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FALLS CHURCH CONSTRUCTION COMPANY, ET AL. v. LAIDLER


FALLS CHURCH
CONSTRUCTION COMPANY, ET AL. v. LAIDLER


October 31, 1997

Record No. 962627

FALLS CHURCH CONSTRUCTION COMPANY, ET AL.

v.

ROBERT C. LAIDLER

OPINION BY JUSTICE BARBARA MILANO KEENAN

FROM THE COURT OF APPEALS OF VIRGINIA

PRESENT: Carrico, C.J., Compton, Lacy, Hassell, Keenan, and
Kinser, JJ., and Gordon, Retired Justice


In this appeal, we consider whether an employee’s intentional
concealment of a material fact on an employment application bars
his receipt of workers’ compensation benefits for a work-related
injury.

Falls Church Construction Company (the Company) hired Robert
C. Laidler in June 1992. Prior to his employment, Laidler
completed a job application which required that he state whether
he had ever been "charged or convicted of a felony or any
crime." In response to this question, Laidler wrote
"No." Approximately eight weeks later, the Company
fired Laidler for absenteeism.

In May 1993, the Company rehired Laidler and, according to its
policy, requested that he complete a second employment
application that was identical to the first application. Laidler
failed to respond to several questions on the second application,
including the question concerning his prior criminal record.

The Company’s human resources representative, Beverly Ann
Spaulding, reviewed Laidler’s first employment application and
did not ask Laidler to complete the unanswered questions in the
second application. After noting that all the completed answers
in the second application were the same as those in the first
application, Spaulding assumed that the answer in the first
application regarding Laidler’s criminal record remained the
same.

In July 1993, Laidler sustained a work-related lumbar strain
while employed by the Company and, pursuant to an agreement by
the parties, the Virginia Workers’ Compensation Commission
(Commission) entered an order providing for payment of temporary
total disability benefits during certain periods in 1993. Laidler
filed a change of condition application in March 1994, alleging
that he was entitled to a resumption of disability benefits.

In answers to interrogatories filed in that proceeding,
Laidler disclosed that he was convicted of breaking and entering
in 1978 and had "served" two years probation. The
Company defended Laidler’s claim for a resumption of benefits on
the ground that he had materially misrepresented his criminal
record in his second job application.

At a hearing in January 1995, Spaulding testified that Laidler
would not have been rehired if the Company had known about his
criminal record. Spaulding further stated that, if the Company
had learned of Laidler’s criminal record prior to his injury,
that fact would have been ground for his termination. Spaulding
explained that the Company performed a large amount of work under
government contracts and, therefore, it was particularly
important that the Company’s employees be trustworthy.

Laidler testified that, although he had been charged with
breaking and entering, he was convicted of the misdemeanor
offense of "unlawful entry." Laidler admitted, however,
that his response on the first employment application to the
question about his criminal record was false.

The Commission held that the Company had not met its burden of
proving that it relied on Laidler’s misrepresentation in rehiring
him. The Court of Appeals affirmed the Commission’s decision,
holding that the record supported both the Commission’s
"implicit credibility finding" which rejected
Spaulding’s testimony, and the Commission’s ultimate conclusion
that the Company failed to prove reliance on Laidler’s
misrepresentation.

In its appeal to this Court, the Company argues that the Court
of Appeals’ decision is contrary to that of Marval Poultry Co.
v. Johnson
, 224 Va. 597, 601, 299 S.E.2d 343, 346 (1983). The
Company asserts that the holding in Marval eliminated the
requirement that an employer seeking to bar an employee’s receipt
of workers’ compensation based on his false representation in an
employment application prove reliance on the misrepresentation
and a causal connection between the misrepresentation and the
work-related injury. Thus, the Company contends that proof of a
misrepresentation alone will bar a claimant from receiving
workers’ compensation benefits. Alternatively, the Company
contends that the Court of Appeals erred in holding that the
Company failed to prove it relied on Laidler’s misrepresentation
in rehiring him. We disagree with both arguments.

An employee’s false representation in an employment
application will bar a later claim for workers’ compensation
benefits if the employer proves that 1) the employee
intentionally made a material false representation; 2) the
employer relied on that misrepresentation; 3) the employer’s
reliance resulted in the consequent injury; and 4) there is a
causal relationship between the injury in question and the
misrepresentation. See, e.g., Billy v. Lopez,
17 Va. App. 1, 4, 434 S.E.2d 908, 910 (1993); Grimes v.
Shenandoah Valley Press
, 12 Va. App. 665, 667, 406 S.E.2d
407, 409 (1991); McDaniel v. Colonial Mechanical Corp., 3
Va. App. 408, 411-12, 350 S.E.2d 225, 227 (1986); 3 Arthur
Larson, Larson’s Workers’ Compensation Law ‘ 47.53
(1997).

As a threshold matter, we find no merit in the Company’s
argument that the Marval decision eliminated from the
false representation defense the requirements that the employer
establish reliance and a causal relationship between the
misrepresentation and the work-related injury. Our holding in Marval
did not address issues of reliance or causation. Rather, we held
only that the justified termination of an employee for
dishonesty barred his later claim for benefits under a change in
condition application. 224 Va. at 601, 299 S.E.2d at 345.

In the present case, Laidler was not terminated from his
employment after he was rehired in May 1993. The only issue
before us is whether the Company established the defense of false
representation, barring Laidler’s claim for further compensation
benefits. We conclude that the Company’s failure to prove the
element of reliance defeated its defense.

We agree with the Court of Appeals’ determination that Laidler
knowingly made a false representation about his criminal record
in the second application by failing to answer the relevant
question. The concealment of a material fact on an employment
application constitutes the same misrepresentation as if the
existence of the fact were expressly denied. See Virginia
Natural Gas Co. v. Hamilton
, 249 Va. 449, 455, 457 S.E.2d 17,
21 (1995); Van Deusen v. Snead, 247 Va. 324, 328, 441
S.E.2d 207, 209-10 (1994); Metrocall of Delaware v.
Continental Cellular
, 246 Va. 365, 374, 437 S.E.2d 189, 193
(1993). The evidence showed that Laidler’s concealment was
intentional since he gave a false answer to the same question on
the first application. Further, the false representation was
material because it was highly relevant to Laidler’s
trustworthiness as an employee.

Since the Company established that Laidler misrepresented his
criminal record on the second employment application, we next
consider the element of reliance. We review the evidence of
reliance in the context of the Court of Appeals’ holding that
credible evidence supported the Commission’s ruling. We are
guided by the principle that the Commission’s findings of fact,
if supported by credible evidence, are conclusive and binding on
appeal. See Code ? 65.2-706; Ivey v. Puckett
Constr. Co.
, 230 Va. 486, 488, 338 S.E.2d 640, 641 (1986).

We conclude that the record supports the Court of Appeals’
determination. Laidler submitted the second job application
almost one year after the date of his first application. The
Company made no attempt to secure the information sought in the
unanswered questions on the second application form. Instead, the
Company assumed that Laidler’s responses to those unanswered
questions would be the same as those given on his earlier
application. Thus, there was credible evidence that the Company’s
decision to rehire Laidler was not made in reliance on his
misrepresentation in the second application, but was founded on
its assumption that he had no criminal record when he submitted
the second application.[1]

Since the Company failed to prove the reliance element of its
false representation defense, we need not consider the remaining
elements of that defense, including the issue whether there was a
causal relationship between the injury and the misrepresentation.
Thus, we do not address the requirements for establishing a
causal relationship between an injury and a misrepresentation
under a false representation defense.

Based on the above evidence, we conclude that the Court of
Appeals properly affirmed the Commission’s decision. See
Code ? 65.2-706. Therefore, we will affirm the Court of
Appeals’ judgment.

Affirmed.

 

 

FOOTNOTES:

[1] We find no merit in the
Company’s argument that reliance was established by Laidler’s
statement before the Court of Appeals that the information
provided in the second application was submitted "to be
relied upon for his second period of employment." Evidence
of Laidler’s intent does not furnish proof that the Company
actually relied on the misrepresentation in the second
application.

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