Losurdo v. Asbestos Free, Inc., 1 N.Y.3d 265 (2003)

Under Workers’ Compensation Law § 114-a(1), the Workers’ Compensation Board has discretion to disqualify a claimant from receiving wage replacement benefits even if the forfeited compensation is not directly attributable to a false statement, but the record must reflect the basis for the penalty.

Summary

This case addresses whether the Workers’ Compensation Board can disqualify a claimant from receiving wage replacement benefits under Workers’ Compensation Law § 114-a(1) when the forfeited compensation isn’t directly linked to a false statement. The Court of Appeals held that the Board has such discretion, but the administrative record must clearly indicate whether a mandatory or discretionary penalty was imposed, and if discretionary, provide a reasoned basis for the penalty. The Court reversed the Appellate Division’s orders, finding insufficient justification for the disqualifications in the records, and remitted the cases for further proceedings.

Facts

In Losurdo, the claimant sought benefits for a knee injury, denying any prior injury. Medical records later revealed a pre-existing injury. The Board found Losurdo made a misstatement, rescinded wage replacement awards, and disqualified him from future benefits. In Machado, the claimant sought benefits for a back injury and claimed total disability. Surveillance showed him driving a taxi, which he initially denied. The Board disqualified him from receiving wage replacement benefits after determining he had made false statements.

Procedural History

In Losurdo, the WCLJ initially found no violation of § 114-a(1). The Board reversed, finding a material misstatement and imposing penalties, which the Appellate Division affirmed. In Machado, the WCLJ initially disqualified Machado from some benefits. The Board reversed and imposed a broader disqualification, which the Appellate Division affirmed, stating that it declined to disturb the penalty as it was specifically authorized by the statute.

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Issue(s)

1. Whether a false statement must affect the dollar value of an award to be considered material under Workers’ Compensation Law § 114-a(1)?

2. Whether the Workers’ Compensation Board can disqualify a claimant from receiving wage replacement benefits when the forfeited compensation is not