Opinion
No. 1D19-4073
07-20-2020
LSG SKY CHEFS, INC./LIBERTY MUTUAL INSURANCE COMPANY, Appellants, v. Gertrudis SANTAELLA, Appellee.
Kimberly J. Fernandes of Kelley Kronenberg, P.A., Tallahassee, for Appellants. Kimberly A. Hill of Law Offices of Anidjar & Levine, P.A., Fort Lauderdale, for Appellee.
Kimberly J. Fernandes of Kelley Kronenberg, P.A., Tallahassee, for Appellants.
Kimberly A. Hill of Law Offices of Anidjar & Levine, P.A., Fort Lauderdale, for Appellee.
Per Curiam.
The Employer/Carrier (E/C) in this workers’ compensation case appeals the Judge of Compensation Claims’ (JCC's) order rejecting their misrepresentation defenses and awarding Claimant a second psychological opinion evaluation. In the order, the JCC found that the E/C did not prove Claimant violated section 440.105(4)(b), Florida Statutes (2015), by knowingly and intentionally making, or causing to be made, any false, fraudulent, incomplete, or misleading oral or written fraudulent statement for the purposes of obtaining benefits. The JCC also found that the medical evidence supported the need for the psychological evaluation and that the E/C waived the right to challenge its medical necessity. Because competent, substantial evidence (CSE) supports the JCC's finding of medical necessity—and the E/C did not directly challenge the waiver ruling in this appeal—we affirm this issue without further comment. We also affirm the JCC's rejection of the misrepresentation defenses but write further to explain why.
Background
In September 2015, Claimant sustained a compensable workplace injury to her low back, and the E/C provided medical care, including back surgery. In March and May of 2019, Claimant filed petitions for benefits seeking additional medical care, including a second-opinion psychological consultation for a spinal cord stimulator. The E/C initially denied that Claimant was entitled to the requested psychological consultation, but later asserted that Claimant forfeited any and all benefits by mispresenting her post-injury earnings and medical condition.
Statutory Authority for Misrepresentation Defense
Under section 440.105(4)(b) 1.-3., Florida Statutes, 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. An employee who knowingly or intentionally violates section 440.105(4)(b) 1.-3. is not entitled to workers’ compensation benefits. See § 440.09(4)(a), Fla. Stat. (2015).
Under Florida Administrative Code Rule 60Q-6.113(2), a fraud or misrepresentation defense based on sections 440.09(4)(a) and 440.105 "must be raised [in the pretrial stipulation] with specificity, detailing the conduct giving rise to the defense." To establish the defense, the employer or carrier must prove violations of section 440.105(4)(b) by a preponderance of evidence. See Singletary v. Yoder's Ameritrust Ins. Corp ., 871 So. 2d 289, 291 (Fla. 1st DCA 2004). The JCC is then "required to determine whether [c]laimant knowingly or intentionally made any false, fraudulent, incomplete, or misleading statement, whether oral or written, for the purpose of obtaining workers’ compensation benefits, or in support of his claim for benefits." Village of N. Palm Beach v. McKale , 911 So. 2d 1282, 1283 (Fla. 1st DCA 2005) (citing § 440.105(4)(b) 2., Fla. Stat. (1999)). The false, fraudulent, or misleading statement does not need to be material to the claim; however, it must be made for the purpose of obtaining benefits. Id . ; see also Matrix Emp. Leasing v. Hernandez , 975 So. 2d 1217, 1219 (Fla. 1st DCA 2008).
Alleged Misrepresentations Regarding Post-Injury Earnings
The E/C asserted that Claimant misrepresented her postinjury earnings when she claimed and received temporary partial disability (TPD) benefits under section 440.15(4), Florida Statutes (2015). When deposed by the E/C in May 2018, Claimant testified that her husband began a job delivering car parts for ADL Delivery in November 2017, soon after her back surgery. She stated that he does all the work but admitted that the paychecks from this employment are issued in her name. She claimed this was because her husband does not have a bank account and declined to explain further. She acknowledged that she often rides with him when he works and that she sometimes does the paperwork while sitting in the car.
In a second deposition in August 2018, Claimant stated again that she receives paychecks from ADL for the deliveries performed by her husband. She indicated that she accompanies him most of the time but denied ever getting out of the car during deliveries. At a September 2018 merit hearing held on a prior claim, the E/C challenged Claimant's credibility based on her ADL employment. Consistent with her previous deposition testimony, Claimant testified that checks are made payable to her, but her husband performed the work. At one point, Claimant stated that she applied for the position because the company needed female drivers. When confronted with her deposition testimony that she applied for the job because her husband does not have a bank account, Claimant stated that this was also true.
In her third deposition in May 2019, Claimant confirmed that she was still receiving paychecks from ADL and that she only rode in the car while her husband made deliveries. She testified further that she had reported these earnings to the IRS. Her 2017 and 2018 federal tax returns showed the ADL payments as her income from work as a self-employed driver. An ADL representative subsequently produced Claimant's payroll and personnel records as well as her signed independent contractor driver agreement, driving history, automobile insurance declaration, and W-9 form. By contrast, ADL had no record of Claimant's husband's employment.
As evidence that Claimant misrepresented her post-injury earnings to obtain indemnity benefits, the E/C relied on two DWC-19 Employee Earnings Statement forms. The first form, signed by Claimant in October 2018, listed no earnings for the month of September and included a handwritten explanation that "Claimant does not receive income from any other source. Any checks issued to claimant's name are for work done and performed by claimant's husband." In January 2019, Claimant signed a similar form with the same information for the time period of October 2018 through December 2018.
At the final hearing, Claimant testified that she did not knowingly or intentionally give any false statements to obtain workers’ compensation benefits when she completed the DWC-19 forms. She explained that she did not list the ADL payments as earnings because her husband was doing the work. She admitted to testifying in May 2018 that she sometimes did paperwork in the car, but stated she stopped doing this because the paperwork was no longer required. On cross-examination, she conceded that the company was looking for both male and female drivers at the time she applied.
Alleged Misrepresentations Regarding Medical Condition
In addition to the alleged misrepresentations in the DWC-19 forms, the E/C argued that surveillance videos established that Claimant misrepresented her medical condition to her doctors and in her deposition. According to the E/C, Dr. Hodor and Dr. McCarthy both testified that the surveillance video showed Claimant engaging in activities beyond what was recommended and what she represented during treatment.
Although the E/C also argued that Claimant misrepresented her medical condition in her own deposition testimony, they specified only the May 2019 deposition in the pretrial stipulation. More specifically, the E/C contended that Claimant testified in May 2019 that "she cannot walk, climb stairs, dress, bathe, or tie shoes without support," but that the surveillance revealed Claimant "walking, ascending into a pickup truck, and hinged at 90 degrees at the waist without support and with no distress."
Final Order
After observing Claimant's demeanor "before, during and after her live testimony," the JCC found Claimant "to be a credible witness, but a remarkably poor historian." The JCC also found her "to be sincere and that she testified to the best of her capacity."
The JCC concluded that Claimant did not intentionally misrepresent her post-injury earnings. In reaching this conclusion, the JCC accepted Claimant's testimony that she believes the ADL income is for her husband's labor, not her own. In addition, the JCC found that (1) Claimant had not performed labor sufficient to meet the definition of income; (2) the surveillance videos supported her testimony that the husband performs the duties of the delivery job and she does not; and (3) Claimant disclosed this unusual employment situation in her deposition before completing the DWC-19 forms.
The JCC also concluded that Claimant had not misrepresented her medical condition. Specifically, the JCC found that Dr. Hodor and Dr. McCarthy both testified that Claimant's activities, as shown in the surveillance videos, "were not inconsistent with her diagnosis of failed back syndrome" despite the fact that "she appeared to be engaging in activities over the levels recommended by [these] physicians." Although the JCC described Claimant's deposition testimony as "equivocal and often confusing," she determined that it was "insufficient to show misrepresentation ... particularly as the video surveillance was not close in time to [Claimant's] depositions."
Discussion
A JCC's ruling on a fraud or misrepresentation defense is reviewed for CSE, and the factual findings will be upheld if any such evidence supports the JCC's decision, regardless of whether "other persuasive evidence, if accepted by the JCC, might have supported a contrary ruling." Pinnacle Benefits, Inc., v. Alby , 913 So. 2d 756, 757 (Fla. 1st DCA 2005) ; see also Paulson v. Dixie Cty. Emerg. Med. Servs ., 936 So. 2d 1109, 1110 (Fla. 1st DCA 2006). But to the extent the ruling involves the JCC's interpretation and application of a statute, it is a question of law subject to the de novo standard of review. See, e.g. , Lanham v. Dep't of Envtl. Prot. , 868 So. 2d 561, 562 (Fla. 1st DCA 2004) ; Hernandez , 975 So. 2d at 1218 (holding JCC's interpretation of fraud statutes is reviewed de novo).
I
On appeal, the E/C argues that the JCC erred when she found Claimant did not misrepresent her post-injury earnings because she did not actually earn the ADL payments. In support, the E/C relies on case law holding that the definition of "wages" under section 440.02(28), Florida Statutes, limits the calculation of a claimant's pre-injury average weekly wage (AWW) to income reported for federal tax purposes. See Fast Tract Framing, Inc. v. Caraballo , 994 So. 2d 355 (Fla. 1st DCA 2008). According to the E/C, if such reported income constitutes "wages" in the determination of the pre-injury AWW, the corollary must also be true: income reported for federal tax purposes constitutes postinjury wages (earnings).
Under section 440.15(4)(a), Claimant's entitlement to TPD benefits is calculated by comparing her AWW to "the salary, wages, and other remuneration" she "is able to earn postinjury." Furthermore, "[t]he amount determined to be the salary, wages, and other remuneration the employee is able to earn shall in no case be less than the sum actually being earned by the employee, including earnings from sheltered employment. " Id . (emphasis added). In deciding Claimant had no post-injury earnings, the JCC looked to the Merriam-Webster Dictionary, which defines "earnings," in part, as "gain for the performance of service or work, and to acquire as a result of effort or action." The E/C argues that the JCC erred because she did not limit her inquiry to whether Claimant's ADL payments were reported for federal tax purposes in accordance with the statutory definition of "wages" under section 440.02(28).
The express inclusion of "sheltered employment" supports our interpretation that the term "earned" otherwise indicates some meaningful action or service provided by the claimant in exchange for payment. The "sheltered employment doctrine" is a courtcreated test directed specifically at the concept of "gainful employment" and provides the courts a way to prohibit gamesmanship (or a manifest injustice) in the instances where an injured employee is able to secure employment (or an offer of employment) which is neither legitimate nor gainful employment reasonably reproducible in the open labor market. See, e.g. , Port Everglades Terminal Co. v. Canty , 120 So. 2d 596, 601 (Fla. 1960). The doctrine has limited applicability, and typically applies only when the JCC is convinced that a claimant's post-injury employment is, for all intents and purposes, not real employment but instead a mere litigation tactic used to defeat a permanent total disability claim of an individual who, on account of his or her injury, cannot secure legitimate gainful employment. See Moore v. Servicemaster Commercial Servs ., 19 So. 3d 1147, 1150 (Fla. 1st DCA 2009).
In 1994, the Florida Legislature amended the statute to provide that, in cases of temporary partial disability , the postinjury earning will include "earnings for sheltered employment." See § 440.15(4)(a), Fla. Stat. (1994). The Legislature enacted this provision as an incentive (or reward) to employers to create returnto-work programs, and so as not to penalize the employer who makes accommodations that are uniquely and specifically tailored to an employee who is still healing from an injury. See generally Moore , 19 So. 3d at 1151 ("We can think of no legislative purpose that would be served by penalizing an employer that has implemented a return-to-work program, even if part of the purpose of the program is to facilitate a reduction in the cost of workers' compensation—a legitimate and textual goal of the Act.").
In fact, the TPD statute expressly refers to "wages," but a careful reading of the statutory definition of "wages" would appear to exclude its application to the alleged post-injury earnings in this instance. Section 440.02(28) states, " ‘Wages’ means the money rate at which the service rendered is recompensed under the contract of hiring in force at the time of the injury and includes only wages earned and reported for federal income tax purposes ...." (Emphasis added). In short, the plain language of the general statutory definition limits "wages" to those that are both earned and reported. And, of course, the TPD statute itself refers to wages that a claimant is able to earn after the injury. § 440.15(4)(a), Fla. Stat. (2015). Furthermore, section 440.02(28) defines "wages" as money received for services "under [a] contract of hiring in force at the time of the injury" and, therefore, has no application to money received under a contract for hire that did not exist at the time of the injury. (Emphasis added). In this case, it is undisputed that Claimant did not begin receiving payment from ADL until after her workplace injury.
Of course, simply reporting the ADL payments to the IRS does not necessarily mean Claimant earned them herself. And the JCC expressly found that Claimant had not performed sufficient work for ADL to establish the payments as earnings of her own. The E/C argues that this too was error because Claimant admitted in her May 2018 deposition that she had done some paperwork while waiting for her husband to make the deliveries. But Claimant did not sign the first DWC-19 form until October 2018. At the hearing, she testified that she stopped doing the paperwork at one point. The E/C did not ask when this occurred and presented no evidence showing that Claimant did any paperwork during the time period in question. As a result, CSE supports the JCC's finding that Claimant had not earned the ADL payments.
Even assuming that Claimant should have reported the ADL payments as her own earnings, it is difficult to conclude here that she misrepresented these payments because she first told the E/C about her situation in May of 2018—months before filing the first DWC-19 form at issue here. She testified to the same basic information in her August 2018 deposition and at the September 2018 hearing. As found by the JCC, "Claimant has consistently disclosed this unusual relationship to the E/C." She also generally referred to these payments on the DWC-19 forms signed in October 2018 and January 2019. The only potential written misrepresentation would be the fact that she did not list the ADL payments amounts as actual earnings.
This leads to the second half of the JCC's finding of no fraud based on the DWC-19 forms. The JCC found that Claimant lacked the requisite intent because she did not knowingly misrepresent her earnings with the intent to obtain benefits. In the order, the JCC found that "[w]hile Claimant does receive the paychecks, her stated belief on multiple occasions was that her husband does the work and therefore the checks are for his employment." Ultimately, the JCC accepted "Claimant's testimony that she believes the income is for her husband's labor not hers."
On appeal, the E/C offers little to challenge the JCC's finding on intent. As the JCC appropriately noted, "[a]t issue is whether [Claimant] intentionally misrepresented to the current E/C her earnings for the purpose of obtaining workers’ compensation benefits." Whatever misrepresentations Claimant may have made to ADL or the IRS, while troubling, are not relevant to the issue here. The JCC would have been justified in finding Claimant lacked credibility in light of her dealings outside the context of this workers’ compensation claim. But, as a general rule, "[i]t is within the JCC's discretion to resolve a conflict in the evidence and make credibility determinations." See Landmark Towers, LLC v. Ibarguen , 954 So. 2d 43, 44–45 (Fla. 1st DCA 2007) ; see also Roose & Griffin Landscape Contractors v. Weiss , 558 So. 2d 102, 106 (Fla. 1st DCA 1990) (weight of expert testimony and credibility of witnesses are questions for trier of fact). And, the fact that Claimant was open about her arrangement with ADL ultimately constitutes CSE in support of the JCC's finding that she lacked the requisite intent for fraud when she submitted the DWC-19 forms in question here.
II
The E/C also argues the JCC erred when she did not find that Claimant misrepresented her medical condition to Dr. Hodor and Dr. McCarthy. The E/C relies on the alleged "inconsistency" between Claimant's presentation to her doctors and her documented activities in the surveillance. But the misrepresentation statute requires the E/C to prove Claimant made, or caused to be made, a false, fraudulent, incomplete, or misleading oral or written statement for the purpose of securing compensation. See § 440.105(4)(b) 1.-3., Fla. Stat. (2015). The E/C cites no oral or written statement by Claimant to either doctor that would serve as the necessary predicate for a valid misrepresentation defense. See, e.g. , Dieujuste v. J. Dodd Plumbing, Inc ., 3 So. 3d 1275, 1277 (Fla. 1st DCA 2009) (holding only oral or written statements can serve as predicate for statutory misrepresentation defense).
In addition, the doctors’ testimony provides CSE in support of the JCC's finding. Dr. Hodor testified that Claimant's activities shown in the surveillance video were not inconsistent with her diagnosis, although likely "ill-advised." More importantly, he testified that, as best he could tell, Claimant had not knowingly and intentionally made any false statements or misrepresentations to him. This testimony alone is CSE in support of the JCC's finding that Claimant did not misrepresent her medical condition to Dr. Hodor. Immediately after viewing the surveillance videos, Dr. McCarthy appeared to acknowledge some "inconsistent" behavior but testified that he expected her to have "good days and bad days." Ultimately his opinion regarding her condition was unchanged and he did not state that she had misrepresented her condition to him.
Based on the doctors’ testimony, the JCC concluded that "[b]oth Drs. Hodor and McCarthy testified Claimant's activities in the surveillance videos were not inconsistent with her diagnosis of failed back syndrome, even though she appeared to be engaging in activities over the levels recommended by the physicians." CSE supports this finding, and to the extent there were any inconsistences, the JCC, as the fact-finder, was entitled to reconcile the content of the testimony with itself. See, e.g ., Ibarguen , 954 So. 2d at 44–45.
III
Finally, the E/C challenges the JCC's determination that Claimant did not mispresent her medical condition in her deposition testimony. The E/C cites four specific statements: one from the May 2019 deposition and three from the August 2018 deposition. The E/C have not identified the specific surveillance video footage purportedly contradicting these statements. But the first video was not taken until December 2018. Given the medical testimony that Claimant's functional ability would not always be consistent, there understandably is no direct contradiction between what Claimant said she could do in August and what she was recorded doing in December.
The JCC made factual findings for four depositions of Claimant. Given that the E/C specified in the pretrial that the May 2019 deposition was the basis of their misrepresentation defense, the JCC should have limited her inquiry to this testimony alone. Claimant, however, did not cross-appeal this issue.
Claimant testified in her May 2019 deposition that she attempts to walk without her cane from her bed to the bathroom and then from the car to the stairs of her home where her husband has to assist her up the stairs. As noted, the E/C has not pinpointed the contradictory surveillance information. But according to the JCC's findings, surveillance video taken later that same month shows Claimant walking slowly with the assistance of a cane. She is seen going slowly up and down the stairs while using her cane and the handrail. For the most part, the surveillance is consistent with Claimant's reported difficulty walking without assistance. To the extent there may be some inconsistencies, the JCC's ultimate conclusion that there was no intentional misrepresentation is supported by her finding that Claimant is generally a poor historian.
Conclusion
In summary, we find CSE supports the JCC's rejection of the E/C's misrepresentation defense and award of benefits. Furthermore, the E/C has not identified any misinterpretation or misapplication of law. For these reasons, we AFFIRM the order below.
Lewis, B.L. Thomas, and Bilbrey, JJ., concur.