the WCAB hearing. The applicant defended by stating that two of the statements were matters of opinion which could not support a perjury conviction. The appellate court disagreed with the applicant. The court stated opinion testimony can be perjury if the applicant does not honestly hold the opinion to which he testifies. The court stated “ the distinction between fact and opinion is one without a difference. Even if the appellant’s statements to the insurance company, Dr. Ovadia and the WCAB were statements of opinion rather than fact, the jury impliedly determined that the statements were false because appellant did not honestly hold those opinions.”


Lottery Agent is Caught “Going And Coming”

A “Lottery agent*’ filed a workers’ compensation claim in an attempt to hit the compensation jackpot. As many of our own attempts to win the lottery have failed, so did the applicant’s attempt in this case fail.

The “lottery agent” carried the status of a peace officer. His job assignment included field work fifty percent of the time. He was provided a state-owned vehicle. The applicant was required to work after normal business hours, including weekends and holidays.

One morning, he was leaving his home and slipped on an icy sidewalk.  He was on his way to work, but had not entered his state-owned vehicle. He was injured and filed his claim. The State contended this injury did not arise out of the employment and was not in the course of employment.  “Ordinarily an employee cannot obtain workers’ compensation for an injury suffered while going to or coming from the workplace (the “going and coming” rule), because the employment relationship is deemed .  suspended from the time the employee leaves work until the time the employee resumes work”.

The court cited the numerous exceptions to the “going and coming” rule, including the exception for driving a company vehicle to work and being injured in that commute. “In every case where this exception has been held to apply, the employee was actually driving the employer-furnished vehicle when he or she sustained injury. To stretch this exception so far as to include cases such as the present case, would make it almost infinitely elastic. If an employee has already begun his commute in an employer-supplied vehicle when he steps of the door of his house, he might just as well be said to have begun it when he steps out of bed in the morning. Both conclusions are absurd, and the second is not more so than the first.”

The court analyzed the rationale for the “ employer-supplied vehicle” exception to the “going and coming rule”. They indicated that me “special mission” exception was equally inapplicable. The court did seem to imply that if an officer were wearing a uniform that may make a difference.  In this case the agent, was wearing a gun and a pager, but was not in uniform. They concluded that since the officer was not in uniform, he was not covered under another exception to the “going ‘ and coming” rule.

It is refreshing to see that the court is willing to draw a line where compensability can begin.


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