PRESENT: Carrico, C.J., Compton, Lacy, Hassell, Keenan, and
Kinser, JJ., and Gordon, Retired Justice
FALLS CHURCH CONSTRUCTION
COMPANY, ET AL.
v. Record No. 962627 OPINION BY JUSTICE BARBARA MILANO KEENAN
October 31, 1997
ROBERT C. LAIDLER
FROM THE COURT OF APPEALS OF VIRGINIA
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. * T
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.
*
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.