CONNOLLY, J.
The Workers' Compensation trial judge found that the appellee, Jennifer Bassinger, had misrepresented her history of work-related injuries on a preemployment questionnaire and dismissed her petition for benefits. The three-judge review panel reversed, and remanded for further proceedings on whether a causal relationship existed between Bassinger's misrepresentation and her later injury.
In her cross-appeal, Bassinger argues that the review panel exceeded its authority in permitting an employer to deny benefits based on an affirmative misrepresentation defense. Summed up, she claims that the misrepresentation defense that we
In 1996, Bassinger started work as a certified nurse aide (CNA) at a nursing home in Syracuse, Nebraska. In 2000, she strained her lower back muscles while moving a patient, an injury that was treated with physical therapy. Workers' compensation benefits covered the treatment, and she fully recovered.
Beginning in 2001, she worked as a CNA for BryanLGH Medical Center, a hospital in Lincoln, Nebraska. In October, while lifting a patient, she developed right low-back pain. She was treated for chronic sacroiliac joint dysfunction. Later, her physician noted disk problems in addition to the joint problem, but he did not recommend treatment. He did not give Bassinger a permanent impairment rating because her pain was under control. But he noted that she had agreed with his recommendation that she should perform only light-duty work. In November 2003, she agreed to a lump-sum settlement of $5,000 for her injury at BryanLGH Medical Center.
In March 2006, Bassinger began work as a CNA at Nebraska Heart Hospital (the hospital). The hospital's preemployment questionnaire asked Bassinger to respond to questions about her history of work-related injuries and her physical condition. She reported only her injury at the Syracuse nursing home. She did not report her 2001 injury at BryanLGH Medical Center.
In her preemployment physical, the hospital's nurse reported that Bassinger could perform the physical tests without pain. But in April 2008, while lifting a patient, she injured her back and experienced instant pain in her lower back and down her leg. She testified that the piercing pain she experienced was different from what she had experienced in 2001. Physical therapy and medications did not alleviate her symptoms from the 2008 injury.
She continued to perform light-duty work at the hospital until she was discharged in July 2008. The hospital discharged her because she could not work during the day, the only time that the hospital offered her light-duty work. In October, she elected to undergo a spinal fusion surgery with a different physician, which successfully alleviated her symptoms.
In July 2008, Bassinger petitioned for workers' compensation benefits. In August 2009, the trial judge dismissed her petition. The judge found that Bassinger had willfully misrepresented her work-related injury history when she failed to disclose any information about her 2001 injury. In concluding that the hospital could deny benefits because of Bassinger's misrepresentation, the judge relied on the rule we adopted in Hilt Truck Lines, Inc.
Bassinger appealed to the review panel. The review panel addressed only her assignment that the trial judge erred in finding a causal connection between her misrepresentation and her 2008 injury. It concluded that Hilt Truck Lines, Inc. required the hospital to show a direct causal relationship between the 2001 injury that Bassinger concealed and her 2008 injury. It reversed the trial judge's order and remanded the case for further findings on causation under its corrected standard.
The hospital assigns that the review panel erred in determining that the trial judge applied the wrong causation standard.
On cross-appeal, Bassinger assigns that the trial judge and review panel improperly applied a misrepresentation defense that the Act does not authorize.
On appellate review of a workers' compensation award, the trial judge's factual findings have the effect of a jury verdict and will not be disturbed unless clearly wrong. But we independently decide questions of law.
The hospital contends that the trial judge applied the correct causation standard. It argues that the review panel incorrectly interpreted Hilt Truck Lines, Inc. to require a direct causal relationship between Bassinger's misrepresentation and her work injury. Bassinger contends that the review panel's direct causation requirement was correct—assuming that Hilt Truck Lines, Inc. adopted an affirmative defense for misrepresentation under the Act.
But in her cross-appeal, Bassinger contends that Hilt Truck Lines, Inc. created a limitation on workers' compensation benefits that the Act does not authorize. Because we conclude that our decision in Hilt Truck Lines, Inc. was clearly erroneous, we do not analyze whether the lower courts correctly applied the causation factor of the misrepresentation defense.
Bassinger contends that the trial court and review panel exceeded their authority by applying a misrepresentation defense because the Act does not authorize such a defense. She argues that because this court's limitation on compensation benefits from Hilt Truck Lines, Inc. is not supported by the Act, the trial court's reliance on that decision and the review
The hospital responds that Bassinger has waived this argument by not presenting it to the review panel. It alternatively argues that even if she has not waived it, it is without merit because the lower court had no alternative but to follow this court's precedent. The hospital's second argument succinctly sums up why Bassinger has not waived her argument.
It is generally true that when a party raises an issue for the first time in an appellate court, the court will disregard it because a lower court cannot commit error in resolving an issue never presented and submitted to it for disposition.
The crux of Bassinger's cross-appeal is that our decision in Hilt Truck Lines, Inc. was wrong. The hospital cites no authority holding that a party must ask a lower court not to follow a controlling decision from this court to preserve for appeal an issue that the party claims we incorrectly decided. Requiring parties to ask a lower court to ignore our decision would obviously be inconsistent with the doctrine of stare decisis, which compels lower courts to follow our decisions.
Although we do not analyze the lower courts' application of the three-factor test that we adopted in Hilt Truck Lines, Inc.,
The driver died shortly after the trucking company hired him, and the company did not receive his driving records until after his death. Those records showed that in the previous 2 years, under a different name, the driver had three driving under the influence convictions. He had started using a different name shortly before he was hired. It was undisputed that the trucking company would not have hired the driver if it had known of his convictions and that it would have discharged him immediately if it had discovered his true driving record before the accident. But the record showed conflicting evidence whether intoxication had caused the crash and his death.
The Workers' Compensation Court awarded benefits. It concluded that because the evidence was insufficient to support a causal relationship between the false representation and the later accident, it was legally insufficient to void the employment relationship retroactively. It also found that under the statutory affirmative defense, the company had failed to prove that intoxication or intentional negligence
We affirmed. We agreed that under the statutory defense, the evidence was insufficient to prove that intoxication or intentional negligence caused the driver's death. We also rejected the trucking company's claim that the employment contract was void ab initio because of the driver's misrepresentations. We first stated an employment contract rule from a legal encyclopedia that essentially incorporated the misrepresentation rule:
Next, we adopted a common-law misrepresentation defense from Professor Larson's treatise to govern when an applicant's misrepresentations will bar recovery of workers' compensation benefits:
Under this rule, we affirmed the Workers' Compensation Court's finding that the evidence was insufficient to show a causal connection between the driver's misrepresentations and his subsequent accident:
Bassinger argues that Hilt Truck Lines, Inc. is an anomaly among our cases and contrary to our holdings that the Workers' Compensation Court has only the authority to act that is conferred upon it by the Act. Substantively, the hospital contends that the Act supports the misrepresentation defense. It points to § 48-102, which provides an employer with a statutory affirmative defense: "[I]t shall not be a defense (a) that the employee was negligent, unless it shall also appear that such negligence was willful, or that the employee was in a state of intoxication . . . ." The hospital contends that "any employee that knowingly and willingly makes a misrepresentation
The plain language of § 48-102 creates an affirmative defense for injury caused by an employee's willful negligence. Persons who misrepresent their physical condition to obtain employment are applicants, not employees. Notably, in Hilt Truck Lines, Inc., we separately analyzed and affirmed the Workers' Compensation Court's conclusions about whether the benefits were barred by the statutory defense for willful negligence or intoxication, or the common-law misrepresentation defense that we adopted.
We conclude that the statutory defense under § 48-102 does not apply to applicants.
Having disposed of the hospital's argument, we now consider Bassinger's argument that the Act does not authorize a misrepresentation defense. Some states have workers' compensation statutes that exclude coverage for employees who knowingly made false statements about their physical condition in an application or preemployment questionnaire.
Moreover, Bassinger correctly states that Hilt Truck Lines, Inc. is an exception in our workers' compensation jurisprudence. We have not applied or considered the misrepresentation defense that we adopted there in any other workers' compensation case. This is significant because in Hilt Truck Lines, Inc., we did not analyze whether a common-law defense was compatible with the Act. We do so now.
We have previously explained that workers' compensation laws reflect a compromise between employers and employees. Under these statutes, employees give up the complete compensation that they might recover under tort law in exchange for no-fault benefits that they quickly receive for most economic losses from work-related injuries.
Courts holding that misrepresentations to obtain employment cannot defeat
We share these concerns. We believe that the Larson rule lacks a coherent rationale apart from being a rule of equity based on public policy concerns. As stated by Professor Larson, the rule does not rest on "purely contractual tests, [but] is a common-sense rule made up of a mix of contract, causation, and estoppel ingredients."
First, the Larson rule reflects a concern that it is inequitable to permit an employer to deny compensation benefits after it has obtained the employee's services for an extended period. This concern has great force in workers' compensation cases because employees have given up the right to sue the defendant for full compensation. Second, it reflects a concern that an applicant's misrepresentations about his or her physical condition could frustrate the employer's attempt to protect itself from liability for the aggravation of a previous injury or a causally related injury.
Both of these concerns are obviously issues of public policy. The Larson rule balances these concerns through a unique application of rescission and estoppel rules. The employer is estopped from rescinding the contract for the employee's misrepresentation about his or her physical condition unless the misrepresentation resulted in the very injury that the employer was attempting to protect itself from by asking the applicant to respond to questions about his or her physical condition and work-related injuries.
The Larson rule may reflect a laudable goal. But it is the Legislature's function through the enactment of statutes to declare what is the law and public policy.
For example, under Nebraska case law, the absence of equity jurisdiction means that the Workers' Compensation Court (1) does not have contempt power to enforce its awards
We have also held that when an employer seeks to enforce its subrogation interest in a third-party settlement through an action in district court, the district court may not bar the claim on equitable grounds: "Whether the employer's defense against the workers' compensation claim is reasonable is determined by the Workers' Compensation Court under the . . . Act, not in the district court by resort to equitable principles."
The unavoidable consequence of these holdings is that our adoption of the equitable misrepresentation defense in Hilt Truck Lines, Inc. was clearly erroneous. We therefore overrule Hilt Truck Lines, Inc. and reverse the judgment of the review panel of the Workers' Compensation Court. We remand the cause to the review panel and direct it to remand the case to the trial judge for further proceedings to determine whether Bassinger is entitled to benefits without regard to the hospital's misrepresentation defense.
Reversed and remanded for further proceedings.
WRIGHT, J., not participating.