Case Law Update – June 2015

Fraud Defense

Tony Joe Leggett v. Barnett Marine Inc., 1D14–4432 First DCA (June 4, 2015)

This case involves a marine dock builder who injured his back on May 9, 2013 while moving a piling. The E/C accepted compensability of the accident and injuries, authorized medical treatment, and began paying TTD benefits.
Subsequently, the E/C conducted surveillance on the claimant and found that over a three-day period during October 2013, he performed physical tasks consistent with the construction of a dock. As a result, the E/C stopped paying TTD benefits and denied the entire claim, asserting the fraud defense under F. S. §440.09 and §440.105.
The basis of the fraud defense was that on July 11, 2014, at the claimant’s deposition, he denied doing any dock work since the date of the accident, claiming he was only “hanging out” near the dock job.
At a Merits Hearing, JCC Douglas Spangler denied the claimant’s claim for TTD benefits on the grounds that he made misrepresentations which resulted in a forfeiture of benefits under the above-cited statutes.
At the appellate level, the claimant did not contest the finding of fraud, but argued that the forfeiture of benefits should not become effective until the date of his misrepresentations at the deposition on July 11, 2014, or alternatively, the date the JCC ultimately entered the order finding fraud. Essentially, he claimed that benefits prior to the date that he made false statements at his deposition should still be payable despite his fraudulent statements.
The First DCA held that under F.S. §440.105, the words contained in the statute “shall not be entitled” applied to all contested and unresolved entitlement to benefits under chapter 440. As a result, the First DCA’s holding indicated that a claimant’s statements which are found to be false or misleading by the JCC result in a forfeiture of all indemnity and medical benefits in the past.

Practical Application:

Although the fraud defense is often difficult to prove, once false or misleading statements have been determined at trial to have been made in order to obtain workers’ compensation benefits, such false and/or misleading statements result in a forfeiture of all past benefits, not just those benefits which occurred on or after the date of the false or misleading statements.
As a result, the “fraud defense” is a very powerful tool which can potentially lead to denial of an entire case and all benefits associated therewith, not just the benefits that would potentially be due and owing after the false statements were made.
Asserting a “fraud defense” is not something to be taken lightly, and should be discussed with your defense attorney before making a decision to do so. However, if the facts and evidence support a denial for fraud defense, it can result in significant savings, and essentially, “shut down” what otherwise would be a viable and compensable claim for indemnity and/or medical benefits.
Please feel free to contact any of our workers’ compensation attorneys listed below if you wish to discuss any of these cases and their application to your claims. You may reach us at the telephone numbers or e-mail addresses listed below:

Fort Lauderdale/East Coast Office: (954) 462-4304

Walter C. Wyatt, Partner – ext. 218

Robert M. Potter, III, Partner – ext. 222

St. Petersburg/West Coast Office: (727) 322-1739

Joseph A. Bayliss, Partner – ext. 306