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Case # G0816211
Date of Accident: 04/17/2014
District Office: Hauppauge
Employer: WRS Environmental Services Inc.
Carrier: Great Divide Insurance Co.
Carrier ID No.: W100135
Carrier Case No.: 2065350
Date of Filing of Decision: 07/12/2017
Claimant's Attorney: Pasternack Tilker Ziegler Walsh Stanton & Romano LLP
Panel: Kenneth J. Munnelly

MANDATORY FULL BOARD REVIEW
FULL BOARD MEMORANDUM OF DECISION

This Amended Mandatory Full Board Review Full Board Memorandum of Decision is issued solely to correct a date error in the Facts section in relation to the dates claimant stopped working; should reference 2014 not 2016. The amended portions of the decision are in italics.

The Full Board, at its meeting on May 16, 2017, considered the above captioned case for Mandatory Full Board Review of the Board Panel Memorandum of Decision filed October 21, 2016.

ISSUE

The issue presented for Mandatory Full Board Review is whether the claimant has violated Workers' Compensation Law (WCL) § 114-a.

The Workers' Compensation Law Judge (WCLJ) found that the claimant had not violated WCL § 114-a.

The Board Panel majority affirmed the WCLJ decision, concluding that there was insufficient evidence that the claimant violated WCL § 114-a.

The dissenting Board Panel member would find that the claimant violated WCL § 114-a.

The carrier filed an application for Mandatory Full Board Review on November 21, 2016, arguing that the claimant's failure to inform the carrier's medical consultants about his self-employment activities constitutes a material misrepresentation which violated WCL § 114-a.

The claimant filed a rebuttal on December 20, 2016, arguing that the record, when viewed as a whole, demonstrates that the claimant was not familiar with the concept of self-employment and therefore did not intentionally misrepresent his employment status.

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

FACTS

This case is established for an injury to the claimant's back due to a work-related motor vehicle accident that occurred on April 17, 2014 (see EC-23 [12-30-14]). The claim was later amended to include the neck, both shoulders, right foot, and right ankle (see EC-23 [2-10-16]). The claimant's average weekly wage has been set at $753.23.

At a hearing on December 24, 2014, the claimant testified that, after his accident, he continued working until May 16, 2014 (see Hearing Transcript, 12/24/14, p. 5). He stated that he had not worked at either the employer of record or any other employer from May 17, 2014, on (see id.). The WCLJ asked the claimant whether he was self-employed, to which the claimant answered: "No sir. I do have a company myself, sir. I do have a company myself, but they're losing the business, so I'm not working, sir" (id. at pp. 5-6). He further testified that he had not done any work for that business (see id. at p. 6).

The carrier's consultant, Dr. Rubin, examined the claimant on January 8, 2015, and issued a report. According to the report, the claimant informed Dr. Rubin that "he has not returned to employment since the time of the motor vehicle accident" (IME -4 [1-8-15], at p. 2).

The carrier's second consultant, Dr. Weiland, examined the claimant on January 22, 2015, and issued a report. According to that report, the claimant indicated that he had "returned to work under 'light duty' conditions as of May 16, 2014[,] as a commercial tractor-trailer driver" (IME-4 [1-22-15], at p. 4).

At a hearing held on February 17, 2015, the WCLJ began by questioning the claimant about his work activities since the last hearing, and the following colloquy occurred:

THE JUDGE: We were last here . . . December 24[;] have you worked at all since that time?

THE CLAIMANT: Sir, no, sir.

THE JUDGE: You've not worked for your former employer or any other employer?

THE CLAIMANT: Sir, no, sir.

THE JUDGE: There's been no self-employment?

THE CLAIMANT: I do have a store, sir, but I have people run it.

(Hearing Transcript, 2/17/15, p. 3).

Immediately after the foregoing conversation, the carrier's attorney resumed questioning the claimant. The carrier's attorney began by stating: "[Y]ou've indicated you've been engaged in work activity [since the last hearing]; is that correct?" The claimant responded: "No, I haven't engaged in work activities" (id.). The carrier's attorney then showed the claimant a document indicating that the claimant owned a company called "Stems 4 U" and the claimant confirmed that he has been the owner and president of that company since February 2012 (see id. at pp. 4-5). The claimant explained that the business started out as an online-only (e-commerce) company, but that they obtained a physical store on October 1, 2014, with the financial assistance of a business partner (see id. at pp. 5, 12). The claimant stated that he would normally work for two hours a day, five days a week, using a computer to process orders and develop the company's online presence (see id. at pp. 5-8, 12). He testified that his work for the company continued at the same rate after his accident on April 17, 2014, but that his wife did the "running around and lifting" for the business (id. at p. 9). The claimant further testified that he would drive by the physical store approximately four times per week "to make sure everything is good" (id. at p. 16). He stated that the company had not earned a profit since opening (see id. at p. 10).

In a decision filed on February 20, 2015, the WCLJ determined that the carrier may suspend payments. The case was continued for both sides' positions regarding the claimant's business activities and for the claimant to produce all business records. On November 12, 2015, the claimant filed with the Board over 400 pages of business records (see ECF Doc ID ##s 255070434 and 255069395).

At a hearing on February 5, 2016, the claimant produced the 2014 tax documents from his business, which were received by the Board on February 8, 2016 (see ECF Doc ID ##s 259284443 and 259284467). The WCLJ found that the claimant had not violated WCL § 114-a. The WCLJ noted: "At most, there was a little confusion about the meaning of the word work" (Hearing Transcript, 2/5/16, p. 8). This finding, among others, was memorialized in a decision filed on February 10, 2016.

The carrier sought administrative review of the WCLJ decision.

LEGAL ANALYSIS

WCL § 114-a provides that a claimant may be disqualified from receiving certain compensation benefits if the claimant knowingly made material misrepresentations in order to obtain compensation benefits or in order to influence any determination regarding the receipt of any compensation benefits (see Matter of Phelps v Phelps, 277 AD2d 736 [2000]; Matter of Johnson v New York State Dept. of Transportation, 305 AD2d 927 [2003]). A fact is "material" if it is "significant or essential" to the issue or matter at hand (see Matter of Losurdo v Asbestos Free, Inc., 1 NY3d 258 [2003], app after remand 29 AD3d 1072 [2006], app den 8 NY3d 805 [2007]). The burden of proof on the issue of whether a violation of WCL § 114-a has occurred rests with the carrier (see Matter of Patient Care, 2010 NY Wrk Comp 00354345).

A material misrepresentation can be based upon an omission of a relevant fact (Matter of Fighera v New York City Dept. of Environmental Protection, 303 AD2d 861 [2003]); the exaggeration of symptoms to a physician who is making a determination regarding the claimant's degree of disability (Matter of Michaels v Towne Ford, 9 AD3d 733 [2004]; see also Matter of Bowes v Gulinellos Town & Country, 3 AD3d 805 [2004]); or an attempt to downplay the significance of prior accidents and/or a pre-existing medical condition (see Matter of Dishaw v Midas Serv. Experts, 27 AD3d 921 [2006]; Matter of Husak v New York City Tr. Auth., 40 AD3d 1249 [2007]).

In this case, the testimonial evidence suggests that the claimant did not knowingly misrepresent his employment status to either the medical providers or the Board, but rather was unaware that owning one's own business constituted "work" or "employment." During the December 24, 2014, hearing, the claimant drew a distinction between being self-employed and owning a business. When asked whether he was self-employed, the claimant responded "no" but added "I do have a company myself, but they're losing the business, so I'm not working" (Hearing Transcript, 12/24/14, pp. 5-6). Similarly, at the February 17, 2015, hearing, the claimant denied to the WCLJ that he was self-employed, but noted, on his own accord, that he owned a store (Hearing Transcript, 2/17/15, p. 3). The claimant seemingly believed that his store ownership did not constitute self-employment because he had "people run [the store]" (id.). Even immediately after informing the WCLJ that he owned a business, the claimant told the carrier's representative that he was not engaged in work activities (see id.). Therefore, the preponderance of the evidence indicates that the claimant was not willfully deceiving the Board, but was only confused, which is insufficient to find a WCL § 114-a violation (see e.g. Matter of Hall of Springs, 2013 NY Wrk Comp G0218446).

This finding is buttressed by the fact that the claimant was repeatedly forthcoming about his business venture when directly asked about it. On cross-examination during the February 17, 2015, hearing, the claimant freely admitted that he was the president and owner of "Stems 4 U" and provided details about when the company opened, his work schedule before and after the accident, his work activities, and the opening of a brick and mortar store. It was only when the claimant was asked more generally about his employment (i.e. whether he had worked for anyone other than the employer of record or whether he was currently working) that he neglected to mention that he owned his own business. Moreover, the claimant filed with the Board over 400 pages of business records (see ECF Doc ID ##s 255070434 and 255069395) as well as his 2014 tax documents (see ECF Doc ID ##s 259284443 and 259284467).

In light of the foregoing, the Full Board finds that the preponderance of the evidence supports a finding that the claimant did not knowingly make material misrepresentations in order to obtain compensation benefits or in order to influence any determination regarding the receipt of any compensation benefits, and did not violate WCL § 114-a.

CONCLUSION

ACCORDINGLY, the WCLJ decision filed February 10, 2016, is AFFIRMED. No further action is planned by the Board at this time.