Renault v. WORKERS COMPENSATION BUREAU, 990167.

• Decision Date: 20 October 1999
• Docket Number: No. 990167.,990167.
• Citation: Renault v. WORKERS COMPENSATION BUREAU, 601 N.W.2d 580, 1999 ND 187 (N.D. 1999)
• Parties: Wade RENAULT, Claimant and Appellant, v. NORTH DAKOTA WORKERS COMPENSATION BUREAU, Appellee.
• Court: North Dakota Supreme Court

601 N.W.2d 580

1999 ND 187

Wade RENAULT, Claimant and Appellant, v.NORTH DAKOTA WORKERS COMPENSATION BUREAU, Appellee.

No. 990167.

Supreme Court of North Dakota.

October 20, 1999.

Douglas L. Broden, Broden, Broden & Walker, Devils Lake, N.D., for claimant and appellant.

Leo F.J. Wilking, Special Assistant Attorney General, Fargo, N.D., for appellee.

KAPSNER, Justice.

[¶ 1]Wade Renault appeals from a judgment affirming a North Dakota Workers Compensation Bureau order requiring him to forfeit future benefits under N.D.C.C. § 65-05-33 for willfully making material false statements in a July 1992 reapplication for benefits and in a November 1992 telephone conversation with a Bureau claims analyst.Renault argues the Bureau's findings about those two statements are not supported by a preponderance of the evidence.We affirm.

I

[¶ 2] On January 9, 1992, Renault was injured when he fell from scaffolding during the course of his employment as a laborer for Aaker Masonry.He was treated for a "chest wall contusion" and possible rib fracture at an emergency room that afternoon.After Renault filed an initial claim for workers compensation benefits, he completed a Bureau request for additional information which stated he left work at 2:30 p.m. on January 9 and returned to work on January 30, 1992.Except for the January 9 visit to the emergency room, however, Renault worked through January 30, 1992, when he was laid off.The Bureau paid Renault $602.85 in disability benefits for January 9 through January 30, 1992.

[¶ 3] Renault returned to work as a laborer for Aaker Masonry in April 1992, and he continued working there until late May 1992.According to Renault, he quit because he was physically unable to do the work.According to Randy Aaker of Aaker Masonry, Renault quit because he was laid off or found a better job and not because he was injured or unable to do the job.In July 1992, Renault filed a reapplication for workers compensation benefits, stating his condition "became worse" on "3/23/92 approx."; he had been "unable to work" since his "last date worked" on "3/23/92"; and on "3/23/92" Dr. Antonios advised him not to work.

[¶ 4] Renault began working at Grand Forks Truss in September 1992, but he was laid off from that job on November 20, 1992.On November 30, 1992, Renault had a telephone conversation with Colleen Strom, a Bureau claims analyst.Renault told Strom his job at Grand Forks Truss was "a modified job ... [j]ust pushing buttons."According to Strom, Renault told her that "he was doing some light duty work," and she then contacted Grand Forks Truss and was informed Renault's job involved manual labor, including "lifting lumber, trusses, boxes of plates and running the press.Much bending, twisting and lifting to a max of about 80-100" pounds.

[¶ 5] In March 1993, the Bureau denied Renault's July 1992 reapplication for benefits, and he appealed.During that appeal, the Bureau discovered it had erroneously paid Renault disability benefits from January 9 through January 30, 1992.The Bureau subsequently issued an order denying Renault further benefits, concluding he willfully made material false statements under N.D.C.C. § 65-05-33, and ordering him to forfeit future benefits and repay the $602.85 in erroneously paid benefits.

[¶ 6] Renault requested and received a formal evidentiary hearing.The administrative law judge (ALJ) who conducted the hearing recommended the Bureau find Renault did not willfully make a false statement about returning to work on January 30, 1992, but he nevertheless was obligated to repay the Bureau $602.85 in erroneously paid benefits.The ALJ did not make a recommended finding about Renault's statements in his July 1992 reapplication for benefits and his November 1992 telephone conversation with Strom, because the ALJ said those statements did not result in the payment of benefits.Instead, the ALJ analyzed only Renault's false statement he returned to work on January 30 and recommended the Bureau find Renault was not required to forfeit future benefits because that false statement was not made willfully.

[¶ 7] The Bureau rejected the ALJ's recommendation, stating the ALJ erroneously ignored Renault's statements in his July 1992 reapplication and his November 1992 telephone conversation because the ALJ said those statements did not result in the payment of benefits.The Bureau explained the correct standard for materiality under N.D.C.C. § 65-05-33 is whether willful false statements could have misled the Bureau or a medical expert in deciding a claim and found Renault willfully made material false statements in his July 1992 reapplication and in the November 1992 telephone conversation.¹The Bureau ordered Renault to forfeit all future benefits for his injury.The district court affirmed the Bureau's decision, and Renault appealed.

II

[¶ 8] Under N.D.C.C. §§ 28-32-19and28-32-21, we must 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 its decision violates the claimant's constitutional rights or deprives the claimant of a fair hearing.Vernon v. North Dakota Workers Comp. Bur.,1999 ND 153, ¶ 8, 598 N.W.2d 139.

[¶ 9] The Bureau's order required Renault to forfeit future benefits under N.D.C.C. § 65-05-33, which during the time relevant to this proceeding provided²:

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.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:

a. Reimburse the bureau for any benefits paid based upon the false claim or false statement, and if applicable, under section 65-05-29.

b. Forfeit any additional benefits relative to that injury.

[¶ 10] The administrative penalties authorized by N.D.C.C. § 65-05-33 are not triggered by a claimant's inadvertent mistake on a bureaucratic form, or a claimant's subjective description of job duties or ability to work.SeeVernon,1999 ND 153, ¶ 13, 598 N.W.2d 139.Rather, as we explained in Hausauer v. North Dakota Workers Comp. Bur.,1997 ND 243, ¶¶ 12-13, 18, 572 N.W.2d 426(citations omitted):

To trigger the statutory consequences under § 65-05-33 for a false claim or false statement by a person claiming benefits or payment of services, 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.We additionally require the Bureau to prove the false statement is material.We have defined "willfully" in the context of this statute's civil penalties as conduct engaged in intentionally, not inadvertently.

Once triggered, N.D.C.C. § 65-05-33 provides for both criminal and civil penalties.The civil penalties include reimbursement to the Bureau "for any benefits paid based upon the false claim or false statement" and "forfeit[ure of] any additional benefits relative to that injury."In order to trigger the civil penalties, the Bureau must prove the elements of N.D.C.C. § 65-05-33 by a preponderance of the evidence.

....

If the Bureau is seeking forfeiture of future benefits, a false claim or false statement is sufficiently material if it is a statement which could have misled the Bureau or medical experts in a determination of the claim.

III

[¶ 11] Renault argues the Bureau used the wrong burden of proof to decide he willfully made material false statements.He argues due process requires the Bureau to prove the elements of N.D.C.C. § 65-05-33 by clear and convincing evidence, because the statute is punitive in nature³ and the forfeiture of future benefits constitutes the taking of an entitlement.

[¶ 12] In Hopfauf v. North Dakota Workers Comp. Bur.,1998 ND 40, ¶ 15, 575 N.W.2d 436, a claimant argued the Bureau was required to prove a civil violation of N.D.C.C. § 65-05-33 by clear and convincing evidence.We said "[w]e have previously applied the preponderance-of-the-evidence standard to N.D.C.C. § 65-05-33."Hopfauf,at ¶ 15(citingHausauer,1997 ND 243, ¶ 13, 572 N.W.2d 426).⁴In Hopfaufat ¶ 15, we declined to decide whether the Bureau must prove a civil violation of N.D.C.C. § 65-05-33 by clear and convincing evidence, however, because the claimant failed to argue for the heightened standard of proof at the administrative hearing, or in his specifications of error to the district court.

[¶ 13] Here, the record does not reflect Renault raised this issue during the administrative proceeding.Renault's specification of errors to the district court did not mention the clear and convincing standard of proof and framed this issue as "the Bureau's Conclusion of Law is not in accordance with the law as the Bureau failed to use the proper legal standard in determining whether [Renault] willfully made false statements with an intent to defraud the Bureau."Renault's brief to the district court cited Hopfauf and said because N.D.C.C. § 65-05-33 is punitive in nature and the forfeiture of future benefits constitutes the taking of an entitlement, due process...