On July 20, 2020 the First District Court of Appeals issued an opinion in the case LSG Sky Chefs, Inc. / Liberty Mutual Insurance Company v. Santaella, Case. No. 1D19-4073, affirming the Judge of Compensation Claims’ order denying the Employer/Carrier (E/C) misrepresentation defense. The pertinent Florida statute in dispute is statute 440.105(4)(b)1-3., which states it is unlawful for any person to make, or cause to be made, any false, fraudulent, incomplete, or misleading oral or written statement for the purpose of securing compensation.
If the defense is established by a preponderance of the evidence the claimant is prohibited from obtaining workers’ compensation benefits. The misrepresentation does not have to be a material issue to the claim but must be made for the goal of securing workers’ compensation benefits. The misrepresentation defense was asserted on two fronts in this case. The Employer claimed misrepresentations as to the claimant’s post-injury earnings and her medical condition. The issue discussed further is the alleged post-earning misrepresentations, which if proved would have caused Claimant to forfeit any benefits.
A few of the areas of emphasis in the case are whether or not she was “able to earn wages” post-injury, whether she received wages as a result of services performed, and importantly whether or not she had the intent to misrepresent her financial situation. As to the issue of earning wages, the Claimant was adamant that she had no earnings. Throughout several depositions, the Claimant informed the Employer that her husband was a delivery driver and she sometimes accompanied him on the route, but he did all the work and was therefore paid for the work performed.
However, as the checks were payable directly to the Claimant from the employer who she had an independent contract with, the E/C asserted that she was earning wages and alleged misrepresentation. The alleged misleading statements were contained in the workers’ compensation earnings statements in which she listed her earnings as zero. The Claimant alleged since she was not doing the physical work it was not technically her earnings. The District Court of Appeals agreed with the JCC on the fact that since the Claimant was forthcoming in numerous depositions that she received the paychecks for her husband’s labor she did not “knowingly or intentionally give any false statements to obtain workers’ compensation benefits.”
The Court agreed that while the Claimant may have made misrepresentations to the IRS and the delivery company she did not intentionally misrepresent the earnings information as she was forthcoming in multiple depositions and therefore did not knowingly make fraudulent statements in order to obtain benefits. The Court affirmed the JCC’s finding that the Claimant did not intentionally make any misleading statements in an attempt to obtain workers’ compensation benefits. The finding of intent is imperative and, in this case, a DCA upheld the JCC’s finding as the E/C offered little in the way of challenging the lower Court’s finding and competent, substantial evidence supported the ruling.
A practice pointer for those on the side of the Employer / Carrier is to first ensure you have undoubtedly established the first step in defending the claim under a misrepresentation defense. The misrepresentation defense requires a showing that the claimant knowingly made a fraudulent or misleading oral or written statement. It is not enough to merely show contradicting written or oral statements, the E/C must make a showing that the claimant knowingly made misleading or fraudulent statements. This means that you cannot rely solely on contradictory surveillance video but must have a showing of statements that are in direct contradiction in scope and time to support the misleading statements. The First DCA in Diejuste v. J. Dodd Plumbing clarifies that surveillance can support a misrepresentation defense however the actual oral or written statements must serve as the foundation to ban benefits. Diejuste v. J. Dodd Plumbing 3 So.3d 1275 (1st DCA 2009). The relationship between the claimant’s statements and misleading non-verbal evidence is seen in Lucas v. ADT Security, the patient’s statements as to her level of pain were not consistent with her non-verbal physical activity during the exam with the treating doctor. Lucas v. ADT Security, 72 So.3d 270 (1st DCA 2011). The doctor’s testimony as to her behavior supported the misrepresentation defense and contradicted the claimant’s misleading oral statements. Id.
Once the initial question of knowingly providing fraudulent statements is met then the second inquiry as to whether the statement was made for the purpose of obtaining benefits can be determined. This defense resulting in banning benefits is an all or nothing type of defense so the E/C must be prepared at each step of the inquiry.
Presented (on behalf of the Firm) by