Opinion
W.C. No. 4-684-982.
February 27, 2009.
FINAL ORDER
The claimant seeks review of an order of Administrative Law Judge Jones (ALJ) dated August 11, 2008, that permitted the respondents to withdraw their general admission of liability and that ordered the claimant to reimburse the respondents amounts paid for temporary total disability benefits and medical benefits. We affirm.
Two hearings were held on a number of issues, including whether the respondents should be permitted to withdraw their admission of liability based on the claimant's fraudulent claim, and whether the claimant was overpaid compensation and benefits. Following the hearing the ALJ entered findings of fact that for the purposes of this order may be summarized as follows. The claimant was employed by the respondent employer since December 2005 as a phlebotomist. On April 20, 2006, she alleged that she sustained injury to her right knee, neck and forehead when she tripped and fell, landing on her knee and striking her forehead on the counter edge. The ALJ found that photographs of the area where the claimant was allegedly injured showed a smooth and round countertop that would not likely have produced the laceration reported by the claimant. The claimant was treated that day by Dr. Reiter, who stated that she had a superficial laceration on her forehead approximately three quarters of an inch in length. Because of the claimant's knee complaints Dr. Reiter restricted her to seated work. The employer offered to accommodate the claimant's restrictions; however, the claimant did not show up for the modified job. The claimant stated to the employer's supervisor, Marta Luger, that she had not been released to work. On May 25, 2006, the claimant again saw Dr. Reiter, this time complaining of increased neck pain. The doctor restricted her from driving. On June 9, 2006 Dr. Reiter approved a modified job offer from the employer pursuant to his restrictions of seated duty only and no driving. On June 8, 2006, the claimant purchased an automobile and several days later the claimant drove to Michigan. The employer attempted to deliver another offer of modified work to the claimant; however, the ALJ found that she "avoided service" of that offer and that it was not delivered.
The respondents conducted video surveillance of the claimant in Michigan, which the ALJ reviewed. She found that the video tapes showed the claimant moving freely with no evidence of her reported torticollis, which is a condition that results in the head being held in an unnatural position due to contraction of the neck muscles. The ALJ found that the surveillance materials showed the claimant suffering from this condition only on the days when she was transported by the respondents to a medical appointment. At other times she was free of the condition. The ALJ also found that the claimant had a lengthy medical history of prior head injuries, but that she did not fully report that history to her medical providers in this claim. She had been treated extensively for torticollis in 1990 after an industrial injury, and had ultimately been determined to be permanently and totally disabled. She settled that claim in 1995 and returned to work in 1998, and she collected social security disability benefits from 1995 until 2002. While being treated for the 1990 claim she sustained a fall while working for a grocery chain and was receiving medical treatment for torticollis resulting from that injury as well. On May 18, 2001, the claimant was involved in a motor vehicle accident, which resulted in a bruise under her eye, and on July 15, 2001, she sustained injuries in another motor vehicle accident, which resulted in her being treated for torticollis until March 20, 2003. While being treated for that injury the claimant was involved in another motor vehicle accident while employed as a phlebotomist and was again treated extensively for torticollis. The claimant did not disclose to her medical providers in that claim that she was also being treated for the same condition resulting from the 2001 claim. The claimant had undergone a Division-sponsored independent medical examination (DIME), performed by Dr. Brunworth, in connection with her 2002 claim. Dr. Brunworth performed an independent medical examination in this claim and reported that the claimant exhibited posture in which her head was bent down and her shoulder elevated. The ALJ credited Dr. Brunworth's testimony that the claimant stated to her that she had been in that posture constantly since her alleged injury of April 2006. The ALJ further credited the opinions of Drs. Brunworth and Reiter that the claimant had consciously misrepresented injuries sustained on April 20, 2006. The ALJ also found that the claimant misrepresented on applications for employment that she had received certain academic degrees, and that she had been untruthful in her explanations for using different names.
The ALJ also found that the claimant's laceration did not occur in the course and scope of her employment with this employer. The hearing officer concluded that the claimant committed fraud in filing this claim for compensation. The ALJ found that the claimant "staged" the accident and falsely represented to her employer and to her medical providers that she had been injured while performing her job duties. These misrepresentations also induced the respondents to file an admission of liability. Based upon her factual findings, the ALJ permitted the respondents to withdraw their admissions of liability. She further ordered the claimant to reimburse the respondents for medical benefits and temporary total disability benefits paid.
The claimant appeals and makes four arguments. First, she argues that the record contains no evidence that she "staged" her accident. She also argues that the ALJ erred in permitting the respondents to retroactively withdraw their admissions and recover benefits and compensation paid. Finally, she argues that the ALJ had no jurisdiction to determine that the claimant had reached maximum medical improvement, and that the ALJ erred in admitting a recorded statement taken from the claimant shortly after her alleged accident. We have reviewed the record and considered the claimant's arguments and we are unpersuaded to set aside or reverse the ALJ's order.
I.
The claimant first argues that the record contains no evidence that she "staged" her compensable accident. The claimant asserts therefore that the ALJ's order concluding that she committed fraud must be set aside as unsupported by substantial evidence in the record. However, in our view, the ALJ could reasonably infer from the circumstantial evidence that there was present a pattern of misrepresentation and deceit from which the ALJ could also draw the inference that the alleged compensable injury was the product of the claimant's fraudulent actions. Therefore, we are unpersuaded by the absence of direct evidence that the claim was "staged" that the ALJ's order should be set aside.
The nature and scope of our review is controlled by § 8-43-301(8), C.R.S. 2008. That statute provides that the Panel may correct, set aside, or remand the ALJ's order, but only on the grounds that the findings of fact are not sufficient to permit review, that conflicts in the evidence are not resolved, that the findings of fact are not supported by the evidence, that the findings of fact do not support the order, or that the order is not supported by the applicable law. Under the statutory constraints to our review function, we have no authority to reweigh the facts with a view toward drawing inferences different from those reached by the ALJ. Scchrieber v. Brown Root, Inc., 888 P.2d 274 (Colo.App. 1993).
Because these questions are factual in nature, we are bound by the ALJ's determinations in this regard if they are supported by substantial evidence in the record. § 8-43-304(8), C.R.S. 2008; City of Durango v. Dunagan, 939 P.2d 496 (Colo.App. 1997). Substantial evidence is probative evidence which would warrant a reasonable belief in the existence of facts supporting a particular finding, without regard to the existence of contradictory testimony or contrary inferences. See F.R. Orr Construction v. Rinta, 717 P.2d 965 (Colo.App. 1985). The substantial evidence standard requires that we view evidence in the light most favorable to the prevailing party, and defer to the ALJ's assessment of the sufficiency and probative weight of the evidence. Thus, the scope of our review is "exceedingly narrow." Metro Moving Storage Co. v. Gussert, 914 P.2d 411 (Colo.App. 2003). This narrow standard of review also requires that we defer to the ALJ's resolution of conflicts in the evidence, credibility determinations, and plausible inferences drawn from the record. Wilson v. Industrial Claim Appeals Office, 81 P.3d 1117 (Colo.App. 2003). Resolution of the credibility of witnesses is the sole prerogative of the ALJ as fact finder. Prestige Homes, Inc. v. Legouffe, 658 P.2d 850 (Colo 1983). We may only substitute our judgment for that of the ALJ regarding credibility matters where there is such hard, certain evidence contradicting the ALJ's determination so that it would be error as a matter of law. See Halliburton Services v. Miller, 720 P.2d 571 (Colo. 1986). In our view this is not such a case.
Here, the ALJ's factual findings are supported by substantial evidence. It is certainly true that no one observed the claimant "staging" the alleged accident and that therefore the ALJ was relegated to circumstantial evidence in weighing the factual record to determine whether the respondents carried their burden of proof. However, here the respondents, by showing the circumstances attendant to the claimant's alleged injury and claim for compensation, established to the satisfaction of the ALJ that the claimant's injury had not been a genuine one. In this regard, we have recited at some length the ALJ's factual findings regarding the circumstances of the alleged accident, including photographs of the physical surroundings where she was injured, regarding the claimant's medical treatment, her history of prior accidents, and the course of surveillance following the alleged injury. It is unnecessary for us to reiterate those findings here, although we note that the claimant has not contested their authenticity but merely their import. In any event, the ALJ's lengthy factual findings derived from the facts and circumstances showed with reasonable probability that the claimant had staged the accident. Such circumstantial evidence may constitute substantial evidence supporting the fact finder's determination. Electric Mutual Liability Insurance Co. v. Industrial Commission, 154 Colo. 491, 391 P.2d 677 (1964); Industrial Commission v. Havens, 136 Colo. 111, 314 P.2d 698 (1957). The ALJ's determination that the respondents met their burden to prove that the claim was fraudulent is supported by substantial evidence and reasonable inferences from the record and is, therefore, binding on appeal. Dover Elevator Co. v. Industrial Claim Appeals Office, 961 P.2d 1141 (Colo.App. 1998); See Lantern Inn v. Industrial Commission, 624 P.2d 929 (Colo.App. 1981) (where there is no direct evidence the issue on review is whether the ALJ's inferences were permissible ones in light of the totality of the circumstances); Garman v. Regis Hair Stylists, W.C. No. 3-718-863 (April 21, 1997).
II.
The claimant also contends that the ALJ erred in permitting the respondents to retroactively withdraw their admissions. We disagree.
The claimant notes that Vargo v. Industrial Commision, 626 P.2d 1164 (Colo.App. 1981) and Kraus v. Artcraft Sign Co., 710 P.2d 480 (Colo. 1985) both held that an admission of liability could only be retroactively withdrawn where the claimant supplied materially false information that induced the respondents to file an admission. The claimant argues that neither case applies here because the injury in this case "actually occurred" and there was an identifiable mechanism that caused the claimant's injuries to her forehead and knee. However, we agree with the respondents' argument that the ALJ concluded otherwise. Hence, in permitting the respondents to withdraw all admissions of liability based upon the claimant's having "staged" the compensable accident, we understand the ALJ to have ruled that no such accident occurred. Contrary to the claimant's argument, this is not a case in which the compensable accident admittedly occurred and the dispute centers around the extent of the claimant's injuries. Rather, the ALJ ruled that no accident happened.
Contrary to the claimant's arguments, Vargo continues to articulate the applicable legal standard and applies to the facts of this case. In Vargo, the claimant made fraudulent representations concerning his condition prior to the industrial injury, and these representations induced the respondents to file a general admission of liability for temporary disability and medical benefits. When the respondents discovered the fraudulent representations, they filed a "denial of liability," ceased payment of medical benefits, but continued temporary disability benefits until the claimant returned to work. In these circumstances, the court upheld an order of the Industrial Commission which declared the admission of liability "void from the date of filing." The court in Vargo observed that no provision of the Act authorizes "retroactive withdrawals of an admission of liability." Nevertheless, the court stated that the "beneficial intent" of the Act is predicated on claimants providing accurate information. Therefore, the court held that where the claimant supplies "materially false information upon which his employer and its insurer relied in filing an admission of liability, the referee is justified in declaring the admission void ab initio." Id. at 1166.
In Stroman v. Southway Services, Inc., W.C. No. 4-366-989 (August 31, 1999) we interpreted Vargo and subsequent statutory amendments to permit retroactive withdrawal of admissions. Similarly, we construed those authorities as permitting the ALJ to order repayment of compensation and benefits, including medical benefits. In Stroman we stated the following:
Although the Vargo decision does not expressly state that a claimant may be ordered to repay the insurer for benefits obtained prior to withdrawal of the fraudulently induced admission, the court's reference to "retroactive withdrawal" of the admission indicates that repayment is the intended remedy. Cf. HLJ Management Group, Inc. v. Kim, 804 P.2d 250 (Colo.App. 1990) (holding that admission may not be withdrawn retroactively unless procured by fraud, but permitting prospective withdrawal of an erroneous admission). Indeed, the court in Lewis v. Scientific Supply Co., Inc., supra, went to substantial effort to distinguish Vargo on the grounds that Vargo, unlike Lewis, involved facts where there was no final admission of liability nor any formal adjudication of the respondents' liability. Although the Lewis court stated that ALJs lack "inherent authority" to remedy fraud, the court reached this ruling in the context of the reopening statute as it existed prior to 1997, and without explicitly overruling Vargo. Thus, when read together, Vargo and Lewis stand for the proposition that the authority of an ALJ to remedy fraud is limited to the express provisions of the statute, except where the fraud occurs prior to entry of a final admission or closure of the claim by way of an order. In circumstances where no final adjudication has occurred, "retroactive withdrawal" is a permissible remedy. Cf. Johnson v. Industrial Commission, 761 P.2d 1140 (Colo.App. 1988) (holding that equitable doctrines of waiver and estoppel may be invoked to prohibit exercise of statutory right to an offset).
Here, the circumstances are identical to those present in Vargo. The respondents filed a general admission of liability which was induced by the claimant's fraudulent representations. As a result of the fraud, the respondents paid temporary disability and medical benefits. Under these circumstances, we conclude that Vargo authorizes the respondents "retroactively to withdraw" their admission of liability, and the remedy in these circumstances is entry of an order requiring the claimant to repay all fraudulently obtained benefits, including medical benefits paid to third parties.
In our view, the facts of this case are closely analogous to those of Stroman, and we are unpersuaded that our reasoning in that order was erroneous. Accordingly, we adhere to the result reached there and again conclude that the ALJ did not err in ordering the withdrawal of the respondents' admissions and repayment of compensation and medical benefits.
The claimant also argues that § 8-43-304(2), C.R.S. 2008 provides the sole statutory authority for recovery of benefits and compensation paid in a fraudulent claim, and that therefore the ALJ erred in ordering the claimant to repay the respondents here. Section 8-43-304(2) provides that "[a]n insurer . . . may take a credit or offset of previously paid workers' compensation benefits or payments against any further workers' compensation benefits or payments due a worker when the worker admits to having obtained the previously paid benefits or payments through fraud, or a civil judgment or criminal conviction is entered against the worker for having obtained the previously paid benefits through fraud."
We disagree with the claimant's argument that this statute, which was enacted in 1994, effectively overruled Vargo and is the sole statutory authorization for recovering money paid because of the claimant's fraud. The plain meaning of § 8-43-304(2) makes it applicable where an insurer owes "further workers' compensation benefits or payments" and thus the statute is inapplicable where the claimant defrauded the employer at the inception of the claim and all admissions of liability are void ab initio. In our view the intent of § 8-43-304(2) was to provide a mechanism for the insurer to unilaterally offset payments made either where there is an admission of fraud or a conviction. Under those limited circumstances the insurer is apparently not required by the statute to obtain an order permitting the offset. We perceive nothing in the language of § 8-43-304(2) indicating that the legislature intended the respondents' only recourse to be an offset against future payments in cases where the claim was fraudulently filed and there will therefore be no future payments.
Similarly, we reject the claimant's related argument that § 8-43-402, C.R.S. 2008 precludes the ALJ from permitting retroactive withdrawal of the admission in cases of fraud. Section 8-43-402 provides that any person making a false statement material to a claim in order to obtain an order, benefit, award, compensation, or payment commits a class 5 felony and "shall forfeit all right to compensation under said articles upon conviction of such offense." Again, we discern no legislative intent to overrule the preexisting case law pertinent to the withdrawal of admissions induced by fraud.
III.
The claimant also argues that, although the respondents put on evidence that the claimant misrepresented the extent of her injuries, the record supports the occurrence of the compensable accident. Therefore, the claimant argues that the respondents were bound by the authorized treating physician's determination of maximum medical improvement and permanent impairment, and that the ALJ had no jurisdiction to resolve those matters absent a DIME. However, this argument is dependent for its force on our having ruled that the ALJ erred in permitting the respondents to retroactively withdraw their admissions. Since, as previously noted, we are unpersuaded to set aside that portion of the ALJ's order, the effect of the ALJ's order is that no compensable accident or injury occurred. Therefore, the questions of maximum medical improvement and the claimant's permanent medical impairment are not relevant to the proceedings. It is therefore unnecessary for us to further address this contention of error.
IV.
Finally, the claimant argues that the ALJ erred in admitting into evidence a statement taken from the claimant shortly after the occurrence of the alleged accident. At the hearing held on June 9, 2008, counsel for the respondents called as a witness the claims adjuster responsible for processing the claim. The adjuster, Monica Westlund, testified that she had taken and recorded a statement from the claimant shortly after the alleged accident, in which the claimant stated that she had had only one previous injury to her head. Tr. (6/9/08) at 10-11. The claimant's attorney objected to admission of the transcript of the claimant's statement and the ALJ deferred ruling on the objection. In her order the ALJ overruled the claimant's objection and admitted the document.
The claimant relies upon § 13-21-301(1)(c), C.R.S. 2008 for support for her argument that the ALJ erred in admitting the recorded statement. The relevant portion of that statute provides that:
(1) If a person is injured as a result of an occurrence which might give rise to liability and said person is a patient under the care of a practitioner of the healing arts or is hospitalized, no person or agent of any person whose interest is adverse to the injured party shall:
(c) Within fifteen days after the date of the occurrence causing the injury, obtain or attempt to obtain any statement, either written, oral, recorded, or otherwise, from the injured patient for use in negotiating a settlement or obtaining a release except as provided by the Colorado rules of civil procedure.
This provision has been interpreted as precluding admission into evidence statements taken in violation of the section and sought to be used for impeachment purposes. Safeway Stores, Inc. v. Smith, 658 P.2d 255 (Colo. 1983); Rowland v. Ditlow, 653 P.2d 61 (Colo.App. 1982).
We agree with the ALJ that this provision has no application under the Workers' Compensation Act or in proceedings pursuant to the Act. The Colorado Court of Appeals has stated that "[t]he Workers' Compensation Act contains explicit provisions governing both the admission of evidence in workers' compensation proceedings . . . and judicial review of administrative orders under the Act. . . . The administrative and judicial review provisions in the Act are complete, definitive and organic, without the `need of supplementation' from other legislative acts. . . ." Gardner v. Friend, 849 P.2d 817, 818 (Colo.App. 1992).
In any event, we perceive no error in the ALJ's admission of the recorded statement for purposes of impeachment of the claimant's credibility. When construing a statute we must attempt to give effect to the legislative intent underlying the provision. In order to carry out that responsibility we must first look to the statutory language itself, and give the words and phrases used by the legislature their commonly accepted and understood meanings. PDM Molding, Inc. v. Stanberg, 898 P.2d 545 (Colo. 1995). As the court of appeals has noted: "If the statutory language is unambiguous, there is no need to resort to interpretive rules of statutory construction. Therefore, if courts can give effect to the ordinary meaning of the words adopted by the General Assembly, the statute should be construed as written, because it may be presumed that the General Assembly meant what it clearly said." Spracklin v. Industrial Claim Appeals Office, 66 P.3d 176, 177 (Colo.App. 2002).
Section 13-21-301(1)(c) expressly applies to statements taken "for use in negotiating a settlement" or obtaining a release. Here, neither party adduced testimony from Westlund regarding the purpose of the interview the day following the alleged injury. Although from Westlund's testimony it appears that the statement was taken pursuant to her responsibility as the claims adjuster to investigate the claim, the ALJ entered no factual findings concerning that question. See Tr. (6/9/08) at 32-33. In any event, there is no suggestion that the statement was taken either to procure a release from the claimant or for use in attempting to settle the claim. Accordingly, in our view, the record lacks evidence that the statement was taken in violation of § 13-21-301(1)(c) and therefore the ALJ did not err in admitting the exhibit.
IT IS THEREFORE ORDERED that the ALJ's order dated August 11, 2008, is affirmed.
INDUSTRIAL CLAIM APPEALS PANEL
______________________________ Curt Kriksciun
______________________________ Thomas Schrant
MARY M WEST, ROYAL OAK, MI, (Claimant).
LAB CORP. OF AMERICA, ENGLEWOOD, CO, (Employer).
BROADSPIRE SERVICES, INC., Attn: MS MONICA WESTLUND, DENVER, CO, (Insurer).
THE FRICKEY LAW FIRM, Attn: JANET L FRICKEY, ESQ., LAKEWOOD, CO, (For Claimant)
SLEVIN DOTSON, P.C., Attn: CINDY SLEVIN, ESQ., GREENWOOD VILLAGE, CO, (For Respondents).