STATE OF WISCONSIN
LABOR AND INDUSTRY REVIEW COMMISSION
P O BOX 8126, MADISON, WI 53708-8126 (608/266-9850)

LOLAGENE M GRUEL, Applicant

DOC TAYCHEEDAH CORRECTIONAL INSTITUTION, Employer

EMPLOYE TRUST FUNDS, Insurer

WORKER'S COMPENSATION DECISION
Claim Nos. 1990011440, 1991018729

On October 23, 1998, Administrative Law Judge Edward W. J. Falkner issued an order in this matter. The Department of Employe Trust Funds (hereafter DETF) filed a timely petition for commission review.

ORDER

Based on its authority under Wis. Stat. § 102.18(3), the commission sets aside the ALJ's Findings and Order, and remands for further appropriate action, including, provisionally, hearing on the application before another ALJ.

Dated and mailed April 30, 1999
gruello.wpr : 101 : 3  ND § 8.8

David B. Falstad, Chairman

/s/ Pamela I. Anderson, Commissioner

/s/ James A. Rutkowski, Commissioner

MEMORANDUM OPINION

This is a "duty disability case." Duty disability benefits are awarded under Wis. Stat. § 40.65, which is part of the statutory chapter governing the state employe benefits generally. Certain aspects of the procedure used in duty disability cases, however, are governed by certain sections of the worker's compensation act in ch. 102, Wis. Stats.

Duty disability benefits may be claimed by a "protective occupation participant" under Wis. Stat. § 40.65. A "protective occupation participant" is a public employe whose activities require exposure to a high degree of danger and also require a high degree of physical conditioning. Claims for duty disability are handled initially by the Department of Employe Trust Funds (DETF). A person applying for duty disability benefits must submit to DETF a certification of disability from at least two doctors, and a statement from his or her employer stating that the injury or disease causing the disability was duty-related. DETF then determines whether the person is entitled to duty disability benefits.

If unsatisfied with DETF's determination, the person may "appeal" to the Department of Workforce Development (DWD.) In hearing the appeal, DWD is required to follow the general procedures used in worker's compensation claims. DETF is an "interested party" in the appeal to DWD by the express language of Wis. Stat. § 40.65(1)(b)5.

In this case, the applicant filed her duty disability application in May 1997. DETF denied the applicant's request for duty disability benefits by letter dated June 25, 1997. DETF explained that the applicant did not submit reports from two doctors, as required under 40.65(1)(b)2. The applicant then appealed to DWD by filing an application for hearing on August 27, 1997.

The hearing application names the State of Wisconsin Taycheeda Correctional Institution (DOC) as employer and the State of Wisconsin Department of Employe Trust Funds as insurer. The file copy of the hearing application indicates it was served on both DOC and DETF. DOC filed an answer admitting liability under the worker's compensation statutes to the extent previously paid under chapter 102, Stats. DETF never answered with respect to the duty disability claim under Wis. Stat. § 40.65.

The hearing was scheduled before ALJ Falkner for October 7, 1998. Evidently, the applicant did not receive the second medical report required under Wis. Stat. § 40.65(1)(b)2 until September 22, 1998. The applicant admits that by the time she filed the report, it was only 13 days before the hearing, after the 15-day filing deadline prescribed under Wis. Stat. § 102.17(1)(d).

Accordingly, DETF objected to the second report, marked as hearing exhibit F. The ALJ excluded it.

The applicant then moved for a default order in her favor, noting that DETF had never filed an answer to her application for hearing before DWD. As noted above, Wis. Stat. § 40.65(1)(b)4 specifies that duty disability claims are to follow the procedures under Wis. Stat. § § 102.16 though 102.26. A department footnote (1) to Wis. Stat. § 102.17, explains that DWD has adopted certain rules of practice in worker's compensation cases. The rules require "adverse parties" to file an answer within 20 days of service of the application. Moreover, the rules specifically permit an ALJ to issue an order, without hearing, upon an adverse party's default in failing to file an answer. (2)

ALJ Falkner concluded that DETF was in default by failing to file an answer. He acknowledged that the applicant was aware of DETF's position before she even filed her hearing application on August 27, 1997, as DWD had denied her claim in writing two months earlier on June 25, 1997. However, the ALJ concluded a prior denial of the claim could not serve as a retroactive answer to an application for hearing which had not yet been filed. As an adverse party, ALJ Falkner reasoned, DETF was required to file an answer under Wis. Stat. § 40.65(1)(b)5 and Wis. Admin. Code § DWD 80.05.

ALJ Falkner noted that he was not required to issue a default order in the applicant's favor, despite DETF's failure to file an answer, as the language of Wis. Admin. Code § DWD 80.05(1) put the matter in his discretion. He noted, however, DETF's insistence on the adherence to the 15-day filing requirement under Wis. Stat. § 102.17(1)(d). Reasoning in part that a party who lives by the sword of legal technicality must surely perish by it, ALJ Falkner used his discretion to issue a default order under Wis. Stat. § 102.18(1)(a).

The commission agrees that DETF was required to file an answer to the hearing application on the duty disability claim. DOC's answer pertained only to previously paid benefits for worker's compensation. DETF is by statute an interested party, adverse to the application for duty disability benefits. Wis. Stat. § 40.65(1) specifies that DWD procedures under Wis. Stat. ch. 102 apply in duty disability cases. DWD's rules governing hearings under Wis. Stat. ch. 102 require adverse parties to file an answer.

But that does not end the case. The question still remains, merely because the ALJ could issue a default order, should this case be resolved by default? In other words, the commission must address ALJ Falkner's discretionary decision to decide this case on default without hearing.

Normally, the commission defers to discretionary decisions on issues such as postponement, the submission of late reports, and other matters which go to the ability of a decision-maker to control his or her calendar. Clearly, however, deciding to issue a default order finally dispensing a claim goes beyond just controlling one's hearing calendar.

In this case, while the commission rejects DETF's assertion that it did not have to file an answer, DETF offered at least an arguable basis for its position. Further, the commission sees no substantial prejudice to the applicant, beyond simply having to go forward on her claim, if DETF were allowed to file an answer and the case proceeded to hearing at this point. The commission also notes that the applicant, too, failed to strictly comply with the procedural requirements of Wis. Stat. 102.17(1)(d). Therefore, the commission, exercising its discretion, remands this case to the department for further appropriate action on the application.

The commission anticipates that upon receipt of this decision, DETF will immediately file an answer to the hearing application. If it does so, DWD should schedule a hearing on the application. If DETF does not file an answer within a reasonable time, appropriate action at that point may include resolution by default order.

cc: ATTORNEY ROBERT T WARD
SCHIRO & WARD

DAVID H NISPEL
DEPUTY CHIEF LEGAL COUNSEL
DEPARTMENT OF EMPLOYE TRUST FUNDS

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Footnotes:

(1)( Back ) DWD's footnotes are accorded "great weight" by the courts. Pigeon v. DILHR, 109 Wis. 2d 519 (1982).

(2)( Back ) Wis. Admin. Code, DWD 80.05(2). While the statutes themselves do not require an answer, they do contemplate one, mentioning an amendment of pleadings in Wis. Stat. § 102.17(1)(b).