Workers’ comp insurer dodges fraud claim

Where a man alleged that a workers’ compensation carrier defrauded Maryland courts by submitting and resubmitting medical records from another person with the same name as evidence in proceedings related to his workers’ claims for permanent disability benefits, but he did not allege the false statement was knowingly made to him, he never relied on the misrepresentation to his detriment and he waited too long to file suit, his fraud claim was dismissed with prejudice.

Background

Samuel A. Lyons, appearing pro se, alleges that Ileen M. Ticer Greene and PMA Indemnity Insurance committed fraud and perjury in connection with Lyons’s workers’ compensation case in Maryland. The matter is before the court on defendants’ motion to dismiss the amended complaint and Lyons’s motion to transfer this action to the District of Maryland.

Jurisdiction

Lyons alleges that Ticer Greene lived and worked in Maryland during the relevant time and that all the events underlying his purported fraud and perjury claims against her occurred in Maryland. Thus, this Virginia court cannot exercise general personal jurisdiction over Ticer Greene.

To the extent Lyons addresses specific personal jurisdiction, he does not specify whether Ticer Greene reached out to him in Virginia or whether he reached out to Ticer Greene in Maryland. Nonetheless, “correspondence and phone calls from out-of-state defendants to in-state plaintiffs [typically] are insufficient as a matter of law to establish the minimum contacts that satisfy due process.” The fact that Lyons happened to live in Virginia during the relevant time is “legally insufficient to exercise specific personal jurisdiction” over Ticer Greene. Accordingly, Ticer Greene is dismissed without prejudice.

Res judicata

PMA argues primarily that “the doctrines of res judicata (claim preclusion) and collateral estoppel (issue preclusion)” foreclose Lyons’s ability to recover damages in this civil action because he “raised the issues in his Amended Complaint before administrative tribunals and the courts of Maryland, and the Maryland courts have already ruled on these issues[.]”

It is not clear from the face of Lyons’s pleading that Maryland’s principles of res judicata bar his common-law fraud claim for damages against defendants. In both cases, Lyons sought judicial review of a state agency’s decision that he was not entitled to full workers’ compensation benefits for injuries sustained in the February 2011 workplace accident. Here, Lyons seeks compensatory damages for defendants’ alleged misconduct intended to influence those agency and judicial proceedings in their favor.

There is a closer question whether collateral estoppel bars litigation of the “fraud issue” in this action. Lyons admits that the “issue of fraud was denied by the [administrative] court” in 2012 and 2013, which suggests that the Maryland workers’ compensation Commission, or WCC, actually considered and rejected Lyons’s assertion that defendants perpetrated a “fraud” on the state agency in connection with his claim for permanent partial disability.

Lyons also alleges, however, that in 2016 the WCC “refused to allow [him] to litigate” the question of whether PMA presented “fraudulent evidence” in connection with his subsequent claim for permanent total disability. He also alleges that the circuit court “dismissed” his appeal in August 2017 and that “[t]he issue of fraud presented to the court was unanswered.”

Viewed in Lyons’s favor, there are “disputed issue[s] of fact” whether the WCC or Maryland courts “actually determined” any fact relevant to Lyons’s common-law fraud claim and, if so, whether Lyons had “a fair opportunity to be heard on the issue.” Accordingly, the court declines to dismiss Lyons’s claim on those grounds.

Fraud

Lyons’s factual allegations convey unequivocally his belief that defendants defrauded the Maryland courts by submitting and resubmitting the other “Samuel Lyons’s” medical records as evidence in proceedings related to his workers’ claims for permanent disability benefits.

However he does not allege that PMA knowingly made any false statement to him during the relevant time. And, even if he did, Lyons’s pleading makes clear that he never “relied on the misrepresentation” to his detriment. Accordingly, his fraud claim shall be dismissed with prejudice.

Statute of limitations

Under Virginia law, the time for Lyons to sue PMA for damages resulting from fraud expired, at the latest, in May 2018. Lyons filed this lawsuit in February 2021. Accordingly, his fraud claims will be dismissed with prejudice on this ground as well.

Transfer

Transfer is not warranted here because Lyons cannot plead a claim for fraud and Maryland’s applicable limitations period expired before Lyons filed suit in February 2021. Thus, transfer would not be in the interest of justice.

Defendants’ motion to dismiss granted. Plaintiff’s motion to transfer venue denied.

Lyons v. Ticer Greene, Case No. 5:21-cv-00010, July 7, 2022. WDVA at Harrisonburg (Hoppe). VLW 022-3-289. 26 pp.