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Losurdo v. Asbestos Free12/22/2003
This opinion is uncorrected and subject to revision before publication in the Official Reports.
3 No. 159 SSM 26
These appeals call for us to decide whether section 114-a(1) of the Workers' Compensation Law authorizes the Workers' Compensation Board to disqualify a claimant from receiving wage replacement benefits where the forfeited compensation is not "directly attributable" to a false statement or representation . We hold that section 114-a(1) affords the Board discretion to impose such a penalty; however, the records below in these two cases are inadequate for us to determine whether the Board properly exercised its discretion.
I.
A. Losurdo
Appellant James Losurdo sought workers' compensation benefits for an injury to his left knee, which occurred on September 12, 1994, while he was working for his employer, Asbestos Free, Inc. At a hearing held on May 15, 1997, Losurdo denied having previously injured his left knee. The Workers' Compensation Law Judge (WCLJ) found that accident, notice and causal relationship were established for Losurdo's injury, and awarded him wage replacement benefits.
The employer's carrier requested review of the WCLJ's decision. The carrier argued that medical records demonstrated a pre-existing injury to Losurdo's left knee, and sought apportionment. The carrier also requested a fraud investigation pursuant to section 114-a(1) because at the hearing Losurdo denied a pre-existing injury. At the new hearing, Losurdo professed that he had honestly not recalled any previous injury to his left knee when he testified in 1997. He admitted that the medical records refreshed his memory about the previous injury. On September 8, 1999, the WCLJ found that Losurdo had not violated section 114-a(1), and that no apportionment was necessary, citing Matter of Peziol v VAW of Am. (245 AD2d 877 [3d Dept 1997] [" nasmuch as claimant was able to effectively perform his job despite his non-compensable pre-existing condition, apportionment does not apply"]).
On July 27, 2001, the Board modified the WCLJ's decision by finding that Losurdo had made "a misstatement of fact" concerning the injury site, which was material and violated section 114-a(1) "notwithstanding the fact that the claimant's compensable injury is not, as a matter of law, apportionable with his prior injuries." The Board rescinded all wage replacement awards after May 16, 1997; disqualified Losurdo from any future wage replacement benefits; and closed the case. The Board did not in any way contradict the establishment of the claim or the existence of a compensable injury. The Appellate Division affirmed (302 AD2d 703 [3d Dept 2003]), holding that the Board's determination of a statutory violation was supported by substantial evidence, and that its interpretation of section 114-a(1) was reasonable. The Appellate Division did not independently review the penalty imposed.
B. Machado
Appellant Florencia Machado sought workers' compensation benefits for a back injury that he sustained on June 13, 1989, while working as an auto mechanic for his employer, Pleasantville Ford, Inc. The WCLJ found that accident, notice and causal relationship were established for the injuries sustained, and awarded Machado compensation for total disability. In 1995, Machado was found to be partially disabled, and his wage replacement award was consequently reduced. Machado protested, claiming that he was totally disabled.
To investigate Machado's claim of total disability, the employer's carrier arranged for surveillance, which revealed that Machado was driving a taxi. At a new hearing requested by the carrier and held on Septem
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