AMERICAN ZURICH v. MARTINEZ, 0498-07-4, Unpublished (Va.App. 1-8-2008)

JUDGE WILLIAM G. PETTY JAMIE MARTINEZ.

American Zurich Insurance Company (carrier) appeals the Workers' Compensation Commission's award of benefits to Jamie Martinez (claimant). While carrier presented several issues on appeal, we address only two issues, which are dispositive of this case. These issues are (1) "whether the full commission erred as a matter of law in ruling that the claimant had established a mutual mistake of fact or other legal basis for vacating Deputy Commissioner Nevin's September 17, 2002 opinion"; and (2) "whether the full commission erred in entering any award in this matter because claimant's claims were barred by the doctrine of res judicata and/or collateral estoppel?"

On review, we reverse the commission's decision.

On appeal from a decision of the commission, "we view the evidence in the light most favorable to the party prevailing below" and grant that party the benefit of all reasonable inferences. Tomes v. James City (County of) Fire, 39 Va. App. 424, 429-30, 573 S.E.2d 312, 315 (2002);see also Grayson (County of) Sch. Bd. v. Cornett, 39 Va. App. 279, 281, 572 S.E.2d 505, 506 (2002). On September 26, 2001, claimant injured his right forearm, right thumb, and right index finger while operating a radial saw at a construction site. On October 5, 2001, he filed a claim for benefits seeking an award of lifetime medical costs for the injuries and compensation for temporary total disability. In the claim he alleged that Danny L. Metcalf Construction (Metcalf) was his employer.

A hearing on the claim for benefits was held before a deputy commissioner on September 9, 2001. The parties stipulated that claimant experienced an injury by accident arising out of and in the course of employment. The sole issue was whether Metcalf was claimant's employer. After hearing the evidence, the deputy commissioner concluded, "claimant failed to carry his burden of proving that he was Metcalf's employee at the time of his injury." In reaching this decision, he made these findings:

Although claimant was obviously working for somebody on September 26, 2001, we cannot determine from the record evidence for whom he was working. Metcalf denied employing him, and testified that he had never seen the claimant before the hearing. We also note the conspicuous absence of "Ortiz[,]" the individual who actually hired the claimant, paid him, and apparently supervised his day-to-day activities. We further note Metcalf's testimony that he did not employ or even know anyone known as Ortiz. The claimant also testified that at the time of his injury, he was working on a multi-level structure that he characterized as an apartment building. The record contains no evidence that Metcalf was doing any construction work on such a building at the time of the claimant's injury. Additionally, the claimant did not even know where in Virginia he was injured. Although some actual documentation indicating that Metcalf paid Sanchez by check might have persuaded us that an employer/employee relationship existed among these individuals, no such documentation is in the record.

This decision was not appealed.

On November 13, 2002, claimant filed a second claim for benefits arising from the accident of September 26, 2001. In the second claim, however, claimant alleged that his employer was "David Ortiz Gomez." After filing the second claim, claimant attempted to join Metcalf to the second claim as either a statutory or direct employer. Furthermore, on May 5, 2004, claimant filed a motion to vacate the deputy commissioner's opinion based upon "mutual mistake and/or fraud."

On September 22, 2004, the deputy commissioner held a hearing on claimant's motion to vacate and the second claim for benefits. After hearing testimony, the deputy commissioner determined that while claimant was an employee of Metcalf at the time of his injury, his claim was barred by res judicata. Moreover, she ruled there was no basis upon which to vacate the September 17, 2002 opinion because there was no mutual mistake. In reaching this decision she observed:

At the initial hearing, it is hardly surprising that Mr. Metcalf testified as he did as he did not know a Mr. Ortiz, his records in no manner indicated any relationship with a Mr. Ortiz and he did not construct apartment buildings at all, no less in an unidentified location, all alleged by the claimant at the hearing. Thus, he was in no manner mistaken in his testimony, while the claimant was in his.

Claimant appealed.

On December 19, 2005, the full commission vacated the September 17, 2002 opinion and reversed the finding that claimant's claim against employer Metcalf was barred by res judicata. The commission concluded that the misidentification of Deybin Noel Ortiz Gomez constituted a mutual mistake of fact. Based upon the commission's implied power to vacate an award procured through mistake, the commission set aside the original opinion. The commission remanded the matter to the deputy commissioner to resolve issues of permanency, average weekly wage, and any other pending issues.

On remand, the deputy commissioner issued an opinion on May 25, 2006. Claimant was granted an award against employer Metcalf and carrier for temporary total disability at the weekly rate of $240 from September 26, 2001 through December 14, 2001 and for a 20% permanent impairment of the right arm at the weekly rate of $240 beginning May 1, 2003 and continuing for 40 weeks. Claimant was also awarded causally related medical attention for as long as necessary under Code § 65.2-603. Carrier requested review by the full commission. On February 2, 2007, the full commission affirmed the May 25, 2006 opinion. This appeal ensued.

On appeal, we defer to the commission in its role as fact finder.VFP, Inc. v. Shepherd, 39 Va. App. 289, 292, 572 S.E.2d 510, 511 (2002). "If supported by credible evidence, the factual findings of the commission are binding on appeal."Tomes, 39 Va. App. at 430, 573 S.E.2d at 315 (citations omitted).

However, the principal issue raised by carrier in this appeal relates not to the factual findings of the commission, but to its application of the law to those findings. Therefore, this issue is a mixed question of law and fact. Roanoke Belt, Inc. v. Mroczkowski, 20 Va. App. 60, 68, 455 S.E.2d 267, 271 (1995). "`[C]onclusions of the Commission upon questions of law, or mixed questions of law and fact, are not binding on [appeal].'" City of Waynesboro v. Harter, 1 Va. App. 265, 269, 337 S.E.2d 901, 903 (1985) (quoting Brown v. Fox, 189 Va. 509, 517, 54 S.E.2d 109, 113 (1949)). Accordingly, we review de novo the commissioner's application of the law to those findings. Roanoke Belt, 20 Va. App. at 68, 455 S.E.2d at 235.

Carrier argues that the full commission erred as a matter of law in ruling that the claimant established a mutual mistake of fact or other legal basis for vacating the deputy commissioner's September 17, 2002 opinion. Carrier asserts a two-fold argument: (1) the commission erred in applying "mutual mistake of fact" principles in this case absent a contract or agreement between the parties; and (2) there is no credible evidence in the record to support the commission's finding that a mutual mistake of fact existed. Assuming, without deciding, that the commission has the authority to vacate an award on the ground of mistake in the absence of a contract or agreement, we conclude that the mistake of fact relied upon must be mutual. Because we find that the claimant's mistake in this case did not constitute a mutual mistake of fact, we reverse.

The General Assembly has granted "the Commission the power and authority not only to make and enforce its awards, but to protect itself and its awards from fraud, imposition, and mistake." Collins v. Dep't of Alcoholic Bev. Con., 21 Va. App. 671, 679-80, 467 S.E.2d 279, 283,aff'd on rehearing en banc, 22 Va. App. 625, 472 S.E.2d 287 (1996). Virginia's case law further clarifies that the commission has the "implied power, incidental to those expressly granted, to entertain and hear an application, seasonably presented, to vacate and set aside an award, procured through fraud or mistake."Harris v. Diamond Constr. Co., 184 Va. 711, 721, 36 S.E.2d 573, 578 (1946).

When exercising its power to set aside a final award on the ground of fraud or mistake, the commission applies the same rules applicable to a proceeding to annul a final judgment at law. See Williamsburg v. Altizer, 220 Va. 9, 13, 255 S.E.2d 536, 538 (1979). To prevail, the party seeking relief must prove fraud or mutual mistake of fact by clear and convincing evidence. J D Masonry, Inc. v. Kornegay, 224 Va. 292, 295, 295 S.E.2d 887, 889 (1982) (citations omitted). Absent proof of fraud, a unilateral mistake of fact on the part of the moving party does not warrant relief. Id. "In determining whether a mutual mistake of fact existed at the time of the agreement, the inquiry is . . . whether each party held the same mistaken belief with respect to a material fact at the time the agreement was executed." Collins, 21 Va. App. at 681, 467 S.E.2d at 283 (emphasis added). Therefore, a unilateral mistake of fact, unaccompanied by fraud, is not sufficient to set aside a final award.J D Masonry, 224 Va. at 295, 295 S.E.2d at 889 ("[T]he evidence proves merely a unilateral mistake of fact by the carrier unaccompanied by any fraud attributable to the claimant. Under such circumstances, relief will not be granted.").

In its December 19, 2005 opinion, the commission vacated the 2002 opinion based on a mutual mistake of identification. The commission reasoned that "[n]either man [claimant nor employer] provided sufficient information about Ortiz/Gomez to result in a meeting of the minds between the two." The commission relied upon the rule of law set forth in Harris, 184 Va. at 721, 36 S.E.2d at 578, to entertain and hear the application. Id.

Carrier argues that there is no credible evidence in the record to support the commission's finding that a mutual mistake of fact existed. When claimant filed the motion to vacate the September 2002 opinion, he had the burden of proving by clear and convincing evidence that he and employer held the same mistaken belief related to a material fact.Collins, 21 Va. App. at 681, 467 S.E.2d at 283. We find no evidence in the record supporting the commission's finding that they shared the same mistaken belief about the identity of claimant's superintendent.

When claimant testified at the initial hearing he identified Metcalf as his employer and Ortiz as his supervisor. Claimant did not subpoena Ortiz or make arrangements for his presence at the hearing. Further, he never referred to an individual named "Gomez." His testimony revealed that at the time of his accident he was working "somewhere" in Virginia on a "six-story" apartment building. Employer testified that he builds and sells homes and town homes and had never built apartments.

When employer was asked whether Mr. Ortiz worked for him, he testified, "[h]e didn't work for me." Employer further added, "[h]e quite possibly could have [worked for], one of my subs." Claimant's attorney failed to question employer specifically about the identity of his subcontractors. Thus, given claimant's incomplete and inaccurate testimony concerning the location and job site, there was no reasonable means for employer to determine that claimant had misidentified Gomez as Ortiz.

At trial, claimant "had the burden of producing evidence that an employment relationship existed between him and [Metcalf]."Craddock Moving Storage Co. v. Settles, 16 Va. App. 1, 3, 427 S.E.2d 428, 430 (1993), aff'd, 247 Va. 165, 440 S.E.2d 613 (1994) ( per curiam). When he testified, however, he provided inaccurate information and failed to meet his burden of proof. A careful review of the record demonstrates that claimant's erroneous testimony was not based so much on mistake, as it was on a failure to properly discover information prior to the first hearing.

Although claimant asserts he did not learn of the identity of Ortiz/Gomez until after the first hearing, claimant could have learned this information through reasonable investigation, such as by review of his own medical records in this case. In those records, "Debin Gomez" is provided as his contact, along with a telephone number. Claimant's failure to obtain the full or correct name of Ortiz/Gomez to pursue his original claim "is simply a case of inadequate, incomplete, and deficient investigation by the [claimant]; it is a failure promptly to discover facts that were available to [claimant]. . . ." J D Masonry, 224 Va. at 296, 295 S.E.2d at 889.

While claimant was clearly mistaken in his testimony at the first hearing, employer was not. Simply put, claimant failed to properly investigate and pose the correct questions necessary to sustain his burden of proof at trial. This type of unilateral mistake does not warrant relief. Id.; see also Foreman v. Clement, 139 Va. 70, 80-81, 123 S.E. 336, 339 (1924) ("[A] party will not be relieved from his obligation . . . where the mistake of fact was not mutual; unless such mistake was induced by the fraud or inequitable conduct of the obligee.").

Carrier argues the commission erred in entering any award in this case because claimant's claims were barred by the doctrine of res judicata or collateral estoppel. Generally, " res judicata precludes the re-litigation of a claim or issue once a final determination on the merits has been reached." K L Trucking Co. v. Thurber, 1 Va. App. 213, 219, 337 S.E.2d 299, 302 (1985).

Therefore, absent fraud or mistake, "the decisions of the Commission or its deputy commissioners from which no party seeks timely review are binding upon the Commission." Id. "One who asserts the defense of res judicata has the burden of proving by a preponderance of the evidence that an issue was previously raised and decided by a tribunal in a prior cause of action." Fodi's v. Rutherford, 26 Va. App. 446, 449, 495 S.E.2d 503, 505 (1998).

In the matter before us, claimant's first and second claims involved the issue of whether Metcalf was claimant's employer. Claimant failed to carry his burden of proof in the first action, and his claim was denied. He did not appeal this ruling. Therefore, claimant's second claim against Metcalf, which raises the same issue as the first claim, is barred by the doctrine of res judicata unless the September 17, 2002 opinion is vacated. Rusty's Welding Serv., Inc. v. Gibson, 29 Va. App. 119, 128, 510 S.E.2d 255, 259 (1999) ( en banc).

Because the commission erred in vacating the September 17, 2002 opinion, claimant's second claim against Metcalf is barred by the doctrine of res judicata.

For these reasons, we conclude that the commission erred as a matter of law in determining that the claimant established a mutual mistake of fact and in setting aside and vacating the September 17, 2002 opinion. Because our conclusion of these issues is dispositive, we need not reach the other questions presented by carrier in this appeal. Accordingly, the decision of the commission is reversed, and we remand this matter to the commission for further proceedings consistent with this opinion.

Reversed.