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Case # G1078799
Date of Accident: 02/11/2014
District Office: Hauppauge
Employer: Crown Recycling
Carrier: Great Divide Insurance Co.
Carrier ID No.: W100135
Carrier Case No.: 2067264
Date of Filing of Decision: 05/19/2017
Claimant's Attorney: Geoffrey Schotter
Panel: Kenneth J. Munnelly

MANDATORY FULL BOARD REVIEW
FULL BOARD MEMORANDUM OF DECISION

The Full Board, at its meeting on April 25, 2017, considered the above captioned case for Mandatory Full Board Review of the Board Panel Memorandum of Decision filed August 1, 2016.

ISSUES

The issues presented for Mandatory Full Board Review are:

  1. whether the claimant has violated Workers' Compensation Law (WCL) § 114-a;
  2. whether awards should be held in abeyance pending further development of the record on the issue of reduced earnings; and
  3. whether the claimant established an attachment to the labor market.

The Workers' Compensation Law Judge (WCLJ) concluded that the claimant did not violate WCL § 114-a, that the claimant maintained a sufficient attachment to the labor market, and that claimant is entitled to reduced earnings awards.

The Board Panel majority modified the decision of the WCLJ on the issue of claimant's entitlement to reduced earnings, directing further development of the record on this issue.

The dissenting Board Panel member would find that the claimant is not attached to the labor market and not entitled to reduced earnings awards.

The carrier filed an application for Mandatory Full Board Review on August 10, 2016, arguing that that a finding should be made that the claimant violated WCL § 114-a based on misrepresentations that he made concerning his work status to the medical providers of record. In the alternative, the carrier argues that further development of the record is required with respect to this issue. The carrier further contends that there is no evidence in the record of ongoing causally related reduced earnings and that the direction to the carrier to continue the payment of reduced earnings to the claimant is prejudicial. Finally, the carrier argues that the opinion of the dissenting Board Panel member on the issue of labor market attachment should be adopted and a finding reached that claimant is not attached to the labor market as his metal scrapping does not constitute work.

The claimant filed a rebuttal on September 4, 2016, arguing that the carrier waived its right to raise the issue of a WCL § 114-a violation when it failed to appeal the October 23, 2015, decision, which is based on a hearing at which the WCLJ found no violation of the statute. The claimant further argues that the carrier failed on the merits with respect to its WCL § 114-a argument. The claimant's alleged misrepresentation in his C-3 forms also cannot be considered as this issue was raised for the first time on appeal. The claimant additionally argues that it was appropriate to award the claimant indemnity benefits at the tentative weekly rate of $150.00 pending further development of the record on the issue of reduced earnings. Finally, the claimant contends that the Board Panel majority properly concluded that the claimant's scrapping activities constitute self-employment, and that the claimant therefore maintained an adequate attachment to the labor market and was not required to comply with American Axle.

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

FACTS

This claim is established for multiple injuries that claimant sustained on February 11, 2014, while working as a laborer. The carrier initially controverted the claim.

At a hearing on August 18, 2015, the claimant testified that he was injured at work on February 11, 2014. He did not see a doctor because he did not have health insurance. He was in a car accident two years before his February 11, 2014, work accident. He injured his back in the car accident. The claimant testified that he injured his knee in a separate work-related accident several months later. The claimant stopped working in 2015 due to his knee injury. The claimant testified that his employer "released me from work," he injured his neck and back in the 2011 motor vehicle accident, and that he filed a lawsuit and received $5,000.00. He received medical treatment from March 2011 to August 2013.

An employer witness testified that he was employed as a foreman on February 11, 2014. He testified that eventually the claimant stopped working for the employer. After the claimant stopped working, he saw the claimant "scrapping metal." The witness explained that the claimant was selling scrap metal to the employer for money.

A second employer witness testified that he was employed as a sales manager on February 11, 2014, and is also an owner of the company. Claimant was let go when business slowed down. After the claimant was let go, the claimant "came and scrapped metal at my facility."

At a hearing held on October 20, 2015, the WCLJ clarified that the claimant's lost time was associated with his June 2014 knee claim (WCB # G0819011) and that there is no claim for any lost time until August. The WCLJ noted that since the employer witness testified that the claimant was selling scrap metal, that there is an ongoing reduced earnings issue. The WCLJ stated that the claimant was working selling scrap metal and he is attached to the labor market. The WCLJ precluded the carrier from producing an IME on causal relationship and then stated that since there is an IME scheduled in two days and the carrier is providing transportation that the claimant attend the IME. The claimant testified that he started selling scrap metal to the employer a week after they let him go.

The carrier then raised WCL § 114-a as the claimant told his doctors that he was not working. The WCLJ stated that the lay witnesses testified at the last hearing with regard to the claimant's scrapping and, as such, there is no prejudice to the employer. The WCLJ pointed out that the medical evidence occasionally indicates 100% disability, but for the most part, his own doctors only gave the claimant a partial disability. The WCLJ stated that he could not yet make awards because there needs to be some documentation provided. The WCLJ stated that by actually working the claimant has satisfied his obligation to look for work. The WCLJ strongly recommended that the claimant "look for better work."

In the resulting decision filed on October 23, 2015, the WCLJ established this claim (WCB # G1078799) for work-related injuries involving the head, back, and abdominal trauma, which occurred on February 11, 2014. The carrier was directed to produce payroll and any scrapping receipts from the claimant's scrapping activities. The claimant was directed to produce documentation in support of reduced earnings. The carrier was precluded from producing an IME on causal relationship. The WCLJ decision does not reflect any findings with respect to WCL § 114-a. This decision was not appealed by the carrier.

At a hearing held on November 23, 2015, with regard to the June 2014 knee claim (WCB # G0819011), the carrier requested an opportunity to obtain an IME and the WCLJ denied the request. The carrier also raised the issue of a WCL § 114-a violation, arguing that the claimant misrepresented his work status to his medical providers, as evidenced by the C-3 he filed. The claimant's representative stated that the claimant is not working. The WCLJ denied the carrier's request to develop the record on WCL § 114-a. The WCLJ made awards. The claimant produced documents detailing his recycling of scrap metal for money.

In a decision filed on November 27, 2015, in this claim, the WCLJ made the following awards: February 12, 2014, to April 14, 2015, no medical evidence; April 14, 2015, to November 24, 2015, $336.44 per week (reduced earnings); and directed the carrier to continue payments. The claimant's representative was awarded a fee of $1,500.00. The claimant's average weekly wage was set at $518.00 without prejudice. The case was continued on the issue of attachment to the labor market.

The carrier requested administrative review of the WCLJ decision filed November 27, 2015.

At a hearing held on January 29, 2016, the claimant testified that he began looking for work in August of 2015. He has been looking for jobs that his doctor says that he will be able to do. He went to VESID back in November, but he has a limited budget and limited amount of fuel so he could not go back. The claimant testified that he is selling all of his property to be able to pay his bills. The claimant testified that he is scrapping metal. He does not have the internet at his home. He has internet on his phone and that his girlfriend helps him look for jobs. He went to Workforce New York in December.

In the resulting decision filed on February 3, 2016, the WCLJ made awards from November 24, 2015, to February 1, 2016, at the rate of $336.44 (reduced earnings) and directed the carrier to continue payments. The claimant's representative was awarded a $30.00 fee. The WCLJ found that the claimant remains attached to the labor market.

The carrier requested administrative review of the WCLJ decision filed February 3, 2016.

On February 1, 2016, the claimant filed a form C-258 (Claimant's Record of Job Search Efforts/Contacts).

LEGAL ANALYSIS

Labor Market Attachment

A claimant with a temporary partial disability must look for work within the limits of his or her partial disability or otherwise demonstrate a sufficient attachment to the labor market (Matter of Robert D. Anderson Co Inc., 2012 NY Wrk Comp G0016823; see generally Matter of Zamora v New York Neurologic Assoc., 19 NY3d 186 [2012]).

The Board has previously concluded, albeit in the context of a WCL § 114-a case, that a claimant's activity in collecting and selling other peoples' abandoned possessions for the express purpose of selling those items for a profit, constitutes work activity (Matter of Tokos Construction, 2017 NY Wrk Comp G0746670, citing Matter of CRS Trucking, 2008 NY Wrk Comp 80402702).

Here, the claimant presented proof to the Board that he was actively engaged in returning scrap metal for a profit between January 1, 2015, and October 21, 2015. Based on the foregoing authority, the claimant has maintained a sufficient attachment to the labor market through self-employment activities.

WCL § 114-a

"If for the purpose of obtaining compensation pursuant to [WCL § 15], or for the purpose of influencing any determination regarding any such payment, a claimant knowingly makes a false statement or representation as to a material fact, such person shall be disqualified from receiving any compensation directly attributable to such false statement or representation. In addition, as determined by the board, the claimant shall be subject to a disqualification or an additional penalty up to the foregoing amount directly attributable to the false statement or representation" (WCL § 114-a[1]).

The claimant argues that the carrier waived its right to raise the issue of a WCL § 114-a violation when it failed to appeal the October 23, 2015, decision, as the WCLJ, at the underlying hearing on October 20, 2015, found no violation of WCL § 114-a. Because the decision filed October 23, 2015, does not reflect any findings concerning WCL § 114-a, the Full Board finds that the carrier did not waive its right to pursue the issue of WCL § 114-a by not appealing that decision.

The carrier has the burden of proof with respect to WCL § 114-a. The carrier's offer of proof consists of testimony from the claimant's physicians indicating that (a) the claimant volunteered that he was not working, and (b) was deemed to have a 100% disability, during a period that he was found to be working. The carrier also pointed to the claimant's C-3s indicating a post-injury return to work. The carrier contends that the claimant misrepresented his disability and work activity in order to secure ongoing workers' compensation indemnity benefits. The carrier's offer of proof, while less than compelling, is sufficient to warrant further development of the record on the issue of a WCL § 114-a violation However, the claimant's indemnity benefits will continue pending further development of the record on this issue.

Reduced Earnings

WCL § 15(5-a) provides, in pertinent part, that "the wage earning capacity of an injured employee in cases of partial disability shall be determined by his actual earnings..." Additionally, upon a finding of permanent partial disability "the Board may, but need not, infer" that there has been a loss of wage earning capacity (Matter of Zamora v New York Neurologic Assoc., 19 NY3d 186 [2012]).

In making a reduced earnings award, it is improper to consider medical evidence of the claimant's degree of disability (Matter of Gioia v Cattaraugus County Nursing Home, 122 AD3d 970 [2014]). Absent a complete and voluntary withdrawal from the labor market, under WCL § 15(5-a), the Board must measure reduced earnings as two-thirds of the difference between the post-injury earnings and the pre-injury average weekly wage. "[T]he Court of Appeals has repeatedly explained that, for claimants who have demonstrated that they remained attached to the labor market, 'where actual earnings during the period of the disability are established, wage earning capacity must be determined exclusively by the actual earnings of the injured employee without evidence of capacity to earn more or less during such disability period'" (Gioia, 122 AD3d 970 [2014] [citations omitted]).

Further development of the record is required in order to determine the claimant's reduced earnings rate based on his self-employment activities. The claimant is to produce relevant income tax returns, and any other evidence demonstrating the nature and extent of his work returning scrap metal for a profit. Awards shall continue to the claimant at the statutory minimum rate of $150.00 on a tentative basis, pending further development of the record on the issue of the claimant's actual reduced earnings. As a result of this finding, the award to the claimant's attorney is reduced from $1,500.00 to $800.00.

CONCLUSION

ACCORDINGLY, the WCLJ decisions filed November 27, 2015, and February 3, 2016, in this case are MODIFIED, in part, to make awards from April 14, 2015, to February 1, 2016, and continuing at the $150.00 tentative rate, to reduce the attorney's fee to $800.00 and to continue the case for further development of the record on the issues of reduced earnings and WCL § 114-a. As modified, the remainder of the decisions remains in effect. The claimant is directed to produce tax returns. The case is continued.