Maxwell v. Aig Domestic Claims, Inc.

Decision Date23 September 2008
Docket NumberNo. 07-P-1858.,07-P-1858.
CourtAppeals Court of Massachusetts
PartiesJesse MAXWELL v. AIG DOMESTIC CLAIMS, INC., & another.<SMALL><SUP>1</SUP></SMALL>

Myles W. McDonough, Boston (Nicholas W. Schieffelin with him) for the defendants.

Chester L. Tennyson, Jr., Weymouth, for the plaintiff.

Present: LENK, BERRY, & WOLOHOJIAN, JJ.

WOLOHOJIAN, J.

The defendants appeal from the denial of their special motion to dismiss made pursuant to G.L. c. 231, § 59H, the so-called anti-SLAPP statute.2 "Strategic litigation" is indeed implicated in this case, although not as the Legislature intended, nor as the defendants argue. The statute was enacted in order to protect ordinary citizens from meritless litigation brought by large private interests for the purpose of tamping or threatening citizens' rights to petition their government. See Duracraft Corp. v. Holmes Prods. Corp., 427 Mass. 156, 161, 691 N.E.2d 935 (1998); Matter of the Discipline of an Attorney, 442 Mass. 660, 673, 815 N.E.2d 1072 (2004). In this case the statute is instead invoked by the defendant workers' compensation insurer and one of its employees, claiming that their petitioning rights have been threatened by the plaintiff, a now-homeless, injured employee to whom the insurer denied workers' compensation benefits and against whom the insurer later groundlessly urged insurance fraud charges.

Background. On October 8, 2000, while working at the Bay State Paper Company (Bay State), the plaintiff, Jesse Maxwell, injured his shoulder, neck, and back by picking up a 100-pound drain grate. He promptly reported the injury to Bay State and sought medical treatment for the injury. X-rays and magnetic resonance imaging showed that he had a torn left rotator cuff. Maxwell's injuries limited the mobility, strength, and range of his left, dominant arm and caused him serious pain.

Maxwell attempted to return to work, but his injuries precluded him from resuming his duties. As a result, on October 18, 2000, Bay State's human resources coordinator completed a "First Report of Injury or Fatality" (a form of the Department of Industrial Accidents [DIA]), reporting the incident and stating that, as of that date, Maxwell was totally or partially incapacitated.

The record does not show what, if any, investigation Bay States' workers' compensation insurer, AIG Domestic Claims, Inc. (AIG), made after receiving this report or before denying Maxwell all benefits on October 31, 2000. The only reason AIG gave for denying benefits was that it had not received medical documentation with the claim. That was rectified shortly thereafter when Maxwell, through his attorney, submitted to AIG medical records documenting his injury and his total disability. Despite the fact that its previous denial had purportedly been based only on the fact that it had not received medical documentation, nothing in the record shows that AIG reevaluated its position once it received the medical records.

Maxwell filed a claim with the DIA on November 29, 2000. At the same time, being without a job or benefits, he sought refuge in various homeless shelters, including the one at the Boston branch of the YMCA.3 As a condition of residence at the YMCA shelter, Maxwell was required to participate in a job training program conducted by Community Work Services,4 a requirement with which he complied from February, 2001, through May, 2001.

Community Work Services is a nonprofit organization that has been in operation since the late Nineteenth Century. The Community Work Services program in which Maxwell participated was a training program for those who are homeless and who, by virtue of their disabilities or economic challenges, cannot be employed in the competitive open labor market. The purpose of the program is to provide vocational and rehabilitative training to help people return to the workforce. Maxwell was never employed by Community Work Services, and he received neither earnings nor wages for his participation in the program.5

In April, 2001, AIG retained a private investigator to follow and observe Maxwell. There is nothing in the record to indicate why AIG decided to hire a private investigator, let alone any evidence in the record to suggest that AIG had any reason to believe that Maxwell was not entitled to benefits or had not truthfully submitted a claim. In any event, under AIG's direct supervision, the investigator conducted a preliminary investigation on April 3 and 4, 2001. First, the investigator searched motor vehicle records for Maxwell and his family.6 No explanation is given, nor is one readily apparent, as to why AIG believed Maxwell's motor vehicle records — or those of his family members — bore on Maxwell's claim for workers' compensation benefits. Second, through surveillance and questioning, the investigator attempted to determine whether Maxwell continued to live on Stuart Street in Boston, his former address. He determined that Maxwell did not live there. However, the investigator, following AIG's instruction to suspend surveillance, did not pursue this line of inquiry further. As a result, the investigator did not discover that Maxwell was at this point living in a homeless shelter at the YMCA.

AIG next authorized the investigator to search court records for any criminal records relating to Maxwell. The record does not reflect what, if any, basis AIG had for imagining that Maxwell had a criminal history or, more importantly, how it might bear on, or relate to, his work injury or subsequent claim for benefits. No criminal records were found.

Maxwell underwent an examination by an impartial medical examiner (IME) on April 25, 2001. See G.L. c. 152, § 11A.7 As part of his medical examination, Maxwell completed a "Patient Information Sheet" that asked him, "Are you working now?" Maxwell responded, "No."

As previously arranged with AIG,8 the investigator waited for Maxwell outside the IME's office. The investigator followed Maxwell as he took several forms of public transportation to the Naval Reserve Recruitment Center (recruitment center) in Quincy, where — for no more than an hour — the investigator observed Maxwell cleaning up trash and mopping the floor. For a couple of hours the following morning, the investigator again observed Maxwell carrying trash and mopping the floor at the recruitment center. Both days' observations were reported to AIG.

The next day the investigator submitted to AIG his final report, in which he concluded that "the claimant Jesse Maxwell is currently employed as a janitor at the Naval Reserve Recruitment Center in Quincy." The investigator's report does not indicate what, if anything, the investigator did to establish or verify that Maxwell was in fact employed as a janitor at the recruitment center. Indeed, Maxwell was not so employed. Rather, he was participating in the Community Work Services training program, and his activities at the recruitment center were part of that training.

On April 30, 2001, an administrative law judge heard Maxwell's workers' compensation claim. Prior to the hearing, apparently as part of an attempt on AIG's part to lay a perjury trap, AIG's counsel asked Maxwell to complete a DIA form entitled "Employee's Earnings Report." The form stated that Maxwell had "an affirmative duty to report to the insurer all earnings, including wages or salary from self-employment." Maxwell reported no earnings on the form and checked and signed a box stating, "I have not received earnings for any period in which I was entitled to receive Workers' Compensation Benefits."

The administrative judge ordered AIG to pay Maxwell total temporary incapacity benefits from October 9, 2000, to the date of the hearing and partial incapacity benefits from the following day forward. AIG was also ordered to pay Maxwell's medical costs under G.L. c. 152, § 30.9 AIG did not appeal this order. Instead, on the same day as the administrative judge's award, it opened an internal fraud investigation based on its view that Maxwell had lied when he had completed the patient information sheet and the employee's earnings report.

The internal investigation was conducted by Tito Medeiros, who summarized his findings in a report dated May 28, 2001. Because it is included in Medeiros's report, we know that by that date AIG had been informed that Maxwell was involved with Community Work Services. However, the report incorrectly stated that Community Work Services was a "temp agency." Medeiros submitted his report, including this incorrect information, to the insurance fraud bureau (IFB),10 and alleged that Maxwell was suspected of having engaged in insurance fraud by (a) working as a cleaning person for the recruitment center; (b) stating on the patient information sheet he filled out as part of the IME that he was not "working"; and (c) stating that he had no "earnings" when he filled out the DIA's employee's earnings report.

In June, 2001, Community Work Services provided a packet of documentation to AIG's counsel concerning Maxwell and the training program in which he participated. Among other things, the packet described the program and the nature of Maxwell's injuries. The record does not reflect that AIG forwarded this information to the IFB even though it clearly bore on (and undercut) the allegations of fraud that AIG had made against Maxwell.

On August 30, 2001, the IFB reported that it had "concluded that a material fraud, deceit or intentional misrepresentation" had occurred and referred the matter to the Suffolk County district attorney's office. That office, in turn, on October 10, 2001, charged Maxwell with workers' compensation insurance fraud, in violation of G.L. c. 152, § 14, and larceny in excess of $250, in violation of G.L. c. 266, § 30(1). The record does not contain any information to show that the IFB or the district attorney's office conducted any independent investigation. Instead,...

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7 cases
  • Maxwell v. Aig Domestic Claims Inc.
    • United States
    • United States State Supreme Judicial Court of Massachusetts Supreme Court
    • 30 June 2011
    ...59H, the so-called “anti-SLAPP” statute. That motion was denied and AIGDC's appeal was unsuccessful. See Maxwell v. AIG Domestic Claims, Inc., 72 Mass.App.Ct. 685, 893 N.E.2d 791 (2008). On remand, the parties conducted discovery and AIGDC filed a motion for summary judgment in August, 2009......
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