Allen & Gooch News

Third Circuit Rules in Favor of AG, Employers & Carriers

Our firm is pleased to report that the Third Circuit Court of Appeal issued a ruling on May 20, 2020 in the Debra White case in favor of our clients which affirmed a violation of the fraud statute under 23:1208 by Ms. White and significantly changed the law in favor of employers and carriers. By means of background, this case started with a default judgment that Judge Braddock confirmed in favor of Ms. White which we were able to reverse on appeal on procedural grounds. Claimant was involved in an admitted slip and fall at work and treated with Dr. LeGlue. The fraud addressed misrepresentations by the claimant on the issue of her prior medical condition, her claims of injury to body parts that were not included in the original accident, and other issues.

In its 27 page decision, the Court of Appeal addressed the many procedural objections by claimant counsel, including the admission of prior claims records, the admission of deposition of unavailable witnesses, ruling on objections, etc. The Court then referred to the plethora of evidence supporting the fraud ruling, including claimant’s attempt to “sell” that she was not involved in a previous accident and that her daughter was the person involved and injured in the previous accident and that she simply signed the release documents in the wrong blank.

The change in the law is that the Court affirmed retroactive forfeiture of unpaid benefits which is the polar opposite of existing Third Circuit case law. The Court observed that in prior cases where forfeiture was not applied retroactively, there was no dispute that the employee was otherwise entitled to benefits prior to the fraudulent misrepresentations. Because Ms. White’s claims for indemnity and medical benefits were disputed and because the intentional misrepresentations directly related to those claims, the court applied forfeiture of benefits retroactively.

We are very proud of this favorable development for the defense bar because previously a claimant could recover all benefits prior to the date of the misrepresentation. If the misrepresentation came in a deposition 2 years into a claim, then the company would still owe benefits for those 2 years notwithstanding a successful fraud case which would yield a hollow victory.

Allen & Gooch is providing this legal update for informational purposes only. This article should not be construed as legal advice or a legal opinion as to any specific facts or circumstances. You should consult your own attorney concerning your particular situation and any specific legal questions you may have.