Sanchez v. Memorial General Hosp.

• Decision Date: 16 August 1990
• Docket Number: No. 11827,11827
• Parties: Richard SANCHEZ, Claimant-Appellant, v. MEMORIAL GENERAL HOSPITAL, a self-insured entity, Respondent-Appellee.
• Court: Court of Appeals of New Mexico

Page 1069

798 P.2d 1069

110 N.M. 683

Richard SANCHEZ, Claimant-Appellant, v. MEMORIAL GENERAL HOSPITAL, a self-insured entity Respondent-Appellee.

No. 11827.

Court of Appeals of New Mexico.

Aug. 16, 1990.

Certiorari Denied Sept. 26, 1990.

[110 NM 684] Anthony F. Avallone, Law Systems of Las Cruces, P.A., Las Cruces, for claimant-appellant.

Douglas R. Vadnais, Tim L. Fields, Stuart R. Butzier, Modrall, Sperling, Roehl, Harris & Sisk, P.A., Albuquerque, for respondent-appellee.

OPINION

DONNELLY, Judge.

Claimant appeals from an order of a workers' compensation judge (WCJ) dismissing claimant's workers' compensation claim with prejudice. Claimant has raised four issues on appeal, which we have consolidated and discuss as follows: (1) whether claimant's misrepresentations on his employment application concerning his prior medical condition and employment history provides a bar to his workers' compensation claim; and (2) whether substantial evidence supports the workers' compensation judge's decision to deny claimant compensation benefits. We affirm.

In April 1978 claimant applied for employment as a custodian with respondent Memorial General Hospital (Hospital). In response to questions contained in the employment application, claimant denied ever having received any benefits from workers' compensation insurance or having any physical limitations which might affect his ability to perform custodial work. The employment application also directed that claimant list the names of his previous four employers. Claimant's written response listed three previous employers, but omitted any reference to having been previously employed for two years by New Mexico State University (NMSU).

In 1968 while employed with NMSU, claimant suffered an injury to his lower back. After filing a workers' compensation claim in district court, claimant settled with NMSU and its compensation carrier for temporary total disability, medical and related benefits. Several different physicians treated claimant for his back injury incurred during his employment with NMSU.

In 1978, claimant was hired as a janitor in the housekeeping department of the Hospital and worked without incident until September 12, 1987. While employed with the Hospital claimant suffered work-related injuries to his lower back on September 12, 1987 and October 14, 1987. Claimant testified that while he was lifting several laundry bags he experienced an onset of low back pain. He stayed home for a week and stated that his back pain improved with bed rest. Claimant returned to work, and three weeks later, while stacking laundry bags, he again suffered a reoccurrence of lower back pain. For these injuries, claimant received temporary and partial disability benefits from the Hospital.

On June 8, 1988 claimant filed a workers' compensation action against the Hospital. After a formal hearing, the WCJ entered orders on August 24, 1989 and September 26, 1989, incorporating findings and conclusions determining, among other things, that claimant had sustained an injury in 1968 while working for an employer other than the Hospital; that claimant had filed a workers' compensation complaint based on his 1968 injury, receiving compensation benefits and a lump-sum settlement totalling $9,114.44; that claimant knowingly and willfully made false representations on his application for employment regarding his past employment with NMSU; that until March 1989 claimant failed to reveal his past work with NMSU; that the Hospital relied on claimant's false representations contained in his employment application relating to his physical condition, and that this reliance was a substantial factor in hiring him.

The findings of the WCJ also determined that claimant never fully recovered from his 1968 injury, and that injury was causally connected to his false representations concerning his physical condition, contained in the Hospital application; that because of his false application of employment, claimant was barred from receiving compensation benefits due to the 1987 incidents; that claimant was not entitled to future medical expenses; that claimant owed the Hospital $5,246.17 for compensation benefits paid by it to claimant as a result of his 1987 injuries; and that no award should be made for claimant's attorneys' fees.

I. CLAIMANT'S APPLICATION FOR EMPLOYMENT

Claimant argues that the representations contained in his employment application should not bar his claim for workers' compensation in the instant case, and that the Hospital failed to establish each of the factors which authorize denial of recovery of a workers' compensation claim based upon an alleged false representation in an employment application.

The courts in New Mexico recognize the defense of false representation in an action for workers' compensation. See Gray v. J.P. (Bum) Gibbins, Inc., 75 N.M. 584, 408 P.2d 506 (1965); Jaynes v. Wal-Mart Store No. 824, 107 N.M. 648, 649, 763 P.2d 82, 83 (Ct.App.1988); Martinez v. Driver Mechenbier, Inc., 90 N.M. 282, 562 P.2d 843 (Ct.App.1977); see generally 1C A. Larson, The Law of Workmen's Compensation, Sec. 47.53 (1990). As observed in Jaynes, a false representation defense to a workers' compensation claim requires that:

(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; and (3) there must have been a causal connection between the false representation and the injury.

Id. at 649, 763 P.2d at 83. See also Martinez v. Driver Mechenbier, Inc.; Jewison v. Frerichs Constr., 434 N.W.2d 259 (Minn.1989); 1C A. Larson, supra, at 8-394; cf. Gray v. J.P. (Bum) Gibbins, Inc. (court found that worker did not knowingly, intentionally or fraudulently misrepresent any material fact and that employer did not rely on questionnaire as a condition of employment). The burden is on the employer to prove each of the three elements. See Jaynes v. Wal-Mart Store No. 824. When the three elements as cited in Jaynes have been proved, a false representation as to physical condition or health made by an employee in procuring employment will preclude the awarding of workers' compensation benefits for an otherwise compensable injury. Jaynes v. Wal-Mart Store No. 824; see also Jewison v. Frerichs Constr.

Claimant challenges the WCJ's findings and conclusions that claimant made a knowing, willful false representation as to his physical condition on his application with the Hospital, asserting that the employment application failed to inquire as to applicant's physical condition. Thus, the alleged misrepresentation was not material. We disagree. Whether a person has acted knowingly or willfully is a fact issue rarely susceptible of proof by direct evidence. Tallman v. ABF (Arkansas Best Freight), 108 N.M. 124, 767 P.2d 363 (Ct.App.1988). Where it is material to his employment, an employee's withholding of the truth as to his physical condition or health may constitute a false representation. McDaniel v. Colonial Mechanical Corp., 3 Va.App. 408, 350 S.E.2d 225 (1986); see Jaynes v. Wal-Mart Store No. 824; cf. Gray v. J.P. (Bum) Gibbins, Inc. (where worker was confused as to meaning of question, there was reason for fact-finder to determine that worker had not knowingly, intentionally or fraudulently made any misrepresentation of any material fact in answering question); Krauzer v. Farmland Indus., Inc., 6 Kan.App.2d 107, 626 P.2d 1223 (1981) (actual misrepresentation not knowingly false where claimant's educational background was an eighth grade education; health history forms were complex and lengthy; and lack of severity of condition and employment physicals tended to negate knowing misrepresentation). Failure to disclose prior receipt of workers' compensation benefits, where such information is sought as part of an employment application, constitutes a knowing and willful false representation. Jewison v. Frerichs Constr.

The standard of appellate review in an appeal from the decision of a workers' compensation judge is that the reviewing court will apply the whole record review and will take into account all evidence, favorable and unfavorable, in the light most favorable to the agency's decision. Tallman v. ABF (Arkansas Best Freight). The reviewing court will not substitute its judgment for that of the Workers' Compensation Division, and the agency's findings will not be disturbed so long as they are supported by substantial evidence on the record as a whole. Id.

At the hearing before the WCJ, evidence was presented that claimant had sustained a 1968 back injury while employed by NMSU, that he had received workers' compensation benefits as a result of such injury, and subsequently settled the claim. The Hospital also presented evidence that claimant failed to reveal this prior injury and the fact that he had received workers' compensation benefits for the injury. There was testimony from four physicians, two of whom were claimant's experts, that in treating claimant for his 1987 injuries, he did not disclose his prior back injury, despite questioning concerning any prior history of back claims or injury. The record also indicates that on his April 1978 application for employment, claimant responded, "no" to the question, "Have you ever received any benefits from workman's compensation insurance?" Although claimant testified that he had not understood this question on the application, claimant stated he had completed the ninth grade, and his own vocational evaluator stated that claimant was proficient in reading. In addition, claimant answered "no" to the question, "If you are employed, do you have any limitations which must be considered for the position in which you have applied?"

Evidence presented below indicates that claimant, when asked to list his four previous employers, omitted any reference to...