P. v. Waterman

Filed 2/18/10 P. v. Waterman CA4/1

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COURT OF APPEAL, FOURTH APPELLATE DISTRICT

DIVISION ONE

STATE OF CALIFORNIA

APPEAL from a judgment of the Superior Court of San Diego County, Richard S. Whitney, Judge. Affirmed.

A jury convicted Jay Bryan Waterman of making false or fraudulent statements to obtain workers' compensation benefits (Ins. Code, 1871.4, subd. (a)(1); counts 4 and 9) and presenting a false claim. (Pen. Code, 550, subd. (a) (1), count 8.)[1] The court sentenced him to 365 days local custody, but stayed the sentence pending his successful completion of five years of supervised probation.

Waterman contends insufficient evidence supports the verdict. We affirm the judgment.

FACTUAL AND PROCEDURAL BACKGROUND

On February 29, 2004, Waterman fell at work, breaking his right foot and injuring his lower back, neck and shoulder. His doctors concluded he had a compensable workers' compensation injury.

Doctor Evaluations

In 2004, Dr. Khalid Ahmed determined that Waterman was totally disabled; therefore, he began receiving workers' compensation benefits. Dr. Ahmed recommended epidural steroid injections and facet injections for his pain management, but the insurance company denied that treatment. Dr. Ahmed categorized Waterman's injury as "permanent stationary" and concluded he was a "qualified injured worker" needing retraining. Waterman's condition did not change significantly through February 2006.

On April 3, 2006, Dr. Thomas Jackson, an orthopedic and spine surgeon, examined Waterman, reviewed his medical records and completed a report noting that Waterman's complaints indicated "some potential for symptom magnification."  

Dr. Jackson claimed he intended the notation "to serve as a red flag warning to say be careful what you do for treatment here. Go by the objective findings, not just the subjective complaints."

In September 2004, Dr. Eric Sabety, an orthopedic surgeon who acted as an "agreed medical examiner" (AME), determined that Waterman had "factors of disability" or a "ratable disability" of 35% for which workers' compensation was appropriate. He stated that Waterman's physical examination was "essentially normal," and instead "there was a disproportion between. . . . what [Waterman] said he couldn't do or how he felt and what we saw on examination."

Dr. Sabety evaluated Waterman on January 4, 2007. Waterman reported continued severe headaches, increased pain in his back, neck and right foot, and numbness in his left arm and fingers. He stated he had not returned to work, and had ridden his motorcycle only four times, for approximately 50 or 75 miles. Dr. Sabety reviewed additional records of medications prescribed and reports from Dr. Ahmed and Dr. Jackson and determined that Waterman's condition was essentially the same as in 2004.

Summary of Video Surveillance

An investigator conducted surveillance on Waterman and video recorded his activities from his home in Murietta, California on different days between February and September 2006.

On February 22, 2006, Waterman drove from his home to an office building, then to Wal-Mart. He pushed a shopping cart into the store and to his car, and loaded bags into the car. Back at home, he bent over, put a briefcase into the backseat, and drove to medical offices in Temecula. On April 2, 2006, Waterman reversed his car from his driveway, parked it and raised his left arm to shoulder height while talking to someone. He washed, detailed and polished a motorcycle for 44 minutes. He bent over from the waist more than half way, twisting at the waist in both directions and turning his neck to the right and left. He repeatedly, and in fluid movements, knelt down and stood up without help. Later, he drove the motorcycle with a passenger to a gas station and motorcycle rally in Corona. He had no difficulty controlling the motorcycle on the freeway. Upon leaving a restaurant, he lifted his right leg over the motorcycle, which he rolled backward, and rode home on the freeway.

On April 3, 2006, Waterman drove to Dr. Jackson's office in Riverside and left after four hours, limping slightly. He drove to a restaurant and went home.

On July 22, 2006, he mowed his front yard without difficulty and walked around clearing debris from his driveway with a lawn blower. That afternoon, he drove a car from his home. The investigators lost sight of him after the car turned into a shopping mall parking lot.

On July 23, 2006, he drove a car from his home. Seventy three minutes later, he and a woman passenger stopped at a Palm Springs casino, where he played a slot machine. About twenty minutes later, he drove to a condominium in Palm Springs, stayed a couple of hours, drove to a supermarket and returned to the freeway, where the investigator lost sight of him.

On August 23, 2006, he drove his motorcycle from home with a child on the back, dropped the boy off at school and stopped for gasoline. At a red light, he balanced the motorcycle while smoking a cigar. On the freeway, he cut through four lanes of traffic and drove to a Harley-Davidson dealership in Temecula. There, he talked on his cell phone, walked around, talked to an employee, raised his arms above his head, and bended over from the knees and waist. He repeatedly squatted and once used a motorcycle to help him stand up again. He ran upstairs into the dealership. He went to a gas station and pumped gasoline without difficulty. That same day, he drove for 36 minutes from his home to an office building in Riverside, and when he left, the investigator lost sight of him, and he had not returned home after two hours, when the investigator stopped working that day. On August 25, 2006, he drove to a nearby grocery store and spent about 40 minutes pushing a shopping cart and making purchases without difficulty. He put the bags of groceries in his car and drove home.

The next day, he left home on his motorcycle with a woman passenger. He joined two others on motorcycles on a rural, winding road in the foothills near Temecula. They stopped at a restaurant in Poway for an hour. He walked his motorcycle backward with his passenger already behind him. The riders got back on the highway and the investigator lost sight of them.

On September 1, 2006, he rode his motorcycle into a nearby town and the investigator lost sight of him. The next day, he drove a child to a toy store and carried a box to his car. He drove to a furniture store in the same shopping center, went in briefly, and returned to the freeway. He drove to a Harley-Davidson dealership in Temecula, ate lunch, went into the showroom and left. He stopped at a local restaurant and waited as an employee brought him approximately three trays of food, which he carried to his car. Afterwards, he drove to a grocery store and shopped. He reversed his car into a neighbor's driveway and three men unloaded the food from his trunk. He drove to a neighboring house, removed more food items, returned home, walked to the first house he had visited and returned home about an hour later.

On September 3, 2006, he trimmed shrubs outside his garage with an electric hedge trimmer, reaching over his head at times with no apparent difficulty, and swept the trimmings a few minutes later. He reversed the motorcycle from the garage, manually closed his garage door and drove with a neighbor to a gas station. They stopped for lunch, got gas, and stopped at another restaurant. He lifted his right leg as he dismounted. Returning home, he manually opened the garage door and drove the bike into the garage. The trip covered approximately 130 miles and lasted from 8:30 a.m. to 2:09 p.m.

Doctors' Review of the Videos

Dr. Ahmed reviewed the surveillance videos of Waterman's activities and testified that the only activity he saw that would be "beyond what [he] thought [Waterman] could do as long as he was taking medications was the long motorbike ride." He explained that Waterman had "tolerances" for up to 30 minutes for standing, walking and sitting, and particular neck motions, and with pain medication, Waterman could perform the activities seen in the videos for limited times. His goal was for Waterman to return to work without medications. Dr. Ahmed relied on Waterman's honesty during the visits, noting that Waterman's truthfulness was necessary to ensure proper treatment and a correct resolution of workers' compensation claims.

Dr. Jackson wrote a supplemental report on December 4, 2006, after reviewing the surveillance videos, and concluded that Waterman had misrepresented his level of pain and physical disability.

Dr. Sabety reviewed the videos and stated that Waterman was "permanent and stationary," meaning he was not going to improve. He believed Waterman could return to work as a car salesman, but he should avoid repetitive heavy lifting, stooping and bending or "prolonged work overhead."

Waterman's Telephone Conversation With the Claims Adjuster

On August 22, 2006, Mary Morales, a claims adjustor for American Commercial Claims Administrators (ACCA), telephoned Waterman, asked him prepared questions and typed his responses. He stated he had missed an appointment with Dr. Sabety because after he had driven the 50 miles to the doctor's office the first time, he needed to lie down because of his pain, but the staff would not permit it.

Morales asked if Waterman could return to work and he responded, "No. I can't do anything right now." He explained, "I haven't worked, not a day, since I got hurt" and added he did not get much sleep and spent most of his days just "sitting around." He said he had "pain, extreme pain, every stinking day of my life." He stated his medications enabled him to do more than he should, adding, "But I'm always in pain or on a lot of meds, then I don't feel anything. But, of course, then I still can't do anything because it wouldn't be safe." He ranked his pain on a scale of one to 10 as, "Seven to nine, most days nine." When asked what activities he could no longer do, he replied, "Like I said, I really don't do anything most days."

He said he typically watched a lot of television and could not do household chores such as vacuuming, cleaning, or washing the dishes. He continued, "I can't do anything. I'm sure in part that is why my wife left me." He said he could not do gardening, weeding, or washing the car, and would drive to do errands, but "[o]nly if I absolutely have to. Otherwise, no way." He said his motorcycle was his "biggest enjoyment," but, "I can only ride, maybe at best, once a month for only about 10 miles, if I'm lucky."

Morales reviewed the videos and concluded that Waterman could do more than his claimed limitation, and the contradiction was relevant and material for determining his benefits.

Waterman's Deposition

Jody Eaton deposed Waterman regarding his workers' compensation claim. During the second deposition, Waterman testified that he never had a day without pain, his neck, back and shoulder hurt more than before, and kept him awake part of the night. Waterman testified regarding his neck injuries:

"[Eaton:] Now how's the flexibility in your neck?

"[Waterman:] Most of the time it's pretty stiff. I can't turn my head to the left very far at all. I typically have to move my shoulders with it. I have this popping when I move my neck, and a pinching of I'm afraid to turn it. So I've gotten to the point where I don't turn that often without moving my whole body.

"[Eaton:] So how do you drive?

"[Waterman:] As far as looking?

"[Eaton:] Correct.

"[Waterman:] I don't drive that often. Typically, I let my wife drive. But if I drive, I just same thing, turn my shoulders.

"[Eaton:] So you can't turn to the left, turn to the right?

"[Waterman:] I don't have full motion. This is about as far as I can move my head to the left (indicating).

"[Eaton:] And from straight forward looking where your chin is centered to the buttons on your clothes, you're only moving your head to the left approximately two inches, three at the max?

"[Waterman:] Max, yeah.

[] . . . []

"[Eaton:] How about the other direction?

"[Waterman:] The other direction doesn't I don't have a lot of pain associated with it. But what scares me is when, you know, whatever is inside there moving, I get that pop or the pinching. It's the return not when I turn it so much but it's the return is when I get that."

Expert Testimony

David Woods, a Harley Davidson dealership employee since 2000, testified that Waterman rode a Harley-Davidson's Electra Glide Ultra Classic motorcycle, the largest the company makes. It weighs approximately 765 pounds without oil, gasoline or a passenger. The separate front and rear brakes have to be used simultaneously. The prosecutor asked Woods on direct examination about the manner of making a safe lane change on the motorcycle. Woods responded: "[Y]ou're a whole lot more vulnerable on a motorcycle. The general recommendation is that you use your blinker and then check your mirror and turn your head and look over your shoulder to make sure no one is in the blind spot, then go ahead and execute your lane change." Woods reiterated that it was not safe to rely only on the mirrors on the motorcycle because they are small and as a rider one has to "make sure there's no one creeping up on you to hurt you." Waterman added a radio system and an LCD screen to see behind him. The motorcycle had a custom seat that enhances the rider's comfort.

Defense Case

Several of Waterman's neighbors testified he was honest and his work injury drastically altered his life. His former employer, Michael Mallonee, stated that before the accident Waterman worked long hours and afterwards he never saw Waterman engage in physical activities. By 2005, Waterman could go on occasional short motorcycle runs after taking medications.

Kirk Wilterding, who regarded Waterman as a father-figure, testified that Waterman's active lifestyle changed after the accident, and without the pain medication, he became miserable, inactive and did not even return phone calls. In 2007, Waterman's pain forced him to stop while on motorcycle rides.

DISCUSSION

Standard of Review

Waterman contends his convictions for two counts of workers' compensation fraud must be reversed for insufficient evidence that his statements were false and material. In evaluating the sufficiency of the evidence, "the court must review the whole record in the light most favorable to the judgment below to determine whether it discloses substantial evidence that is, evidence which is reasonable, credible, and of solid value such that a reasonable trier of fact could find the defendant guilty beyond a reasonable doubt." (People v. Johnson (1980) 26 Cal.3d 557, 578; see also Jackson v. Virginia (1979) 443 U.S. 307, 318-319.) Reversal on the ground of insufficient evidence is "unwarranted unless it appears 'that upon no hypothesis whatever is there sufficient substantial evidence to support [the conviction].' " (People v. Bolin (1998) 18 Cal.4th 297, 331.)

Legal Principles

Insurance Code section 1871.4 provides in part: "(a) It is unlawful to do any of the following: [] (1) Make or cause to be made any knowingly false or fraudulent material statement or material representation for the purpose of obtaining . . . any compensation, as defined in Section 3207 of the Labor Code." (See also People v. Webb (1999) 74 Cal.App.4th 688, 693-694.) The trial court, without any defense objection, instructed the jury regarding Insurance Code Section 1871.4 as follows:

"In order to prove such [a] crime, each of the following elements must be proved:

1. A person made or caused to be made a written or oral statement; 2. The person knew the statement was false or fraudulent; 3. The false or fraudulent statement was material; 4. The false or fraudulent statement was made with the specific intent to obtain workers' compensations benefits; 5. The person acted with the specific intent to defraud. [] A statement is material if it concerns a subject reasonably relevant to the insured's investigation and if a reasonable insurer would attach importance to the fact represented. A statement is material if it does not influence the ultimate decision to award benefits. The statement is material if it can influence the decision to award benefits."

Sufficient Evidence Supported the Count 4 Conviction

The amended information alleged in count 4 that Waterman under-represented his abilities and stated in a deposition that he could not turn his neck, which was disproved by the videos.

On appeal, Waterman disputes that he said he could not turn his neck, and claims that in any event, the People did not prove that statement was false. Contrary to Waterman's argument, he specifically stated in his deposition that his neck had become so stiff he oftentimes turned his whole body. Moreover, he avoided turning his neck because of a "pinching" and a "popping," and the limited times he drove, he had to turn his shoulders along with his head. Further, he complained that raising his right arm straight up and down was difficult, and it hurt or locked up unless he made special accommodations. The jury could reasonably infer that he was referring to an inability to turn his neck.

The videos also showed Waterman driving and engaging in other activities on several days in a seven-month period. Waterman was able to control his motorcycle with a passenger on the back, on rural, winding roads in the Temecula area and for over an hour at a time. He had no difficulty controlling the motorcycle when reversing it or riding it on the streets and freeways. Only once did he use his right hand to assist him to get off the motorcycle; at other times, he lifted his leg across the motorcycle with no difficulty. He took a trip that covered approximately 130 miles and lasted roughly five and a half hours. He also needed to turn his head and look over his shoulder to check his blind spot when changing lanes. The jury could conclude that Waterman would be unable to safely ride his motorcycle for long distances if he were required to turn both his neck and shoulder at the same time as he checked his blind spot.

As the trial court instructed, Waterman's statement was material if it concerned a subject reasonably relevant to the insured's investigation and if a reasonable insurer would attach importance to the fact represented. Although the statement need not influence the ultimate decision to award benefits, it is material if it can influence the decision. Waterman's depositions were aimed at calculating any settlement or benefits. After the second deposition, Eaton reviewed the videos and concluded that Waterman could turn his neck more than the two or three inches he claimed, and without appearing to turn his shoulders. This discrepancy was significant for calculating the settlement amount.

We conclude that based on the videos and other reasonable, credible, and solid evidence, the jury could reasonably have found that Waterman's statements of limitations were false.

Substantial Evidence Supports the Count 9 Conviction

The information alleged in count 9 that Waterman told the claims adjuster "he could not do anything, and he could not drive unless he absolutely had to, when, in fact, [he] was seen riding his motorcycle on a regular basis."

Morales asked Waterman a series of relevant and material questions regarding his level of disability, and he repeatedly told her that the accident and resulting pain practically incapacitated him. As set forth above and as shown in the videos, Waterman's physical activities between February and September 2006 belie the statements he made to Morales. His examining doctors' testimonies also support the jury's findings. The doctors agreed that Waterman had a compensable workers' compensation injury. Both Dr. Jackson and Dr. Sabety believed Waterman had exaggerated his subjective symptoms. Dr. Ahmed testified that Waterman's long motorcycle ride was inconsistent with what Waterman's exam results showed he was capable of doing.

We reject the contention and conclude that substantial evidence supports the jury's findings that Waterman knowingly made false statements during his telephone conversation with the claims adjuster.

DISPOSITION

The judgment is affirmed.

O'ROURKE, J.

WE CONCUR:

HALLER, Acting P. J.

IRION, J.

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[1] Waterman was originally charged with eight counts under Insurance Code section 1871.4, subdivision (a)(1); and two counts under Penal Code section 550, subdivision (a)(1). The court dismissed counts 3, 6, and 10 under Penal Code section 1118.1. The jury acquitted him of counts 1, 2, 5 and 7.