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Workers' Compensation Board

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Case # G0399281
Date of Accident: 07/19/2011
District Office: Albany
Employer: The Fort Miller Service Corp
Carrier: Valley Forge Insurance Co
Carrier ID No.: W224000
Carrier Case No.: E2790932
Date of Filing of Decision: 03/24/2017
Claimant's Attorney: Martin, Harding & Mazzotti LLP
Panel: Kenneth J. Munnelly

MANDATORY FULL BOARD REVIEW
FULL BOARD MEMORANDUM OF DECISION

The Full Board, at its meeting on February 28, 2017, considered the above captioned case for Mandatory Full Board Review of the Board Panel Memorandum of Decision filed October 25, 2016.

ISSUE

The issue presented for Mandatory Full Board Review is whether, pursuant to Workers' Compensation Law (WCL) § 114-a, the claimant should be permanently disqualified from receiving future indemnity benefits.

The Workers' Compensation Law Judge (WCLJ) found that the claimant violated WCL 114-a, assessed both a mandatory penalty as well as a discretionary penalty disqualifying claimant from receiving any further indemnity benefits.

The Board Panel majority affirmed both the finding that claimant violated WCL 114-a and the mandatory penalty imposed by the WCLJ, but found that the discretionary penalty of permanent disqualification was disproportionate to the claimant's offense and rescinded that penalty.

The dissenting Board Panel member would affirm the discretionary penalty permanently disqualifying claimant from receiving future indemnity benefits.

The carrier filed an application for Mandatory Full Board Review on November 21, 2016.

The claimant filed a rebuttal on December 19, 2016.

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

FACTS

This case is established for a work-related back injury that occurred on July 19, 2011.

Document #250135656 in the case file is a carrier questionnaire completed and signed by the claimant on June 17, 2014, wherein the claimant reported he was not working, he was not self-employed or employed in any capacity whether for payment or non-payment of services including volunteer work and working for family or a friend's business, he was not looking for work, and besides social security income and workers' compensation benefits, he received no other income.

Document #250135657 contains the same questionnaire, completed and signed by the claimant on October 7, 2014, wherein the claimant reported he was not working, he was not self-employed or employed in any capacity, whether for payment or non-payment of services including volunteer work and working for family or a friend's business, he was looking for work, and besides social security income and workers' compensation benefits, he received no other income.

Document #249623898 contains the same questionnaire, completed and signed by the claimant on June 22, 2015, wherein the claimant indicated he was not working, was not self-employed or employed in any capacity, whether for payment or non-payment of services including volunteer work and working for family or a friend's business, he was looking for work, and besides social security income and workers' compensation benefits, he received no other income.

In a C-4.3 (Doctor's Report of MMI/Permanent Impairment) dated October 13, 2014, the claimant's treating neurosurgeon, Dr. Noce, found the claimant was capable of sedentary work with a weight restriction of no lifting more than 10 pounds. Dr. Noce also noted no climbing, and occasional lifting, pulling, bending, kneeling, reaching overhead and at shoulder level, driving and operating machinery.

According to an IME-4 (Independent Examiner's Report of Independent Medical Examination) dated March 4, 2015, for an examination on February 25, 2015, the carrier's consultant, Dr. Hughes, examined the claimant and noted, "he is confined to the house. He just putters around the house and garage. He has not worked in any capacity. He is not attending any type of schooling or performing any type of volunteer work." Dr. Hughes also found the claimant had a permanent partial disability and according to the NYS Guidelines for Determining Permanent Impairment and Loss of Wage Earning Capacity, Table S11.4 and Table S11.7(b), the claimant had a total score of 30 which corresponded to severity ranking of F. Dr. Hughes also found the claimant's prescription medications were appropriate.

Claimant testified at a hearing on August 6, 2015. Prior to claimant's testimony, the carrier noted that it had in its possession surveillance materials it might use for litigation purposes. The claimant testified he last worked on July 1, 2013. His work restrictions include no lifting more than 10 pounds, no bending, and no sitting or standing for more than 15 minutes. On cross-examination, the claimant testified that he completed three questionnaire statements, all of which he wrote that he was not working in any capacity, whether for payment or non-payment of services including volunteer work and working for family or a friend's business. The claimant admitted during his testimony that he makes and sells Adirondack chairs and birdhouses along with his brother-in-law as a hobby, but testified it was not a business or a job. He sold some items in 2014, and may have sold more in 2015, but the items had been made in 2014.

The claimant also testified that the carrier's medical consultant, Dr. Hughes, examined him on February 25, 2015, and the claimant told Dr. Hughes he was not working but he admitted to Dr. Hughes that he did woodworking and small engine repair as hobbies. He collects scrap metal, cleans it, and turns it in for money. The claimant stated, "[i]t's not employment to me. I mean I'm sorry, it's just something I do." The claimant testified that he earned $250.00 collecting scrap metal during the past year, and about $300-$400 selling Adirondack chairs.

Upon questioning from the WCLJ, the claimant testified he began making the chairs and birdhouses around March, April or May of 2014, and continued until the fall of 2014. The claimant testified he used drills, saws and a screw gun to make the chairs, and he used hand tools for the scrap metal and for repairing small engines. He bent over only to help put the chairs together. He had also been cleaning and selling scrap metal for about forty-five years, and he used his garage for these activities. He had been repairing small engines for about thirty years, and he did not charge for the repairs because he only repaired engines for family members. His grandson did all the heavy lifting and most of the work. At the conclusion of the hearing, the WCLJ granted the carrier's request to suspend payments based on a possible WCL § 114-a violation.

At a hearing held on September 25, 2015, the carrier's investigator testified that he performed surveillance on the claimant on five separate occasions, and prepared three separate reports. The investigator had covert surveillance of the claimant on July 14, 2014, and October 17, 2014. The carrier offered the surveillance video and report into evidence.

The investigator's report highlights surveillance conducted of the claimant and claimant's residence on June 5, 2014, and October 17, 2014. The reports states that on June 5, 2014, the investigator traveled to the claimant's home on a dead end street and observed a tall white male approximately seventy years of age standing inside the garage. The investigator noted numerous tools hanging on the wall of the garage, and various appliances in disrepair along the back of the garage. The investigator also described a small trailer on the front lawn with birdhouses and wooden yard decorations, and a "for sale" sign. The report noted the investigator learned the claimant made the birdhouses and also Adirondack chairs with folding footstools that sold for $200.00.

The investigator's surveillance on October 17, 2014, reported that the investigator went to the claimant's home, and found the claimant sitting in the garage on a tall stool with a small pillow at the lower portion of his back. The claimant drove the investigator in a golf cart to a storage shed to find birdhouses. The investigator reported he spent eight minutes with the claimant, and the claimant "frequently placed his hand at his lower back but he moved without apparent difficulty..."

By a reserved decision filed on December 3, 2015, the WCLJ found the claimant had a permanent disability and a 37.5% loss of wage earning capacity. The WCLJ also found the claimant violated WCL § 114-a by failing to disclose that he was self-employed when he responded to the carrier's questionnaires. The WCLJ imposed a mandatory penalty precluding the claimant from receiving benefits from June 17, 2014, until the date the claimant's payments were suspended. In addition, the WCLJ imposed the discretionary penalty pursuant to WCL § 114-a, and disqualified the claimant from receiving future indemnity benefits, finding the claimant's misrepresentations were serious in nature because the claimant misrepresented his work activities on multiple questionnaires and at the hearing held on August 6, 2015.

The claimant filed an application for administrative review, and as is relevant here, argued he had not violated WCL § 114-a because he discussed his woodworking and auto work activities with his physicians, and the activities were within his medical restrictions. The claimant further contended he testified truthfully about his activities and the amount of money he earned from the activities. The claimant also maintained he did not realize that his activities constituted work, because he considered his activities as hobbies. The claimant argued the WCLJ decision should be rescinded because he did not knowingly make a false statement or representation in violation of WCL § 114-a.

The carrier submitted a rebuttal, arguing the WCLJ properly imposed the mandatory and discretionary penalties pursuant to WCL § 114-a because the claimant knowingly made numerous false statements of material fact concerning his work activities. The carrier additionally noted that the claimant's admissions concerning his work activities only occurred after several false statements were made, and after being informed of the surveillance video.

LEGAL ANALYSIS

Pursuant to the authority granted by WCL § 114-a(1), the Board has the discretion to disqualify a claimant from receiving any future wage replacement benefits. However, "the penalty imposed may not be disproportionate to the underlying misconduct (Matter of Harp v New York City Police Dept., 96 NY2d 892 [2001])" (Matter of Kodra v Mondelez Intl., Inc., 145 AD3d 1131 [2016]). In support of a determination that this onerous penalty is warranted, the Board must provide an explanation that the underlying deception was egregious or severe, or there was a lack of mitigating circumstances (Kodra, 145 AD3d 1131 [2016]).

Here, while it is true the claimant failed to disclose his income from the woodworking activities on three questionnaires, the claimant testified truthfully about making and selling Adirondack chairs and birdhouses, repairing small engines, and cleaning scrap metal. The claimant explained that he did not inform the carrier he was working because he did not consider making chairs and birdhouses, cleaning scrap metal, and repairing small engines activities as work, but as his hobbies. The claimant testified, "[i]t's not employment to me. I mean I'm sorry, it's just something I do."

To be sure, the claimant never misrepresented his medical condition and all of his activities were within the claimant's medical restrictions. The claimant's deception in failing to admit earning $650.00 by making chairs and birdhouses, and cleaning scrap metal in his garage, does not rise to the level of serious and egregious conduct requiring the imposition of the discretionary penalty of permanent disqualification from future indemnity benefits. As the onerous penalty of permanent disqualification from future benefits is not warranted, it is suggested that a discretionary penalty of $650.00, the amount of money the claimant earned, is warranted.

Therefore, the Full Board finds that the preponderance of the evidence in the record supports a finding that the claimant's conduct was not so severe or egregious to warrant imposition of the discretionary penalty of permanent disqualification from future benefits. However, pursuant to WCL 114-a, a discretionary penalty of $650.00, reflecting the amount of money the claimant earned while also receiving benefits, should be imposed.

CONCLUSION

ACCORDINGLY, the WCLJ reserved decision filed December 3, 2015, is MODIFIED to impose a discretionary penalty of $650.00 pursuant to WCL § 114-a. In all other respects the decision remains in effect. No further action is planned by the Board at this time.