Norton Concrete Company, Inc. v. Mario A. Escobar

• Court: Court of Appeals of Virginia
• Decided: April 17, 2001
• Docket: 1645002
• Status: Unpublished

Opinion

COURT OF APPEALS OF VIRGINIA

Present: Judges Elder, Annunziata and Humphreys Argued at Richmond, Virginia

NORTON CONCRETE COMPANY, INC. MEMORANDUM OPINION* BY v. Record No. 1645-00-2 JUDGE LARRY G. ELDER APRIL 17, 2001 MARIO ANTONIO ESCOBAR

FROM THE VIRGINIA WORKERS' COMPENSATION COMMISSION

E. Wayne Powell (Powell & Associates, on briefs), for appellant.

Gregory O. Harbison (Craig B. Davis; Geoffrey R. McDonald & Associates, on brief), for appellee.

Norton Concrete Company, Inc., (employer) appeals from a

decision of the Workers' Compensation Commission awarding benefits

to Mario Escobar (claimant) on his change-in-condition

application. On appeal, employer contends the commission

erroneously (1) refused to remand to the deputy commissioner for

consideration of a defense based on Granados v. Windson

Development Corp., 257 Va. 103, 509 S.E.2d 290 (1999); (2) refused

to re-open the record to allow it to submit after-discovered

evidence relevant to that defense and a claim of fraud; and (3)

considered claimant's representations on brief as evidence in

ruling on those requests. We hold that the commission's rulings

* Pursuant to Code § 17.1-413, this opinion is not designated for publication. on these issues did not constitute reversible error, and we affirm

the award of benefits.

I.

A.

WAIVER OF GRANADOS STATUS DEFENSE

Commission Rule 3.1 provides that

[a] request for review [of a deputy's decision by the full commission] should assign as error specific findings of fact and conclusions of law. Failure of a party to assign any specific error in its request for review may be deemed by the Commission to be a waiver of the party's right to consideration of that error.

Here, the original attorney for both the employer and its

carrier determined not to pursue the Granados status defense at

the hearing before the deputy commissioner. Employer had the

right to be represented by its own counsel in those proceedings,

but it chose to rely on the carrier's counsel, as it conceded on

brief in referring to its "former counsel." Therefore, it is

bound by all representations and actions of counsel not timely

disclaimed. Cf. Hunter v. Commonwealth, 15 Va. App. 717, 427

S.E.2d 197 (1993) (upholding defendant's conviction for

willfully failing to appear in part because evidence indicated

attorney of record had notice of trial date and "[t]he

attorney-client relationship presumes that attorney and client,

as servant and master, will communicate about all the important

stages" of the proceedings).

- 2 - Furthermore, the record establishes that the commission

mailed a copy of the deputy commissioner's January 21, 2000

decision, which addressed only the marketing issue, not only to

counsel but also to employer itself. Thus, employer had at

least constructive notice of counsel's abandonment of the status

defense and the commission's entry of an award, which

specifically indicated that a request for review could be filed

with the commission within twenty days from the date of receipt

of the award. Despite this constructive knowledge, employer did

not file its own request for review, and it did not ask the

original counsel to withdraw from representing employer until

February 24, 2000, which presumably was well after the appeal

period had expired.

Finally, when employer retained new counsel separate and

apart from that provided by the carrier, it did not request

leave to add additional issues to its request for review.

Instead, it first asserted the status defense in its written

statement. Thus, under Rule 3.1, the commission was entitled to

view employer's failure properly to assign error to this issue

as "a waiver of [employer's] right to consideration of that

[alleged] error." Commission Rule 3.1.

- 3 - Assuming without deciding that the Granados status defense

implicates the commission's subject matter jurisdiction, 1

employer nevertheless was required to raise the defense in a

procedurally proper fashion. This entailed presenting both the

defense and the evidence to support it at the proper stage of

the proceedings. Although subject matter jurisdiction "cannot

be waived or conferred on the court by agreement of the

parties," Morrison v. Bestler, 239 Va. 166, 169-70, 387 S.E.2d

753, 755 (1990), a party asserting the lack of subject matter

jurisdiction as a defense must provide a proper evidentiary

record to support his claim, cf. Friedman v. State, 249 N.E.2d

369, 374 (N.Y. 1969) (holding that issues of fact in challenge

to subject matter jurisdiction become binding and subject to res

judicata once litigated but that where determination "is a mere

legal conclusion" not depending on the resolution of any

disputed factual issues, "the want of jurisdiction . . . may

always be asserted and raised directly or collaterally"); 4

C.J.S. Appeal and Error § 38, at 111-12 (1993) (noting that

absence of subject matter jurisdiction may not be waived but

that parties "may be estopped to deny the existence of facts on

which jurisdiction depends").

1 Nowhere in employer's brief did it use the word "jurisdiction," and its references at oral argument to the claimant's status as being jurisdictional were minimal.

- 4 - Defects in subject matter jurisdiction appearing on the

face of the record, therefore, may be challenged and reviewed at

any stage of a proceeding, whether at the trial level or on

appeal. However, a party wishing to establish a lack of subject

matter jurisdiction which is not apparent on the face of the

record must submit the evidence establishing that fact at the

proper stage of the proceedings. Here, employer was entitled to

submit evidence only to the deputy commissioner or, under

limited circumstances, to the commission on request for review,

as discussed infra in Part I.B. Because employer failed to

submit sufficient evidence to support its jurisdictional

challenge at the proper stage of the proceedings, its

jurisdictional challenge does not bar the contested award. 2

B.

AFTER-DISCOVERED EVIDENCE

The commission also did not err in refusing employer's

request to admit various documents as after-discovered evidence.

Commission Rule 3.3 provides:

No new evidence may be introduced by a party at the time of review except upon agreement of the parties. A petition to reopen or receive after-discovered evidence may be considered only upon request for review. A petition to reopen the record for additional evidence will be favorably acted

2 We do not decide whether employer may be entitled to assert the claim of lack of subject matter jurisdiction, based on Granados, as a defense in any subsequent proceedings involving claimant.

- 5 - upon by the full Commission only when it appears to the Commission that such course is absolutely necessary and advisable and also when the party requesting the same is able to conform to the rules prevailing in the courts of this State for the introduction of after-discovered evidence.

Therefore, the party seeking to re-open the record to submit

after-discovered evidence must prove that "(1) the evidence was

obtained after the hearing; (2) it could not have been obtained

prior to the hearing through the exercise of reasonable

diligence; (3) it is not merely cumulative, corroborative or

collateral; and (4) it is material and should produce an

opposite result before the commission." Williams v. People's

Life Ins. Co., 19 Va. App. 530, 532, 452 S.E.2d 881, 883 (1995).

Here again, employer did not seek leave to re-open the

record to submit after-discovered evidence in its request for

review, despite the fact that Rule 3.3 provides such request

"may be considered only upon request for review." Once employer

retained separate counsel, counsel did not seek leave to expand

the request for review and merely included the proffered

after-discovered evidence as attachments to employer's written

statement.

Further, the record supports the decision of the commission

that the documents employer proffered did not qualify as

admissible after-discovered evidence because, assuming without

deciding that they satisfy the first three prongs of the test,

they do not satisfy prong (4). First, proof that claimant

- 6 - falsified his driver's license and identification card was not

likely to produce a different result under Granados. Granados

specifically rejects the argument that an employer may deny

benefits to an injured employee simply because that employee

used forged citizenship documents to obtain employment. 257 Va.

at 106-08, 509 S.E.2d at 291-92. Under these circumstances,

"[an employer] fail[s] to demonstrate the required causal

relationship between [the employee's] false representation and

his resulting injury." Id. at 108, 509 S.E.2d at 292. In order

for an employer to deny benefits under Granados, it must

establish that the claimant was an illegal alien who could not

be employed lawfully in the United States such that "his

purported contract of hire was void and unenforceable." Id. at

108-09, 509 S.E.2d at 293. Thus, it is an employee's status as

an illegal alien rather than his actions in falsifying

citizenship documents which provides the basis for denying

benefits under Granados.

Here, the forgery conviction order employer sought to have

admitted, even viewed in conjunction with his employment

eligibility verification form and deposition, established at

best only that claimant presented falsified documents to

establish his citizenship. It did not establish that he was an

illegal alien or was otherwise unable to enter into a valid

contract for employment when hired by employer in 1995 or when

- 7 - injured in 1997. 3 Thus, employer was unable to prove admission

of the conviction order was likely to produce a different result

on the merits of the Granados status defense.

Second, admission of the proffered documents was not likely

to produce a different result on the disposition of this claim

because documents failed to establish that claimant fraudulently

induced employer to withdraw its Granados defense. 4 Fraud

requires proof of "'(1) a false representation, (2) of a

3 Employer argued in its written statement to the commission that the conviction order was material because it established claimant's guilt of crimes of moral turpitude which henceforth would disqualify him from working in the United States under federal immigration law. However, employer did not raise this argument on brief or in oral argument to this Court, and we consider it abandoned. See Tidewater Assoc. of Homebuilders, Inc. v. City of Virginia Beach, 241 Va. 114, 118 n.2, 400 S.E.2d 523, 525 n.2 (1991). Proof that claimant was not authorized to work in the United States during the period of time for which he sought partial disability compensation may have served as a valid defense to claimant's change-in-condition application. See Manis Constr. Co. v. Arellano, 13 Va. App. 292, 294, 411 S.E.2d 233, 235 (1991) (holding that partially disabled claimant who is illegal immigrant is unable, as a matter of law, to market his residual capacity because any such employment is illegal). However, this defense, like the Granados status defense, was not included in employer's request for review, and employer's written statement to the commission referenced this issue only in passing. The commission's majority opinion did not address this issue, and employer did not assign error to this issue on appeal to this Court. Thus, we consider this argument abandoned, as well. See Tidewater Assoc. of Homebuilders, 241 Va. at 118 n.2, 400 S.E.2d at 525 n.2. 4 As set out above in the discussion of Granados, proof that an employee used fraudulent citizenship documents to obtain employment is insufficient to permit a denial of workers' compensation benefits. Granados, 257 Va. at 106-08, 509 S.E.2d at 291-92.

- 8 - material fact, (3) made intentionally and knowingly, (4) with

intent to mislead, (5) reliance by the party misled, and (6)

resulting damage to the party misled.' The fraud must be proved

by clear and convincing evidence." Batrouny v. Batrouny, 13 Va.

App. 441, 443, 412 S.E.2d 721, 723 (1991) (quoting Winn v. Aleda

Constr. Co., 227 Va. 304, 308, 315 S.E.2d 193, 195 (1984)).

When employer's counsel deposed claimant, claimant implied

that he believed he would soon be receiving a work permit, but

he admitted he did not then have a green card and was not

otherwise authorized to work in the United States at that time.

He also admitted that the Department of Motor Vehicles (DMV) had

taken the only social security card and driver's license he had

and told him it did so because the cards bore an incorrect

number. He said he obtained the number on the cards from an

English-speaking Mexican woman who provided volunteer help to

the Hispanic community and accompanied claimant to the DMV to

fill out the application for him. Employer did not specifically

ask claimant whether he was an illegal alien or was otherwise

unable to enter into a valid contract for employment when hired

in 1995 or when injured in 1997.

Claimant's workers' compensation attorney represented at

the deposition only that claimant had an immigration appeal

pending and was legally entitled to remain in the United States

pending that appeal; he did not represent that claimant was

authorized to work at that time and made no representations

- 9 - regarding claimant's immigration status at the time he was hired

or the time he was injured. Although claimant's attorney said

he was unable to provide documentation regarding claimant's

current status, he indicated that he planned to subpoena

claimant's immigration lawyer to testify on that subject.

At the deputy commissioner's hearing, the parties

apparently had further discussions regarding claimant's status,

but those discussions do not appear in the record. The record

indicates only that employer did not assert the Granados status

defense at that hearing and that it believed claimant's

"immigration status is apparently pending and that he's legal

during the pending status."

Employer has failed to establish that any of the

representations claimant or his representatives made during the

deposition or at the deputy commissioner's hearing were false.

Employer had ample opportunity to conduct a more detailed

investigation of claimant's status prior to the hearing by

deposing claimant's immigration lawyer or subpoenaing records

related to the immigration proceedings, but the record contains

no indication that it did so. Thus, employer failed to make out

even a prima facie case of fraud.

For these reasons, employer failed to prove that admission

of the proffered documents was likely to produce a different

result. Therefore, we hold the commission did not commit

- 10 - reversible error in refusing to admit the proffered exhibits as

after-discovered evidence.

C.

CLAIMANT'S REPRESENTATIONS ON REVIEW AS EVIDENCE

Employer contends lastly that the commission erred in

considering as evidence arguments claimant made in his written

statement on review. It also contends that such statements were

immaterial because they related to the legality of claimant's

remaining in the country pending his immigration appeal rather

than to the impact of his immigration status on his ability to

contract for employment. We hold that the commission's reliance

on the challenged statements, if error, was harmless and that

the commission focused on the material issue in the case.

The commission stated in its opinion that claimant had

prepared to challenge employer's Granados status defense by

calling as a witness the attorney who was handling claimant's

immigration application and petition for asylum. The commission

noted its own records confirmed that this attorney had appeared

as a witness for an aborted hearing scheduled for August 10,

1999, but it went on to note that the attorney "appeared for the

evidentiary hearing on January 11, 2000, but was not called

because the defendants abandoned their illegal immigrant

defense." It indicated that "these representations are

uncontradicted and accepted as credible and probative." It then

considered those representations as evidence that "facts

- 11 - concerning [the status defense] [were] known to, but . . .

abandoned by, the defendants at that evidentiary hearing."

Assuming without deciding that the commission's reliance on

this proffer was error, the commission relied on it only as it

related to employer's waiver of the Granados status defense.

Contrary to employer's assertion, nothing in the record

indicates that the commission relied on it as substantive

evidence of claimant's ability to remain in the United States or

that the commission improperly focused on claimant's ability to

remain in the United States rather than on his status and

related ability to work. Because other undisputed evidence in

the record established employer's waiver of the status defense,

as discussed supra in Part I.A., any error of the commission in

relying on claimant's proffer was harmless. See, e.g., Ferguson

v. Commonwealth, 16 Va. App. 9, 12, 427 S.E.2d 442, 444-45

(1993).

II.

For these reasons, we hold the commission did not commit

reversible error in refusing to remand to the deputy commissioner

for consideration of a Granados status defense; refusing to

re-open the record to allow employer to submit after-discovered

evidence claimed to be relevant to that defense and a claim of

fraud; and considering claimant's representations on brief as

- 12 - evidence in ruling on those requests. Therefore, we affirm the

commission's award.

Affirmed.

- 13 -