MISREPRESENTATION/FRAUD DEFENSE

• THG Rentals and Sales of Clearwater Inc. V Arnold; opinion dated September 28, 2018 (not yet final) Link
• (original,  substantive opinion, issued July 6, 2016, rehearing denied August 15, 2016) LINK.
  • Facts of the case.  On September 28, 2018, the First District Court of Appeal, in a unanimous "Per Curiam, Affirmed" opinion may have finally brought to a close the long saga of a quest for catastrophic workers’ compensation payments by the claimant in this case, who not only described his pain to physicians as 10 plus - plus (on a scale of 1 to 10) but who prescribed, for himself, a motorized cart, cane, etc.   Claimant's trial attorney was Bradley Smith.
    Claimant alleged back and leg injuries, however, the carrier, Summit/Claims Center, through its able trial attorney Tim Jesaitis, launched an investigation based on several red flags, resulting in seriously compromising surveillance evidence.

• Ruling below:  Employing a novel tactic before trial, the claimant jettisoned/dismissed claims relating to "back" injury, i. e., the "body part" (only arguably) implicated by the surveillance materials, and proceeded to trial claiming benefits solely on the basis of the "leg" injury, and the JCC accepted the argument that such severance in effect purged the claim of fraud! The JCC also made comments suggesting the videos may have demonstrated false or misleading testimony but did not seem to rise to the level warranting the sanction of forfeiture of benefits. (This is not the precise holding but a substantively reasonable paraphrasing.)
  Defense attorney Jesaitis and Summit decided to refer the matter to H. George Kagan to prosecute an appeal. Claimant's appellate attorney was Wendy S. Loquasto. The case was selected by the court for oral argument in Tallahassee.

• • The first appeal/significant ‘fraud’ opinion: The opinion opens in a remarkable manner, personally gratifying to Mr. Kagan: the court issued an earlier version of the opinion in which, on the one hand, the employer carrier prevailed, i.e. obtained a reversal and remand for reconsideration by the trial judge.  However, elements of the opinion struck Kagan as capable of producing confusion below, and so a rehearing was carefully fashioned to suggest as much to the court. The court agreed! Here is how the opinion begins;
    “The Employer/Carrier (E/C) moves for rehearing on the merits, arguing that repleading its misrepresentation defense is unnecessary and potentially problematic in the unique procedural posture of this case. On consideration of the E/C's arguments and the pertinent portions of the record, we agree. Accordingly, we grant the E/C's motion for rehearing, withdraw our previous opinion, and substitute the following in its place.”  THG Rentals & Sales of Clearwater, Inc. v. Arnold, 196 So. 3d 485, 486 (Fla. Dist. 1^st DCA 2016), reh'g denied (Aug. 15, 2016)

In addition to enabling his client to prevail, Kagan is also proud of the fact two important precedents cited in the case as ‘building blocks’ of the holding were also prior positive outcomes on behalf of industry prosecuted by attorney Kagan.

In the revised opinion the court rejected the notion a claimant might escape consequences of actionably false/misleading statements by abandoning part (or theoretically even all) of the claim before trial.  False or misleading statements in a workers’ compensation case have dire consequences -- that's what the legislature wants folks to understand – – and once perpetrated – – they cannot be ‘cleansed’ by abandoning the ‘part’ of the claim to which they pertain, a doctrine Kagan helped successfully establish in the first case testing and upholding the constitutionality of the "any knowingly-made false or misleading statement equals all benefits forfeited” construction of Act, cited in the body of the Arnold opinion, to wit; Wright v. Uniforms for Industry, 772 So.2d 560 (Fla. 1st DCA 2000). The court also held it is not necessary that the false/ misleading statement be directly material to the claim; only that it was made with the idea of gaining or preserving WC benefits, a proposition for which the court cited the other notable Kagan outcome, Village of N. Palm Beach v. McKale, 911 So.2d 1282 (Fla. 1st DCA 2005).

• Significant additional ruling:  This was also a case of first impression construing then-new rule 60Q–6.113(2)(h), which requires great specificity by an E/C pleading misrepresentation. Though the carrier was found not to have complied, it's subsequent acts were deemed tantamount to compliance, coupled with Claimant's late-made rule-based objections, thus avoiding the harsh outcome, for E/C, of waving the fraud defense!

The court remanded and instructed the JCC to issue a new opinion in conformity with their opinion.

• The second appeal/(apparent) finality!  On remand there was marked controversy (putting it mildly) as to what was expected of the JCC by the court. In the end the JCC felt the remand and the record compelled determination Claimant had indeed committed proscribed acts, and issued an order denying the claim in its entirety and dismissal with prejudice.

Claimant appealed. The appellate attorneys were the same.

On September 28, 2018 the court issued a unanimous "Per Curiam, Affirmed" opinion sustaining, without comment, the JCC's denial and dismissal of the claim based on the claimant's actionable misrepresentations. As of this writing the time for rehearing has not yet expired (but it is exceedingly difficult to alter the outcome of a "per curiam affirmed" determination).