HIEU NGUYEN, Employee, v. COMPASS GROUP USA, and ZURICH INS., Employer-Insurer/Appellants.
WORKERS= COMPENSATION COURT OF APPEALS
NOVEMBER 15, 2002
VACATION OF AWARD - FRAUD; PRACTICE & PROCEDURE - REFERRAL. Where the parties have submitted opposing affidavits on the question of fraud, the matter is referred to the Office of Administrative Hearings for an evidentiary hearing.
Petition to vacate referred to OAH.
Determined by Stofferahn, J., Wilson, J., Johnson, C.J.
Compensation Judge: John Ellefson.
DAVID A. STOFFERAHN, Judge
The employer and insurer have appealed the Findings and Order of the compensation judge, served and filed February 7, 2002. The employer and insurer have also filed a petition to vacate the Findings and Order. The petition to vacate is referred to the Office of Administrative Hearings for an evidentiary hearing. The appeal is stayed pending the results of that hearing.
On May 21, 2001, the employee, Hieu Nguyen, was in a motor vehicle accident while in the course and scope of his employment with Compass Group USA. At the time of the accident, the employee was working a second job as an airplane cleaner with H & H Aircraft. The employee claimed to have sustained injuries to his left knee, left shoulder, low back, and neck which disabled him from both jobs and which resulted in ongoing medical care and expense.
The employer and insurer admitted that a motor vehicle accident occurred on May 21, 2001 and initially paid the employee benefits for temporary total disability and medical expenses. Later the employer and insurer denied that the employee had sustained any personal injury in the motor vehicle accident.
This matter came on for hearing before Compensation Judge John Ellefson on January 25, 2002 on the employee=s claim petition filed June 19, 2001 as amended in September 2001 and January 2002. At hearing, the issues were (1) what injuries if any the employee had sustained on May 21, 2001; (2) whether proposed knee surgery was reasonable and necessary treatment for the employee=s work injury; (3) whether certain unpaid chiropractic bills were for treatment related to the May 21, 2001 work injury; (4) whether a penalty should be assessed against the employer and insurer for a notice of intention to discontinue benefits filed November 7, 2001; and (5) whether the employer and insurer should be allowed to discontinue temporary total disability benefits as of January 7, 2002. In his Findings and Order issued on February 7, 2002, the compensation judge found in the employee=s favor on all issues.
The employer and insurer appealed. While the appeal was pending, on August 30, 2002, the employer and insurer filed a petition to vacate the Findings and Order. The petition alleged the findings should be vacated on the basis of newly discovered evidence and fraud pursuant to Minn. Stat. ' 176.461. Specifically, the employer and insurer asserted that the employee had purposely misrepresented his physical condition to obtain workers= compensation benefits. Further, it is alleged that, contrary to his deposition and hearing testimony, the employee did not stop working at H & H Aircraft after his work injury but had continued to be employed there under false names and had also worked part-time on a paper route for the Star Tribune. In support of the petition the employer and insurer filed numerous affidavits, surveillance videos and exhibits. This court issued its order staying appeal on September 12, 2002, pending the receipt of the response of the employee.
On October 14, 2002, the employee filed his response to the petition. The employee disputed the allegations of the employer and insurer and restated his position that he had not been employed since the end of May 2001. The employee also argued that the petition of the employer and insurer was frivolous and the employee requested an award of penalties pursuant to Minn. Stat. ' 176.225, subd. 1(a).
This court=s authority to vacate the Findings and Order of a compensation judge is provided by Minn. Stat. ' 176.461. Good cause under this statute includes newly discovered evidence and fraud, both of which are claimed to exist here by the employer and insurer.
Both concepts of newly discovered evidence and of fraud have very specific requirements which must be met by the evidence presented. In the instance of newly discovered evidence:
1. The evidence must be relevant and admissible.
2. The evidence, although in existence at the time of the award, could not have been discovered with the exercise of reasonable and due diligence.
3. The evidence is not merely collateral, impeaching, cumulative, or duplicative.
4. The evidence must be such to have had a probable effect on the outcome of the litigation.
Gruenhagen v. Larson, 310 Minn. 454, 459, 246 N.W.2d 565, 569 (Minn. 1976).
To establish fraud there must be (1) a false representation of facts; (2) the representation must deal with past or present fact; (3) the fact must be susceptible of knowledge; (4) the representing person must know the fact is false; (5) the representing party must intend that another be induced to act based upon the false representation; (6) the other person must in fact act on the false representation; and (7) the misrepresentation must be the proximate cause of actual damages. Weise v. Red Owl Stores, Inc., 286 Minn. 199, 202, 175 N.W.2d 184, 187 (1970).
We are mindful of the concern raised by the employee that the petition to vacate delays resolution of this case further and that, pending resolution, the employee is not able to have surgery prescribed by his doctor. However, the allegations made by the employer and insurer are very serious and evidence has been submitted which may support their allegations. Determining whether the employer and insurer have established their allegations is not possible without factual findings. This court is not a factfinding tribunal.
This matter is referred to the Office of Administrative Hearings for an evidentiary hearing pursuant to Minn. Stat. ' 176.381. The hearing should be assigned to a compensation judge other than Compensation Judge Ellefson, since his Findings and Order remain on appeal. At the hearing, the compensation judge should make findings of fact on the following issues:
1. Whether the employee was employed at H & H Aircraft at any time from May 21, 2001 to January 25, 2002.
2. Whether the employee was employed or was paid compensation for services by any other person or company between May 21, 2001 and January 25, 2002.
3. If the answer to either question is affirmative, whether the evidence of employment could have been discovered before the hearing on January 25, 2002 with the exercise of due diligence.
4. Whether the employee made a false representation of facts as to his employment before January 25, 2002.
5. Whether the employer made a false representation of facts as to his physical condition and ability to be employed before January 25, 2002.
6. If the employee made a false representation of facts, whether the employee knew the representation was false.
7. If the employee made a false representation of facts, whether the employee intended for another to act based upon the false representation.
8. If the employee made a false representation of facts, whether the false representation was the proximate cause of actual damages.
The compensation judge=s findings of fact shall be reported to this court for a determination of whether the employer and insurer have established a basis to vacate the February 7, 2002 Findings and Order. The appeal of the employer and insurer is staying during the period of referral.