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

GAY GULBRANDSON, Applicant

MARDEN ELECTRONICS, Employer

NATIONAL UNION FIRE INS CO OF PITTSB, Insurer

WORKER'S COMPENSATION DECISION
Claim No. 1996-056839


An administrative law judge (ALJ) for the Worker's Compensation Division of the Department of Workforce Development issued a decision in this matter. A timely petition for review was filed.

The commission has considered the petition and the positions of the parties, and it has reviewed the evidence submitted to the ALJ. Based on its review, the commission agrees with the decision of the ALJ, and it adopts the findings and order in that decision as its own.

ORDER

The findings and order of the administrative law judge are affirmed.

Dated and mailed December 20, 2001
gulbran . wsd : 101 : 1   ND § 8.9

/s/ David B. Falstad, Chairman

/s/ James A. Rutkowski, Commissioner


MEMORANDUM OPINION

Ms. Gulbrandson injured her left wrist at work on October 22, 1996. According to information initially provided by the insurer on a form WKC-13 before the default order, Ms. Gulbrandson was temporarily disabled by the injury from January 21, 1997 to August 20, 1997, a period of 30 weeks. At the weekly rate of $166.13, this should have resulted in a temporary disability payment of $4,983.90. However, the information submitted by the insurer on the WKC-13 also established that the insurer only paid $4,082. Because the insurer also overpaid permanent partial disability by $57.40, the net amount underpaid was $844.46 based on the information initially submitted by the insurer. Accordingly, the Worker's Compensation Division sent out demand letters for the deficit.

The final formal demand letter, dated November 5, 1998, stated that $844.46 in temporary total disability benefits was due on the claim. The letter demanded payment within 30 days and stated that failing payment, a default order assessing the payment plus a penalty and reducible to judgment might issue. The Worker's Compensation Division's demand letter, thus, meets the requirements for such letters in default cases under the Enus Brown (1)  line of cases.

However, the insurer did not respond to the November 5, 1998 demand letter. An informal follow-up letter was sent on October 30, 2000. The insurer still did not respond. Accordingly, ALJ Schiavoni issued a default order, assessing both the $844.36 due in temporary total disability and an $84.44 penalty for delayed payment of that amount, on August 13, 2001.

Thereafter, on August 23, 2001, Coryl R. Wagaman, a branch manager for Gallagher Basset Services, Inc., sent a fax to ALJ O'Malley. Ms. Wagaman's fax has been treated as a timely petition for commission review.

Ms. Wagaman explained that the demand letters "had been sent to us, through the insurance carrier, but had not been forwarded to us, until we received a fax with the Findings of Fact And Conclusions of Law..." Ms. Wagaman goes on to explain that the original WKC-13 form sent by the insurer was wrong, and that Ms. Gulbrandson was not actually disabled continuously from January 21 to August 20, 1997. Rather, she was disabled from January 21 to February 12, 1997 (a period of 3 weeks, and then again from March 21 to August 19, 1997 (a period of 21 weeks and one day). Thus, instead of being off 30 consecutive weeks, she was off a total of 24.1667 weeks over two separate periods punctuated by a brief period of employment. The long and short of it is, if one accepts the insurer's new figures, it owed $4,014.81 in temporary total disability and paid $4,082.04. Given the overpayment in permanent disability, under the new figures there would be no underpayment.

However, the time that Ms. Gulbrandson actually missed from work due to her injury -- offered in justification of the insurer's lower payment here -- is a defense that should have been raised in response to the demand letters. In the absence of such a response, resolution by default under Wis. Stat. § 102.18(1) is appropriate. Normally, the commission declines to set aside a default order based on a factual defense that could have been raised before the default order, but was not, where the insurer had adequate warning a default was imminent.

While this may seem harsh, the insurer had chances to respond to the claim that it underpaid by answering the demand letters sent by the Worker's Compensation Division; the insurer missed that chance; the focus now is on why insurer did not respond to the demand letter, not what the insurer could have said if it had responded; and the insurer has not explained its failure to answer the demand letters. The fact that the insurer may have hired a new firm to handle its claims and failed to forward the demand letters to it is not sufficient justification for the insurer's failure to respond to the department's inquiries. The nature of default is that it is a judgment based more on one side's non-response than on the facts that might have been proven had the non-responding side been more diligent. The commission concludes that the ALJ appropriately issued a default order under Wis. Stat. § 102.18(1), given the facts of this case.

cc: Cory Wagaman


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Footnotes:

(1)( Back ) Enus Brown v. Select Staff, WC claim no. 89-043390 (LIRC, July 2, 1990)

 


uploaded 2001/12/21