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Workers' Compensation Board

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Case # G0779844
Date of Accident: 07/29/2014
District Office: NYC
Employer: La Dona Food Service Inc.
Carrier: *** Carrier Undetermined ***
Carrier ID No.: W000004
Carrier Case No.: 0001560787
Date of Filing of Decision: 08/21/2017
Claimant's Attorney: Irwin Silverman, Esq.
Panel: Kenneth J. Munnelly

MANDATORY FULL BOARD REVIEW
FULL BOARD MEMORANDUM OF DECISION

The Full Board, at its meeting on July 18, 2017, considered the above captioned case for Mandatory Full Board Review of the Board Panel Memorandum of Decision filed October 4, 2016.

ISSUE

The issue presented for Mandatory Full Board Review is whether the case should be continued for further development of the record on the issues of proper employer and proper carrier.

The Workers' Compensation Law Judge (WCLJ) declined to continue the case, finding that the issue of coverage had previously been decided.

The Board Panel majority disagreed and restored the case to the trial calendar for further development of the record on the issues of proper employer and carrier. The majority rescinded the WCLJ decisions filed December 23, 2014, and October 20, 2015, without prejudice.

The dissenting Board Panel member would affirm the WCLJ decision.

Jeimy Vega/La Dona Catering Services, Inc. filed an application for Mandatory Full Board Review on October 11, 2016, asking that the decision of the dissenting Board Panel member be adopted by the Full Board, or in the alternative, a finding made that claimant was not an employee of Vega or La Dona Catering Services, Inc. on the date of accident.

Jose Guareno/La Dona Food Service, Inc. filed an application for Mandatory Full Board Review on November 1, 2016, asking that the Full Board affirm the WCLJ's October 20, 2015, decision and that Guareno and La Dona Food Service, Inc. be removed from notice.

The claimant filed an application for Mandatory Full Board Review on November 3, 2016, asking that in accordance with the opinion of the dissenting Board Panel member, the WCLJ decisions filed December 23, 2014, and October 20, 2015, be affirmed.

Republic Franklin Insurance Company/Utica Mutual Insurance Group filed a rebuttal on November 10, 2016, in which it admitted that it did not properly cancel its policy, but argued that further development was necessary on the issues of proper employer and carrier, restating its prior assertion that "Guareno sold the business to Vega who operated the business for several weeks and then gave ownership to Guareno. At the time, and prior to the accident date, Guareno changed the business to a new and distinct entity, which was not insured by Republic Franklin."

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

FACTS

Claimant filed a C-3 (Employee Claim) on August 15, 2014, alleging that she injured her back on July 29, 2014, while working as cook for "La Dona's Restaurant" (11 Main Street, Haverstraw, New York), when she fell in the kitchen. Republic Franklin Insurance Company/Utica Mutual Insurance Group (Republic) controverted the claim, alleging that it cancelled its policy covering "La Dona Food Service, Inc. DBA Dona Restaurant" effective May 24, 2014, and therefore did not cover claimant's accident.

A Board investigation report dated September 17, 2014 (C-49.2; doc. #233842332), contains several documents indicating that Jose Guareno (Guareno) was the president of "La Dona Food Service Inc.," including a Department of Health food service permit renewal application signed by Guareno, president of La Dona Food Service, and dated March 18, 2014. The investigation report also indicates that La Dona Food Service Inc. was dissolved on July 27, 2011.

At the hearing on December 18, 2014, claimant was present with counsel, and Guareno appeared pro se. Also present were counsel for Republic and the Uninsured Employers Fund (UEF). The UEF representative noted that there was a question of proper cancellation, that La Dona Food Service, Inc. had dissolved on July 27, 2011, so that the claim would have to be against Guareno personally, and that "there was an issue regarding a transfer that we will have to get into later on" (transcript, 12/18/14 hearing, p. 3). The WCLJ (Donovan) noted that in dispute were the "question of proper cancellation..., and also who is the correct employer," as claimant had "filed a claim against La Dona Food Services but the Board investigation indicates La Dona Food Service, Inc. was no longer a viable corporation on the day of the claim" (id. at 4). Claimant's attorney indicated that the claim was being amended to allege that claimant was employed by Guareno personally at the time of the accident. The WCLJ found jurisdiction over Guareno. After reviewing documents concerning the attempted cancellation of Republic's policy, the WCLJ determined that Republic's policy was not properly cancelled, as the cancellation was due to a reason other than non-payment of premium, and the notice was sent less than 30 days prior to the date of cancellation. Therefore, the policy remained in effect on the date of claimant's accident on July 29, 2014 (the policy was scheduled to run from March 14, 2014, to March 14, 2015). The WCLJ found that Republic "is therefore the liable carrier in this case" and removed UEF from notice (id. at 14). The WCLJ found that "Mr. Guareno" was "covered on the date of this injury so you don't have any potential personal liability at this moment until the Board Panel reverses my decision" (id. at 16). The findings made at the December 18, 2014, hearing are reflected in a decision filed December 23, 2014, which stated, in part, "I find Republic-Franklin Ins. Co. failed to properly cancel its policy...and is therefore liable for compensation in this case."

Republic did not seek administrative review of the WCLJ decision filed December 23, 2014.

By a reserved decision filed January 2, 2015, the Senior Workers' Compensation Law Judge transferred venue of this matter from the Board's White Plains Service Center to its New City Hearing Point at the claimant's request.

At a hearing on April 15, 2015, before WCLJ Oberman, counsel for Republic argued, among other things, that Guareno "sold the business to Jaime Vega" on May 9, 2014, prior to the claimant's accident, and that Ms. Vega was required to obtain her own insurance (transcript, 4/15/15 hearing, p. 2, 7). The WCLJ directed that an investigation be performed with respect to Jaime (Jeimy) Vega (Vega), directed that Vega be placed on notice and continued the case. The resulting decision filed April 28, 2015, continued the case on the issues of "proper employer and carrier, question of C-7," and directed Vega to appear and produce evidence of workers' compensation coverage on the date of accident.

The record contains a contract providing for the purchase of "Shares of La Dona Restaurant" by Vega from Guareno on May 9, 2014.

A Board investigation report dated May 11, 2015 (C-49.2; doc. #245385000), indicates that Vega was interviewed and alleged that the purchase of the business was never completed, that she never operated the restaurant, and was not in the country on the date of claimant's alleged injury. The report contains New York State Department of State records indicating that Vega incorporated "La Dona Catering Services Inc." on May 14, 2014.

Vega and UEF were both placed on notice and a hearing was held on October 15, 2015, before WCLJ Donovan, at which the claimant, Guareno and Vega were all present and represented by counsel, and counsel for Republic and UEF were present. The WCLJ found that in his prior decision, filed December 23, 2014, he had found that Republic had not properly cancelled its policy and was liable for this case, and that WCLJ Oberman had exceeded his authority by making findings inconsistent with the December 23, 2014, decision, which was not appealed. The WCLJ again discharged UEF from notice. In the resulting decision filed October 20, 2015, the WCLJ stated that "[a]s found in my decision filed 12/23/14, Republic-Franklin Ins. is the liable carrier in this case."

On November 20, 2015, Republic filed an application for administrative review of the WCLJ's October 20, 2015, decision, alleging prior to the accident, Guareno transferred La Dona Food Services to Vega, who created a new entity, La Dona Catering Services, which she operated for several weeks, and then transferred that entity back to Guareno who "changed the business to a new and distinct entity" that was not covered by Republic. The carrier did not dispute that it did not properly cancel its policy, but requests that the matter be continued on the issues of proper employer and carrier.

Both Guareno and Vega filed rebuttals requesting that the WCLJ's October 20, 2015, decision be affirmed, arguing that Republic's application is an untimely request for review of the WCLJ's December 23, 2014, decision.

LEGAL ANALYSIS

At the hearing on December 18, 2014, the WCLJ stated that there was a "question of proper cancellation..., and also who is the correct employer," as claimant had "filed a claim against La Dona Food Services but the Board investigation indicates La Dona Food Service, Inc. was no longer a viable corporation on the day of the claim" (transcript, 12/18/14 hearing, p. 4). Claimant's attorney, at the suggestion of the WCLJ, indicated that the claim was being amended to allege that claimant was employed by Guareno personally at the time of the accident (id.). The WCLJ found that the policy issued by Republic had not been properly cancelled and remained in effect on the date of claimant's accident on July 29, 2014. The WCLJ expressly found that Republic "is therefore the liable carrier in this case" and that "Mr. Guareno" was "covered on the date of this injury" (id. at 16). The findings made at the December 18, 2014, hearing are reflected in a decision filed December 23, 2014, which stated, in part, "I find Republic-Franklin Ins. Co. failed to properly cancel its policy...and is therefore liable for compensation in this case." Republic did not seek administrative review of the WCLJ's December 23, 2014, decision.

Clearly, the WCLJ found at the December 18, 2014, hearing that the policy issued by Republic insuring La Dona Food Service was not properly cancelled and remained in effect on the date of claimant's accident. The WCLJ also expressly found that in addition to covering La Dona Food Service, the Republic policy also covered Guareno personally, and if claimant is found to have been injured while in the employ of either La Dona Food Service or Guareno, Republic will be liable for the claim. Those findings were not appealed and remain in effect.

However, the Full Board finds that nothing in the WCLJ's December 23, 2014, decision would preclude development of the record on the issue of whether, at the time of her injury, claimant was employed by an entity other than La Dona Food Service or Guareno. Nor should that decision be read so broadly as to find that the Republic policy provided coverage for any and all entities who may be found to have employed claimant at the time of her injury, including entities not yet placed on notice or even identified at the time of the December 18, 2014, hearing.

CONCLUSION

ACCORDINGLY, the WCLJ decision filed October 20, 2015, is RESCINDED. The WCLJ decision filed December 23, 2014, REMAINS IN EFFECT. The case is continued for further development of the record on all outstanding issues, including proper employer.