In re Murphy's Case2/4/2002
Suffolk.
November 2, 2001
Statute, Construction. Workers' Compensation Act, Fraud, Reimbursement of insurer, Attorney's fees. Words, "Proceeding."
Appeal from a decision of the Industrial Accident Reviewing Board.
The case was heard in the Appeals Court by Kass, J.
Charles Murphy (employee) injured his shoulder on Tuesday, September 18, 1990, while working in Massachusetts for Trans World Airlines (TWA) as an airline baggage handler. Three days later, on September 21, 1990, the employee began a job as a corrections officer with the New Hampshire Department of Corrections. While still working as a corrections officer in New Hampshire, the employee filed for, and began collecting, workers' compensation benefits for a temporary total disability, under 34 of the Workers' Compensation Act, G. L. c. 152 (Act). This appeal raises the question whether certain of the employee's actions constitute fraud within the meaning of 14(2) of the Act. We also consider the scope of the authority of an administrative judge of the Department of Industrial Accidents (department) to order recoupment of benefit overpayments within a proceeding to modify or discontinue benefits.
Background.
The employer's insurer, Continental Insurance Company (insurer), voluntarily placed the employee on temporary total disability compensation shortly following his September, 1990, injury, but after he had begun employment as a corrections officer. The employee did not at that time reveal to the insurer his employment as a New Hampshire corrections officer. The employee was fired from his New Hampshire job on May 28, 1991, for reasons not relevant to this appeal. In November, 1991, TWA learned of the employee's New Hampshire job and terminated his employment. On March 10, 1993, the insurer filed a discontinuance request with the department, pursuant to 10 of the Act. The parties appeared before the administrative judge on August 2, 1993, for a conference as prescribed by 10A, at which the employee acknowledged his (then previous) corrections employment. The parties did not reach agreement on an appropriate level of compensation benefits at the conference, and the administrative judge entered a conference order awarding the employee partial incapacity benefits of $400 per week.
The insurer appealed the conference order, seeking a total discontinuance of benefits and sanctions pursuant to 14(2). A hearing on the appeal was held before the administrative judge on May 31, 1994. Prior to the hearing, in January, 1994, an impartial medical examiner examined the employee, as provided in 11A of the Act. The examiner's report, which was entered in evidence at the hearing before the administrative judge, concluded that the employee was partially disabled as a result of his work-related injury. The examiner's report also included the following statement:
"[The employee] believes that he will not be able to do the work that he did prior to the episode. At the present time the patient is not employed, having stopped work on September 18, 1990. He does some chores at home, helping his wife, but he tells me that he is not involved in any strenuous activities or activities would require the prolonged use of his right shoulder."
In December, 1994, the administrative judge entered a decision in which he concluded that the employee had defrauded the insurer by concealing his New Hampshire employment for the purpose of claiming temporary total disability. The finding of fraud rested on the employee's failure to disclose his employment to TWA, the insurer, and a rehabilitation consultant prior to the August, 1993, conference, or to the imp
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