Vernon v. North Dakota Workers Compensation Bureau

• Decision Date: 29 July 1999
• Docket Number: No. 990096,990096
• Citation: 598 N.W.2d 139
• Parties: David VERNON, Claimant and Appellant, v. NORTH DAKOTA WORKERS COMPENSATION BUREAU, Appellee and G.L. Trucking & Rental, Respondent
• Court: North Dakota Supreme Court

Page 139

598 N.W.2d 139

1999 ND 153

David VERNON, Claimant and Appellant, v. NORTH DAKOTA WORKERS COMPENSATION BUREAU, Appellee and G.L. Trucking & Rental, Respondent

No. 990096.

Supreme Court of North Dakota.

July 29, 1999.

Kathryn L. Dietz, Dietz, Little & Haas, Bismarck, for claimant and appellant.

Lawrence E. King, Special Assistant Attorney General, Bismarck, for appellee.

MARING, Justice.

¶1 David Vernon appealed a judgment affirming a North Dakota Workers Compensation Bureau order requiring him to forfeit future benefits for a back injury, reversing the Bureau's order requiring him to repay $33,519.30 in previously paid benefits, and directing the Bureau to pay him benefits for the period between January 21, 1997 and May 14, 1997. We affirm.

I

¶2 Vernon received workers compensation benefits for a back injury sustained during the course of his employment in 1988. His condition improved with back surgery in 1990, but he continued treatment for back pain and was restricted from returning to work. In July 1993, Kevin Axtman conducted a functional capacity assessment and categorized Vernon as having a tolerance for "sedentary/light work." During this time, Vernon reported he had trouble sitting for long periods. In 1994 and 1995, Dr. John Lonstein indicated Vernon had reported significant back pain which interfered with his daily activities. In November 1995, Vernon underwent a functional capacities assessment conducted by Allan Brossart. During the assessment, Vernon described pain at a level of nine on a scale of one to ten, and reported daily activities aggravated his back pain. As a result of the assessment, Brossart placed Vernon at a "less than sedentary work level," which, according to Brossart, posed "significant difficulties" for employability and retraining. Dr. Lonstein indicated Vernon reported significant back pain in April 1996, and the doctor concluded Vernon was permanently disabled.

¶3 In 1996, after receiving an anonymous tip, the Bureau assigned a private investigator to perform an "activities check" on Vernon. The investigator interviewed Vernon and videotaped him on two occasions. On December 31, 1996, the Bureau mailed Vernon a notice of intention to discontinue benefits (NOID), which said his temporary total disability benefits would be discontinued effective January 21, 1997, because "information received by the bureau indicates that you have made false statements regarding your physical disability status. A formal legal order will be mailed in the near future." The NOID informed Vernon he had 21 days to contest the termination.

¶4 On January 17, 1997, Vernon responded, stating he did not believe he had made any false statements regarding his disability status and inquiring "what false statements [he] supposedly made." On January 30, 1997, Vernon's counsel asked the Bureau to respond to Vernon's inquiry and to document the alleged false statements. On February 26, 1997, Vernon's counsel sent the Bureau another letter inquiring about Vernon's claim.

¶5 On May 14, 1997, the Bureau's director of claims and rehabilitation, Jeff Bitz, issued an order under N.D.C.C. § 65-05-33 denying Vernon further benefits for the back injury and requiring him to repay $33,519.30 in benefits paid from August 16, 1994 through January 1, 1997.

¶6 Vernon requested and received a formal evidentiary hearing. Thereafter, an administrative law judge recommended the Bureau find Vernon made false statements about his physical condition throughout the claim process, but the false statements were inadvertent and not willful and intentional within the meaning of N.D.C.C. § 65-05-33. The ALJ recommended reversing the Bureau's May 1997 order. The Bureau, through Bitz, rejected the ALJ's recommendation and concluded Vernon willfully made false statements to his health care providers, thus forfeiting his right to future benefits and requiring him to repay previously paid benefits.

¶7 The district court affirmed in part and reversed in part, concluding a reasonable mind reasonably could have concluded a preponderance of the evidence supported the Bureau's finding Vernon willfully and intentionally made false statements. The court affirmed the Bureau's decision requiring Vernon to forfeit future benefits for the injury. The court concluded, however, there was insufficient evidence to establish the Bureau had paid Vernon disability benefits because of the false statements and therefore reversed the Bureau's order requiring him to repay $33,519.30 for previously paid benefits. The court also concluded the Bureau violated N.D.C.C. § 65-01-14(7) ¹ and directed it to pay Vernon benefits from January 21, 1997, the date of termination of his benefits under the NOID, to May 14, 1997, the date the Bureau issued the formal order denying him further benefits. Vernon appealed. ²

II

¶8 On appeal, we review the Bureau's decision, not the district court's decision. Unser v. North Dakota Workers Comp. Bur., 1999 ND 129, p 15. 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 it violates the claimant's constitutional rights or deprives the claimant of a fair hearing. Sprunk v. North Dakota Workers Comp. Bur., 1998 ND 93, p 4, 576 N.W.2d 861. In deciding whether the Bureau's findings of fact are supported by a preponderance of the evidence, we exercise restraint and do not make independent findings of fact, or substitute our judgment for the Bureau's decision. Frohlich v. North Dakota Workers Comp. Bur., 556 N.W.2d 297, 301 (N.D.1996). Instead, our review of the Bureau's findings of fact is limited to determining whether a reasoning mind reasonably could have determined the findings were proven by the weight of the evidence from the entire record. Loberg v. North Dakota Workers Comp. Bur., 1998 ND 64, p 5, 575 N.W.2d 221.

III

¶9 Vernon argues the Bureau did not consider the entire record, clarify inconsistencies, and adequately explain its rationale for rejecting the ALJ's recommendation. He argues he did not make "false statements" within the meaning of N.D.C.C. § 65-05-33, and the Bureau's conclusion he willfully made false statements to his healthcare providers is not supported by its findings of fact.

¶10 If the Bureau rejects a hearing officer's recommendation, it must sufficiently explain its rationale for not following the recommendation. Blanchard v. North Dakota Workers Comp. Bur., 1997 ND 118, p 21, 565 N.W.2d 485. The Bureau may reject a hearing officer's recommendation on a witness's credibility. Id. An agency must adequately state its findings of fact and conclusions of law to facilitate meaningful appellate review. See Singha v. North Dakota Bd. of Med. Exam'rs, 1998 ND 42, p 23, 574 N.W.2d 838; Evans v. Backes, 437 N.W.2d 848, 850-51 (N.D.1989). In other contexts, we have said a mere recitation or summary of evidence is not sufficient to satisfy a trier-of-fact's obligation to make findings of fact. See Dunseith Pub. Sch. Dist. v. State Bd. of Pub. Sch. Educ., 437 N.W.2d 825, 830 (N.D.1989); Peterson v. Hart, 278 N.W.2d 133, 136 (N.D.1979).

¶11 The Bureau terminated Vernon's benefits under N.D.C.C. § 65-05-33, which during the time relevant to this proceeding, provided: ³

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.

¶12 Section 65-05-33, N.D.C.C., authorizes the Bureau to use administrative proceedings to recoup benefits paid to a claimant based upon a false claim or statements and to require a claimant to forfeit future benefits for that injury. See Zueger v. North Dakota Workers Comp. Bur., 1998 ND 175, 584 N.W.2d 530; Hopfauf v. North Dakota Workers Comp. Bur., 1998 ND 40, 575 N.W.2d 436; Hausauer v. North Dakota Workers Comp. Bur., 1997 ND 243, 572 N.W.2d 426; Dean v. North Dakota Workers Comp. Bur., 1997 ND 165, 567 N.W.2d 626; F.O.E. Aerie 2337 v. North Dakota Workers Comp. Bur., 464 N.W.2d 197 (N.D.1990); Hayden v. North Dakota Workers Comp. Bur., 447 N.W.2d 489 (N.D.1989).

¶13 The sanctions of N.D.C.C. § 65-05-33 are not triggered merely because there is a difference of opinion about a claimant's entitlement to benefits, or the Bureau discredits evidence supporting a claim. Rather, as we explained in Hausauer, 1997 ND 243, pp 12-13, 17-18, 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...