Florida Workers' Compensation Lawyer & Attorney : David A. McCranie : Serving Jacksonville, Miami, Tampa, St Petersburg

This is a little off-topic, but yesterday the U.S. Supreme Court weighed in on the issue of an employee's use of a fake social security number in obtaining employment in this country .  See Flores-Figueroa v. U.S., decided on 5/4/2009.

 

Ignacio Flores-Figueroa is a citizen of Mexico who gave his prospective U.S. employer a false name, birth date, and social security number, along with a counterfeit alien registration card, in order to gain employment. The social security number and the number on the alien registration card were not those of a real person.  Later, however, he presented his employer with new counterfeit social security and alien registration cards.  These cards, unlike the earlier alien registration card, used his real name.  But this time the numbers on both cards were real numbers which were in fact assigned to other U.S. citizens.  Based on these facts, Flores-Figueroa was found guilty of "aggravated identity theft" [18 U.S.C. §1028A)(a)(1)], which provides for an enhanced sentence to anyone who "knowingly. . . uses. . . a means of identification of another person. . ." in the commission of another crime.

 

The key words there are "knowingly" and "another person."  A unanimous U.S. Supreme Court reversed Flores-Figueroa's enhanced sentence, holding that the statute requires proof that the defendant knew that the fake number belonged to another person, not just that the number was false.  Although there was evidence that Flores-Figueroa knew that the social security number that he gave his employer was not his own, there was no evidence that he knew that the number really belonged to someone else.  The ABA Journal has this report on the decision.

 

Though similar to the federal statute which was at issue in Flores-Figueroa,  §440.105(4)(b)9, Fla. Stat., is worded slightly differently.  Florida's statute makes it unlawful for anyone "to knowingly present or cause to be presented any false, fraudulent, or misleading oral or written statement to any person as evidence of identity for the purpose of obtaining employment or filing or supporting a workers' compensation claim."   Because there is no requirement in Florida's statute that the accused know that the identification actually belongs to "another person," I doubt that the Flores-Figueroa decision would be controlling in a case involving §440.105(4)(b)9.

 

 

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The problem of illegal immigration continues to spill over into the area of workers' compensation law.  Take the tragic case of Victor Leon.  Victor is an illegal immigrant who, while working for Altec Roofing on a construction project in Palm City, fell off the roof of a three-story building.  The accident resulted in his permanently paralysis. You can read a newspaper account of his story here.

 

Victor says that his employer knew all about his immigration status and that before his accident they even helped him to obtain a fake social security number.  The newspaper account suggests that all of this puts him "at the crux of the debate" about his rights right to receive workers' compensation benefits as a result of his accident. 

 

But at this point, absent further action by the legislature, that debate is actually over.  The First DCA has now held that using a fake social security number just to obtain employment does not justify the forfeiture of an injured worker's right to workers' compensation benefits for an on-the-job accident.   Rather, §440.09(4)(a) requires that an injured worker make a false statement "for the purpose of securing workers' compensation benefits" before the ultimate sanction of forfeiture may be imposed.  See Matrix Employee Leasing v. Hernandez, 975 So.2d 1217 (Fla. 1st DCA 2008).  So unless there are other facts about the case which weren't reported, his illegal status does not affect his right to workers' compensation benefits.

 

But Victor has another problem.  A post-accident drug test revealed the presence of cocaine and marijuana in his system.  Section 440.09(3) says that workers' compensation benefits for an otherwise compensable accident are not payable if the injury "was occasioned primarily. . . by the influence of any drugs. . . not prescribed by a physician."  And §440.09(7)(b) creates a presumption that the injury was occasioned primarily by the presence of a drug when a post-accident test confirms its presence in the worker's system at the time of the accident.

 

Apparently, Victor has retained an expert who has testified that the drugs in his system at the time of the accident did not actually impair him.  But rather than seeking an adjudication of his right to workers' compensation benefits before the judge of compensation claims, Victor took another approach.  After initially filing a petition for benefits, he voluntarily dismissed that petition and instead filed a tort claim against his employer in circuit court - evidently on an estoppel theory.  That is, Victor argues, having elected to controvert the compensability of his accident under the Florida Workers' Compensation Law, the employer/carrier should now be estopped to claim workers' compensation immunity to a claim for tort liability. 

 

Unfortunately for Victor, the courts haven't really bought into this estoppel argument lately, and the circuit court granted Altec's motion for summary judgment.  And, citing Tractor Supply Co. v. Kent, 966 So.2d 978 (Fla. 5th DCA 2007), a case which I discussed here and here, the Fourth DCA last week affirmed that decision.  So as far as any remedy against Altec Roofing is concerned, I suppose it's back to the workers' compensation forum for Victor at this point.

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Who will watch the watchmen?  That question crossed my mind when I read this story from the 11/6/2008 edition of the Miami Herald.  According to the story, Arturo Vega, an investigator with the Florida Department of Financial Services, was arrested for trying to shake down a Miami employer which had failed to obtain workers' compensation insurance coverage for its employees.  Vega had determined that Pipe Designs, Inc., in Miami did not have proper coverage and charged the company with about $30,000 in penalties.  However, he allegedly reduced the proposed penalties down to $7,483.69 in return for two $1,000 money orders with the payee information left blank.  One of those money orders was deposited with the state in order to lift a stop work order which had been entered against Pipe Designs, but the other Vega allegedly kept for himself.

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Section 440.105(4)(b), Fla. Stat., makes it unlawful for any person knowingly to make any false, incomplete, or misleading statement in support or denial of any benefit under the Florida Workers' Compensation Law.  And as a recent case from Montana illustrates, if the U.S. Mail or wire services are used to facilitate the making of those false statements, they may violate federal law as well.

 

Bonnie Schreiber, an employee of the U.S Postal Service, injured her back on the job and also developed carpal tunnel syndrome as a result of her employment. Since 1986 she had received disability benefits under the Federal Employees' Compensation Act because of those injuries, and since that time she had periodically submitted OWCP Form 1032, which  requires a recipient to report to the U.S. Department of Labor any work or earnings within the previous 15 months and to report any improvement in her condition.  She always reported that she had been unemployed and that she was incapable of employment.

 

Surveillance evidence, however, showed otherwise.  Schreiber was videotaped engaging in a variety of activities, including bending, twisting, loading and unloading firewood, moving logs and garbage cans, carrying 32-lb. cinder blocks, driving a tractor, and operating a chain saw.  Based on this evidence, she was charged with stealing money from the U.S. government.  In addition, however, because she had used the U.S. Mail to send in her Form 1032, she was indicted for mail fraud (18 U.S.C. §1341) and because her monthly disability benefits were deposited electronically into her bank account, she was indicted for wire fraud (18 U.S.C. §1343).  You can read the indictment here.  On October 1, she was convicted on all four counts of the indictment.  Sentencing is scheduled for January 8.  Press coverage is available here.

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Section 440.15(1)(f)2.b, Fla. Stat., provides in part that an employer/carrier is not required to make any payment of permanent total disability benefits to an injured worker "if the employee refuses to apply for or cooperate with the employer or carrier in applying for social security disability benefits."  Now comes word from this article in the 10/23/2008 edition of the New York Times that a similar provision in a disability policy has landed a major disability insurer in hot water.  According to the article, a federal jury sitting in Boston has found Unum, the nation's largest disability insurer, guilty of committing fraud in some cases by requiring disability recipients to apply for social security disability benefits knowing that they were not eligible for those benefits.  The suit was brought by a whistleblower under the federal False Claims Act, 31 U.S.C. §§3729, et seq.  You can view the amended complaint here.

 

Could this type of lawsuit become a problem for Florida's workers' compensation insurers if they insist on requiring a permanent total disability recipient to apply for Social Security disability benefits?  Possibly, but I really don't think so.  As the article correctly notes, the Social Security Administration defines "disability" more strictly than Unum's policy does. [Unum's policy pays disability benefits in cases where the recipient is unable to perform his "own occupation," while the Social Security Administration requires a recipient to be unable to perform any occupation].  From 1994 through 2003, the Florida Workers' Compensation Law expressly tied the standards for an award of permanent total disability to the standards for an award of Social Security disability benefits.  And after 2003, at least by legislative design, the standards for an award of permanent total disability benefits in Florida have become even stricter.

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As I noted here and here, the Escambia County School Board fired its employee, Jackie Fowler, on the grounds that Ms. Fowler had committed workers' compensation fraud, even after an administrative law judge ("ALJ") had concluded that she was not guilty of the offense.  The First DCA has now reversed the Board's decision, holding that because the ALJ's findings of fact were supported by competent substantial evidence, the Board could not reject those findings in making its decision.  Fowler v. Escambia County School Board.

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Dreggors v. Wausau Ins. Co., decided on 8/22/2008, is just the latest in a series of court cases arising out of the alleged commision of workers' compensation fraud by the claimant, his wife, and his attorney. Because the facts are so involved, I simply haven't had time to write about the cases before now, but those interested can read two of those decisions here and here.  See also State v. Dreggors, 813 So.2d 170 (Fla. 5th DCA 2002); Horning-Keating v. State, 777 So.2d 438 (Fla. 5th DCA 2001).

 

This particular case involved an action for defamation by the claimant and his wife against Wausau (the workers' compensation carrier) and Wausau's attorney because of the attorney's statements to Orlando's Channel 9 News in which he described the case against the Dreggors as "the biggest workers' compensation fraud case in the history of Florida."  Under Florida law, statements of "pure opinion" are constitutionally protected and are therefore not actionable.  Because the Fifth DCA concluded that the attorney's statements were expressions of "pure opinion," the court affirmed the award of summary judgment in favor of the insurer and the attorney.

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I wrote here about Escambia County School Board v. Fowler, a case where the school board had terminated the employment of one of its school bus drivers on the grounds that she had committed workers' compensation fraud by making false statements about her medical condition.  [Section 1012.40(2)(b), Fla. Stat., provides that the employment of an "educational support employee" may be terminated only for "reasons stated in the collective bargaining agreement, or in a district school board rule in cases where a collective bargaining agreement does not exist. . . ." The collective bargaining agreement between the school board and the Union of Escambia Education Staff Professionals provides that all "discipline shall be progressive, fair, and only for just cause" (emphasis added).  However, "just cause" is not defined in the agreement].

 

After the board voted to terminate Fowler's employment, she requested an administrative hearing pursuant to §120.57, Fla. Stat.  After considering the evidence, the hearing officer concluded that there was insufficient evidence that Fowler had "knowingly" and "intentionally" made false statements about her condition, and she recommended that Fowler be reinstated.

 

The board, however, disagreed with the recommended order and voted once again in this order to terminate Fowler's employment.  Fowler has now appealed that decision to the First DCA [Fowler v. Escambia County School Board, Case No. 1D07-4826].  Oral argument was held on 7/16/2008.  You can view the oral argument here.

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Bologna v. Schlanger, though not a workers' compensation case, is an interesting recent decision from the Fifth District Court of Appeal on the issue of "fraud" which could have some application in the workers' compensation setting.  The trial court had dismissed Bologna's negligence claim after concluding that she had lied in her deposition about prior injuries.  Reversing, the Fifth DCA held that Bologna was entitled to an evidentiary hearing before the ultimate sanction of dismissal was warranted.

 

The court focused on whether Bologna's deposition testimony was knowingly false under the circumstances, particularly in light of the fact that it was only because of her previous truthful answers to interrogatories that defense counsel learned of the prior injuries in the first place: 

It is difficult to envision a scheme to conceal a prior injury that includes identifying the doctor who treated it.

 

The court also seemed to question the tactics of the defense counsel:

This record, as well as others, hints that there may now be a “fraud” strategy on the part of defense counsel. If a plaintiff denies a particular prior injury or treatment or pattern of pain, rather than probe in detail-which may risk the jogging of the plaintiff's memory-the questioning on this point just stops until the inevitable motion to dismiss for fraud is ruled on.

Judge Griffin's concurring opinion is also worth a read.

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I wrote here about three businessmen who were recently convicted in federal court of conspiracy, mail fraud, wire fraud, and money laundering in connection with various fraudulent workers' compensation schemes.  They've now been sentenced to a combined 55 years in prison along with forfeiture of $75M in assets.

 

You can read the story here.

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As I discussed here, an employer's or carrier's allegation that an employee has committed workers' compensation fraud by violating one or more provisions of §440.105 can sometimes have collateral consequences.  For example, in Sickles v. Pasco Co. Sheriff's Office, JCC Hafner concluded that Sickles, a deputy sheriff, had knowingly made false statements in connection with his workers' compensation claim in violation of §440.105 and that any further benefits on account of his accident must be denied for that reason.

 

Two days later, according to this 5/29/2008 article from the Tampa Tribune, the Pasco County Sheriff's Office suspended Sickles from his job without pay and without benefit of a pre-suspension hearing.  That prompted Sickles' request for an injunction from the circuit court on the grounds that PCSO's action violated the "Police Officer's Bill of Rights" [see §112.532, Fla. Stat., which sets forth various procedural due process rights of law enforcement officers charged with misconduct].  According to the article, the lawsuit has now been "settled," although it appears that the sheriff's office is continuing its investigation.

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I wrote here about whether an employee who knowingly presents false evidence of his identity to his employer in obtaining employment, thereby violating §440.105(4)(b)9, Fla. Stat., also thereby forfeits his right to workers' compensation benefits if he is injured in a subsequent on-the-job accident.  The authors of this article in the October 2007 edition of the Florida Bar Journal argued that he should.

 "Not so fast," said the First DCA in Matrix Employee Leasing v. Hernandez, decided on 3/10/2008.  The Court concluded that before an employee's benefits may be forfeited, §440.09(4)(a), Fla. Stat., requires that the false statement of identity must have been presented "for the purpose of securing workers' compensation benefits." 

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I wrote here and here about whether false evidence of identification in the form of a false Social Security number can constitute "fraud" under §440.105(4)(b)9, Fla. Stat.  JCC John P. Thurman in Gainesville recently weighed in on the subject in Gonzalez v. Williston Timber, OJCC No. 07-018284JPT.

 

Mr. Gonzalez, who possessed a fifth grade education, purchased from some individuals whose names he could not recall a Social Security card upon migrating illegally to the United States.  He was later told by some friends that his card was not valid, but he did not believe them.  When he went to work for Williston Timber, no one told him that his card was invalid, and in fact Williston Timber never received any notice from the Social Security Administration that his number was not valid.  Following his on-the-job accident, he presented his Social Security number to his employer, to his authorized treating physician, and on his subsequent petition for benefits.  At some point after he filed his petition for benefits - the order does not say when or how - Mr. Gonzalez realized that the number was not valid, and he never used it again.

 

Based on these facts, JCC Thurman found that Mr. Gonzalez did not knowingly present false evidence of his identity, and he was therefore not guilty of violating §440.105.  Accordingly, he did not forfeit his right to future workers' compensation benefits under §440.09(4), Fla. Stat.

 

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Three men were recently convicted by a federal jury in Jacksonville on various counts of conspiracy, mail fraud, wire fraud, and money laundering.   According to the 73-page indictment, the men defrauded client companies of various professional employer organizations (PEOs) by having them pay premiums for workers' compensation insurance coverage.  The problem was that the insurance companies allegedly providing the coverage were sham corporations, and the defendants simply pocketed the premiums - millions of dollars' worth.  You can read the story from the Florida Times-Union here and a press release from the United States Attorney for the Middle District of Florida here.

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Section 626.989(9), Fla. Stat., directs the Department of Financial Services to prepare an annual "joint performance report" to the legislature on workers' compensation fraud by January 1 of each year.  The Department has now issued its report covering the period 7/1/2006 through 6/30/2007, which you can read here. 

 

Among the statistics: 184 convictions for workers' compensation fraud consisting of claimant fraud (58), working without workers' compensation insurance (65), premium fraud (13), fraudulent certificate of insurance (29), identity theft (1), grand theft (10), and violation of stop work order (8).

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Although it's difficult to tell all of the facts from the Court's brief opinion, it would appear that the employee had an employment contract with his employer in which he agreed to arbitrate rather than litigate any employment-related claims under the "Employment Retirement Income Security Act, Title VII of the Civil Rights Act of 1964, the Equal Pay Act, the Americans with Disabilities Act, the Older Workers' Benefits Protection Act, as well as all other federal, state, and local employment-related laws, regulations, rules or theories."  The contract specifically excluded from arbitration, however, those claims brought under "the workers' compensation laws." 

 

 

The employee here brought suit against the employer for malicious prosecution.  The Third DCA held that "the instant claim stems directly from [the employer's] actions during the workers' compensation case," and therefore "it is not arbitrable under the parties' agreement."  Although the opinion doesn't say so, I suspect that this must stem from some allegedly false accusation of workers' compensation fraud.  Cross v. Braman Motors, Inc. 

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This post is slightly off the topic of Florida workers’ compensation law, but I wrote here about the debate over whether an employee has committed “fraud” under §440.105(4)(b)9 - thereby justifying the termination of his workers’ compensation benefits pursuant to §440.09(4) - if he has deliberately provided his employer with false evidence of his identity in the form of a fake Social Security number. But what if the employer actually knows or has reason to know that the Social Security number is a fake and continues the claimant’s employment anyway? Should an employer (or its carrier) be able to profit by denying the compensability of an otherwise compensable workers’ compensation claim based on such “fraud” if the employer itself had knowledge of the “fraud” all along? Obviously, all of this is tied in with the current national debate over illegal immigration and what should be done about it. 

 

Actually, 8 U.S.C §1324a(a)(2) makes it unlawful for an employer either to “hire” or to “continue to employ” an alien “knowing the alien is (or has become) an unauthorized alien with respect to such employment.” The key word here is the word “knowing,” because 8 C.F.R. §274a.1(l)(1), the regulation implementing the statute, defines “knowing” as having either “actual” or “constructive” knowledge.

 

Continue Reading...

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Other than perhaps that of attorney's fees, probably the hottest topic in Florida workers' compensation law over the last few years has been that of "fraud."  Section 440.105(4)(b)1, Fla. Stat., makes it unlawful for "any person" to "knowingly make, or cause to be made, any false, fraudulent, or misleading oral or written statement for the purpose of obtaining or denying any benefit or payment under this chapter."  In turn, §440.09(4)(a), Fla. Stat., requires a complete forfeiture of any further workers' compensation benefits - both indemnity and medical - upon a judicial determination that the employee "has knowingly or intentionally engaged in any of the acts described in s.440.105 or any criminal act for the purpose of securing workers' compensation benefits."

 

In addition, however, §440.105(4)(b)9, Fla. Stat., makes it unlawful for any person to "knowingly present or cause to be presented any false, fraudulent, or misleading oral or written statement to any person as evidence of identity for the purpose of obtaining employment or filing or supporting a claim for workers' compensation benefits"  (Emphasis added).  So what if an employee is injured on the job and the employer/carrier later discover that the employee provided a false Social Security number to the employer when he commenced his employment?  Does he forfeit his entitlement to workers' compensation benefits as a result?

 

Continue Reading...

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Jorge Diaz, an injured worker, was accused by the employer/carrier of committing workers' compensation fraud by submitting false mileage reimbursement requests.  The Judge of Compensation Claims agreed to "bifurcate" the issues, that is, to conduct a hearing where the issues would be limited solely to whether Diaz was guilty of committing fraud and therefore whether any further workers' compensation benefits would be barred pursuant to §440.09(4), Fla. Stat.  In this order, the JCC concluded that Diaz in fact was not guilty of fraud, and the employer/carrier sought review of that decision by way of a petition for writ of certiorari to the First District Court of Appeal.

 

In this decision rendered on 8/8/2006, the First DCA denied the petition, but "without prejudice to appellants seeking review after the Judge of Compensation Claims issues a final order on the merits of the claims pending below."  Later, rather than proceeding to a hearing on the merits, the parties settled the pending petition for benefits, as reflected in this stipulation and order from the JCC dated 2/13/2007.  The employer/carrier then sought to raise the denial of its fraud defense on appeal for the second time.

 

But in Isol Auto Supply v. Diaz, decided on 9/12/2007, the First DCA once again refused to consider the employer/carrier's fraud defense on its merits.  In the stipulation, the parties agreed, among other things, that "all issues are resolved except as to the amount of attorney's fees and costs."  This agreement, said the court, rendered the fraud defense moot.

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An adjudication that an injured worker has violated §440.105(4)(b), Fla. Stat., the so-called "fraud" provision of the Florida Workers' Compensation Act, will result in the worker's loss of any right to claim workers' compensation benefits resulting from his otherwise compensable accident.  See §440.09(4), Fla. Stat.

 

A "fraud" charge can have other consequences, too.  Violation of §440.105 is actually a felony, so of course there can be criminal liability for the claimant, not just a loss of his workers' compensation benefits.  Or, as I wrote about here, a false charge of fraud can lead to the filing of a civil lawsuit by the injured worker against the person or persons bringing the charges.

 

But what if the employer believes that the injured worker has committed workers' compensation fraud and uses that as a basis not for terminating the claimant's workers' compensation benefits, but for terminating his employment?  That's what happened in Escambia County School Board v. Fowler, DOAH Case No. 06-4028, decided on 6/8/2007.

 

Continue Reading...

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Falsely accusing someone of being a criminal is usually considered defamatory.  In this case, a jury found that a police lieutenant had defamed one of his subordinates by falsely accusing him of committing workers' compensation fraud. They awarded him $50,000 in damages. 

 

On appeal, however, the Fourth District Court of Appeal reversed the award with directions that judgment be entered in favor of the lieutenant.  Relying upon earlier precedent, the Court concluded  that the lieutenant, a "public official" whose statements were made in the course of his duties as police officer, was immune from liability for those statements.  In Florida, said the Court, "public officials who make statements within the scope of their duties are absolutely immune from suit for defamation."

 

 

 

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Here's an interesting case from the Sixth Circuit U.S. Court of Appeals, decided on 7/10/2007.  The plaintiffs there were injured workers who alleged that, in order to deprive them of benefits under the Michigan Workers' Disability Compensation Act,  their self-insured employer, its workers' compensation servicing agent, and the authorized treating physician had sent fraudulent communications among themselves and to the plaintiffs by mail and by wire in violation of federal law, and that these violations constituted the  "predicate acts" necessary to state a civil cause of action against them for violation of the federal Racketeer Influenced and Corrupt Organizations Act ("RICO").

 

In a 2-1 decision, the Sixth Circuit affimed the federal district court's dismissal of the complaint for failure to state a cause of action - but not because the plaintiffs' allegations of mail and wire fraud were insufficient.  Under the law prevailing in the Sixth Circuit (covering Kentucky, Michigan, Ohio, and Tennessee), a plaintiff alleging a RICO violation must allege and prove that he relied upon the defendants' alleged fraudulent acts.  [RICO provides a private right of action and treble damages for "any person injured in his business or property by reason of a violation" of the act].  Because allegations of detrimental reliance were absent from the plaintiffs' complaint, the appellate court agreed that the complaint failed to state a cause of action.  Nevertheless, two of the three judges argued that the issue should be considered by the entire Court sitting en banc. 

 

Thanks to How Appealing for the heads up on this case.

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