Fraud/Special Investigation

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.

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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.

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_{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.}