Hamberger & Weiss LLP

H&W Obtains §114-a Fraud Finding at Appellate Division

In Leising v. Williamsville Central School District, our firm successfully convinced the Appellate Division to reverse a Board finding that the claimant did not commit workers' compensation fraud under WCL §114-a. This case involved a claimant who was working in a seasonal job at a golf course while collecting indemnity payments. Claimant initially disclosed her job at the golf course to the carrier, but then subsequently rescinded the disclosure, stating that it was a mistake and that she was not working. Later, claimant also failed to disclose the employment during a telephone conversation with the carrier’s claims handler when asked if she was working. The claimant inadvertently tipped the carrier off to her job by calling the claims handler from the golf course, causing her employer’s name to show up on the caller ID display.

The WCLJ found a fraud violation and imposed a lifetime disqualification from indemnity awards. Claimant appealed and the Board reversed, inexplicably finding that any misrepresentations by claimant about her work activities were not material for purposes of the fraud statute. Eventually realizing their mistake, the Board then issued a modified decision simply finding insufficient proof that claimant concealed her employment from the carrier.

The Appellate Division reversed under the substantial evidence rule, finding no rational reading of the evidence in the record could support the Board’s finding. This holding by the Appellate Division is notable for two reasons. First, reversals under the substantial evidence rule are rare. The Court almost always defers to factual findings by the Board. Second, the Court is normally bound by the Board’s credibility findings when assessing the weight of witness testimony. However, in this case the court parsed the facts in the record closely, and held that the Board credibility findings were irrelevant, stating that no credibility issue existed on the important points of testimony from the carrier’s main witness. This holding by the Court could arguably be interpreted as stating that no credibility issue exists as a matter of law when the important points of witness testimony are not contradicted and there is no other reason to question the veracity of that testimony. Additional decisions from the Court may be needed to clarify to whether this is what the Court intended. The case now returns to the Board for a modified decision regarding whether the misrepresentations identified in the Court’s decision were material.

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