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

BARBARA SUE GESTRICH, Applicant

DR DETAIL, Employer

MILWAUKEE MUTUAL INS CO, Insurer

WORKER'S COMPENSATION DECISION
Claim No. 1999034612

The employer and insurer submitted a petition for commission review alleging error in the administrative law judge's findings and interlocutory order dated November 1, 1999. The applicant submitted an answer to the petition. At issue is whether the administrative law judge appropriately entered a default order in this case.

The commission has carefully reviewed the entire record in this matter and hereby sets aside the findings and interlocutory order below and substitutes the following therefor:

FINDINGS OF FACT AND CONCLUSIONS OF LAW

The applicant filed an application for hearing on June 28, 1999 for a work-related back injury on April 2, 1997. The employer filed an answer on July 30, 1999 which denied that the applicant suffered an accident arising out of her employment. The department sent the parties a notice of prehearing on July 15, 1999 which included a warning that failure to appear as scheduled may result in a decision by default under Wis. Stat. § 102.18(1)(a). The notice of prehearing was duly mailed to the employer and the insurance carrier on July 15, 1999 and it was not returned by the Postal Service and there is a presumption of due receipt of the notice of prehearing sent to the employer and the insurance carrier. The employer and insurer did not request a postponement of the prehearing and offered no explanation prior to the issuance of the administrative law judge's order for their failure to appear.

The employer and its insurer contend in the petition for commission review that the insurer never received a copy of the notice of prehearing. It appears that the notice of prehearing was sent to the correct address for both the employer and the insurer. The issue in this case is whether the administrative law judge's interlocutory default order should be set aside. Wis. Stat. § 102.18(1)(a) authorizes the department to issue decisions in worker's compensation cases by default. A nonappearing party may be entitled to relief in the form of further hearing if his or her failure to appear was a result of excusable neglect. Auclair v. LIRC and Friendly Village, Inc, Court of Appeals case No. 83-836, District 3 unpublished decision (May 22, 1984). Excusable neglect is that neglect that might have been the act of a reasonable prudent person under similar circumstances. Auclair Slip Opinion at 3, and Hedtcke v. Sentry Insurance Company, 109 Wis. 2d 451, 468 (1982). Excusable neglect is not the same as neglect, carelessness or inattentiveness.

For the purposes of determining whether to remand for hearing on the failure to appear issue the commission follows a procedure similar to that followed when acting on late petitions. First, the commission assumes that statements offered by the non-appearing party to explain his nonappearance are true, unless something in the record makes the statements appear inherently incredible. The next step is to consider whether, if believed, those statements establish that the failure to appear was from excusable neglect. If the statements, even if believed, do not meet that standard, remand is unnecessary: the commission simply denies further hearing. If the alleged facts do show excusable neglect, the commission may either remand for a hearing to attest whether the facts actually are as alleged or simply remand for testimony on the merits.

In this case, it appears that the notice of prehearing was sent to the parties at the proper address and there is a presumption of due receipt of the notice of hearing sent to the employer and insurance carrier. Ms. Fiebrantz, a senior claims examiner for the insurer, indicated in an affidavit attached to the petition for commission review that she was the person responsible for the insurer's file in this matter and that she had never received a copy of the prehearing notice and was surprised to find out that a default order had been entered. Ms. Fiebrantz indicated that prior to receiving the department's order she had no knowledge that the prehearing had been scheduled, and a relatively short period of time had passed from the filing of the respondent's answer and she did not receive a blue notice from the department, and otherwise had no actual notice of the prehearing. The commission finds nothing in the file making the insurer's statements in its petition for commission review inherently incredible. The insurer's allegation that it did not receive a notice of prehearing demonstrates probable good cause for its failure to appear at the prehearing conference. However, as the commission noted in its decision in Hamilton v. American Steak & Seafood, commission decision dated January 30, 1997, involving an interlocutory default order in a case in which the employer failed to appear at a prehearing conference, once the employer's explanation is accepted it is premature to conclude from the record that the employer has shown actual good cause for its failure to appear. The commission cannot exclude the possibility that the insurer and the employer may have been aware at some point prior to the prehearing conference that it had received the notice sent to the correct address. As the commission found in the Hamilton case, in order to conclusively prove that the employer and insurer has good cause for its failure to appear at the prehearing before allowing relief from the default order, actual testimony from the employer and the insurer is necessary. Therefore, the commission remands the case for a hearing to establish whether the facts support setting aside Administrative Law Judge Smiley's interlocutory default order and provisionally on the merits of the case. If Administrative Law Judge Smiley finds probable good cause she may proceed to the merits of the case and if she does not, she may reinstate or reissue her default order.

NOW, THEREFORE, this

ORDER

The commission remands this matter to the department for a hearing to determine whether the employer and its insurer had actual good cause for its failure to appear at the hearing in accordance with the commission's decision set forth above, and provisionally on the merits of the case.

Dated and mailed January 24, 2000
gestric.wrr : 175 : 5  ND § 8.9  § 8.10

/s/ David B. Falstad, Chairman

/s/ Pamela I. Anderson, Commissioner

/s/ James A. Rutkowski, Commissioner

cc: ATTORNEY DAVID F ANDRES
PETERSON JOHNSON & MURRAY SC

[NOTE: This decision is shown as it was modified by an Amended Decision issued on February 3, 2000, which added the word "not" in the fourth sentence in the first paragraph of the findings of fact and conclusions of law, that word having been omitted from the original decision by mistake].

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