Wis.LIRC WC Decision: Palmer - June 10, 1993 - ND � 9.2 - Petition for Review - late petition - dept. failure to mail copy of decision to party's attorney - probable good cause that reason for late petition was beyond the party's control; ND � 10.5 - Review of Compromise - new evidence, gross inequity -- "grossly inequitable" means more than after-the-fact perception that compromise was "a bad deal."

BEFORE THE
STATE OF WISCONSIN
LABOR AND INDUSTRY REVIEW COMMISSION

TONI L PALMER, Applicant

TORO COMPANY, Employer

TORO COMPANY, Insurer
c/o ALEXIS RISK MANAGEMENT

WORKER'S COMPENSATION DECISION
Claim No. 86012679

On January 7, 1993, the department received a petition for commission review from the applicant dated January 6, 1993. The petition requests review on an administrative law judge's November 19, 1991 decision which confirmed a compromise agreement entered into between the applicant and the employer. Both the applicant and the employer submitted briefs to the commission in support of their positions. This case poses two issues: (1) whether the commission should accept the applicant's petition for commission review, and (2) whether the commission should set aside, modify or confirm the compromise agreement between the parties. The commission has carefully reviewed the entire record in this matter and is prepared to proceed to disposition.

1. Timeliness of Petition for Commission Review.

Section 102.18 (3), Stats., provides, in part, as follows:

"A party in interest may petition the commission for review of an examiner's decision awarding or denying compensation if the department or commission receives the petition within 21 days after the department mailed a copy of the examiner's findings and order to the party's last-known address. The commission shall dismiss a petition which is not timely filed unless the petitioner shows probable good cause that the reason for failure to timely file was beyond the petitioner's control . . ."

Section LIRC 1.02, Wis. Admin. Code provides in relevant part as follows:

"All petitions for commission review shall be received within 21 days from the date of mailing of the administrative law judge's findings and decision or order, except as provided under this section. 'Received' means physical receipt. A mailed petition postmarked on or prior to the last day of an appeal period but received on a subsequent day is not a timely appeal. All petitions or appeals shall be in writing."

Section LIRC 3.01, Wis. Admin. Code, which deals specifically with worker's compensation cases, provides in relevant part as follows:

"A petition for commission review of the findings or order of a department of industry, labor and human relations' administrative law judge shall be received within 21 days from the date of mailing of the findings and order to the parties and during regular office hours by an employe of either the worker's compensation division, or unemployment compensation division of the department."

The administrative law judge's order confirming a prior order approving the compromise was dated and mailed on November 19, 1991. Consequently the last day on which a timely petition for review could have been filed was December 10, 1991. The petition for commission review was received on January 7, 1993.

In his petition for commission review, the applicant's attorney stated that the petition was late because the administrative law judge's November 19, 1991 decision was initially mailed to the wrong post office box. As a result, it was returned to the department without having ever been received by the applicant's attorney. The applicant's attorney did not discover this, however, until he inquired about the status of the case in mid-December of 1992. Shortly thereafter, a second copy of the decision was sent to him on December 22, 1992, and he first received the decision on December 23, 1992. Because his petition for commission review was received by the department less than 21 days after the he first recieved a copy of the appeal tribunal decision, the applicant's attorney contends that the petition should be accepted.

As noted above, sec. 102.18 (3), Stats., permits a party in interest to petition for commission of an administrative law judge's decision within 21 days after the department mails the copy of the administrative law judge's findings and order to the party's last-known address. The employer contends that a copy of the administrative law judge's decision was mailed to the applicant, and thus the statute was complied with even if the applicant's attorney never received his copy. However, a strong argument could be made that once a party appears by attorney in a worker's compensation case, the party's last-known address for the purposes of the legal proceedings arising from that case could reasonably be considered to be his or her attorney's address. Certainly, when an applicant hires an attorney to represent him or her in a worker's compensation claim, he or she may reasonably understand that a copy of any decision will be sent to that attorney who will take further action on the decision, whether to appeal it, defend it against an appeal, or simply explain it to the applicant.

The commission concludes that the fact that the copy of the decision sent to the applicant's attorney was misaddressed shows good cause that the applicant's failure to timely file a petition for commission review was beyond her control. First and most obvious, the applicant had no control over how the decision sent to her attorney was addressed. Moreover, after examining the file, the commission is convinced that the decision was misaddressed as a result of a simple clerical error; nothing in the file indicates that the applicant or her attorney provided the wrong address or information which might have caused the petition to be misaddressed. While it is true that the record indicates that a copy of the decision was sent to the applicant as well as her attorney, the commission is not inclined to place upon the applicant the burden of contacting her attorney and determining whether he had in fact received a copy of the decision as was indicated on the last page of the decision. Rather, once the applicant hired an attorney to represent her and notified the department of that, the focus shifts to whether or not it was within her attorney's control to file a timely petition. The department's consistent practice is to mail copies of decisions to attorneys of record, and the applicant may reasonably rely on that practice particularly where the decision itself designates the attorney for receipt of a copy. Because the original copy of the decision sent to the applicant's attorney was misaddressed and never delivered, the commission concludes that his failure to file a timely petition of that decision was beyond his control.

The commission therefore finds that the petition for commission review was not timely, but that the applicant/petitioner has shown probable good cause that the reason for having failed to file a timely petition was beyond her control, within the meaning of sec. 102.18 (3), Stats.

2. Reopen or Set Aside the Compromise Agreement.

The commission has reviewed the applicable records and evidence with respect to the issue of whether to confirm or set aside the earlier order approving the compromise agreement (or, in effect, whether to reopen the compromise). The commission has also considered the applicant's petition and all relief requested. The commission finds that the administrative law judge's findings and order on the issue of whether to reopen the compromise are supported by the records and evidence. The commission therefore adopts the findings and order of the administrative law judge as its own. The commission provides a brief outline of its reasoning in the memorandum opinion attached to this decision.

ORDER

The Labor and Industry Review Commission accepts the petition for commission review and proceeds to the merits of the case. The commission orders that the findings and order of the administrative law judge are hereby affirmed.

Dated and mailed June 10, 1993
ND � 9.2 ND � 10.5

/s/ Pamela I. Anderson, Chairman

/s/ Richard T. Kreul, Commissioner

/s/ James R. Meier, Commissioner

MEMORANDUM OPINION

The commission and the department have authority to reopen a compromise agreement under sec. 102.16 (1), Stats. That section provides that, within one year after a compromise is filed or an award has been entered on the compromise, a party may request that the compromise be opened and ask the department to review or modify a compromise agreement. Before setting aside or modifying a compromise, the department has generally required a showing of "fraud, newly discovered evidence, a substantial change in the applicant's condition since the date of the compromise, or gross inequity." In its decisions on the subject, the commission usually applies an even narrower standard which allows setting aside compromises only in cases of "fraud, duress, important newly discovered evidence, overreaching or reasonable misinterpretation of the terms of the compromise." See Julie M. Stuart-Giese v. Shoeneck Containers & United States Fire Insurance Company, Claim No. 85-060165 (commission decision dated February 5, 1990); Carol J. Hafner v. Amery Constant Care, Inc., & Lumberman's Mutual Casualty Co., Claim No. 85-050202 (commission decision dated September 4, 1990). While some commission decisions have included the "gross inequity" standard, the use of the term may understandably be questioned in light of its subjective meaning that one party made "an extremely bad deal."

In this case, the applicant, her attorney and the employer's attorney signed the comprosmise agreement on January 31, 1990. An administrative law judge issued an order on February 22, 1990 which approved the compromise and made an award based on the compromise. The applicant filed an application for review of the compromise which was dated February 12, 1991 and received by the department on February 15, 1991. The application was thus timely under sec. 102.16, Stats.

The applicant's request for reopening the compromise in this case is based on a claim of important new evidence and gross inequity. The applicant now contends that the opinion of Dr. Sherwin Goldman and a vocational expert's report (both obtained after the compromise was approved) should be considered as "important new evidence" and a valid reason for reopening the claim. The applicant also contends that, based on the vocational expert's opinion that she has suffered a 100 percent loss of earning capacity, the total amount of her award, in present value, exceeds $142,000. She contends that it was "grossly inequitable" to settle this $140,000 claim for merely $7,500.

The commission sees problems with the applicant's position, however. First, Dr. Goldman's opinion does not actually provide new evidence or a described change in the applicant's condition. Basically, Dr. Goldman reaffirmed the applicant's lifting restriction already imposed by Drs. Chestnut and Hayden (although he believes she should be restricted to lifting 10-15 pounds instead of the 15-20 pound restriction imposed by the other doctors). Further, while Dr. Goldman imposed restrictions on standing, walking, twisting, climbing, and bending for prolonged periods of time, Dr. Chestnut had already noted the applicant's difficulty in prolonged standing and specifically stated that she should avoid repetitive bending in her December 10, 1987 letter and her practitioner's report. Someone who has difficulty with prolonged standing and is restricted from repetitive bending would also, by logical extension, be restricted from prolonged twisting and climbing. Consequently, Dr. Goldman's opinion neither describes some change in the applicant's condition nor provides new evidence.

In addition, the applicant could have hired a vocational expert before entering into the compromise, but chose not to. The fact that the vocational expert's report was not produced earlier may have been either a deliberate strategy chosen by the applicant's attorney or an unintentional oversight. In either event, the report would not be "newly discovered evidence" under the commission's usual formulation which requires that a party not be negligent in failing to discover such evidence before the hearing was held. Naden v. Johnson, 61 Wis. 2d 375, 384 (1974). Finally, the report of the vocational expert does not say whether or not it turns on Dr. Goldman's opinion, but rather cites that opinion together with the opinions of Drs. Chestnut and Hayden as the general basis for the report. There is no evidence that the "changing condition" which the applicant contends is contained in Dr. Goldman's report would have made any difference in the vocational expert's opinion.

The applicant's final argument is that the award was "grossly inequitable." Again, the formulation most often used by the commission when determining whether to reopen a compromise does not consider whether the result of the compromise is grossly inequitable. Even considering whether the compromise was grossly inequitable, however, more is necessary than the applicant's after-the-fact perception that the compromise was "a bad deal." As the commission noted in Michael W. Blenke v. American Can Company, Claim No. 87-037750 (commission decision dated September 9, 1992), "a compromise envisions and incorporates the right . . . to bargin away and/or settle and receive payment for all aspects of a claim . . . including those . . . for which in the future, there may be . . . a basis for compensation. . . ." That is, a party could always argue that a compromise agreement is a poor deal compared to an adjudication by the department or the commission totally in his or her favor.

In this case, the fact that the applicant's vocational expert opined that she had a 100 percent loss of earning capacity does not automatically mean that she had such a loss or that the department or the commission would have found such a loss. Further, the commission is not inclined to find "gross inequity" in this case where there was nothing coercive or unfair about the compromise to which the applicant and her attorney voluntarily agreed. When a party makes a full and knowing agreement to a compromise, the rules of equity are less likely to provide relief. The general rule is that the consent which gives rise to a compromise order also gives rise to an estoppel to attack the order. See Lubke v. Watertown, 230 Wis. 512 (1939).

101 - CD3510

cc:

ATTORNEY WALTER D THUROW
LAW OFFICES OF WALTER D THUROW

ATTORNEY RONALD M FITZPATRICK
FITZPATRICK SMYTH DUNN & FITZPATRICK

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