Marriott Corp. v. Industrial Com'n of Arizona

• Decision Date: 24 January 1985
• Docket Number: No. 1,CA-IC,1
• Citation: 708 P.2d 1314,147 Ariz. 123
• Parties: MARRIOTT CORPORATION, Petitioner-Employer Petitioner-Carrier, v. The INDUSTRIAL COMMISSION OF ARIZONA, Respondent, Armida Godfrey, Respondent-Employee. 3165.
• Court: Arizona Court of Appeals

Page 1314

708 P.2d 1314

147 Ariz. 123

MARRIOTT CORPORATION, Petitioner-Employer Petitioner-Carrier, v. The INDUSTRIAL COMMISSION OF ARIZONA, Respondent Armida Godfrey, Respondent-Employee.

No. 1 CA-IC 3165.

Court of Appeals of Arizona Division 1, Department B.

Jan. 24, 1985.

Bury, Moeller & Humphrey by J. Michael Moeller, Kevin Miniat, Tucson, for petitioner employer-petitioner-carrier.

Sandra Day, Chief Counsel, The Indus. Com'n of Arizona, Phoenix, for respondent.

Tretschok, McNamara & Clymer, P.C., by Patrick R. McNamara, Tucson, for respondent-employee.

OPINION

KLEINSCHMIDT, Judge.

This is a special action review of an industrial commission award granting temporary medical and compensation benefits to the claimant, Armida Godfrey. The issue is whether an employee, who makes a deliberate material misrepresentation about his or her health to a prospective employer, is entitled to compensation benefits for an industrial injury that is causally related to the undisclosed condition. We find that such a misrepresentation precludes compensation and we set aside the award.

In 1975, the claimant sustained an industrial injury to her back while working as a maid at Skyline Country Club. She received benefits and her claim was closed in 1979 with no permanent disability. In 1981, the claimant applied to the petitioner, the Marriott Corporation, for a job as a maid. An employee of Marriott helped the claimant fill out the employment application. In that application the claimant stated that she had no back trouble or disability and had never received workers' compensation. The claimant testified that she could not remember whether she had been asked about a prior back problem but she conceded that she knew it would make it harder for her to get a job if prospective employers learned that she had a history of back trouble. The Marriott employee who helped the claimant complete the employment application testified that the answers recorded on it were the ones the claimant gave her.

In December, 1982, claimant injured her back while at work. She filed a petition to reopen the old claim and a separate claim for a new injury. Following a hearing on the matter, the administrative law judge denied the petition to reopen but granted benefits for the claim. The administrative law judge rejected Marriott's assertion that the trend in Arizona is toward adoption of the so-called "Larson Rule," which precludes benefits when an employee has misrepresented his or her health history. Relying upon Roach v. Industrial Commission, 137 Ariz. 510, 672 P.2d 175 (1983) and Edwards v. Industrial Commission, 14 Ariz.App. 427, 484 P.2d 196 (1971), the administrative law judge determined that the Arizona courts have indicated that intentional misrepresentations on a job application should not affect an employee's right to recover under the worker's compensation statutes. The judge therefore made no findings regarding claimant's alleged misrepresentation. The award was affirmed on review and this special action followed.

Marriott urges this court to adopt the "Larson Rule," which has been explained as follows:

[I]t has been held that employment which has been obtained by the making of false statements--even criminally false statements--whether by a minor or an adult, is still employment; that is, the technical illegality will not of itself destroy compensation coverage. What seems to be emerging, in place of a conceptual approach relying on purely contractual tests, is a common-sense rule made up of a melange of contract, causation, and estoppel ingredients. The following factors must be present before a false statement in an employment application will bar benefits: (1) The employee must have knowingly and wilfully made a false representation as to his physical condition. (2) The employer must have relied upon the false representation and this reliance must have been a substantial factor in the hiring. (3) There must have been a causal connection between the false representation and the injury. (Footnotes omitted.)

IC Larson, Workmen's Compensation Law § 47.53 at 8-310 (1983).

The claimant argues that neither legislative nor decisional authority warrants the application of such a rule in Arizona. She says that Roach and Edwards evince a judicial intent not to adopt the rule and that the goal of returning the worker to employment after injury outweighs any inequity suffered by the employer due to an employee's misrepresentations about past traumatic injury. Claimant's reliance upon Roach and Edwards is misplaced. Although both cases recognize that previously disabled workers often suffer employment discrimination, neither case deals with the question of, or specifically condones, a claimant's receipt of benefits following an intentional misrepresentation of health history to gain employment.

The claimant also argues that the absence of a statutory bar to the receipt of benefits for an employee's misrepresentation of his or her health history is an indication that the legislature did not intend such a result. There are, however, anti-fraud provisions in our statutes which require employees to be truthful in employment and benefit applications. Under A.R.S. § 23-1028, any person who obtains a benefit under the act by an intentional false statement is guilty of a misdemeanor and if a claimant is convicted of such he forfeits his benefits. Benefits are also barred under A.R.S. § 23-901.04 when a claimant intentionally misrepresents his history of occupational disease in a pre-employment statement.

At least six states have adopted the Larson Rule. Air Mod Corp. v. Newton, 59 Del. 148, 215 A.2d 434 (1965); Martin Co. v. Carpenter, 132 So.2d 400 (Fla.1961); Martinez v. Driver Mechenbier, Inc., 90 N.M. 282, 562 P.2d 843 (App.1977); Cooper v. McDevitt & Street Co., 260 S.C. 463, 196...