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Workers' Compensation Board

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Case # G0399726
Date of Accident: 06/10/2011
District Office: Albany
Employer: Saratoga Casino & Raceway
Carrier: Technology Insurance Co. Inc.
Carrier ID No.: W206759
Carrier Case No.: 815972-1
Date of Filing of Decision: 09/12/2016
Claimant's Attorney: Kirk & Teff, LLP
Panel: Kenneth J. Munnelly

MANDATORY FULL BOARD REVIEW
FULL BOARD MEMORANDUM OF DECISION

The Full Board, at its meeting on July 19, 2016, considered the above captioned case for Mandatory Full Board Review of the Board Panel Memorandum of Decision filed December 9, 2014.

ISSUE

The issue presented for Mandatory Full Board Review is whether the carrier's investigative report and the testimony of its investigator should be precluded because the carrier failed to divulge its existence prior to claimant's testimony.

The Workers' Compensation Law Judge (WCLJ) denied the claimant's request to preclude the investigator's testimony and report.

The Board Panel majority affirmed the WCLJ's opinion. The Board Panel majority found that the carrier was not required to disclose the existence of the investigatory material prior to the claimant's testimony because the rule set forth in Matter of Waldbaums (1996 NY Wrk Comp 09018108) does not apply to all investigatory evidence, but only those materials associated with covert surveillance.

The dissenting Board Panel member would find that all materials obtained by an investigator, including the carrier's investigative report in this matter, are subject to the disclosure rule set forth in Matter of Waldbaums. The dissenting Board Panel member would preclude the investigator's testimony and report.

The claimant filed an application for Mandatory Full Board Review on January 5, 2015.

The carrier filed a rebuttal on February 3, 2015.

Upon review, the Full Board votes to adopt the following findings and conclusions.

FACTS

This matter involves an established case for a work-related accident on June 10, 2011, that resulted in an injury to the claimant's low back. It was determined that the claimant had a temporary partial disability.

In a reserved decision filed on May 14, 2013, the WCLJ directed the claimant to submit documentary evidence of labor market attachment.

On July 2, 2013, the claimant filed Form C-258 (Claimant's Record of Job Search Efforts/Contacts) with the Board. The form contained a listing of the claimant's job search contacts for the period June 3, 2013, through June 26, 2013.

The carrier filed a Form RFA-2 with the Board on August 7, 2013, and requested the claimant's testimony on labor market attachment and job search.

On October 28, 2013, the claimant filed another Form C-258 with the Board. The five page form contained a listing of the claimant's job search contacts for the period June 3, 2013, through October 25, 2013, and included the jobs listed on the claimant's previously submitted Form C-258.

At a hearing held on October 28, 2013, the claimant testified that she had been contacting One Stop once a month since September 2011. The claimant testified that she had accounts for 15 different job search sites. The claimant testified that a representative at One Stop helped her modify her resume. The claimant testified that she spent about two hours a day, five days per week searching for a job. The claimant testified that she went to VESID, filled out paperwork, but was declined because her doctor had found her one hundred percent disabled. On cross-examination, the claimant testified that she applied at Glens Falls Hospital, Ace Hardware, Cool Ledge Resort, and Town of Bolton Recreation Center. The claimant testified that she did not remember applying at Family Dollar, Dave's Market, or Glens Falls Hospital for a dietary position, even though the positions were listed on her job search record. The claimant testified that she had not received email confirmations for all the jobs that she applied for on-line and she did not save all the email confirmations that she received.

At the conclusion of the hearing held on October 28, 2013, and memorialized in a notice of decision filed on October 31, 2013, the WCLJ found that there was evidence of labor market attachment based on the documentation and the claimant's testimony. The carrier sought administrative review of that decision.

The carrier then raised Workers' Compensation Law (WCL) § 114-a based on material misrepresentations in the claimant's job search, stated that there was no video surveillance, and requested that an investigator be allowed to testify about the report. The WCLJ continued the case for the testimony of the investigator. The carrier supplied a copy of the investigative report to the claimant upon the completion of the hearing. The investigative report indicated that the investigator contacted the twenty-six businesses the claimant alleged she applied to for employment and eleven businesses had no record of the claimant applying for employment. A breakdown of the remaining fifteen businesses indicated that one business declined to provide any information because it was against company policy, four businesses were unable to confirm or deny if the claimant inquired about employment, and ten businesses had no definitive information (including nonresponses).

In the carrier's application for administrative review of the notice of decision filed on October 31, 2013, it argued the WCLJ's finding that the claimant was attached to the labor market should be reversed because the claimant failed to produce documentation of a timely, diligent, and persistent job search. The carrier argued in the alternative that the Board Panel hold the issue of attachment to the labor market and continuing awards in abeyance until the WCL § 114-a issue was litigated.

The claimant argued in her rebuttal that the WCLJ decision concerning labor market attachment and the direction to continue awards pending full development of the record should be affirmed in its entirety because the decision was fully supported by the record.

At a hearing held on December 23, 2013, the claimant made a motion to preclude the carrier's investigative report because the existence of the report was not disclosed prior to claimant's testimony being taken. The claimant also argued that the investigator's report should be precluded since it contained hearsay statements with no supportive corroborative evidence. The WCLJ denied the claimant's motion and stated that he would make a determination as to the weight the investigative report should be given. The WCLJ memorialized his denial of the claimant's motion to preclude the investigator's testimony and report in a notice of decision filed on December 27, 2013.

In the claimant's application for administrative review of the notice of decision filed on December 27, 2013, she argued that the WCLJ erred in refusing to preclude the carrier's investigative material and testimony. The claimant argued that the carrier's failure to disclose the existence of the investigative report prior to the claimant's testimony should be precluded pursuant to Matter of Waldbaums, 1996 NY Wrk Comp 09018108. The claimant argued in the alternative that the investigative report and testimony should be precluded due to the lack of corroborating evidence offered to support the wholly hearsay evidentiary assertions.

The carrier argued in its rebuttal that the WCLJ correctly admitted the investigative report and the investigator's testimony into evidence. The carrier argued in the alternative that the claimant's appeal was interlocutory and the case should be returned to the WCLJ for a final determination.

In a reserved decision filed on January 27, 2014, the WCLJ did not decide the WCL § 114-a issue, but referred the case to the administrative review division to decide the outstanding appeals, reasoning that the preclusion of the investigator's report was a threshold issue to the applicability of WCL § 114-a.

LEGAL ANALYSIS

The Board has the authority to govern disclosure of any surveillance materials in the parties' possession (Matter of Monzon v Sam Bernardi Constr., Inc., 60 AD3d 1261 [2009]). An employer or carrier may withhold video surveillance tapes and investigative reports until after the claimant testifies and receive the benefit of maximizing the effect of that evidence for cross-examination purposes (see Matter of Reimers v American Axle Mfg., 2 AD3d 1246 [2003]; Matter of DeMarco v Millbrook Equestrian Ctr., 287 AD2d 916 [2001]). However, the Board requires that before the claimant's testimony is taken, the claimant must be notified that the carrier or the employer has a surveillance videotape in its possession (see e.g. Matter of Waldbaums, 1996 NY Wrk Comp 09018108). Such advance notification serves to limit the gamesmanship that otherwise might occur (see e.g. Matter of City of New York Social Servs., 1999 NY Wrk Comp 09231717).

Failure to notify the claimant of the existence of videotaped surveillance prior to testifying warrants preclusion of the videotaped surveillance, associated investigative reports, and any testimony relating to the reports (see e.g. Matter of Gary Cummings, 2006 NY Wrk Comp 79911267; Matter of St. Charles R.C. School & Church, 2005 NY Wrk Comp 00048213).

Here, the investigatory materials at issue were not obtained as the result of surveillance, but instead are the result of the carrier's verification of the purported job search reflected in the C-258 forms claimant had previously submitted to the Board. In concluding that these investigatory materials were not subject to the Board's disclosure rule concerning surveillance materials, the Board Panel majority drew a distinction "between investigatory material that was the product of covert surveillance and investigatory material that was not obtained through covert means." The majority wrote,

"Surveillance material obtained through a secret investigation into the claimant's activities, such as pictures, videos, and other recordings, are objective and, absent a claim that the recording was falsified, are unassailable; they plainly state the events recorded. Whereas, a report from an investigator or agent detailing their personal observations and conversations is subject to scrutiny regarding reliability and credibility."

As noted by the Board Panel majority, the Board's rule with respect to surveillance materials was originally set forth in Matter of Waldbaums (1996 NY Wrk Comp 09018108). In Waldbaums, supra, the Full Board set forth procedures requiring a party to disclose the existence of any "surveillance tapes or films, or investigative reports" before a claimant testifies. The ruling did not encompass all materials obtained by a carrier through investigation. Rather, it is clear that the Full Board was solely concerned with those materials associated with covert surveillance. Matter of Waldbaums was a videotape surveillance case in which the Board adopted a narrow discovery rule requiring the disclosure of the existence of any surveillance tapes or associated investigative reports. Nothing in the decision, or its progeny over the past 17 years, indicates the Waldbaums rule applies to all investigatory evidence.

For these reasons, the Full Board finds that the investigatory materials in question here are not subject to the Board's disclosure rule concerning surveillance materials.

Because hearsay evidence is admissible in workers' compensation proceedings (see WCL § 118), the investigator's report is admissible as evidence, although what weight to afford the report is subject to the Board's discretion.

Therefore, the Full Board declines to preclude the investigative report and testimony of the carrier's investigator.

CONCLUSION

ACCORDINGLY, the WCLJ decision filed December 27, 2013, is AFFIRMED for the reasons stated hereinabove. The WCLJ's decision filed October 31, 2013, is AFFIRMED for the reasons set forth in the Board Panel's decision filed December 9, 2014. The case is continued.