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Fraud case – Singh v. Cream-O-Land Dairy

By on July 1, 2008 in Key Defenses with 0 Comments

New Jersey has its own fraud provision built into the statute under N.J.S.A. 34:15-57.4.  There are two helpful unreported cases on fraud.

In Singh v. Cream-O-Land Dairy, A-2468-06T5, (App. Div. March 27, 2008), the Appellate Division affirmed the decision of the Honorable Michael P. Mullen, Judge of Compensation, in denying compensation to a claimant who misrepresented material facts and in ordering the petitioner to repay benefits.

The case is particularly interesting because the petitioner, a truck driver, did indeed suffer a work-related injury on May 2, 2002, which caused two herniated discs and subsequent two-level disc excision surgery.  The fraudulent representations took place after the injury and after the surgery and pertained mostly to petitioner’s ability to work.

On January 3, 2003, petitioner applied for a job as a truck driver with Banibal Trucking Co., a company owned by his cousin.  Petitioner worked there until June 2004 as a tractor-trailer driver.  His 2003 tax returns showed expenses for 195 nights of over-the-road lodging mainly in this job.

In August 2004, petitioner underwent a physical examination for Wills Trucking, Inc. during which he denied suffering any disabilities or injuries in the past five years.  Mr. Singh’s 2004 tax return disclosed 276 nights of over-the-road lodging and a gross income of $86,776.

Respondent paid 46 and three sevenths weeks of temporary disability benefits and a bona fide offer of 12.5%.  In spite of his employment, petitioner told his treating and workers’ compensation examining doctors that he could not work as a truck driver as a result of his severe pain.  He testified in court on September 14, 2004 that he had not been employed since May 2, 2002 by anyone other than his cousin.  He also minimized the work he did for his cousin and he denied that he could work on a full-time basis due to his pain.

At the next date of testimony, respondent confronted petitioner with records of Banibal Trucking and Wills Trucking.  Petitioner said he left Banibal in June 2004 because he could not drive a truck long distances.  However, respondent offered evidence of petitioner’s per diem lodging expenses on his 2003 and 2004 tax returns.

Petitioner’s expert, Dr. Moskowitz, found 75% permanent partial disability.  Petitioner told Dr. Moskowitz that he had only been able to return to work part-time.  He led Dr. Rubin to believe that he was depressed because he was not able to get back into the work force.   He further told respondent’s expert on May 12, 2004 that he had remained out of work since the 2002 accident.

Judge Mullen wrote a 51-page decision finding that petitioner had committed fraud in violation of N.J.S.A. 34:15-57.4  He highlighted the misrepresentations in court and to the examining doctors.  He ordered the following:

1)     Petitioner was to reimburse respondent $1,350 for seven days of trial court reporting bills;

2) Petitioner was to return the voluntary tender of 12.5% or $12,600

3) Petitioner was to return $7,278.42 in temporary disability benefits with interest;

4) Petitioner’s claim petition was dismissed for no compensation at all.

The Appellate Division affirmed the decision of Judge Mullen, noting that there was ample evidence of fraud.  The court also commented on an issue not previously addressed in the New Jersey Division of Workers’ Compensation, namely the level of proof required in fraud cases.  The court said that for Part (a) of the Fraud Statute, which involves proof of a fourth degree crime, the standard of proof is beyond a reasonable doubt.  However, for the remaining parts of the Fraud Statute, which involve civil remedies such as those ordered in this case, the standard of proof is simply a preponderance of the evidence.

This case represents perhaps the first Appellate Division decision in which a petitioner was ordered to reimburse indemnity benefits in an otherwise compensable claim (the herniated disc was work-related and led to work-related surgery) and in which the entire claim for permanency was dismissed due to petitioner’s dishonesty in trying to enhance the value of his claim by making material misrepresentations.  The case clearly shows that judges of compensation as well as the Appellate Division are increasingly sensitive to the terms of the Fraud Statute and are not loathe to dismiss an otherwise compensable claim of significant magnitude where petitioner has lied about the impact on his working ability and earnings capacity.

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John H. Geaney

About the Author

About the Author:

John H. Geaney, a shareholder and co-chair of Capehart Scatchard's Workers' Compensation department, began an email newsletter entitled Currents in Workers’ Compensation, ADA and FMLA in 2001 in order to keep clients and readers informed on leading developments in these three areas of law. Since that time he has written over 500 newsletter updates.

Mr. Geaney is the author of Geaney’s New Jersey Workers’ Compensation Manual for Practitioners, Adjusters & Employers. The manual is distributed by the New Jersey Institute for Continuing Legal Education (NJICLE). He also authored an ADA and FMLA manual as distributed by NJICLE. If you are interested in purchasing the manual, please contact NJICLE at 732-214-8500 or visit their website at www.njicle.com.

Mr. Geaney represents employers in the defense of workers’ compensation, ADA and FMLA matters. He is a Fellow of the College of Workers’ Compensation Lawyers of the American Bar Association and is certified by the Supreme Court of New Jersey as a workers’ compensation law attorney. He is one of two firm representatives to the National Workers’ Compensation Defense Network. He has served on the Executive Committee of Capehart Scatchard for over ten (10) years.

A graduate of Holy Cross College summa cum laude, Mr. Geaney obtained his law degree from Boston College Law School. He has been named a “Super Lawyer” by his peers and Law and Politics. He serves as Vice President of the Friends of MEND, the fundraising arm of a local charitable organization devoted to promoting affordable housing.

Capehart Scatchard is a full service law firm with offices in Mt. Laurel and Trenton, New Jersey. The firm represents employers and businesses in a wide variety of areas, including workers’ compensation, civil litigation, labor, environmental, business, estates and governmental affairs.

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