Title: Falls Church Construction Co. v. Laidler
Citation: N/A
Docket Number: 962627
State: Virginia
Issuer: Virginia Supreme Court
Date: October 31, 1997

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.