P O BOX 8126, MADISON, WI 53708-8126 (608/266-9850)




Claim No. 93045798

On March 11, 1996, an administrative law judge for the Workers Compensation Division of the Department of Workforce Development issued a decision approving a compromise in this matter. On March 7, 1997, the applicant filed an application for review of compromise under Wis. Stat. 102.16 (1). A prehearing conference was held on September 11, 1997, at which the applicant appeared pro se. Following the prehearing conference, Administrative Law Judge R. A. Collins confirmed the compromise agreement by order dated September 29, 1997.


Pursuant to Wis. Stat. 102.18 (3), the Labor and Industry Review Commission remands this case to the Worker's Compensation Division for a hearing and decision before another administrative law judge.

Dated and mailed: January 15, 1998
beaudgi.wpr : 101 : 7   ND 7.16

Pamela I. Anderson, Chairman

David B. Falstad, Commissioner

James A. Rutkowski, Commissioner


The commission sees two issues in this case:

(1) Can the department resolve this without a full hearing? and

(2) If so, has the applicant stated sufficient reason for setting aside the compromise?

Because the commission concludes a hearing was necessary in this case, it remands on the first issue without reaching the second issue.

Wisconsin Statutes 102.16 (1) provides in relevant part:

"Any controversy concerning compensation . . . shall be submitted to the department in the manner and with the effect provided in this chapter. Every compromise of any claim for compensation may be reviewed and set aside, modified or confirmed by the department within one year from the date the compromise is filed with the department, or from the date an award has been entered, based thereon, or the department may take that action upon application made within one year . . . The employer insurer or dependent under 102.51 shall have equal rights with the employe to have review of a compromise or stipulation of settlement. Upon petition filed with the department, the department may set aside the award or otherwise determine the rights of the parties."

Because Wis. Stat. 102.16 (1) uses the word "may" in discussing reviews of compromise, one might assert that the department may exercise its discretion in determining whether to hold a hearing on that issue. However, that statute also provides that review of a compromise is had by filing an "application." Wisconsin Statutes 102.17 (1)(a) requires the department to hold a hearing whenever any application, on any dispute or controversy, is filed. The law does permit the department to require a pre-hearing conference after which the department may order the disclosure or exchange of information necessary to resolve the dispute expediently. Failing such disclosure, the department may dismiss the claim, without prejudice. Wisconsin Statutes 102.17 (1)(b). In addition, of course, the department may resolve any application by default without a hearing under Wis. Stat. 102.18 (1)(a).

In this case, the department evidently sent the applicant two form GL31 letters requiring the applicant to submit affidavits and medical records. However, the letters were sent before the prehearing conference, so the applicant's failure to comply would not seem to be grounds for a dismissal of the application without prejudice under Wis. Stat. 102.17 (1)(b). Further, ALJ Collins did not indicate that he dismissed the application for review of compromise for failing to comply with a prehearing order, but rather simply confirmed the compromise.

The commission views ALJ Collins' order as disposing of the application without hearing by default pursuant to Wis. Stat. 102.18 (1)(a). Normally, a default order is issued when a party fails to appear, or when a party fails to file an answer or other required document. (1) In other words, such an order presumes the party against whom the order is issued is somehow in default. Aside from the failure to comply with the GL31 letter, the commission's review of the record discloses no basis for concluding that the applicant was in "default."

One might argue that the term "default" in this context should include a failure to state a claim upon which relief may be granted. With respect to applications for review of compromise, the commission has consistently held that compromises should not be reopened absent gross inequity, important newly- discovered evidence, fraud, duress, or mutual mistake. Yench v. UW Oshkosh, WC nos. 90029552 and 89076285 (LIRC, July 31, 1995). In his application for review of compromise, and in his petition for review to this commission, the applicant argues that "no payment whatsoever for permanent disability was noted in the compromise agreement;" that the money paid from his compromise settlement to June Beaudoin pursuant to a family court order was not used for child support; that the ALJ did not look out for the applicant's best interests; and that the insurer paid monies, presumably to Ms. Beaudoin, by mistake.

In this case, the compromise agreement clearly states that it compromised any claim for permanent disability. In addition, the respondent's attorney sent the applicant's attorney a copy of the family court "income withholding" order before the applicant signed the compromise. Further, the statutory provisions allowing the involuntary assignment of workers compensation benefits to pay child support orders contemplate a broad assignment of all workers compensation benefits as income. Wis. Stat. 102.27 (2)(a) and 767.265 (1). Finally, while the applicant contends that Ms. Beaudoin did not use the money she was paid for child support, neither the workers compensation division nor this commission has any jurisdiction over that matter. It could thus be argued that the assertions made by the applicant in support of his application for review of compromise are insufficient to support reopening the compromise as a matter of law.

On the other hand, the applicant in this case is unrepresented. As hearing examiners, administrative law judges have the authority to develop a record independently of a party's, particularly a pro se party's, presentation of the facts. Further, the statutes expressly allow a summary disposition without a hearing on a default, but not for a failure to properly allege the facts necessary to support a claim. More importantly, the request to have a compromise reviewed states a claim for all practical purposes. Finally, even if the applicant failed to state expressly an adequate reason for setting aside the compromise at the prehearing conference, some record must be made to allow the commission to review the matter and make that finding. Accordingly, the commission remanded this case for a hearing on the record.

735 N WATER ST STE 930

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(1)( Back ) Link Farms, Inc., v. LIRC, case no. 84-1179 (Wis. Ct. App. June 13, 1985).