.

Defense Digest

Don’t Forget Your Medical History: Why Fraud Never Pays, Nor Does Convenient Amnesia

Defense Digest, Vol. 29, No. 3, September 2023

September 1, 2023

Key Points:

  • In Santiago Mendoza v. Talarico Bldg Svcs., Inc., Delaware Superior Court affirmed Industrial Accident Board’s voiding the underlying compensation agreement, as reached either by fraud or due to material misrepresentations.
  • Investigate a claimant’s prior medical history and treatment.

In the recent workers’ compensation case of Santiago Mendoza v. Talarico Bldg Svcs., Inc., d/b/a Service Master Cleaning, 2023 WL 2726923 (Del. Super. Mar. 30, 2023), the Delaware Superior Court considered an appeal from the Industrial Accident Board on the claimant’s allegation of error in the Board’s decision. In a joint hearing on the claimant’s petition for additional compensation due for spine fusion surgery, and the employers’ petition to terminate benefits, the Board found for the employer on both petitions. The Board terminated indemnity benefits and denied the claimant’s demand for surgical approval, and medical and indemnity workers’ compensation benefits.

The Industrial Accident Board had found that the claimant sustained total disability previously from a 2001 head injury that occurred in New York State and he received total disability from 2001–2007. The claimant did not work from 2007–2015 and obtained Social Security Disability benefits in the interim period. In 2016, the claimant requested a total disability slip from his primary care provider.

In 2017, the claimant went to work for Talarico Building Services. At that time, he did not report any disability or work restrictions. In 2018, he suffered a witnessed slip-and-fall injury, landing on his buttocks. He complained of headaches, dizziness, and head and neck pain. The injury was accepted. A month later, the claimant was in a car accident and injured his neck. Diagnostic imaging (CT Scan) evidenced degenerative changes in the cervical spine.

In 2021, the claimant underwent a three-level cervical fusion. He filed a petition for additional compensation due relative to the cervical spine fusion surgery. The employer defended and filed a petition for review in order to terminate indemnity benefits on the basis of fraud.

The Board denied the petition for additional benefits, finding that the cervical spine surgery was unrelated to the 2018 work accident. The Board found that the claimant failed to disclose his medical history to his own surgeon, thus depriving the surgeon of the ability to “accurately appreciate it [the medical history].” On the petition for review, the Board was asked by the employer to undo the total disability agreement on the basis of fraud and, also, to preclude any future claim petitions being filed by the claimant as a result of the precedent fraud. The Board struck the underlying agreement to compensation on the basis of fraud, but allowed the claimant to refile an initial petition to establish causation on any alternate set of facts. The claimant was ordered to repay the employer the amount of disability paid to him.

On appeal, the Delaware Superior Court considered the evidentiary standards without separately weighing the evidence as per the appellate rules. The court found that the undisputed evidence is that the claimant indicated to his surgeon that his physical neck and back symptoms developed for the first time after his 2018 slip and fall. The claimant’s testimony was found to be “incredulous.” He denied his prior medical treatment history as though it never existed. He denied having been found permanently and totally disabled prior to 2018, despite medical evidence of multiple prior disability ratings. The Superior Court affirmed the Board’s disregard of the claimant’s testimony as not credible and unreliable. The claimant’s lack of credibility was considered as enhanced in view of his surgeons’ inability to consider the effect of his prior injury, treatment, and therapy as it impacted his causal opinion and surgical determination.

On the issue of fraud, the Superior Court found the Board properly considered the fraud factors and acted correctly under Superior Court Rule 60(b) in re-opening the prior total disability determination reduced to an agreement on compensation. On that basis, the court affirmed the Board’s voiding the underlying compensation agreement, as reached either by fraud or due to material misrepresentations. The claimant had misrepresented his prior medical history and disability status to the employer and his own surgeon. The Superior Court found that the Board properly determined that the claimant’s lack of candor was “at best, chronically evasive, at worst, fatally fraudulent.”

Investigate prior medical history and treatment. Prior medical records and a medical canvass are valuable tools in considering a defense strategy. Consider the factual statements made by the claimant, any fact witnesses, and any workplace investigations. Social media canvassing can be helpful as well. Claimants often say one thing or allege disability, and, on social media accounts, are found to be contradicting their allegations. Also, other employment can be seen in photos, posts, tweets, and social media activities. Consider carefully the treatment notes of the current surgeon or main provider (orthopedist, pain management). Consider the consistency or inconsistency of the claimant’s recitation of events as compared against reports to other providers, such as occupational health, physical therapy, and chiropractic. With regard to surgeons, count the times the claimant actually sees the surgeon versus the physicians assistant or nurse practitioner. You may find the claimant treats for a time period and only sees the physician or surgeon infrequently, and that surgical opinions are actually delivered to the claimant by the midlevel provider and not the surgeon.

Where there is inconsistency, fraud should be a consideration and investigated.


 

 

Defense Digest, Vol. 29, No. 3, September 2023, is prepared by Marshall Dennehey to provide information on recent legal developments of interest to our readers. This publication is not intended to provide legal advice for a specific situation or to create an attorney-client relationship. ATTORNEY ADVERTISING pursuant to New York RPC 7.1. © 2023 Marshall Dennehey. All Rights Reserved. This article may not be reprinted without the express written permission of our firm. For reprints, contact tamontemuro@mdwcg.com.

Firm Highlights

Thought Leadership

Commonwealth Court Reaffirms the Constitutionality of Act 111's IRE Provisions

In this case, the claimant sustained a work injury of January 6, 1994, which was acknowledged by Notice of Compensation Payable (NCP). After the claimant’s receipt of 104 weeks of temporary total disability benefits, the employer filed a Request for an Impairment Rating Examination (IRE). The IRE was performed in May 2023 and the IRE physician found that the claimant had a 5% whole person impairment, under the AMA Guides. The employer filed a Petition based on the IRE results, and the Petition was granted by the WCJ. During litigation, the claimant argued that the IRE provisions of Act 111 (Section 306(a.3) of the Act) were not applicable to her injury, since it predated June 24, 1996, the date Act 57 went into effect, and that the IRE provisions were unconstitutional. The Workers’ Compensation Judge (WCJ)) granted the Petition and the Board affirmed. On appeal to the Commonwealth Court, the claimant argued that Act 111 violated the nondelegation doctrine and that its retroactive application to the claimant’s injury was unconstitutional. The court rejected the arguments on the basis that they had already found the same arguments without merit in multiple, prior cases. The court also addressed an argument made by the claimant that Act 111 was procedurally defective under the Pennsylvania Constitution because it was only considered on two days in each House after having undergone amendments and reassignments. The court noted that the Pennsylvania Constitution requires every bill to be considered on three different days in each House. The claimant maintained that, according to the legislative history, the bill did not receive three separate days of consideration from each House when it was assigned a new bill number. The court pointed out, however, that the bill number, H.B. 1840 remained constant and was considered on three occasions by the House. Further, the court concluded that minor amendments to the bill were germane to its original subject, which was to modify the Act’s IRE process, in accordance with Protz II.

Thought Leadership

WCJ Improperly Refused to Conduct C&R Hearing and Erroneously Required Settlement of All Pending Petitions

In this case, the claimant sustained injuries in the course and scope of her employment as a registered nurse. The employer acknowledged the injury by a Notice of Compensation Payable (NCP).  Subsequently, a Workers’ Compensation Judge (WCJ) expanded the description of injury. The employer then filed a Termination Petition, alleging the claimant was fully recovered from the injuries. Providers filed Utilization Review (UR) Petitions, challenging UR determinations finding their chiropractic treatment to be not reasonable and necessary. A settlement of the claim was eventually reached, and the employer filed a Petition to Seek Approval of a Compromise and Release (C&R) Agreement. The C&R outlined that the agreement fully resolved all future workers’ compensation claims except for the termination and UR Petitions. Briefs were filed and one day later, the WCJ issued an Interlocutory Order which stated if instructions were not followed regarding filing of a C&R, a settlement hearing date would not be given. The employer complied with the order, and filed the C&R. Subsequently, the WCJ notified the parties that the C&R must resolve all issues in the petitions, or would not be entertained. A settlement hearing was never held, and the WCJ then issued a decision, granting the Termination Petition and dismissing the UR Petitions. The WCJ also said that the Petition for Approval of a C&R was dismissed without prejudice, as the issues in the Termination and UR Petitions went to a decision. The claimant appealed to the Workers’ Compensation Appeal Board (Board). The Board granted the claimant’s appeal, finding that the WCJ violated the requirement of Section 449 that an expedited hearing be held when a Petition for Approval of a C&R is filed.  The Board further held that it was legally incorrect for the WCJ to insist that the C&R resolve all issues raised by the pending Petitions. The Board remanded the case to a new WCJ, and Employer appealed to the Commonwealth Court. The court affirmed the Board and held that the WCJ erred, as a matter of law, by refusing to hold an expedited hearing within 30 days, once the Petition for Approval of a C&R was filed.  The court noted that the language of Section 449(b) is mandatory, and a settlement hearing is not discretionary or dependent on a party’s separate request for a stay, or whether the record has been closed. The court further rejected Employer’s argument that the case should not be remanded to a new WCJ for a new decision on the termination and and UR Petitions, as the Board passed no judgment on whether the C&R Agreement resolved the termination and UR Petitions, and left it for the WCJ to decide in connection with the Petition for Approval of a C&R.

Thought Leadership

Appellate Division Reversed Trial Judge's Orders Granting a Plaintiff's Section 40 Summary Judgement Motion

In Haskins v. Casey, et al., the plaintiff Dane Haskins worked for defendant Ekornes, Inc. (Ekornes) as a material handler. In June 2021, he filed a workers’ compensation claim petition for benefits due to a left shoulder injury in December 2020. He then resolved his workers’ compensation claim in November 2022 under an Order Approving Settlement. In January 2023, he filed a lawsuit against Ekornes and later amended to add additional claims and name other defendants, including the Ekornes president, chief financial officer, and director of human resources. In May 2025, a second amended complaint alleged that after he filed the workers compensation claim, Ekornes placed him on leave under the Family and Medical Leave Act (FMLA), denied his request for a work accommodation, and ultimately terminated him from employment in December 2021. He pleaded several causes of action asserting violations of the New Jersey Law Against Discrimination (LAD) as well as fraudulent concealment and wrongful discharge. The plaintiff then moved for partial summary judgment, seeking an order enforcing Section 40 of the Workers’ Compensation Act (WCA) as well as summary judgment on his FMLA claims. The defendants opposed the motions and cross-moved for summary judgment on the FMLA claims. After arguments, the court entered an order in December 2025, denying the FMLA motion and cross motion and granting the plaintiff’s Section 40 motion. In the order, the court permitted the plaintiff to pursue compensatory damages at trial in connection with the bodily injury claim. The court also allowed the plaintiff to present evidence of any workers’ compensation benefits to support his claim. The court then denied the defendant's subsequent reconsideration motion in February 2026. The defendants that appealed the Section 40 aspect of the orders. In reviewing the appeal de novo, the Appellate Division rejected the plaintiff's argument that the work-related injury arose out of his discrimination claims under the LAD. The plaintiff argued that he should be able to pursue a personal injury claim as a part of his LAD claim, noting that the employer’s compensation carrier would be able to assert a lien against any recovery against his LAD claims. In distinguishing between the Richter vs. Oakland Board of Education, 246 N.J. 507 (2021) case, in which the Court found that any recovery would be subject to a Section 40 lien as the allegation was that the defendants failed to accommodate her pre-existing diabetic condition, which resulted in bodily injury. In this case, the Appellate Division indicated that there was no bodily injury caused by Ekornes’ failure to accommodate a pre-existing disability. Rather, the shoulder injury was a result of a workers compensation claim, for which he received appropriate benefits previously. The Appellate Division noted that if the plaintiff was successful in proving his LAD claims, he would be entitled to damages caused by the discriminatory discriminatory conduct such as lost wages and emotional distress damages and that there will be no Section 40 lien. In addition, the Appellate Division disagreed that the petitioner could present evidence about and seek damages for his shoulder injury at trial. Although the petitioner argued that a defendant who retaliated against an employee for filing a workers’ compensation claim should not benefit from the exclusivity provision of the WCA, the Appellate Division noted that the Legislature did not include this type of scenario in the statue nor did any of the case law recognize this type of claim as a remedy. As such, the Appellate Division reversed the December 2025 order granting the the plaintiff’s Section 40 summary judgment motion as well as the February 2026 reconsideration motion order. The Appellate Division noted that they did not intend to limit the plaintiff in his pursuit of his other claims on under the LAD, FMLA, and workers’ compensation retaliation causes of action.