99-0241

ALASKA WORKERS' COMPENSATION BOARD

P.O. Box 25512 Juneau, Alaska 99802-5512

JERRY D. FLOCK, 
Employee, 
Respondant, 
v. 
GENERAL ROOFING SYSTEMS,
(Uninsured) Employer,
Petitioner.

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RECONSIDERATION
DECISION AND ORDER
AWCB Case No(s). 199713636
AWCB Decision No. 99-0241
Filed with AWCB Anchorage, Alaska
on November 30, 1999

We heard the employer’s November 17, 1999 petition for reconsideration of our decision in Flock v. General Roofing Systems, AWCB Decision No. 99-0220 (November 2, 1999) (Flock I), on the written record at Anchorage, Alaska. The employee represents himself. Ms. Sandra Smart, owner of General Roofing, represents the employer. We closed the record on November 18, 1999 when we first met after the employer filed its petition for reconsideration.

ISSUE

Whether to reconsider our decision and order in Flock I.

SUMMARY OF THE EVIDENCE

We incorporate by reference the 26 page summary of the evidence as detailed in Flock I. In Flock I we set aside a compromise and release agreement (C&R) approved by the Board on August 26, 1998, based on fraudulent statements or misrepresentations made by Ms. Smart, which constituted fraud. We also ordered payment of certain medical benefits. The hearing in Flock I was held on July 27, 1999. At this hearing, the employer initially appeared, but left the hearing in protest of the video-taping of the hearing. In Flock I at page 28 and 29 we found:

We are required to give each party, either personally or by certified mail, at least 10 days’ notice of a scheduled hearing date.¹ We find notice of the July 27, 1999 hearing was timely sent by certified-return receipt requested mail, and by regular mail. We further find Employer personally appeared at the July 27, 1999 hearing. We find Employer subsequently left the hearing in protest of the Board’s decision allowing the hearing to be videotaped. We find there was no counsel, or other representative, present on behalf of Employer after her departure.

. . .

We find we have discretion under 8 AAC 45.070(f) to proceed with a hearing in a party’s absence, and decide the issues, if that party has been served with proper notice of the hearing. We find continuances and cancellations of hearings are not favored by the Board under 8 AAC 45.074. We find Employer was served with proper notice of the July 27, 1999 hearing. We find this panel informed Employer the hearing would proceed in her absence if she elected to leave. We find because notice of the July 27, 1999 hearing was properly served on Employer, and based on general principles of equity as applied to the parties, we properly exercised our discretion to proceed with the hearing in Employer's absence.

At page 33, we found:

We find the Alaska DMV lists Employer as the owner of 12 vehicles, all free and clear of any liens, and all of which could have been sold or borrowed against to pay additional compensation benefits or medical expenses. We find Employer did not submit any documentation between August 24, 1999 and September 13, 1999, to refute the information contained in the Alaska DMV records. We find Employer never informed Employee, or this Board, of the 12 unencumbered vehicles.

We find Employee signed the C&R only because he believed Employer had no resources, other than a second mortgage on her personal residence, to pay the compensation benefits and medical expenses she agreed he was entitled to under the Act. We find this Board agreed to approve the C&R only because it believed Employer had no resources, other than a second mortgage on her personal residence, available to pay additional compensation benefits or medical expenses to Employee.

We find Employee and this Board believed Employer’s only resource to pay compensation benefits and medical expenses in this case was a second mortgage on her personal residence. We find our belief resulted from Employer’s false representation of fact, and withholding of information. We find Employer’s false representations were intended to deceive Employee so that he would act upon it to his legal detriment. We find Employer’s misrepresentations, regarding resources available to pay Employee’s compensation benefits, medical expenses, and settlement funds, induced Employee to sign, and the Board to approve, the C&R on the erroneous belief Employer had no resources other than a second mortgage on her personal residence. We conclude Employer’s misrepresentations constituted fraud, and that the C&R should be set aside.

The employer’s November 17, 1999 petition for reconsideration provides in full:

COMES NOW the employer, General Roofing, and moves for reconsideration of that portion of the Board's Decision and Order dated November 2, 1999 in which the Board orders payment of certain medical benefits and orders that the August 25, 1998 C&R be set aside. See, Decision and Order No. 99-0220 at p. 54.

The employer moves for reconsideration of the order that it pay certain medical expenses, inasmuch as those medical expenses have already been paid in full by the employer. To the extent the Board ordered that the employer now pay medical bills which it has already paid, the Board's Decision is based on a mistake of fact and should be reconsidered and modified. The Decision and Order should be corrected to reflect the employer's prior payment of such bills, and that portion of the Decision and Order which again orders payment, along with related interest and penalties, should be modified.

Attached to this motion are original statements from various medical providers reflecting that certain bills for medical treatment identified in the Board's Decision and Order have already been paid. These payments, as the attached documents reflect, were made prior to the Board's entry of its Decision and Order. Therefore, further payment is not owed.

The Board's order setting aside the previous Compromise & Release Agreement between the parties should also be reconsidered and modified. The Board's Decision is based solely on the finding that "the Alaska DMV lists employer as the owner of 12 vehicles, all free and clear of any Hen, and all of which could have been sold or borrowed against to pay additional compensation benefits...." The Board's Decision and Order fails to reflect those vehicles it believes the employer owned. Moreover, to the extent the Board relied upon the August 24, 1999 Memorandum from Joireen Cohen, investigator, to the Alaska Workers' Compensation Board, the Board's Decision and Order fails to address, in any way, how vehicles owned by and/or registered to Glenn Smart, or to Glenn or Shirley Smart, can be deemed to be assets of the employer.

The Board's Decision and Order cites no basis, in fact or law, for its determination that vehicles owned by and/or registered to Glenn or Shirley Smart are assets of the employer. Neither Glenn nor Shirley Smart presently have, or have at any time during the pendency of this workers' compensation claim had an ownership interest in General Roofing. The Decision is devoid of any support for the conclusion that the assets of these individuals are assets of the employer. To the extent the Board's decision overturning the prior Settlement Agreement is based in any way on a determination that assets held individually by Glenn Smart or by Glenn and Shirley Smart are assets of the employer, the Board's Decision is flawed in fact and in law and should be reconsidered and modified.

Only assets of the employer, General Roofing, are available to satisfy the employer's debts. Of the vehicles referenced in Ms. Cohen's August 24, 1999 Memorandum, only seven are even plausibly the assets of the employer. No evidence was presented as to the value of those vehicles and, consequently, any finding by the Board that the employer's resources were misrepresented so substantially as to constitute fraud in connection with the 1998 Settlement Agreement lacks a factual basis.

For the foregoing reasons, the employer requests reconsideration of that portion of the Board's Decision and Order which orders payment of expenses, interest and penalty based upon medical bills which have already been paid, and that portion of the Board's Decision and Order which sets aside the August 1998, Settlement Agreement, and requests that the Board's November 2, 1999 Decision and Order be modified accordingly.

FINDINGS OF FACT AND CONCLUSIONS OF LAW

AS 44.62.540 provides in pertinent part:

(a) The agency may order a reconsideration of all or part of the case on its own motion or on petition of a party. The power to order a reconsideration expires 30 days after the delivery or mailing of a decision to the respondent. If no action is taken on a petition within the time allowed for ordering reconsideration, the petition is considered denied.

Regarding the medical bills, we find we proceeded properly in proceeding in the employer’s (Ms. Smart’s) absence under 8 AAC 45.070(f). We find the employer could have presented any defenses at the July 27, 1999 hearing. We find she voluntarily chose not to participate in the July 27, 1999 hearing.

We find the receipts and billing statements submitted with the employer’s petition for reconsideration were generated after we issued our decision in Flock I. From these receipts we find it appears the employer has been paying some of the medical bills we ordered in Flock I (although not in full); we encourage the employer’s continued compliance. However, we find no reason to reconsider our previous decision regarding medical bills based on these partial payments.

Regarding the setting aside of the C&R, we similarly find no reason to reconsider our decision. The apparent basis for the employer’s request for reconsidering our decision in Flock I regarding the C&R is that "only seven [of the vehicles] are even plausibly the assets of the employer," instead of 12 as referenced in the decision in Flock I. Regardless, we find our decision was based on the fraud Ms. Smart committed when she misrepresented to the Board and the employee that her only available asset was a second mortgage on her personal residence. We would still find fraud as a basis to overturn the C&R had only one significant unidentified asset been discovered. We reconfirm our conclusion the employer fraudulently misrepresented her assets to us and the employee in an attempt to secure our approval of the C&R. Accordingly, we will deny and dismiss the employer’s petition for reconsideration.

ORDER

The employer’s petition for reconsideration is denied and dismissed.

Dated at Anchorage, Alaska this 30 day of November, 1999.

ALASKA WORKERS' COMPENSATION BOARD

/s/ Darryl Jacquot
Darryl Jacquot,
Designated Chairman

/s/ S.T. Hagedorn
S. T. Hagedorn, Member

APPEAL PROCEDURES

This compensation order is a final decision. It becomes effective when filed in the office of the Board unless proceedings to appeal it are instituted. Proceedings to appeal must be instituted in Superior Court within 30 days of the filing of this decision and be brought by a party in interest against the Board and all other parties to the proceedings before the Board, as provided in the Rules of Appellate Procedure of the State of Alaska.

CERTIFICATION

I hereby certify that the foregoing is a full, true and correct copy of the Reconsideration Decision and Order in the matter of JERRY D. FLOCK employee / respondant; v. GENERAL ROOFING SYSTEMS, uninsured employer / petitioner; Case No. 199713636; dated and filed in the office of the Alaska Workers' Compensation Board in Anchorage, Alaska, this 30th day of November, 1999.

Brady D. Jackson III, Clerk

^{1 AS 23.30.110(c); 8 AAC 45.060(e).
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