Jacobson v. ND Workers Comp. Bureau

• Decision Date: 29 December 2000
• Docket Number: No. 20000102.,20000102.
• Citation: 621 N.W.2d 141,2000 ND 225
• Parties: Myron JACOBSON, Claimant and Appellant, v. NORTH DAKOTA WORKERS COMPENSATION BUREAU, Appellee.
• Court: North Dakota Supreme Court

621 N.W.2d 141

2000 ND 225

Myron JACOBSON, Claimant and Appellant, v. NORTH DAKOTA WORKERS COMPENSATION BUREAU, Appellee.

No. 20000102.

Supreme Court of North Dakota.

December 29, 2000.

Rehearing Denied February 5, 2001.

Stephen D. Little, Dietz, Little & Haas, Bismarck, ND, for claimant and appellant.

Brent J. Edison, Special Assistant Attorney General, North Dakota Workers Compensation Bureau, Bismarck, ND, for appellee.

VANDE WALLE, Chief Justice.

[¶ 1] Myron Jacobson appealed the district court judgment affirming a North Dakota Workers Compensation Bureau order requiring Jacobson to forfeit future benefits because of violation of N.D.C.C. § 65-05-33, but remanding the case to the Bureau for reinstatement of Jacobson's benefits from July 21, 1997, to November 30, 1998, to remedy violations of Jacobson's due process rights. We affirm.

I

[¶ 2] Myron Jacobson injured his back on February 4, 1983 when he lifted a 30-gallon barrel while working as an agricultural chemical salesman. He filed a claim for workers compensation benefits and the Bureau accepted his claim. He returned to work full time on March 16, 1983. Jacobson worked for over four years until July 1987 when he asked the Bureau to reopen his claim. After a period of temporary benefits, the Bureau awarded Jacobson permanent total disability benefits beginning January 1991.

[¶ 3] Jacobson began entering fishing tournaments as a professional in 1991. On March 1, 1995, and on June 6, 1996, Jacobson was interviewed to determine the nature and extent of his physical activities. During a March 1, 1995, interview, Jacobson said he could not lift over ten pounds, avoided all twisting, and left his home only for about an hour each day to visit others. A June 6, 1996, interview was similar except possibly to suggest worsening back pain. That report reiterated Jacobson's activities were quite limited, consisting of doing a few things around the house, some visiting, and avoiding all lifting, twisting, and bending. In conjunction with that interview, as well as on May 3, 1996, and August 25, 1996, Jacobson responded "no" to the form question "Have you performed ANY other work, whether on a part-time, full-time or voluntary basis?"

[¶ 4] On September 3, 1996, an informant told the Bureau that Jacobson had been receiving money fishing in professional fishing tournaments. The Bureau investigated, finding Jacobson was a professional tournament fisherman traveling throughout the upper Midwest and beyond. Jacobson had won some tournaments resulting in substantial income, with the fees for these tournaments paid by Twin City Marine. Jacobson represented Twin City Marine at trade shows, assisted on the sales floor, and he purchased boats from Twin City Marine at a discounted price. Jacobson became aware of the Bureau's surveillance. In February 1997, the Bureau sent another form to Jacobson. This time Jacobson responded "yes" to the same question asking him if he had performed any work and attached an explanation that he understood from his claims worker that winning money at a fishing tournament would not jeopardize his workers compensation benefits.

[¶ 5] On June 30, 1997, the Bureau issued Jacobson a notice of intention to discontinue benefits on the basis of providing false statements regarding his workers compensation claim and failing to report earned income to the Bureau. After the Bureau issued a final order on October 31, 1997, Jacobson requested reconsideration. A formal hearing was held before the administrative law judge on December 18 and 21, 1998, after being scheduled for November 30 and rescheduled at Jacobson's request.

[¶ 6] The administrative law judge recommended a finding that the greater weight of the evidence of record showed Jacobson willfully made false statements relevant to the determination of his claim for workers compensation benefits which could have misled the Bureau in determination of his benefits. The administrative law judge recommended affirming the order denying further benefits but reversing the order for repayment. The administrative law judge also recommended a conclusion that Jacobson was not denied due process of law by the pre-termination notice or the post-termination delay. The Bureau adopted the order of the administrative law judge and Jacobson appealed to the district court. The district court affirmed the Bureau's order to deny further benefits but held the notice and delay violated due process requirements. The district court ordered reinstatement of benefits for the period between the initial termination of benefits on July 21, 1997, to November 30, 1998, the original date of the formal hearing. The Bureau did not appeal from that portion of the order reinstating benefits to November 30, 1998.

II

[¶ 7] On appeal, we review the decision of the Workers Compensation Bureau. Siewert v. North Dakota Workers Comp. Bureau, 2000 ND 33, ¶ 18, 606 N.W.2d 501. Under N.D.C.C. §§ 28-32-19 and 28-32-21, we affirm the Bureau's decision unless its findings of fact are not supported by a preponderance of the evidence, its conclusions of law are not supported by its findings of fact, its decision is not supported by its conclusions of law, its decision is not in accordance with the law or violates the claimant's constitutional rights, or its rules or procedure deprived the claimant of a fair hearing. Negaard-Cooley v. North Dakota Workers Comp. Bureau, 2000 ND 122, ¶ 7, 611 N.W.2d 898. We exercise restraint in determining whether the Bureau's findings of fact are supported by a preponderance of the evidence and do not make independent findings or substitute our judgment for that of the Bureau, but determine only whether a reasoning mind reasonably could have determined the findings were proven by the weight of the evidence from the entire record. Renault v. North Dakota Workers Comp. Bureau, 1999 ND 187, ¶ 16, 601 N.W.2d 580.

III

[¶ 8] Jacobson argues he did not make willful, material false statements in violation of N.D.C.C. § 65-05-33. Section 65-05-33 of N.D.C.C. at the time of Jacobson's statements provided:

Filing false claim or false statements— Penalty. Any person claiming benefits or payment for services under this title, who willfully files a false claim or makes a false statement, or willfully fails to notify the bureau as to the receipt of income, or an increase in income, from employment, after the issuance of an order awarding benefits, in connection with any claim or application under this title is guilty of a class A misdemeanor, but if the act is committed to obtain, or pursuant to a scheme to obtain, more than five hundred dollars in benefits or services, the offense is a class C felony. Provided further that:

1. For the purposes of this section, "statement" includes any testimony, claim form, notice, proof of injury, proof of return to work status, bill for services, diagnosis, prescription, hospital or doctor records, x-ray, test results, or other evidence of loss, injury, or expense.

2. In addition to any other penalties provided by law, the person claiming benefits or payment for services in violation of this section shall reimburse the bureau for any benefits paid based upon the false claim or false statement and, if applicable, under section 65-05-29 and shall forfeit any additional benefits relative to that injury. 1995 N.D. Sess. Laws ch. 616, § 6.

[¶ 9] To trigger the statutory consequences of N.D.C.C. § 65-05-33 for a false statement, the Bureau must prove: (1) there is a false claim or false statement; (2) the false claim or false statement is willfully made; and (3) the false claim or false statement is made in connection with any claim or application under this title. Hausauer v. North Dakota Workers Comp. Bureau, 1997 ND 243, ¶ 12, 572 N.W.2d 426. We have defined "willfully" in the context of this statute's civil penalties as conduct engaged in intentionally, not inadvertently. Dean v. North Dakota Workers Comp. Bureau, 1997 ND 165, ¶ 15, 567 N.W.2d 626 (citing F.O.E. Aerie 2337 v. Workers Comp. Bureau, 464 N.W.2d 197, 201 (N.D.1990)).

[¶ 10] We additionally require the Bureau to prove the false statement is material. Dean, 1997 ND 165, ¶ 15, 567 N.W.2d 626 (citing F.O.E. Aerie 2337, 464 N.W.2d at 201, holding "a false statement must be intentional, not inadvertent, and material, not peripheral."). If the Bureau seeks reimbursement for benefits paid, the level of materiality required is proof by the Bureau that the false claim or false statement caused the benefits to be paid in error. Hausauer, 1997 ND 243, ¶ 17, 572 N.W.2d 426. However, if the Bureau is seeking only forfeiture of future benefits, as in Jacobson's case, no such causal connection is required. Id. A false claim or false statement is sufficiently material for forfeiture of future benefits if it is a statement which could have misled the Bureau or medical experts in a determination of the claim. Vernon v. North Dakota Workers Comp. Bureau, 1999 ND 153, ¶ 13, 598 N.W.2d 139.

[¶ 11] Jacobson told an investigator on March 1, 1995, and on June 6, 1996, his activities were limited; saying he mostly stayed at home, ventured out only to visit friends for a short time each day and avoided bending, twisting or lifting anything over ten pounds. These statements were made during the time period Jacobson was a professional tournament fisherman in the Cabela's and In-Fisherman Professional Walleye Trail circuits. In 1995 Jacobson entered eight tournaments in the states of North Dakota, South Dakota, Minnesota, Wisconsin, Michigan, and Ohio. In 1996 Jacobson reported entering six professional fishing tournaments, including the invitational Professional Walleye Trail Walleye Super Pro in Arkansas. At one tournament, Jacobson reported catching an eleven-pound walleye. The administrative law judge stated in paragraph eight of the findings of fact, concerning the June 1996 interview, "[i]t is passing strange that any conversation...