By: Board Members Lobban, Paprocki, Foster
The self-insured employer (SIE) requests review of the Workers' Compensation Law Judge (WCLJ) decision filed April15, 2011. No timely rebuttal has been served upon the Board.
The issue presented for administrative review is whether the claimant's indemnity benefits should be suspended pending development of the record on the issue of a possible violation of Workers' Compensation Law (WCL) § 114-a.
This case was established for a work related injury to the low back pursuant to WCL § 21-a in a Notice of Decision filed July 14, 2010. The carrier's consulting neurologist, Dr. Jay Levy, had previously examined the claimant on May 3, 2010, and reported that the claimant had a marked partial disability, and the claimant's treating physician was reporting a total disability. The parties entered into a written stipulation which was filed with the Board and memorialized in a Notice of Decision filed September 1, 2010. In that decision, the parties agreed to a benefit rate for an award and continuing payments to the claimant at the compromise rate of $564.04, which falls between the marked and total rates for this claim. Dr. Levy examined the claimant again on October 8, 2010, and again found a marked partial disability.
The carrier's investigator conducted surveillance on a person purported to be the claimant on seven days over the course of approximately three months. The surveillance DVD's and investigator's report were submitted to the Board and sent to Dr. Levy and the claimant's doctor for review. The DVD footage has yet to be authenticated. The footage consists almost entirely of the claimant walking. The claimant can be seen walking both with and without a cane. The claimant is slightly or noticeably limping in most of the footage, with or without his cane, and appears to be walking with a normal gait for a portion of the footage. The claimant can be seen carrying a briefcase and two water bottles at one point. It is impossible to determine the weight of the briefcase from the footage, but it does not appear to be heavy. The footage also shows the claimant going to and from buildings, one of which appears to contain doctor's offices. There has been no testimony laying a foundation as to the claimant's activities on the days the footage was taken, so there is no evidence of the purpose for which the claimant visited each of the buildings. However, the surveillance footage for November 19, 2010, includes footage taken inside the Board hearing point before the claimant's case was called that day. Approximately two minutes of that footage shows the claimant engaging in a conversation with his attorney, who is sitting next to the claimant on a bench. There is no sound on the DVD submitted to the Board, but the investigator's report includes a statement by the investigator explaining a specific question asked by the claimant as well as his attorney's response.
At a hearing on November 19, 2010, the WCLJ directed depositions of Dr. Levy and Dr. M. Gordon Whitbeck, Jr., and continued the case on the issue of the claimant's degree of disability after November 20, 2010. Essentially, Dr. Whitbeck testified in accordance with his reports that the claimant had a total disability, and Dr. Levy testified in accordance with his reports that the claimant had a marked disability. The WCLJ issued a reserved decision on March 11, 2011, in which he summarized the reports and deposition testimony of the doctors, found no change in the claimant's condition since the parties entered into the stipulation at the compromise rate, and made an award and direction to the SIE to continue payments at the stipulated rate of $564.04 per week. That decision was not appealed.
After his deposition on January 24, 2011, Dr. Levy was asked to provide an addendum regarding the claimant's degree of disability based upon the surveillance footage of the claimant. Dr. Levy issued an addendum dated February 25, 2011, which was filed with the Board on March 2, 2011, in which he changed his degree of disability finding from his examination on October 8, 2010, from marked to moderate based upon the surveillance footage.
The case returned to the trial calendar on April 12, 2011, to address concerns raised by the claimant's attorney in his memorandum of law regarding the SIE's surveillance video. The WCLJ found that he would not make a ruling regarding the admissibility of the surveillance DVD's until the SIE provided a foundation for the admissibility with the testimony of the investigator. The carrier requested suspension of benefits based on its offer of proof that the contents of the surveillance footage support a finding of a violation of WCL § 114-a. The minutes from the hearing reveal that the WCLJ directed the SIE to continue payments at a tentative rate pending development of the record since the carrier's consultant still found an ongoing causally related disability. The WCLJ continued the case for the testimony of the investigator on May 24, 2011. That hearing was cancelled and rescheduled for June 13, 2011. At the rescheduled hearing, the SIE's witnesses appeared but no testimony was taken, and the case was referred to the WCLJ for a reserved decision.
The SIE asserts that the claimant's indemnity benefits should have been suspended pending development of the record on the issue of a possible violation of Workers' Compensation Law (WCL) § 114-a.
Initially, the Board Panel notes that the case was "established" pursuant to WCL § 21-a, which allows payments to the claimant without actually establishing the claim. If an employer or carrier is unsure of the extent of its liability in a claim, it may invoke WCL § 21-a, which allows the employer to make indemnity payments and payments for prescribed medicine without admitting liability for up to one year. If the employer makes such payments, it must serve on the claimant and the Board a notice of temporary payment of compensation. The SIE filed a C-669 on March 3, 2010, in which it indicated that it began temporary payments to the claimant without prejudice and without liability, in accordance with WCL § 21-a. The payment of such temporary compensation shall terminate after one year or upon the employer's decision to controvert the claim within that year, as long as the employer submits a notice of termination to the claimant and the Board. Thus, a carrier which has invoked WCL § 21-a may subsequently file a notice of termination and a notice of controversy and fully defend the claim as if it had filed its C-7 in the first instance. However, in the instant case, the SIE never filed a notice of termination or a C-7 within one year of the filing of its C-669. As a result, the SIE waived its right under WCL § 21-a to controvert this claim, such that the claim is hereby properly established for a work related injury to the low back.
Before turning to the issue on appeal, the Board Panel notes that a portion of the surveillance footage upon which the application for review is based consists of footage of the claimant and his attorney sitting with no one near them inside the Board's Rochester, New York hearing site discussing this case. Although there is no sound recording on the footage submitted to the Board, the investigator's report reveals that the investigator conducting the surveillance heard the contents of the conversation, which pertained to a legal issue that was to be addressed before the Board at the claimant's hearing that day. The fact that the surveillance footage submitted to the Board does not contain sound does not mean that the investigator did not record the conversation. The Board Panel notes that many devices presently available, including the present generation of "smart phones," are capable of making both audio and video recordings of high quality.
The attorney-client privilege prevents the introduction of evidence of a confidential communication made between a claimant and his attorney for the purpose of obtaining legal advice (CPLR § 4503 [a]; Matter of Rossi v Blue Cross & Blue Shield of Greater N.Y., 73 NY2d 588 ). CPLR § 4503 specifically states that any person who obtained, without the knowledge of the client, evidence of a confidential communication made between the attorney and the client in the course of professional employment, shall not disclose such communication in any action, including administrative hearings conducted by any state agency. The purpose of this evidentiary rule is to foster open communication between the attorney and his or her client by assuring that the contents of conversations cannot later be used against the client (see, Matter of Spectrum Sys. Int'l Corp. v Chemical Bank, 78 NY2d 371 ).
The Board Panel further notes that eavesdropping has been illegal in New York State for many years. Penal § 250.05 makes eavesdropping a Class E felony, and includes the "mechanical overhearing of a conversation." Penal Law § 250.00 defines the "mechanical overhearing of a conversation" to mean "the intentional overhearing or recording of a conversation or discussion, without the consent of at least one party thereto, by a person not present thereat, by means of any instrument, device or equipment." In a November 21, 1957, Opinion of the Attorney General, the Attorney General concluded that the eavesdropping statute, which was then codified as Penal Law § 738 and was then limited to overhearing telephone or telegraph communications, prohibited an employer from hiring a private detective agency to surreptitiously listen in on an employee's conversation "for the purpose of determining whether the employee was being unfaithful, disloyal or dishonest to the employer" (see 1957 Annual Report of the Department of Law at pp. 272-275). In this opinion, the Attorney General quoted the 1956 report of the Joint Legislative Committee to Study Illegal Interception of Communications, which included its intention that the eavesdropping statute was intended to apply to the surreptitious electronic recording of an employee's private conversations. The legislative purpose was to "effectively outlaw all electronic eavesdropping by anyone, except law enforcement officers specifically authorized by court order." The statute has since been expanded to include the "mechanical overhearing of a conversation," to include the new audio and video recording devices which have become available since the statute was first enacted in 1957.
In the instant case, the Board Panel finds that contents of the surveillance footage and investigator's report pertaining to the claimant's meeting with his attorney at the hearing site were clearly obtained without the claimant's consent and are evidence of a confidential communication between the claimant and his attorney in the course of the attorney's professional representation of the claimant. The SIE's assertion that the communication was not confidential because it occurred in a public area of the hearing site is unpersuasive, as it is clear from the footage that no one is sitting or standing anywhere near the claimant and his attorney. In addition, meetings between claimants and their attorneys at hearing sites before and sometimes after their hearings are a frequent component of the practice of workers' compensation, and such meetings are routinely held in common public areas due to a lack of private meeting space at the hearing sites. As a result, the Board Panel finds that it is imperative that such meetings be protected by the attorney client privilege and not be subjected to surveillance or eavesdropping by carrier's investigators. In addition, any audio or video recording at a Board hearing site is a violation of the Board's policy that such conduct is prohibited without prior Board authorization.
Therefore, the Board Panel finds that the portion of the surveillance footage of the claimant meeting with his attorney, and the portion of the investigator's report which pertain to that meeting are hereby struck from the record.
The issue on appeal is the WCLJ's decision not to suspend benefits to the claimant pending development of the record on the issue of whether the claimant committed fraud in violation of WCL § 114-a. The Board may suspend benefits to a claimant pending development of the record on the issue of fraud if the SIE has produced some evidence of such fraud (Matter of Reimers v American Axle Mfg., 2 AD3d 1246 , see also Matter of Wegmans Food Market, 2007 NY Wrk Comp 80606548). The Board will not suspend benefits if the SIE or carrier has merely made an assertion of fraud but has produced no evidence thereof (Matter ofQueens General Hospital, 2003 NY Wrk Comp 09556463; Matter of World Kitchen, Inc., 2010NY Wrk Comp 70608208).
The evidence presented in support of the suspension of benefits is the surveillance footage of the claimant, the investigator's report pertaining to that footage, and the addendum from Dr. Levy. The carrier's only assertion on appeal of a WCL § 114-a violation is that the claimant's gait and use of a cane varied in the footage when visiting doctors as opposed to everyday activities. The carrier also asserts that Dr. Levy's addendum supports a suspension because the doctor changed his opinion on the claimant's degree of disability from marked to moderate.
If a claimant knowingly makes a false statement or representation as to a material fact for the purpose of obtaining compensation or for the purpose of influencing any determination regarding any such payment, such person shall be disqualified from receiving any compensation directly attributable to such false statement or representation (WCL § 114-a). A fact is material for purposes of WCL § 114-a(1) so long as it is significant or essential to the issue or matter at hand (Matter of Losurdo v Asbestos Free, Inc., 1 NY3d 258 ). An omission of a material fact made knowingly is treated the same as the making of a false statement of a material fact (id).
The SIE does not identify on appeal any false statement or omission on the part of the claimant. As a result, the SIE fails to articulate how the evidence upon which it relies constitutes evidence of a false statement or omission made by the claimant. As noted above, a suspension of benefits pending development of the record must be based upon evidence of fraud, not based on the mere existence of surveillance footage. Although it is not the function of the Board Panel to set forth an argument on appeal for a party, the Board Panel has reviewed a subsequent memorandum of law submitted by the SIE and found that the SIE is asserting that the claimant committed fraud by misrepresenting the degree of his disability to the carrier's consultant and to his own doctor.
The SIE does not identify any statement or omission made by the claimant to his treating physician, let alone make an assertion of how the evidence in question shows any statement or omission to be false. In the addendum he filed after reviewing the surveillance footage, Dr. Levy only notes that the claimant was carrying a briefcase and water bottles which appear likely to weigh more than 10 to 15 pounds combined, and that the claimant's gait varied from normal to limping. Dr. Levy then concluded that the claimant's function is more consistent with a moderate disability than a marked disability. Dr. Levy does not set forth any statements or omissions the claimant made to him that might have been false in light of the surveillance footage. The SIE also has failed to identify on appeal any statements or omissions made by the claimant to Dr. Levy that the evidence in question may indicate were false.
Therefore, the Board Panel finds, upon review of the record and based upon a preponderance of the evidence, that the WCLJ properly allowed continuing indemnity benefits to the claimant pending development of the record on the issue of a violation of WCL § 114-a, as the SIE failed to produce evidence that the claimant actually made a false statement or omission. The WCLJ's decision is modified, to preclude the portion of the SIE's surveillance footage of the claimant meeting with his attorney, the portion of the investigator's report which pertain to that meeting, as well as any testimony from the SIE's investigator pertaining to the claimant's meeting with his attorney as set forth above.
The Board Panel notes that the portion of the surveillance footage that has not been precluded must still be authenticated before it can be admitted into evidence. The videotape may be authenticated by the testimony of a witness to the recorded events or of an operator of the videotape equipment that the videotape accurately represents the subject matter depicted or truly and accurately represents what was before the camera (Matter of People v Patterson, 93 NY2d 80 ). Even if the footage which has not been precluded is authenticated, the addendum of Dr. Levy which was based on a viewing of the footage in its entirety must be precluded since his opinion may have been tainted by the precluded footage.
ACCORDINGLY, the WCLJ decision filed April15, 2011, is MODIFIED, to preclude the portion of the SIE's surveillance footage of the claimant meeting with his attorney, the portion of the investigator's report which pertain to that meeting, as well as any testimony from the SIE's investigator pertaining to the claimant's meeting with his attorney as set forth above. The case is continued.