St. Paul Fire & Marine Insurance Company appeals from the entry of judgment as a matter of law on its claims that defendants James Ellis and Ellis & Ellis engaged in common law fraud, unfair trade practices as proscribed by Mass. Gen. Laws ch. 93A, and statutory fraud in violation of § 14 of the Massachusetts workers’ compensation statute during Ellis’s representation of David Formoso in pursuing a claim for Workers’ Compensation benefits from St. Paul. Although the issue of St. Paul’s burden of. proving the element of damages in its fraud claim presents some complexity because of the workers’ compensation context, we nonetheless agree with St. Paul that the trial court erred in granting defendants’ motions for judgment as a matter of law. Consequently, we vacate the judgment of the district court.
I.
We recite the evidence presented at the trial in some detail because the outcome of this appeal turns, in part, upon the proper construction of that evidence. Since 1981, James Ellis has been an attorney specializing in workers’ compensation law. At the time of the events underlying this case, he was a partner with his brother in the firm of Ellis & Ellis, where he managed the workers’ compensation department. The present case arises from Ellis’s representation of one person who was employed at two different jobs under two different names: Denis Milan and David Formoso. During 1989, this individual, while maintaining his separate identities, had two work-related injuries, one at each place of employment. To reduce some of the inevitable confusion regarding these dual identities, we will refer to Denis Milan only when discussing his claim for the first accident at the Victory Button Company. Because it appears uncontradicted that David Formoso is the correct name of this individual, we will use that name in all other instances.
The first accident occurred on March 25, 1989 at the Victory Button Company. Denis Milan, a worker at the factory, claimed an injury to his lower back after he reached up to pull some hangers. Doctors placed that injury at the L5-S1 location. Milan sought workers’ compensation benefits for this injury and filed a claim with Victory Button’s insurer, Cigna Insurance Company. The second accident occurred approximately eight months after the first, on November 17, 1989, at the *57 Westford Regency Hotel. David Formoso, who worked as a dishwasher at the hotel, claimed to have injured his back during a fall. Doctors examining Formoso determined that this injury was also at the L5-S1 location in his lower back. Formoso also sought benefits for this alleged injury, submitting a workers’ compensation claim to the Massachusetts Department of Industrial Accidents on December 22, 1989. This claim was referred to St. Paul, West-ford Regency’s insurer. Ellis represented Formoso in both claims.
Although Formoso was claiming a causal relationship between his back injury and the fall at the Westford Regency Hotel, the prior accident at the Victory Button Company — with its injury to the same part of the back — was never disclosed to St. Paul. Not surprisingly, the parties dispute the significance of this nondisclosure. Ellis, who testified as a hostile witness during St. Paul’s case-in-chief, claimed ignorance of the concealed identity until five months after the Westford Regency Hotel accident. He did not disclose this dual identity because of his belief that Formoso was still entitled to benefits and his concern that disclosure would jeopardize For-moso’s ability to remain in this country. 1 St. Paul took a darker view of Ellis’s conduct, describing a fraudulent scheme to obtain workers’ compensation benefits. We, of course, must view the evidence in the light most favorable to St. Paul because of the standard of review applicable to this appeal. So viewed, the evidence discloses a fraudulent scheme to obtain workers’ compensation benefits.
A. Formoso’s deceit
Three months after the Victory Button Company accident, Milan began a course of treatment for his injury. His prognosis at that time was poor, with at least one of his doctors indicating that Milan would suffer a total disability unless and until surgery was performed. That surgery never occurred. Indeed, Milan’s doctors were unanimous in concluding that he had suffered a disabling injury that prevented him, at least temporarily, from returning to work. These doctors, however, were apparently never told that during the same period that they concluded he could not work, Milan was working, as Formoso, at the Westford Regency Hotel as a dishwasher. 2 Moreover, Formoso took another job at Malu Construction in the fall of 1989, again while still under a diagnosis of disability from his doctors. Thus, during the time when Milan was diagnosed as totally disabled, Formoso was in fact performing two other jobs. In other words, the injury to Milan, though serious enough to keep Milan from working, had no corresponding effect on Formoso’s ability to work.
Indeed, Formoso apparently only lost his ability to work when he suffered an accident as Formoso at the Westford Regency Hotel. Nonetheless, there was a basis in the evidence for questioning whether that accident actually resulted in any injury. Dr. Robert Bates, a chiropractor, treated Milan from August 10, 1989, to April 6, 1990, three times a week. Though this time period included the Westford Regency Hotel accident on November 17, 1989 — and therefore should have included some loss of function corresponding to that *58 injury — Dr. Bates testified that Milan showed a “fairly consistent” improvement in condition. “There were ... waxes and waning of symptoms, in other words, be a little better, a little worse; but overall he got a little bit better through the treatment.”
Moreover, Dr. Bates put Milan through a series of circuit training exercises designed to improve muscle strength in his back. Dr. Bates kept logs of these exercises. These logs showed that between November 17 and December 4, 1989, and again between December 4, 1989 and February 2, 1990, Milan increased the weights he used on these machines as well as the number of repetitions he performed. In contrast, during the same period, Formoso was seen by Dr. Param Singh (on November 28, 1989), Dr. Roland Caron (on December 29, 1989) and Dr. Bernard Stone (on February 28, 1990). Dr. Singh reported that Formoso was experiencing low back pain that was “moderate to severe in intensity, constant in nature, aggravated by movements of the spine, by prolonged ambulation, prolonged standing, or any physical exertion.” Dr. Caron saw surgery as an option and opined that Formoso “is totally disabled at the present time” with a “guarded” prognosis. Dr. Stone confirmed the reports of low back pain and recommended surgery as a realistic option because Formoso’s symptoms were “not improving.” Dr. Bates, however, considered Milan’s progress on the circuit training exercises from November 17, 1989 to February 2, 1990, as indicative of a “positive result.”
This evidence reveals a striking disjunction during the same time frame between Milan’s improving conditions and Formo-so’s supposedly severe back problem. Indeed, the medical histories of Milan and Formoso are like those of two different people. When Milan suffered a debilitating injury, Milan needed to stop work while Formoso kept working. Likewise, when Formoso fell at the hotel, he exhibited severe symptoms while Milan showed steady progress in his rehabilitation. It is undisputed, however, that Milan and For-moso are the same person. What reconciles the contradictions is a scheme to defraud St. Paul. Before the accident at the hotel, Formoso knew — from his treatment as Milan — that the objective indicators of injury, such as x-rays, would be consistent with a lower back injury like the one he had already suffered at the Victory Button Company. 3 He knew the symptoms the doctors would expect from that injury. To fabricate a claim for workers’ compensation benefits he only needed an accident at the hotel that he could claim resulted in symptoms identical to those he was already experiencing because of his prior injury. He could then convince doctors that there was a causal connection between his symptoms and that accident by claiming to have no prior back injuries. Whether the accident at the hotel was a mere fortuity or was manufactured makes no difference. The jury could have concluded that Formoso recognized his opportunity and, using the symptoms from his Victory Button Company injury, proceeded to claim benefits from St. Paul despite the absence of any actual injury during the fall at the hotel.
B. Ellis’s complicity in Formoso’s deceit
Ellis’s representation of Milan began at some point after the Victory Button accident and continued until July of 1990 when that claim was finally settled. Ellis’s representation of Formoso began at least in November of 1989 and continued until July *59 of 1994. 4 Ellis claimed that he did not learn that his office was representing one person with different claims under two different names until March 23, 1990, when Formoso came into his office and confessed to his dual identity. There was contrary evidence, however. There was testimony that Ellis himself admitted in a June 1994 hearing on Formoso’s claim that he knew of the dual identity as early as December of 1989. Furthermore, one of Ellis’s former associates testified that Ellis met personally with every new client during the initial intake process. Accordingly, the jury could have concluded that Ellis knew from the moment he began representing Formoso that he was also representing him in a different claim under the name of Denis Milan.
Although at trial Ellis would only admit to an awareness that Formoso was “reluctant” to tell doctors of his prior medical history, the evidence supports an inference that Ellis knew that Formoso would falsify his medical history by failing to disclose to doctors examining him after the hotel accident the prior accident at the Victory Button Company. Furthermore, although Ellis claimed that attorney-client confidentiality prevented him from revealing Formoso’s dual identity to St. Paul, nothing in the record reveals that he ever sought to ensure that his analysis of that ethical issue was correct. Ellis never shared Formoso’s confidences with attorneys at his own firm. Indeed, Ellis testified that during the entire period of his representation of both Milan and Formo-so, he was the only person in his office who knew of the dual identity.
Also, Ellis’s management of the workers’ compensation department at his firm is entirely consistent with the actions of a man engaged in a fraudulent endeavor seeking to avoid exposure. Ellis controlled the flow of information in the workers’ compensation department of his law firm. His method of assigning attorneys to files ensured that those attorneys were never able to gain a complete picture of any given case. Files were assigned randomly each week, with Ellis giving each attorney only enough information to allow that attorney to deal with the specific matter at issue. Ellis handled all of the mail and controlled its dissemination. In short, Ellis’s method of managing the practice of his department reveals a man afraid of his subordinates getting enough information to form a complete picture of the department’s activities.
Likewise, Ellis went to great lengths to ensure that Formoso never had to appear before the Department of Industrial Accidents as Milan. Though claimants would normally attend hearings on the settlement of a claim, Milan did not attend a hearing on the settlement of his claim against Cigna. Instead, Ellis submitted an affidavit dated May 10, 1990 indicating that Milan was a resident of Mamaroneck, New York with no intent to return to Massachusetts. On May 16, 1990, however, Formoso was in Massachusetts receiving a medical evaluation connected with the hotel accident.
In addition to actively concealing the dual identity, Ellis consistently used others as a buffer between himself and the creation and dissemination of false information in furtherance of Formoso’s claim. *60 Formoso’s doctors incorporated the false medical history in their reports, thus unknowingly creating false reports that Ellis then used to convince St. Paul to pay benefits. Having assisted Formoso in the creation of, these false reports, Ellis then used his associates, all of whom were in the dark about the true state of affairs, to unknowingly pass along that false information to St. Paul. In short, there was abundant evidence suggesting that Ellis was a willing participant in a scheme to obtain benefits fraudulently from St. Paul.
C. The St. Paul claim and the history of this case
St. Paul began making payments on the Formoso claim shortly after receiving it in December of 1989 and continued to honor the claim until June of 1994. During that period, Formoso was seen by numerous doctors, including several performing Independent Medical Examinations (IMEs) on behalf of St. Paul. With one exception, none of these doctors also saw Milan. 5 Without exception, none were told of the prior injury. These doctors, including Formoso’s own, created reports that were forwarded to St. Paul. In fact, Ellis’s office routinely forwarded the medical reports it received on Formoso’s condition despite Ellis’s knowledge that those reports contained false information regarding Formoso’s medical history. Indeed, Ellis testified that he never tried to dissuade Formoso from lying to doctors. All of these reports attributed Formoso’s symptoms to the only accident the doctors knew of: the accident at the hotel.
St. Paul relied on these reports and their causation determinations until 1994, when it filed a motion for discontinuance to stop its payments to Formoso. At a conference on that motion on June 10th, Ellis admitted that he had known that Milan and Formoso were the same person from either December, 1989 or January, 1990. The discontinuance was eventually granted. 6 During the period of coverage, St. Paul paid $181,856.72 7 on the Formoso claim.
Approximately six months after the June conference, St. Paul filed the present action in the district court, alleging numerous counts against Ellis and Ellis & Ellis. 8 *61 Specifically, St. Paul alleged that both Ellis and his firm in their representation of Formoso committed common law fraud; engaged in unfair trade practices in violation of Mass. Gen. Laws ch. 93A §§ 2, 3, & 11; committed statutory fraud in violation of Mass. Gen. Laws ch. 152 § 14(2); and acted negligently. Hotly contested from the outset, the case went to trial before a jury in April of 1998 and lasted ten days. At the conclusion of St. Paul’s case-in-chief, the defendants moved for judgment as a matter of law on all counts. The court granted these motions from the bench. St. Paul filed a motion for reconsideration, which the court denied in a written memorandum expanding upon its earlier reasoning. St. Paul now appeals.
II.
We review the grant of motions for judgment as a matter of law de novo.
Collazo-Santiago v. Toyota Motor Corp.,
On appeal, St. Paul contends that the district court misapplied the burden of proof on its fraud claim and misapprehended the evidence on the ch. 93A and ch. 152 claims. We address each of these three arguments in turn.
A. Fraud
We begin our analysis with an examination of the Massachusetts common law of fraud. The specific fraud alleged was the misrepresentation of Formoso’s medical history and alternate identity. “To sustain a claim of misrepresentation, a plaintiff must show a false statement of a material fact made to induce the plaintiff to act, together with reliance on the false statement by the plaintiff to the plaintiffs detriment.”
Zimmerman v. Kent,
1. Reliance
In concluding that St. Paul had failed to meet its burden on this issue, the district court ruled that St. Paul had failed to adduce any evidence showing that it had relied upon the lack of evidence of a prior back injury in approving Formoso’s claim for workers’ compensation benefits. St. Paul counters with the claim that the record contains ample evidence to prove its reliance on the misrepresentations. We agree. Under Massachusetts law, in order to prove reliance upon a misrepresentation, it is not necessary to prove that the false representations were “the sole or predominating motive that induced the victim to part with his money or property.”
Nat'l Shawmut Bank v. Johnson,
When measured against this standard and with due appreciation for the circumstantial evidence adduced in this case, St. Paul provided more than enough evidence to allow a jury to conclude that Formoso’s misrepresentations about his medical history were a substantial factor in its acceptance of Formoso’s claim for benefits. Elaine Young was a decision maker with primary authority for the handling of the Formoso claim so long as total expenditures did not exceed $150,000. She testified explicitly to her responsibilities in handling claims. As part of those responsibilities, she would “obtain medical documentation of the person’s disability, verify that the accident did happen, and ... schedule IMEs and make payment if necessary — if seemed deemed [sic] suitable.” Her decision to make payments necessarily involved an evaluation of medical reports, particularly their determinations about disability, injury, and causation. Young testified that when deciding whether payments were appropriate, she explicitly relied upon medical reports produced by IMEs. Only if those reports contained discrepancies or problems that were readily apparent from the report itself would she question their medical determinations. Indeed, the evidence of Young’s reliance upon these reports was bolstered by her testimony that she never had any doubts during her handling of the Formoso claim that an injury had occurred at the West-ford Regency Hotel. This lack of doubt is unremarkable given that none of the reports contained any evidence that would have supported a contrary conclusion.
Young’s evidence was bolstered by the testimony of Betty Clark, who was Young’s subordinate, and by Ellis himself. Clark testified that she would make recommendations about how to proceed after conducting her own review of the records. She continued to recommend payment of Formoso’s claim because she never saw “any medical documentation to file for a discontinuance.” Ellis acknowledged that insurers take into account medical records and the representations about causation when making decisions in the course of a claim:
Q. In circumstances where there is an ongoing claim for a back injury, isn’t it *63 true that those are the circumstances where an insurer, like St. Paul, would base some of their decisions on these reports?
A. Some of their decisions.
This evidence is sufficient to have allowed the jury to conclude that, although not the only factor in St. Paul’s decision to pay benefits, the falsified medical history contained in the medical reports was a factor in that decision.
2. Damages
In ruling that St. Paul failed to carry its burden of proving that it was damaged by the misrepresentations, the district court said that St. Paul had to “show that had the information about a prior injury been revealed, it would have relieved St. Paul of an obligation to pay for the injuries resulting from the” hotel accident. To carry this burden, the court reasoned, St. Paul needed to adduce evidence — which, in this context, would need to be expert medical testimony — demonstrating that the hotel accident either did not result in an injury or resulted in an injury that was “fleeting and temporary.” We disagree with this analysis.
The court did not appreciate the manner in which the workers’ compensation context of this case affects the relative burdens of the parties on the damages element of St. Paul’s fraud claim. To be sure, under Massachusetts law, “[t]he burden of proving fraud by a preponderance of the evidence rests on the party alleging it.”
Connolly v. Rochester Shoe Tree Co.,
Nonetheless, it does not follow that because St. Paul’s decision to deny the payment of benefits could be overruled by a state agency, it also bore a burden to prove in this fraud action, as Ellis claims, that “as a result of the failure to disclose Formoso’s prior injuries, it was required to pay workers’ compensation benefits that it would not otherwise have been obligated to pay under the worker compensation laws.” In order to understand why St. Paul’s burden does not extend so far, it is first necessary to examine its burden on damages absent this workers’ compensation anomaly.
a. Detrimental reliance
Once St. Paul provided evidence that it relied upon the misrepresentation, it needed to show that this reliance was detrimental in order to prove that it was damaged.
Zimmerman,
*64 Although the district court fairly noted that St. Paul did not provide expert medical testimony directly on this point, the record contained sufficient circumstantial evidence to enable St. Paul to prove that it would have contested Formoso’s right to payment if it had known his full medical history. As noted, Clark testified that the incomplete medical reports did not give grounds for seeking a discontinuance. The jury would have been entitled to conclude that at least some of those reports would have been different if the doctors examining Formoso had been told that he had a prior injury at the Victory Button Company. For instance, one of the doctors that St. Paul hired to perform an IME, Dr. Metzmaker, testified that determining causation was a significant part of his responsibilities in examining Formoso. According to Dr. Metzmaker, medical history was important to that determination because the onset of pain provided a significant clue as to the cause of the injury. Because Formoso concealed a prior injury to the same part of the back, all of the evidence of the onset of pain given to Dr. Metzmaker and the other doctors indicated that this pain began after the Westford Regency Hotel accident. The jury would have been entitled to conclude that, based upon the importance of pain in determining causation, at least some of the medical reports would have reached a different conclusion about the cause of Formoso’s symptoms, thus giving St. Paul the evidence it needed to discontinue payment.
Ellis’s disclosure of the Victory Button Company accident also would have allowed St. Paul to discover the prior treatment, Formoso’s dual identity, and the scheme to defraud St. Paul. It is inconceivable that St. Paul would have continued to pay benefits to Formoso under those circumstances. Thus, the evidence before the jury was more than sufficient to demonstrate that St. Paul’s reliance upon the false representations was detrimental. Put another way, St. Paul proved that it was damaged by the payment of money it would not have chosen to pay if Ellis had disclosed Formo-so’s full medical history.
b. St. Paul’s workers’ compensation obligations
We next turn to the question of whether the workers’ compensation context increases St. Paul’s burden beyond this showing of detrimental reliance. We first look to St. Paul’s obligations under the workers’ compensation laws. The existence of a second injury with a causal relationship to the accident at the West-ford Regency Hotel is central to the issue of whether St. Paul was required to pay benefits to Formoso. Under Massachusetts workers’ compensation law, when an employee suffers an accident that exacerbates a pre-existing injury or that causes a new injury at the same location as a prior injury, full responsibility for that injury rests with the insurer providing coverage for the second accident and not with the insurer who was responsible for the prior injury. Thus, “[w]here an employee ... has suffered a series of compensable injuries, he has a right to be paid compensation by the insurer on the risk at the time of the most recent injury shown to have a causal connection with his present incapacity.”
Falcione’s Case,
It does not follow, however, that because St. Paul would have been
*65
required to pay benefits if there were a second injury, it also had the burden of proving the absence of such an injury. Indeed, Massachusetts law is squarely to the contrary. “It has uniformly been held by this court that the burden of proof remains throughout the trial on the [employee] to establish his case on all the evidence where liability is denied, or the amount to be recovered is in issue.”
In re Ginley,
If St. Paul had discovered the fraud and contested Formoso’s right to receive benefits, therefore, Formoso would have borne the burden of proving his entitlement to those benefits. We conclude that the Massachusetts courts would not shift this burden to the insurer in a later action alleging fraud. Indeed, Ellis has provided no argument explaining why the burden should shift and so increase the insurer’s proof beyond a showing of detrimental reliance. Nor could he. Ellis’s argument for burden shifting on the damages issue only arises once the insurer has demonstrated all of the other essential elements of a fraud that spared Formoso and Ellis the burden of proving the claim for benefits in a workers’ compensation proceeding. Allowing the burden to shift to the insurer in this fraud action despite that avoidance would only serve to reward fraudulent wrongdoing. Given the striking similarities between the injuries alleged to have resulted from both the Victory Button and the Westford Regency Hotel accidents, along with the other facts of this case, that burden may have been a difficult one for Formoso and Ellis to surmount in a workers’ compensation proceeding. We decline to reward such fraud by shifting this burden to St. Paul. Of course, it remains open to Ellis, if he chooses to do so, to shoulder the burden of proving, as a defense to the damages claim in this fraud case, that despite his wrongdoing, St. Paul would still have been required to pay the benefits it paid to Formoso.
10
Cf. Lorber v. Beebe,
Our conclusion on this point is bolstered by the Massachusetts cases analyzing burdens of proof in case within a case attorney malpractice actions. In these actions, once some form of negligence has been shown on the part of the defendant attorney in the malpractice action, the issue of the defendant’s ultimate liability for damages turns upon whether his or her negligence affected the result in the prior action. The burden of proof, however, does not shift between the prior
*66
action and the action for malpractice. “The factual issues once involved in the underlying action are presented to the trier of fact in the [malpractice] case with the burden of proof placed precisely as it was in the underlying action itself.”
Glenn v. Aiken,
B. The Chapter 93A claims
St. Paul also appeals from the entry of judgment as a matter of law on its count alleging violations of Mass. Gen. Laws ch. 93A §§ 2, 3 & 11 (ch. 93A). “Chapter 93A ‘created new substantive rights by making conduct unlawful which was not unlawful under the common law or any prior statutes.’ ”
Schubach v. Household Finance Corp.,
Though ch. 93A provides a broad remedy, it is only directed at conduct that occurs in the course of trade or commerce. “[U]nfair or deceptive acts or practices” therefore can only form the basis of a ch. 93A claim if those acts “are perpetrated in a business context.”
Lantner v. Carson,
We disagree with the court’s characterization of the events at issue here. To be sure, the “adversarial workers’ compensation litigation” formed a backdrop to Ellis’s actions. The jury could have easily concluded, however, that those actions were not vigorous advocacy in pursuit of Formoso’s workers’ compensation claim. Instead, the jury could have found that Ellis used the workers’ compensation litigation to add a veneer of legitimacy to a fraudulent scheme to dupe St. Paul into paying benefits to which Formoso was not entitled. Such a scheme affects trade or commerce and can be a basis for ch. 93A liability.
See Coggins v. Mooney,
C. The Chapter 152 § 14 claims
Finally, we turn to St. Paul’s challenge to the district court’s entry of judgment on the ch. 152 § 14(2) claims. Section 14(2) prohibits fraud in workers’ compensation proceedings. The statute was amended by the Massachusetts Legislature in 1991 to make its scope more explicit.
11
In the pre-amendment version, section 14(2) specifically referenced fraud by a party.
12
That
*68
language was replaced in 1991 so that section 14(2) prohibited fraud by “a party, including an attorney or expert medical witness acting on behalf of an employee or insurer.” Mass. Gen. Laws ch. 152 § 14(2). Approved on December 23, 1991, this amendment was effective upon passage. “This new amendment was deemed substantive, applying only to ‘all fraudulent activity occurring after the effective date of this act.’ ”
Murphy v. Trans World, Airlines,
11 Mass. Workers’ Comp. Rep. 94,
The district court concluded that the pre-amendment version could not apply to Ellis’s conduct prior to December 23, 1991, a ruling that St. Paul does not challenge on appeal. Instead, the district court focused upon the language in amended section 14(2) limiting liability to those cases in which fraud is perpetrated “in any proceeding within the division of dispute resolution.” Mass. Gen. Laws ch. 152 § 14(2). After correctly noting the paucity of case law construing section 14(2), the court turned to the decisions of the Department of Industrial Accidents, reasoning that it should be guided by decisions by the agency charged with administering chapter 152. Specifically, it relied upon the Department’s interpretation of section 14(2) in
Murphy,
The district court confirmed this approach in its written memorandum denying St. Paul’s motion for reconsideration. It also dealt with a slightly different issue: whether the Department’s decision in
Pirelli v. Caldor, Inc.,
11 Mass. Workers Comp. Rep. 380,
On appeal, the section 14(2) issue has become more complicated because the principal case the district court relied on,
Murphy,
Although
Murphy’s Case
creates some ambiguity in Massachusetts law regarding the definition of “proceeding” in section 14(2), we do not have to resolve that ambiguity. Whatever its parameters, the
Murphy’s Case
definition is broader than that adopted by the Department in
Murphy v. Trans World Airlines,
and we conclude that the record would allow a finding of section 14(2) liability even under the Department’s more restrictive definition. In applying the
Murphy
decision, the Department has clarified the scope of section 14(2) liability. Such liability can be grounded upon evidence that the accused party has “participated in the creation or presentation of evidence which he knows to be false,” combined with a showing that this false evidence was admitted into evidence at one of the four proceedings identified in
Murphy v. Trans World Airlines. Pirelli
Contrary to the district court’s conclusion, the record contains evidence that would support the conclusion that Ellis participated in the creation of false evidence that was later admitted in a proceeding before the Department. In the late fall of 1993, Dr. Arthur Safron performed an IME on Formoso. In connection with that examination, he created a report on November 27, 1993. That report indicated that Formoso “specifically denies any pre-existing back problem.” Ellis admitted that he knew that Formo-so’s statement was false, and a jury would be entitled to conclude that Ellis knew that Formoso would make such false statements when examined by doctors. Despite his knowledge of this false report, Ellis took no action to prevent its use in a Department proceeding, and on February 27, 1994, this report was entered into evidence during a conciliation related to St. Paul’s motion for a discontinuance. Under the interpretation of the statute provided by the Department, this is sufficient evidence to ground liability under 14(2).
III.
In conclusion, we note that St. Paul also argues in the alternative that the district court abused its discretion by placing limitations upon the testimony of three of St. Paul’s witnesses and then entering judgment as a matter of law against it because of the insufficiency of its evidence. Having concluded that St. Paul’s evidence was sufficient without the testimony of these three witnesses, we decline to address this alternative argument.
Judgment vacated. Remanded for further proceedings consistent with this decision.
Notes
. Formoso appears to have been an undocumented alien, and there was evidence that, as Milan, his legal status had already been called into question.
. Ellis disputes this, claiming that Milan/For-moso only began working at the Hotel in October of 1989. The hotel owner, however, testified that Formoso was a steady employee from March of 1989 until the accident in November of 1989.
. Formoso had also been injured in the same part of his back in 1987.
. The evidence is conflicting as to when representation of Formoso began. Ellis claimed representation did not begin until shortly before the December 1989 filing of the workers' compensation claim for the Westford Regency Hotel accident. Nonetheless, Ellis's business records indicate that his office was meeting with Formoso on his claim as early as November 28, 1989.
. Dr. Richard Hawkins saw both Milan and Formoso. Specifically, Dr. Hawkins saw Formoso on March 13, 1990 and produced a report for St. Paul. Like all of the medical reports forwarded to St. Paul, this one contained no reference to the earlier Victory Button accident. On the other hand, Dr. Hawkins saw Milan on March 27, 1990 and produced a report, forwarded to Cigna, that did not reflect the later Westford Regency accident. According to these two reports, For-moso, who was reported as weighing 220 pounds with a height of 6'1", lost both weight and height before being seen as Milan, described as weighing 195 pounds with a height of 5'10". The significance of these oddities is unclear.
. St. Paul initially based its motion on an IME indicating an improvement in Formoso’s condition, but later added allegations of fraud. Although the record is not entirely clear on this point, it appears that the Department approved die discontinuance of benefits solely because of Formoso’s improvement rather than fraud.
. This figure represented $140,888.75 in indemnity payments, $15,356.45 in payments to physicians, $2,420.00 in payments for Independent Medical Examinations, $10,023.70 in investigative costs, $1,237.36 in miscellaneous payments, and $11,930.46 in payments to law firms.
. St. Paul also named as defendants Debra Kagan, Robert Marquis, and Richard Sur-rette, all attorneys employed by Ellis & Ellis, as well as William Russel, a workers’ compensation litigation administrator at the firm, Anthony Ranauro, a claims administrator at the firm, Joan Trottier, a registered nurse employed by the firm, and David Formoso. Formoso was never served and appears to no longer reside in the country. The remaining *61 six defendants entered into a settlement with St. Paul in July of 1997, pursuant to which they were dismissed from the case.
. Ellis himself effectively conceded that the prior injury was a material fact. Materiality depends upon "whether 'a reasonable man would attach importance [to the fact not disclosed] in determining his choice of action in the transaction in question.' ”
Zimmerman,
. Here, in the proof of Ellis's defense to St. Paul’s allegations of fraud, expert medical testimony becomes a central issue.
Medeiros v. San Toro Mfg.,
7 Mass. Workers' Comp. Rep. 66,
. The current version of section 14(2) provides in pertinent part:
If it is determined that in any proceeding within the division of dispute resolution, a party, including an attorney or expert medical witness acting on behalf of an employee or insurer, concealed or knowingly failed to disclose that which is required by law to be revealed, knowingly used perjured testimony or false evidence, knowingly made a false statement of fact or law, participated in the creation or presentation of evidence which he knows to be false, or otherwise engaged in conduct that such party knew to be illegal or fraudulent, ... the party shall be assessed, in addition to the whole costs of such proceedings and attorneys' fees, a penalty payable to the ággrieved insurer or employee, in an amount not less than the average weekly wage in the commonwealth multiplied by six.
Mass. Gen. Laws ch. 152 § 14(2). The revision to section 14(2) also vested jurisdiction for such actions in the Department of Industrial Accidents. Old section 14(2) had placed jurisdiction exclusively in the Superior Court.
. Old section 14(2) provided in pertinent part:
*68 If it is determined that any party has brought, prosecuted, or defended proceedings with the intent to defraud, the party shall be assessed, in addition to the whole costs of such proceedings and attorney's fees, a penalty, payable to the aggrieved insurer or employee, in an amount not less than the average weekly wage in the commonwealth multiplied by three.
. The district court appears to have misread Pirelli in concluding that it applied only to false statements made to medical examiners. The false statements in that case, though made to a medical examiner, supported section 14(2) liability because they caused the creation of a false report that was then entered into evidence at a proceeding.