Falls Church Const. Co. v. Laidler

• Decision Date: 31 October 1997
• Docket Number: No. 962627,962627
• Citation: 493 S.E.2d 521,254 Va. 474
• Parties: , 13 IER Cases 743 FALLS CHURCH CONSTRUCTION COMPANY, et al. v. Robert C. LAIDLER. Record
• Court: Virginia Supreme Court

Page 521

493 S.E.2d 521

254 Va. 474, 13 IER Cases 743

FALLS CHURCH CONSTRUCTION COMPANY, et al. v. Robert C. LAIDLER.

Record No. 962627.

Supreme Court of Virginia.

Oct. 31, 1997.

Benjamin J. Trichilo (Trichilo, Bancroft, McGavin, Horvath & Judkins, on briefs), Fairfax, for appellants.

Roger A. Ritchie, Harrisonburg, for appellee.

Present: CARRICO, C.J., and COMPTON, LACY, HASSELL, KEENAN and KINSER, JJ., and GORDON, Retired Justice.

KEENAN, Justice.

In this appeal, we consider whether an employee's intentional concealment of a material fact on an employment application bars his receipt of workers' compensation benefits for a work-related injury.

Falls Church Construction Company (the Company) hired Robert C. Laidler in June 1992. Prior to his employment, Laidler completed a job application which required that he state whether he had ever been "charged or convicted of a felony or any crime." In response to this question, Laidler wrote "No." Approximately eight weeks later, the Company fired Laidler for absenteeism.

In May 1993, the Company rehired Laidler and, according to its policy, requested that he complete a second employment application that was identical to the first application. Laidler failed to respond to several questions on the second application, including the question concerning his prior criminal record.

The Company's human resources representative, Beverly Ann Spaulding, reviewed Laidler's first employment application and did not ask Laidler to complete the unanswered questions in the second application. After noting that all the completed answers in the second application were the same as those in the first application, Spaulding assumed that the answer in the first application regarding Laidler's criminal record remained the same.

In July 1993, Laidler sustained a work-related lumbar strain while employed by the Company and, pursuant to an agreement by the parties, the Virginia Workers' Compensation Commission (Commission) entered an order providing for payment of temporary total disability benefits during certain periods in 1993. Laidler filed a change of condition application in March 1994, alleging that he was entitled to a resumption of disability benefits.

In answers to interrogatories filed in that proceeding, Laidler disclosed that he was convicted of breaking and entering in 1978 and had "served" two years probation. The Company defended Laidler's claim for a resumption of benefits on the ground that he had materially misrepresented his criminal record in his second job application.

At a hearing in January 1995, Spaulding testified that Laidler would not have been rehired if the Company had known about his criminal record. Spaulding further stated that, if the Company had learned of Laidler's criminal record prior to his injury, that fact would have been ground for his termination. Spaulding explained that the Company performed a large amount of work under government contracts and, therefore, it was particularly important that the Company's employees be trustworthy.

Laidler testified that, although he had been charged with breaking and entering, he was convicted of the misdemeanor offense of "unlawful entry." Laidler admitted, however, that his response on the first employment application to the question about his criminal record was false.

The Commission held that the Company had not met its burden of proving that it relied on Laidler's misrepresentation in rehiring him. The Court of Appeals affirmed the Commission's decision, holding that the record supported both the Commission's "implicit credibility finding" which rejected Spaulding's testimony, and the Commission's ultimate conclusion that the Company failed to prove reliance on Laidler's misrepresentation.

In its appeal to this Court, the Company argues that the Court of Appeals' decision is contrary to that of Marval Poultry Co. v. Johnson, 224 Va. 597, 601, 299 S.E.2d 343, 346 (1983). The Company asserts that the holding in Marval eliminated the requirement that an employer seeking to bar an employee's receipt of workers' compensation based on his false representation in an employment application prove reliance on the misrepresentation and a causal connection between the misrepresentation and the work-related injury. Thus, the Company contends that proof of a misrepresentation alone will bar a claimant from receiving workers' compensation benefits. Alternatively, the Company contends that the Court of Appeals erred in holding that the Company failed to prove it relied on Laidler's misrepresentation in rehiring him. We disagree with both arguments.

An employee's false representation in an employment application will bar a later claim for workers' compensation benefits if the employer proves that 1) the employee intentionally made a material false representation; 2) the employer relied on that misrepresentation; 3) the employer's reliance resulted in the consequent injury; and 4) there is a causal relationship between the injury in question and the misrepresentation. See, e.g., Billy v. Lopez, 17 Va.App. 1, 4, 434 S.E.2d 908, 910 (1993); Grimes v. Shenandoah Valley Press, 12 Va.App. 665, 667, 406 S.E.2d 407, 409 (1991); McDaniel v. Colonial Mechanical Corp., 3 Va.App. 408, 411-12, 350 S.E.2d 225, 227 (1986); 3 Arthur...