Foster v. Esis, Inc.

563 S.W.2d 180, 1978 Tenn. LEXIS 530
CourtTennessee Supreme Court
DecidedMarch 13, 1978
StatusPublished
Cited by15 cases

This text of 563 S.W.2d 180 (Foster v. Esis, Inc.) is published on Counsel Stack Legal Research, covering Tennessee Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Foster v. Esis, Inc., 563 S.W.2d 180, 1978 Tenn. LEXIS 530 (Tenn. 1978).

Opinion

OPINION

FONES, Justice.

In this workmen’s compensation case, the employee appeals from a trial court judgment that she suffered no compensable injury, and that she would be estopped by fraud from recovery in the event her injury were compensable.

It was proved and uncontradicted at trial that appellant, Dorothy L. Foster, had undergone back surgery in January, 1967, as a result of an accidental injury which arose out of her employment with C. R. Daniels Company in 1964, and it was shown that she obtained a judgment against C. R. Daniels Company awarding her a twenty-five (25%) percent permanent partial disability rating.

Employee testified that her supervisor at C. R. Daniels had been a Mrs. Jack Hilliard, and that she and her husband were social friends of the Hilliards at the time of her injury at C. R. Daniels. Both employee and her husband testified that employee had told Jack Hilliard, a plant manager for Levi Strauss, that C. R. Daniels would not rehire her after her injury, and that she was unable to obtain other work because of her *182 back trouble. The Fosters testified that Jack Hilliard told appellant that his company would be able to hire her so long as she did not disclose her history of back trouble on her employment application.

Employee applied for work at Levi Strauss in November, 1968, and she admitted at trial that she intentionally failed to disclose her history of back trouble on her application; she wrote “I quit” as her reason for leaving C. R. Daniels; she answered “no” to questions asking if she had ever collected workmen’s compensation, or if she had had “frequent or occasional back pain, disorders of the spine”; she omitted any mention of her back condition in questions asking if she had had medical treatment in the past five (5) years and requesting dates and reasons for all hospital admissions in the previous ten (10) years.

Employee stated on cross-examination that she was initially interviewed by a clerk at Levi Strauss, to whom she submitted the admittedly false application. It was established at trial, and uncontradicted, that Jack Hilliard was employee’s supervisor after she was hired at Levi Strauss.

Jack Hilliard testified that he did not know of employee’s history of back trouble, and that he had not told her to falsify her application. He admitted that he and his wife had been social friends with the Fosters, but he could not remember any details of employee’s employment, nor whether they were social friends at that time. The trial judge noted that Hilliard was “remarkable for his poor memory.”

Hilliard and other managerial employees of Levi Strauss testified that it was company policy not to hire workers with histories of back trouble, that job applicants were initially screened by the personnel office, and, if deemed employable, were then referred to the person who would be supervising the applicant in the event he were hired, for the final hiring decision.

Employee argues that she should not be estopped by her misrepresentations because the employer did not rely on them, Hilliard having actual knowledge of the true facts, and because the employer did not carry its burden of proving that the injury for which compensation is sought was causally related to the previous medical history concealed from the employer.

Employee hurt her back in 1975, and received hospitalization benefits through the non-occupational medical insurance carried by Levi Strauss. Employee testified that this injury had been job-related, but that she reported it as non-occupational because she was afraid that she would lose her job if she told the truth. She underwent surgery for a ruptured disc as a result of this injury. She returned to work in early 1976, and shortly thereafter, hurt her back again, which injury is the subject of this lawsuit.

First, we consider the question of estoppel. In Federal Copper & Aluminum Co. v. Dickey, 493 S.W.2d 463 (Tenn.1973) this Court enunciated a three-pronged test to determine whether an employee is es-topped to claim workmen’s compensation benefits because of misstatements on the employment application. The three elements are these: (1) the employee must have knowingly and willfully made a false representation as to his physical condition; (2) the employer must have relied upon the false representation and this reliance must have been a substantial factor in the hiring; (3) there must have been a causal connection between the condition misrepresented and the injury for which compensation is sought. In addition, the causation between the employee’s prior physical condition and the injury for which compensation is sought must, in all but the most obvious cases, be established by medical testimony. Daniels v. Gudis Furniture Co., 541 S.W.2d 941 (Tenn.1976).

Employee admitted at trial that she willfully misrepresented her prior medical history on her employment application, but here contests the trial judge’s finding of estoppel on the other two criteria.

Even if Hilliard knew of employee’s prior back trouble before hiring her, it does not necessarily follow that the employer could not have relied on the misrepresentations. The employer established by three *183 witnesses that employee could not have been hired without passing the initial screening with a personnel official, and that Hilliard had no control over this initial interview. Representatives of Levi Strauss testified that employee would not have been referred to Hilliard if her prior medical history had been known. The reliance element is established where the employee would not have been hired without the deception. Haddix v. Day & Night Mfg. Co., 540 S.W.2d 639 (Tenn.1975).

Employee urges that Hilliard’s knowledge of employee’s medical history must be imputed to his principal, Levi Strauss. This rule is intended to protect those who exercise good faith, and is not applicable where the party advocating the rule was aware of circumstances which plainly indicated that the agent would not advise his principal. DeFord v. Nat'l Life & Accident Ins. Co., 182 Tenn. 255, 185 S.W.2d 617 (1945). Employee’s testimony provides material evidence to support the conclusion of the trial judge that she was engaged in a conspiracy with Hilliard to conceal her medical history from Levi Strauss.

There was ample medical testimony from which the trial judge could have found that employee’s present back problems were causally related to her earlier back trouble while employed at C. R. Daniels. Doctor David Fardon testified by deposition that one with a history of back trouble is permanently impaired and this impairment results in increased risk of future back problems. The medical evidence adduced at trial revealed that all three episodes of back trouble were characterized by problems with the L-5 disc in her back.

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Bluebook (online)
563 S.W.2d 180, 1978 Tenn. LEXIS 530, Counsel Stack Legal Research, https://law.counselstack.com/opinion/foster-v-esis-inc-tenn-1978.