Opinion
Record No. 1439-93-2
April 26, 1994
FROM THE VIRGINIA WORKERS' COMPENSATION COMMISSION
Virginia G. McNeill (Denton Drash, on brief), for appellants.
Louis D. Snesil (Williamson Stoneburner, on brief), for appellee.
Pursuant to Code § 17-116.010, this opinion is not designated for publication.
In this workers' compensation appeal, we hold that where an injured employee has obtained an overpayment of benefits by fraudulently misrepresenting medical mileage, Code § 65.2-712 empowers the commission to grant relief to an employer. We also hold, however, that because Code § 65.2-712 is not applicable to compensation claims that predate its effective date, the commission lacked authority to grant the employer relief for Towles's fraud.
We further hold that Code § 65.2-201 does not confer on the commission general authority to grant the employer a credit against future travel reimbursements in order to recoup the fraudulent overpayments. Finally, we hold that the commission did not err by refusing to order the employer to pay $767.52 to the employee for outstanding medical travel expenses as a means of protecting its award from imposition caused by fraud and misrepresentation. The commission's refusal to award the employee $767.52 for medical travel expenses did not resulted in a credit against future compensation benefits. Accordingly, we affirm the commission's decision.
Employee, Melvin Towles, sustained a compensable injury in 1982. The commission entered a workers' compensation award in favor of Towles. He received medical treatment from Dr. Charles Bonner. Towles claimed a later period of disability and medical expenses for treatment by Dr. Bonner beginning in May 1988, and medical mileage reimbursement for traveling to physical therapy treatments. Towles traveled thirty-nine miles each way to therapy. However, he fraudulently reported the mileage as ninety-nine miles each way. As a result, the employer overpaid him $6,581.58 for mileage from May 1988 to May 1991.
After discovering the fraud, the employer refused to pay Towles for mileage from March to July 1992. For the actual mileage that Towles traveled, the costs would have been $767.52. Towles filed a claim with the commission seeking reimbursement for $767.52 in travel expenses. The employer defended by claiming that it was entitled to a $6,581.58 credit to offset the fraudulent payments to Towles.
The commission found that Towles and his wife had fraudulently misrepresented the mileage. The commission held, however, that Code § 65.2-712 was inapplicable to this case and that it had no other authority to reimburse or credit the employer for the fraudulent payments made to Towles against Towles's award. In effect, the commission held that prior to the enactment of Code § 65.2-712, when an award had been obtained by fraud and misrepresentation, the employer had to resort to civil or criminal remedies because the Act provided no statutory remedy. The commission refused, nevertheless, to order the employer to pay Towles $767.52 for travel expenses that he had incurred, for which he had not been reimbursed. The commission held that Code § 65.2-201 gave it the general authority to protect its awards from fraud, but because Code § 65.2-712 was inapplicable, the commission refused to authorize the employer to credit the balance of the overpayment against future travel expenses as they are incurred.
The employer appeals the commission's decision denying it authority to take credit against future travel expenses. The employee appeals the commission's finding of fact that he intentionally and fraudulently misrepresented the medical mileage and the commission's decision not to award him $767.52 for incurred medical travel expenses.
The evidence that the employee intentionally misrepresented the medical mileage was clear and convincing and supports the commission's finding of fraud. We are bound by the commission's findings of fact when supported by credible evidence. See James v. Capitol Steel Construction Co., 8 Va. App. 512, 515, 382 S.E.2d 487, 488 (1989); Code § 65.2-707.
I.
Code § 65.2-712 expressly empowers the commission to grant relief to an employer for overpayment of benefits resulting from an employee's fraudulent misrepresentations. However, Code § 65.1-100.3, recodified as Code § 65.2-712, did not become effective until July 1985. Towles's compensable injury occurred in 1982. We held in WMATA v. Pender, 14 Va. App. 100, 102-03, 415 S.E.2d 239, 241 (1992), and Brushy Ridge Coal Co. v. Blevins, 6 Va. App. 73, 79, 367 S.E.2d 204, 207 (1988), that Code § 65.1-100.3 (recodified as Code § 65.2-712) does not apply to compensation claims predating the effective date of the statute. Thus, because Code § 65.2-712 was inapplicable at the time of Towles's claim, the commission correctly ruled that the employer was not entitled to credit against Towles's future travel expenses in order to recoup the fraudulent overpayments to him.
Code § 65.2-712 provides that "[a]ny payment to a claimant by an employer or insurer which is later determined by the Commission to have been procured by the employee by fraud [or] misrepresentation . . . may be recovered from the claimant by the employer or insurer either by way of credit against future compensation payments due the claimant, or by action at law against the claimant."
II.
We uphold the commission's ruling that Code § 65.2-201 does not give it general authority to credit the fraudulent overpayment against the employer's future compensation payments or travel expense reimbursement. Except for Code § 65.2-712, which does not apply, the commission had no authority to grant a credit for overpayment of compensation benefits resulting from an employee's fraudulent misrepresentations. In Blevins, we held that Code § 65.2-712 created a "substantive right . . . which did not exist previously." Id. at 79, 367 S.E.2d at 207.See also Pender, 14 Va. App. at 102, 415 S.E.2d at 241 ("The only authority for such a credit is found in Code § [65.2-712]").
III.
The claimant contends that by denying him an award for the travel expenses he had incurred, the commission, in effect, granted the employer a credit under Code § 65.2-712, when no authority existed for doing so. The commission did not, however, base its action on Code § 65.2-712. Rather, the commission declined to make an award because to have done so would have resulted in an imposition on the commission's authority and a condonation of claimant's fraud. In Harris v. Diamond Construction Co., 184 Va. 711, 36 S.E.2d 573 (1946), the Court held "that the [Workers' Compensation Commission] has the implied power, incidental to those expressly granted, to . . . set aside an award procured through fraud." Id. at 721, 36 S.E.2d at 578. If the commission can set aside an award procured through fraud, it may refuse to enter an award that will perpetuate the effects of a fraud. Therefore, although the commission had no authority at the time to grant an employer direct relief for fraudulently obtained benefits, we cannot say the commission erred by refusing to award the claimant $767.52 that the employer had withheld to recoup money paid as a result of his fraud. Accordingly, the commission's decision is affirmed.
Affirmed.