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Taylor v. State Compensation Insurance Fund

Court of Workers Compensation of Montana

August 21, 1995

EDWIN TAYLOR Petitioner
v.
STATE COMPENSATION INSURANCE FUND Respondent/Insurer for MONTANA DEPARTMENT OF HIGHWAYS Employer.

          FINDINGS OF FACT, CONCLUSIONS OF LAW AND JUDGMENT

          Mike McCarter Judge

         Summary: Truck driver for the Montana Department of Transportation filed three claims for compensation. State Fund accepted liability for each claim and paid benefits. Following investigation, State Fund alleged the claims were fraudulent.

         Held: With regard to two of the three claims, the insurer carried its burden of proving the nine required elements of fraud. The Court relied on credible testimony of witnesses who said claimant told them he was "scamming the system," but also on evidence that claimant had a financial motive, was unhappy with his job and angry at his supervisors, inconsistencies in claimant's statements to medical providers and others, lack of objective medical evidence of some injuries, and evidence that claimant exaggerated and fabricated injuries and symptoms, some of which were anatomically inappropriate. Where an insurer may maintain a civil action for fraud against a claimant to recover benefits paid, see State Fund v. Chapman, 267 Mont. 484, 491, 885 P.2d 407 (1994), the claimant is liable to repay the insurer for the medical and compensation benefits paid on account of those two claims.

         Topics:

Fraud: With regard to two of three claims filed by truck driver, insurer sustained its burden of proving fraud, entitling the insurer to an order of reimbursement from claimant for medical and compensation benefits paid on the two claims. In finding the insurer proved the nine required elements of fraud, the Court relied on credible testimony of witnesses who said claimant told them he was "scamming the system," but also on evidence that claimant had a financial motive, was unhappy with his job and angry at his supervisors, inconsistencies in claimant's statements to medical providers and others, lack of objective medical evidence of some injuries, and evidence that claimant exaggerated and fabricated injuries and symptoms, some of which were anatomically inappropriate.
Evidence: Fraud. Although the Workers' Compensation Court was made aware that a criminal proceeding alleging fraud was pending against claimant, that fact and documents pertaining to that prosecution were not evidence of fraud.
Evidence: Fraud. With regard to two of three claims filed by truck driver, insurer sustained its burden of proving fraud, entitling the insurer to an order of reimbursement from claimant for medical and compensation benefits paid on the two claims. In finding the insurer proved the nine required elements of fraud, the Court relied on credible testimony of witnesses who said claimant told them he was "scamming the system," but also on evidence that claimant had a financial motive, was unhappy with his job and angry at his supervisors, inconsistencies in claimant's statements to medical providers and others, lack of objective medical evidence of some injuries, and evidence that claimant exaggerated and fabricated injuries and symptoms, some of which were anatomically inappropriate.

         The trial in this matter was held on February 23 and 24, 1995, in Helena, Montana. Petitioner, Edwin Taylor (claimant), was present and represented by Mr. Wade J. Dahood. Mr. Bernard J. Everett was also present on behalf of claimant but did not actively participate in the trial due to a previous order of this Court. Respondent, State Compensation Insurance Fund, was represented by Mr. Oliver H. Goe.

         Claimant testified on his own behalf. Elizabeth Larain, Robert Beebe, Carol McKean, Quentin Miller, Bryan Costigan, Lance Zanto, Bill Visser and Bernard Everett also testified. The depositions of Elizabeth Larain, Edwin Taylor (two volumes), Erica Byrd, Dee Dee Derzay, Dan Noyes, Dr. Jim Deming, Dr. John Robbins, Dr. John Diggs, Quentin Miller, Dr. Steven Shaneyfelt, Barb Beukenhorst, Ben Sinnema, Dr. Daniel Gannon, Linda Davis, Phil Davis, Dr. Pamela Hiebert, Bernard Everett, Alan Alsop, Joyce Sather and Skip Tinder were submitted for the Court's consideration. Elizabeth Larain's deposition, which is also marked as exhibit 62, is admitted only for the portions referenced in her examination and cross-examination at trial.

         Exhibits: Exhibits 2a-d, 3a-c, 4a-b, 5, 5a-f, 6, 9a-f, 11 trough 15, 16a-d, 17a-b, 18 through 20, 22a-b, 23, 24a-c, 30 through 34, 36, 38 through 43, 44a, 44f-k, 46, 51 and 56 were admitted without objections. The objections to exhibits 7, 21, 25a-b, 26, 27 and 54 were withdrawn and those exhibits were admitted. Exhibits 1, 8, 28, 29, 35, 37 with the exception of its bankruptcy and subpoena portions, 44, 44b-c, 44l-m, 45, 45a-e, 46c, 52, 53, 62 and 64 were admitted over objection. Exhibits 47, 47a-d, 48, 49a-c and 57 through 61 were admitted for the limited purpose of showing reasonableness. Exhibit 49a-c were also admitted for the purpose of showing prior inconsistent statements, which were referenced a trial. Exhibits 22c, 44d, 46a-b, 50 and 63 were withdrawn. Exhibit 62 was denied except for portions that were referred to in Larain's testimony at trial. Exhibit 65 was not offered.

         The Court reserved its rulings on the admissibility of Exhibits 10, 55 and 66. Exhibit 10 is refused as it is incomplete and in any event included in its entirety in Exhibit 49c, which was admitted for purposes of reasonableness and prior inconsistent statements. Exhibit 55 except pages 19 and 20 is refused as it principally concerns an independent medical condition and is irrelevant. Pages 19 and 20 of the exhibit are admitted since they concern claimant's low-back condition. Finally, Exhibit 66, to which claimant objected, is refused.

         The transcript of these proceedings is in three volumes. The transcript of Elizabeth Larain's, Robert Beebe's and Carol McKean's testimony will be referred to as Tr. I. The transcript of claimant's testimony will be Tr. II. The transcript of Lance Zanto's testimony will be cited as Tr. III. The trial testimony of Bernard Everett, Bill Visser, Quentin Miller and Bryan Costigan was not transcribed.

         Issues presented: Two Petitions for Hearing are considered herein. The first petition (WCC No. 9406-7066) was filed by claimant and concerns an injury alleged to have occurred on March 4, 1991. The claim was initially accepted but in April 1994 the State Fund repudiated its acceptance, alleging fraud. Claimant seeks reinstatement of his benefits. The second petition (WCC No. 9407-7097) was filed by the State Fund. The State Fund alleges that claims for injuries on March 4, 1991, February 26, 1990 and November 15, 1990, were fraudulent and seeks reimbursement of all benefits paid on those claims. On February 16, 1995, this Court consolidated the two petitions into WCC No. 9406-7066. (Order Consolidating Files.)

         Having considered the Pretrial Order, the testimony presented at trial, the demeanor and credibility of the witnesses, the depositions and exhibits, and the parties' briefs and proposed findings of fact and conclusions of law, the Court makes the following:

         FINDINGS OF FACT

         1. At the time of trial claimant was forty-nine years old. (Tr. II at 6.) Claimant has a GED. (Id.)

         2. In the late 1980's, claimant went to work for the Montana Department of Transportation (DOT), formerly the Montana Highway Department. (Tr. II at 7.)

         3. Claimant filed claims for compensation for industrial injuries that allegedly took place on February 26, 1990, November 15, 1990 and March 4, 1991. At the time of the alleged injuries, the State Fund insured the DOT. It accepted liability for each of the claims and has paid claimant wage loss and medical benefits.

         4. Claimant has not worked since March 4, 1991, and he claims that he has been totally disabled since that date. (Tr. II at 6.) He received temporary total disability benefits from March 4, 1991 until April 1994, at which time the State Fund terminated his benefits in the belief that his claim was fraudulent.

         5. The Court finds that the credibility of the witnesses testifying at trial is critical to the resolution of this case. I found the witnesses testifying against claimant to be credible. On the other hand, I found the claimant incredible. Indeed, after listening to claimant's testimony, I was firmly persuaded that his claims with respect to alleged injuries on November 15, 1990 and March 4, 1991, were false. In judging claimant's credibility, I have given no weight to deposition testimony regarding claimant's reputation or veracity. My credibility findings are based on trial testimony, my personal observation of claimant, my assessment of the credibility of the other witnesses who testified at trial, claimant's admissions to those other witnesses, claimant's behavior following his alleged injuries, his motive to falsify claims, and his overall conduct.

         6. Although this Court has been made aware that a separate criminal proceeding is also pending against claimant, that fact and the documents pertaining to it are not considered in this case. The criminal charges are mere allegations and are not evidence of fraud.

         7. Ultimately, as detailed in the following findings, I find that claimant's November 15, 1990 and his March 4, 1991 claims were fraudulent. With respect to the claim regarding an alleged injury on February 26, 1990, I find that the State Fund has failed to carry its burden of proof that this claim was fraudulent.

         Alleged February 26, 1990 Injury

         8. The first of claimant's three claims for compensation is for an alleged industrial accident occurring on February 26, 1990. According to claimant, he was working alone in the shop at the time of this incident. (Tr. II at 113.) He testified that he backed into an open door of a truck that was being repaired. (Id. at 114.) He further testified that he hit the door with such a force that it knocked him to the ground. (Id. at 115.)

         9. Claimant did not report any accident on that date and continued working until March 20, 1990. (Id. at 119.)

         10. On March 20, 1990, claimant left work on account of chest pains and went to the emergency room of the Bozeman Deaconess Hospital. At the hospital he was examined by Dr. Steven Shaneyfelt, who recorded that claimant had severe and incapacitating substernal and left-sided anterior chest pain. (Ex. 2a.) Claimant was hospitalized at that time.

         11. During his hospitalization claimant reported that he also had shoulder pain radiating from the back of his neck. (Ex. 3a.) On March 22, 1990, claimant was examined by Dr. Daniel Gannon, an orthopedic surgeon, who ordered a cervical CT scan. (Ex. 3a.) The scan revealed moderate to severe narrowing of the neural foramina on the left side at the C4-5 level. (Ex. 4b.) Ultimately, claimant was diagnosed as suffering from a ruptured cervical disk. (Ex. 5f.)

         12. Only after he learned that he had a significant cervical condition did claimant report an industrial accident to his employer. That report is reflected in an attachment to the Employer's First Report. (Ex. 1.) It reads in part:

Mr. Taylor entered Bozeman Deaconess Hospital during his work shift on 3-20-90 with chest pains. During his stay in the hospital (3-20-90 / 3-24-90) [sic] a cat scan was performed. As a result of the scan, Mr. Taylor was told by Dr. Dan Gannon, orthopedic surgeon, that he had a ruptured disc and compressed fracture of the vertebrae and was advised to have corrective surgery.
Mr. Taylor stated he recalled the incident that caused the injury. While he was sweeping the shop floor, he had bent over and was moving backwards when he raised up and hit his neck and shoulder on the left side, on the front door edge of the wing truck. The doors of this truck were tied in an open position while the truck was being worked on. Mr. Taylor did not report the incident, deciding to just continue working.

         Following the Doctor's recommendation for surgery, he advised the DOH of the accident. He has not returned to work as of March 26, 1990.

         13. On July 25, 1990, Dr. James Johnson performed an anterior diskectomy and fusion at the C4-5 level. (Exs. 5d and 5f.)

         14. The State Fund accepted liability for the February 26, 1990 claim. It paid claimant $5, 591.64 in wage loss benefits and $17, 161.70 in medical benefits.

         15. While the circumstances of claimant's report of this injury, taken together with facts found regarding claimant's subsequent two claims, raise a suspicion of fraud with respect to the February 26, 1990 claim, there is insufficient evidence to persuade me that this claim was fraudulent.

         Alleged November 15, 1990 Injury

         16. Claimant filed a claim for an injury that allegedly occurred on November 15, 1990. There were no witnesses to the alleged accident. (Tr. II at 131.)

         17. According to claimant, the accident occurred in a maintenance shed: claimant asserts he bumped his head when he was rising up from checking plow bolts. (Tr. II at 131 and Ex. 8.) At trial he testified that he was knocked to his knees and that "possibly" he lost consciousness for a few seconds. He said that he told his treating physician that he did not know whether he was knocked out or not. (Id. at 132.)

         18. Claimant further testified that the accident occurred at 3:05 p.m., near the end of his shift. (Tr. II at 130-31) and that within 15 minutes of the accident he reported the incident to his supervisor, Quentin Miller. (Tr. II at 133.) He decided to finish his shift, which ended at 3:30 p.m., and drove himself to the doctor after work.

         19. The Employer's First Report states that claimant reported his injury at 12:00. (Ex. 8.)

         20. Dr. Pamela Hiebert examined claimant at the Bozeman Deaconess Hospital on the evening of November 15, 1990. (Ex. 9a.) Her medical note on that date states that claimant reported he "was knocked out" but "[h]e doesn't know for how long." (Id.) In her deposition, Dr. Hiebert confirmed that claimant reported that he had been knocked out. (Hiebert Dep. at 15-16.) The positive report of loss of consciousness conflicts with claimant's trial testimony.

         21. During her November 15, 1990 examination of claimant, Dr. Hiebert noted that he had a tender lump in the left occiput but no depressed skull fracture. (Ex. 9a.) Dr. Hiebert testified that she determined that the lump was tender based on claimant's subjective complaints. (Hiebert Dep. at 34.) She also commented that claimant's lump was not impressive because she did not describe it. (Id. at 21.) She opined that claimant's lump was of recent origin but she qualified that opinion by saying that it was based on what claimant told her; she agreed that she really had no idea how long the lump had been there. (Id. at 30 and 43.) She stated that although she diagnosed claimant as having a concussion, her diagnosis was based on claimant's report that he had lost consciousness. (Id. at 38-39.) Dr. Hiebert hospitalized claimant for observation on account of that report. (Id. at 33-4.) Other than the lump, there was no objective evidence of any injury. (Id. 21-22, 24.)

         22. In her note of November 15, 1990, Dr. Hiebert also wrote that claimant was a difficult historian. (Ex. 9a.) She explained at her deposition that the term "difficult historian" means that she had trouble getting a coherent history from claimant and she did not know if the history was reliable. (Hiebert Dep. at 27.)

         23. Claimant was hospitalized overnight and then released. (Ex. 9e.) Dr. Hiebert never saw him again with respect to this incident. (Hiebert Dep. at 23.)

         24. Dr. Steven Shaneyfelt, an internist, examined claimant in the hospital on the morning after he was admitted (November 16, 1990). (Shaneyfelt Dep. at 40.) He found a small bruise or hematoma which indicated an initial injury of up to a week previous but more likely "within 48 to 72 hours of coming to the hospital." (Id. at 41.)

         25. Robert Beebe met claimant in 1980 when he was working for the same trucking firm as Beebe. (Tr. I at 95.) For the next ten years they were mere acquaintances. (Id.) However, commencing in January 1990, claimant and Beebe lived in the same trailer court and became friends. (Id. at 95.)

         26.Claimant showed Beebe a lump on the left side of his neck three to four days before the alleged workers' compensation accident. (Tr. I at 101.) Beebe described the position of the lump as "on the hard part of the muscle" of the left side of the neck, at the hairline of the head. (Id. at 100.) In response to questions by the Court concerning the location of the lump, he pointed to the area where the left neck muscle attaches to the base of the skull, an area which is to the rear of the left ear. That area roughly corresponds to the location described and drawn by Dr. Hiebert. (Hiebert Dep. at 20, 30 and Dep. Ex. 7 and Ex. 9d.) Beebe testified that the lump was "about a half size of an egg length- wise." (Tr. I at 101.) Dr. Hiebert estimated the size as between one to three or four inches. (Hiebert Dep. at 20, 30 and Dep. Ex. 7; Ex. 9d). Beebe's estimate was within those parameters.

         27. Beebe drove claimant to the hospital on the evening of November 15, 1990. Before entering the emergency room of the hospital, claimant told Beebe, "Don't tell nobody, but I'm going to turn this in as an industrial accident." (Tr. I at 102.)

         28.Claimant did not deny that he showed Beebe something on his neck shortly before November 15, 1990. However, at trial he explained it away by saying that a day or two before his hospitalization on November 15, 1990, he had asked Beebe to look at a "pimple" on his neck. (Tr. II at 135.) He further testified that it was not the "big lump" that Dr. Hiebert examined and that Beebe looked at it and said, "I think it's a pimple." (Id.)

         29. I find claimant's "pimple" explanation unconvincing. Claimant was not credible, whereas Beebe was. I find that the lump on claimant antedated claimant's alleged industrial accident of November 15, 1990, and that ...


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