LORENZ SEULING, Applicant

AMRON LLC, Employer

AMERICAN PROTECTION INSURANCE CO, Insurer

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.

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

Dated and mailed July 30, 2002
seulilo . wsd : 101 : 8  ND § 8.7  § 8.8 

/s/ David B. Falstad, Chairman

/s/ James A. Rutkowski, Commissioner

/s/ Laurie R. McCallum, Commissioner

The applicant filed an application for hearing in April 2001, seeking compensation for permanent partial disability related to hearing loss. The department, in turn, served the application by mail on April 23, 2001, together with a notice of application. The notice of application indicates that separate copies of the notice and application were mailed to the employer and to the insurer.

However, the employer and the insurer (collectively, the respondent) failed to file an answer within 20 days, as required by Wis. Adm. Code § 80.05(2). (1)   Nor, apparently, was either the insurer's or the employer's notice of application returned to the department by the U.S. Postal Service. Also on April 23, 2001, the department sent the insurer a copy of the applicant's practitioner's report.

On April 26, 2001, the department sent the insurer a letter setting out its computation of disability compensation due. The letter instructed the insurer to let the department know immediately if payment was not made in accordance with the letter. No response was received.

On November 13, 2001, the department, by ALJ Knutson, sent the insurer a letter stating that no answer had been filed, even though the insurer had been sent a copy of the hearing application on April 23, 2001. ALJ Knutson's letter instructed the insurer to file an answer within 21 days, and warned that if no answer was filed, "a default order will be issued in this case."

When there was no response, ALJ Knutson issued a default order in favor of the applicant on January 25, 2002 under Wis. Stat. § 102.18(1)(a). (2)   The order requires the respondent to pay $3,497.84 in disability compensation.

The respondent filed a petition for review, together with an answer, on February 12, 2002. The petition for review does not explain the late answer, but raises the defense that proper date of injury was later than that alleged in the application and found by the ALJ, so that a different insurer should be liable.

In its subsequent brief, the respondent restated its date of injury defense. It also explained the failure to answer as follows:

"It is the position of the petitioners that Amron LLC and American Protection Insurance Company never received a copy of the Application for Hearing or any other notice sent by the Worker's Compensation Division regarding the Applicant's claim."

The brief goes on to state that the department has broad discretion regarding default orders, and did not have to issue a default order on the insurer's failure to answer.

The court of appeals considered the issue of default orders for failures to answer in Verhaagh v. LIRC, 204 Wis. 2d 154 (Ct. App. 1996). In that case, Mr. Verhaagh, an injured worker, filed an application on May 26, 1993. On July 12, 1993, about four weeks after a 20-day filing deadline, the employer filed its answer. Thereafter, the matter was scheduled for a hearing, and the injured worker sought a default order. Both the ALJ and this commission denied the default order. The court of appeals affirmed the commission's decision, stating:

"Section 102.18(1)(a), STATS., provides: `All parties shall be afforded opportunity for a full, fair, public hearing after reasonable notice, but disposition of application may be made by a compromise, stipulation, agreement, or default without hearing.'

"The use of the term `may' in the foregoing statute clearly submits the issue of default orders to the LIRC's discretion.

"Because of the limited application of the rules of civil procedure to the administrative agencies of this state, we reject Verhaagh's contention that the appropriate legal standard to be applied by LIRC in determining whether to grant his motion for a default order is based upon a finding of surprise, mistake, or excusable neglect. Rather, the agency is entitled to exercise its discretion based upon its interpretation of its own rules of procedure, the period of time elapsing before the answer was filed, the extent to which the applicant has been prejudiced by the employer's tardiness and the reasons, if any, advanced for the tardiness. [Underlining supplied.]"

Verhaagh, at 204 Wis. 2d 160-61.

In addition, the commission generally finds the bare assertion of a repeated failure of the delivery of correctly addressed mail, without explanation, to be incredible. See Podgorski v. ABB Paint Finishing, WC Claim No. 95035783 (LIRC, August 29, 1996) aff'd sub nom. ABB Paint Finishing v. LIRC, Case No. 97-1922 (Wis. Ct. App., January 6, 1998); and Wayne Kutay v. James Kramer, WC Claim No. 97018527 (June 30, 1998), aff'd sub nom Kramer v. LIRC, Case No. 99-908 (Wis. Ct. App., November 9, 1999). The commission's policy ties in with the established presumption that mailing a letter will result in delivery and receipt. State ex rel. Flores v. State, 183 Wis. 2d 587, 612 (1994).

In this case, the application was filed on April 23, 2001, so the last day for a timely answer to the application was 20 days later, on May 13, 2001. However, the department did not receive the answer until February 13, 2002, over 39 weeks late. This is considerably longer than the four-week delay in Verhaagh. Also, in Verhaagh, the respondent had not ignored a "second chance," as was given by ALJ Knutson's November 13, 2001, letter.

As the reason for the delay, the respondent asserts that it did not get any notice sent by the department regarding the applicant's claim prior to receiving the default order. However, the file indicates that the department sent the insurer (1) an April 23, 2001 letter transmitting the hearing application, (2) an April 23, 2001 letter regarding the applicant's expert, (3) an April 26, 2001 letter setting out the award calculated by the division and demanding a response if the insurer disagreed, and (4) ALJ Knutson's November 13, 2001 letter warning the default was imminent.

These four letters were all sent to the insurer at the correct address. (3) Nonetheless, the respondent takes the position that none of the four letters was received while the default order was. The commission cannot credit that explanation on the record in this case, and concludes that the ALJ appropriately resolved the application by default.

cc: 
Attorney Peter M. Silver
Amron LLC

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(1)( Back ) DWD 80.05 Procedure on claim. (1) In cases of disputes in matters coming under the jurisdiction of ch. 102, s. 101.47, 56.21 or 40.65, Stats., any party to the dispute may apply to the department for relief and the department shall make such order or award as shall be lawful and just under the circumstances. (2) In all such cases under sub. (1), the party complaining shall file his or her application with the department, along with sufficient copies of the application for service on the adverse parties. The department shall thereupon serve the adverse parties with a copy of the application and the adverse parties shall file an answer to the application with the department within 20 days after the service and likewise serve a copy of the answer on the party making application. The department shall thereupon notify the parties of the time and place of hearing, at least 10 days prior to the hearing. If no answer is mailed by the respondent within 20 days of mailing by the department, the department may issue an order by default, without hearing, in accordance with the application, as provided by s. 102.18 (1) (a), Stats. (s. 102.17, Stats.)

(2)( Back ) 102.18 Findings, orders and awards. (1) (a) All parties shall be afforded opportunity for full, fair, public hearing after reasonable notice, but disposition of application may be made by compromise, stipulation, agreement, or default without hearing.

(3)( Back ) It is the same address as used in the default order which the insurer admits it did receive, and it is the address given in the insurer's own late answer.

uploaded 2002/08/09