There is a perception that in Florida a great many litigation allegations are leveled regarding "fraud." This is mentioned in multiple appellate decisions such as Isaac v. Green Iguana, Inc., 871 So.2d 2004 (Fla. 1st DCA 2004)("employer/carrier sought to raise a fraud defense").
In Pinnacle Benefits, Inc. v. Alby, 913 So.2d 756 (Fla. 1st DCA 2005), the Court referred to this as the "so-called fraud defense." This defense is based upon the provisions of section 440.105(4)(a), Florida Statutes. This renders actions of an employer illegal if done "knowingly." The provisions of paragraph (4)(b) are directed more broadly to the actions of "any person." In some of the subparts of that statute, there are requirements of "knowingly," "knowing," and "intended."
In Alby, the Court explained that various "statutory provisions require a showing of 'knowing; or 'intentional' activity." Thus, to make a mistake, alone, may not equate to a violation of the law. Furthermore, though the word "fraudulent" also appears in multiple sub-sections, that is not the only word used. There are sections that also or instead use "false," "misleading," "incomplete," "knowingly omit," "conceal," and "misrepresent." These subsections affect such topics as "applications for coverage," "the employment relationship," and "obtaining or denying any benefit."
The precise language related to statements made "as part of, or in support of, a claim for payment or other benefit," paragraph (4)(b), requires that "such statement contains any false, incomplete or misleading information concerning any fact or thing material to such claim." Note the word "material," which may narrow the application of the prohibition. This is the subsection that is engaged by the employer/carrier as a "defense." Thus, there are those who instead refer to the "so-called fraud defense" instead as the "misrepresentation" defense.
Practitioners sometimes give little consideration to the language regarding the intent, i.e.: "knowingly," "knowing," and "intended." Some perhaps do not give full consideration to the "material" requirement. There are those who find anything that is not true to equate, ipso facto, to something that is knowingly or intentionally false. The fact is that human beings are fallible. We all make mistakes and even misstatements sometimes. It may be because we recall things inaccurately, or even that we misstate or poorly describe what we accurately remember.
The Court in Alby stressed that determining the credibility of a witness is the trial judge's responsibility. It is up to the trial judge to observe the witnesses and to determine whether the testimony is believed or not. The appellate court will generally uphold or affirm the trial judge's conclusions "if any competent substantial evidence supports the JCC's decision." It is not the role of the appellate court to determine if there is "other persuasive evidence, (that) if accepted by the JCC might have supported a contrary ruling."
I was reminded of this when I reviewed a May 22, 2019 decision of the Court of Appeal Second Circuit, State of Louisiana titled Hunter v. Town of Richwood, No 52,696-WCA. There, an injured employee accused the employer of misrepresentation. The case arose from a work-related motor vehicle accident. The workers collected workers' compensation benefits and filed a lawsuit against the driver whose vehicle struck them. A particular payment of workers' compensation to one worker, approximately $6,377 consisted of various components: costs, attorney fees, medical care, and temporary total disability benefits. However, the check stub memorandum reflected merely "temporary total disability."
The employer sought to participate in the employee's recovery from the other driver. As part of proving what the employer had paid, and thus what it might be entitled to recover, it provided the employee's attorney with a "record of payments." The employee's attorney recognized that the $6,377 was not fully labeled correctly, and pointed that out to the employer. The employer wrote back and explained why it contended that figure should be included and added: "There is clearly no intention of defrauding anyone."
The matter came before a workers' compensation judge, upon the injured worker's contention that the employer was "guilty of workers' compensation fraud," having "disguised" some non-indemnity payments ("costs, attorney fees, medical care") as indemnity and that the reason for this "false information" was "an effort to recover" that money. The worker asserted that the employer should therefore be barred from participating in his recovery against the third-party driver he had sued for the accident.
An adjuster testified regarding the $6,377. She explained that all of that money was characterized as indemnity benefits because the computer software utilized only offered limited category choices. She testified that she provided the "record of payments" to the attorney for the employer, but that she "did not know that the document was going to be presented" to opposing counsel. She also "denied that she was trying to defraud or mislead," or "gain an advantage." The trial judge accepted this testimony and held for the employer. The employee appealed.
The appellate court quoted La. R.S. 23:1208, a statute not dissimilar to the provisions of the Florida law quoted above. It explained this statute's use of "willfully" and that such statement be "for the purpose of obtaining or defeating any benefit" were each important in the evaluation of an untrue statement.
The Court found the employee's argument about the $6,377 check characterization was "somewhat disingenuous" because that check was "made out to" both the employee and the attorney, and that the attorney was "presumably . . . aware of exactly what the check included." The Court also noted that the trial judge had observed the employer's testimony at trial and accepted it (concluded it was credible). Thus, acknowledging that the characterization was at least incomplete (listing one category and omitting others), the Court held that did not amount to being either "willful" or intentional.
Thus, in this example, there is support for the conclusion that false does not equal fraud. False may not even equal misrepresentation. The party that seeks to benefit from a prohibition such as La. R.S. 23:1208 or section 440.105(4), Florida Statutes, will have to prove "all the necessary elements required under that statute." When those elements are not proven, then false or misrepresented may merely equal an error or mistake. Admittedly, we all make mistakes. When asserting that some misstatement, omission, or representation is actionable, the community should consider any statutory modifiers regarding intent and materiality.
