The Full Board, at its meeting held on December 18, 2012, considered the above captioned case for Mandatory Full Board Review of the Board Panel Memorandum of Decision filed February 2, 2012.
The issues presented for Mandatory Full Board Review are:
The Workers' Compensation Law Judge (WCLJ) found that that the claimant did not violate WCL § 114-a.
The Board Panel majority affirmed the WCLJ's decision, concluding that the WA-1 forms were inadmissible and that the record was insufficient to support a finding that the claimant violated WCL § 114-a.
The dissenting Board Panel member determined that the claimant's failure to timely reveal her illegal work activities and her proffer of deceptive testimony at the May 7, 2008, hearing warranted a finding that she violated WCL § 114-a.
The carrier, State Insurance Fund (SIF), filed an application for Mandatory Full Board Review on March 5, 2012.
The claimant filed a rebuttal on March 21, 2012.
Upon review, the Full Board votes to adopt the following findings and conclusions.
This case is established for a work-related injury to the claimant's right wrist that occurred on February 7, 2004, while working for Pizza Hut. The claim was amended to include consequential left wrist carpal tunnel syndrome.
An OC-400 (Notice of Retainer and Appearance) form was filed with the Board on April 7, 2004, indicating that the claimant was represented by counsel.
The claimant completed and signed two WA-1 (Work Activity Report) questionnaire forms sent to her by SIF, dated October 4, 2006, and September 21, 2007, in which she indicated that she had not engaged in any work activity for any employer or in her own business, for pay or on an unpaid basis, since the time of her February 7, 2004, accident.
In a letter dated January 15, 2008, the Orange County Probation Department indicated that the claimant was arrested on May 4, 2007, for the crimes of "Criminal Possession of a Controlled Substance 3rd and Criminal Sale of a Controlled Substance 3rd"; that the claimant was detained in Orange County Jail from May 4, 2007, to May 7, 2007; and that on June 14, 2007, the claimant "pled guilty to Attempted Criminal Sale of a Controlled Substance 3rd Class "C" Felony," and was sentenced to five years' probation.
In a C-8 (Notice that Payment of Compensation for Disability has Been Stopped of Modified) form filed with the Board on September 21, 2007, SIF indicated that payments were suspended as of September 14, 2007, because the claimant was incarcerated.
At a hearing held on December 19, 2007, claimant testified that she was arrested in March 2007 and spent four days in jail. She ultimately accepted a plea bargain and was sentenced to five years' probation. She testified that she has not done any work at all, either for an employer, for herself or a relative, or on a volunteer basis, since the date of her injury. She testified that she was currently receiving treatment for a drug addiction, and had been "clean for 9 – 11 months" (Transcript, 12/19/07 Hearing, p. 18). Claimant stated that she "was selling cocaine. I didn't realize it. It was kind of stupid" (id.). According to claimant, she was charged with "selling two grams of coke," but "didn't make any money on it" (id. at 20-21). In the resulting decision filed on February 28, 2008, the WCLJ ordered the carrier to continue payments and continued the case.
SIF filed an RB-89 (Application for Board Review) on March 12, 2008, in which it argued that the claimant submitted WA-1 forms in which she denied participating in any work activity and that she was convicted for the attempted sale of a controlled substance such that her statements regarding her work activity were misrepresentations in violation of WCL § 114-a. As such, SIF asserted that the claimant was not entitled to awards of compensation.
The claimant filed an RB-89.1 (Rebuttal of Application for Board Review) on March 28, 2008, in which she argued that there was no proof that she derived any economic benefit from the attempted sale and that SIF's appeal was premature, frivolous, and should be denied.
At a hearing held on May 7, 2008, claimant testified with respect to the circumstances of her arrest and subsequent conviction that her boyfriend provided cocaine to an undercover police officer that they had befriended. According to claimant, she and her boyfriend never asked the undercover officer if "he wanted anything," and that the undercover had called them repeatedly asking whether they were "going to get something for yourself today?" (Transcript, 5/7/08 Hearing, p. 4). According to the claimant, her boyfriend provided two grams of cocaine to the undercover officer at his cost, making no profit on the transaction. Claimant alleged that her only participation in the transaction was to take the undercover officer's phone call and convey to her boyfriend that he wanted her boyfriend "to pick him up two G's" (id. at 6). Claimant testified that she never received any money from the sale of drugs. She also stated she has not done any work whatsoever since her accident. Claimant also testified that she has not done any work at all, either for an employer or for herself, or on a volunteer basis, since the date of her injury.
On cross-examination, the claimant conceded that she had completed and signed two WA-1 forms in which she indicated that she had not engaged in any work activity for any employer or in her own business, for pay or on an unpaid basis, since the date of her injury. When asked by the WCLJ whether she consider the "cocaine incident to be work," claimant responded:
No, because I thought I was doing a friend – like going get milk at the store, and he called and "could you pick it up for me" – when I was addicted to drugs, everybody would go out and pick up drugs for everybody, and they would pay whatever they owed. It was like making one trip to the store. When you're addicted to drugs, you don't look at it as selling, that's why I chose the plea because my lawyer said that people would look at it that way.
(Id. at 11). The WA-1 forms were submitted into evidence at the May 7, 2008, hearing without objection.
In a decision filed June 26, 2008, the Board Panel modified the WCLJ's February 28, 2008, decision to hold in abeyance awards of indemnity benefits subsequent to December 19, 2007, pending further development of the record on the WCL § 114-a issue.
At a hearing held on March 23, 2010, the claimant's attorney objected to the admission of the WA-1 forms on the grounds that SIF directly corresponded with the claimant without the permission of her counsel and without forwarding copies of the forms to their office. The WCLJ found that SIF had failed to copy claimant's attorneys on the WA-1 forms sent to claimant, although they were required to do so. The WCLJ found SIF failed to demonstrate that the claimant "knowingly or willfully made a false representation" with respect to her work activities and did not violate WCL § 114-a. The resulting decision was filed on March 26, 2010.
If a proper OC-400 form is in the file, a carrier should not send written communications to a claimant without sending a copy to the claimant's attorney, unless authorized or directed to do so by statute or regulation. Such conduct constitutes a direct communication with a represented claimant and is contrary to principles of fairness, creates an unacceptable risk that unsophisticated claimants may be misled, and interferes with the attorney/client relationship announced in the notice of retainer. Any such communication with a claimant, absent prior notification to the claimant's attorney or simultaneous provision of a copy to the claimant's attorney, is improper and irregular; and any information obtained from such contact is not admissible (Matter of Rochester Business Alliance, 2011 NY Wrk Comp 70511177).
In the instant case, it is undisputed that the carrier was on notice that the claimant was represented by counsel as of the April 7, 2004, OC-400 form. It is also undisputed that SIF mailed two WA-1 forms directly to the claimant, without simultaneously copying her attorney. Therefore, the Board Panel majority properly precluded the WA-1 forms.
WCL § 114-a
"Workers' Compensation Law § 114-a authorizes the Board to disqualify a claimant from receiving future wage replacement benefits if it finds that the claimant knowingly made a false statement or misrepresented a material fact in order to obtain workers' compensation benefits or to influence any determination regarding such benefits (see Matter of Phelps v Phelps, 277 A.D.2d 736 )" (Matter of Johnson v NYS DOT, 305 AD2d 927 ).
In Matter of Johnson v NYS DOT, 305 AD2d 927 , while receiving workers' compensation benefits, claimant pleaded guilty to "attempted criminal sale of a controlled substance in the third degree and, during the plea colloquy, admitted that he sold a quantity of crack cocaine for $270" (id.). Claimant subsequently testified before the Workers' Compensation Board that he had not received income from any source, including self-employment. The Board found that claimant's testimony that he received no income from any source was a material misstatement which constituted a violation of WCL § 114-a in light of his admission that he had received $270 for the sale of crack cocaine. The Appellate Division, Third Department affirmed, stating that "[a]lthough claimant argued that his statement was not knowingly false because he did not profit from the sale or know that this criminal activity could be considered self-employment, the Board found that he knowingly made a false statement of material fact."
Here, the claimant pleaded guilty to Attempted Criminal Sale of a Controlled Substance in the Third Degree. "A person is guilty of criminal sale of a controlled substance in the third degree when he knowingly and unlawfully sells: 1. a narcotic drug;" (Penal Law § 220.39). In light of claimant's guilty plea, the Full Board finds that claimant's testimony at the hearings on December 19, 2007, and May 7, 2008, that she had done no work whatsoever since her accident and that she received no money from the sale of illegal drugs to constitute false statements concerning material facts made for the purpose of influencing a determination regarding the payment of Workers' Compensation benefits, in violation of WCL § 114-a.
The Full Board further finds that based on the seriousness of claimant's false statements while under oath, the appropriate penalty is to disqualify her from receiving any lost wage benefits subsequent to her testimony on December 19, 2007.
ACCORDINGLY, the WCLJ decision filed on March 26, 2010, is MODIFIED to find that claimant violated WCL § 114-a and to disqualify her from receiving any further lost wage benefits after December 19, 2007. No further action is planned by the Board.