RICK DREGNE BUILDERS, Employer-Applicant

DAVID KELLEY, Employee-Respondent

WIS WC UEF, Insurer-Respondent

Rick Dregne Builders (the employer) filed an application for hearing in May 2000. The application raised the issue of the existence of an employer-employee relationship between the employer and David Kelley (Worker Kelley).

The matter was heard by administrative law judge (ALJ) Sherman Mitchell of the Department of Workforce Development, Worker's Compensation Division (the department), on February 26, 2003. Thereafter, on May 19, 2003, ALJ Mitchell issued an order holding that the applicant's injury was not covered under the Wisconsin Worker's Compensation Act, ch. 102, Wis. Stats., because the employer primarily performed services in Illinois and any employer-employee relationship between Worker Kelley and the employer on or around the date of injury was based in Illinois. (1)

Consequently, the ALJ concluded that the Wisconsin Worker's Compensation Uninsured Employer's Fund (the Fund) overpaid by mistake of fact: (1) $3,660 in compensation to Worker Kelley, and (2) $832.01 in attorney fees to his attorney, Daniel Kelley, (Attorney Kelley).

Following the issuance of ALJ Mitchell's order, Attorney Kelley became concerned that the Fund would take ALJ Mitchell's order to circuit court to obtain a judgment against him under Wis. Stat. § 102.20 for the $832.01 in overpaid fees. On June 2, 2003, Attorney Kelley wrote to the commission asking for a statement to the effect that the commission and the department lack authority to actually order an attorney or worker to repay the amounts overpaid, and so technically there is no "award" in favor of the Fund against him (Attorney Kelley) on which a circuit court may render judgment under Wis. Stat. § 102.20. Attorney Kelley also suggested that he technically was not a party to the hearing before ALJ Mitchell. This, he contended, raised a due process concern if ALJ Mitchell's order could be construed as ordering him to pay anything. Attorney Kelley concluded, however, that if he were a party he desired that his letter be treated as a petition for commission review.

The general counsel for this commission, James L. Pflasterer, wrote back to Attorney Kelley on behalf of the commission. He explained that while the commission lacks authority actually to order an injured worker (and by inference a worker's attorney) to repay amounts overpaid or paid in excess, the department and this commission will ordinarily issue decisions concluding that amounts have been overpaid when the insurer (or here, the employer) asks for it. What a circuit court does with those decisions when asked to render judgment, Mr. Plasterer continued, is up to the court. However, noting the possibility that Attorney Kelley might be considered a party, Mr. Pflasterer told Attorney Kelley the commission would process his letter as a petition for review, and determine whether the commission has jurisdiction to reach the merits of ALJ Mitchell's order.

Under Wis. Stat. § 102.18(3), a party in interest may petition the commission for review of a decision that grants or denies compensation. ALJ Mitchell's decision may possibly be viewed as denying compensation -- at least to Worker Kelley. However, the supreme court has held both that attorneys are not technically "parties" and that an attorney fee is technically not "compensation" (2)   for the purposes of the right to judicial review of a commission decision under Wis. Stat. 102.23. Under the facts of this case, the commission sees no reason to adopt a different rule with respect to commission review of an ALJ decision under Wis. Stat. § 102.18(3). Accordingly, the commission concludes that Attorney Kelley is not a party interest under Wis. Stat. § 102.18(3), and so his letter dated June 2, 2003, to the extent it is treated as a petition for review, must be dismissed.

NOW, THEREFORE, the Labor and Industry Review Commission makes this

The petition for review is dismissed.

Dated and mailed September 26, 2003
kelleyd2 . wpr : 101 : 9  ND § 5.43   § 9.2

/s/ David B. Falstad, Chairman

/s/ James T. Flynn, Commissioner

/s/ Robert Glaser, Commissioner

The commission reiterates that it declines to comply with Attorney Kelley's request that it provide:

...confirmation that the Department and Commission lack authority to order repayment. I also ask that you provide confirmation that the order of Judge Mitchell in this case does not order repayment; and therefore is not an award that can form the basis for a judgment pursuant to § 102.20.

As noted above, the commission's general counsel, James Pflasterer, has already answered this in the third and fourth paragraphs of his letter of June 4, 2003. As Mr. Pflasterer points out, the commission has traditionally held that the commission and ALJs lack authority to affirmatively order injured workers to repay amounts overpaid. (3) The explanation for this policy is that Wis. Stat. § 102.18(1)(bw) allows the department to order an insurer to compensate or repay another insurer for excess benefits paid by the other. However, the statutes contain no similar provisions authorizing the department to order an injured worker to repay excess benefits.

Consequently, the appropriate course is to find that benefits have been overpaid, and go no further. This is precisely what ALJ Mitchell did. What a court will do with ALJ Mitchell's order is for the circuit court to decide. It is not for the commission to presume to expand or limit a circuit court's jurisdiction by attempting to say whether a particular order is an "award" on which a circuit court may render judgment under Wis. Stat. § 102.20, and any attempt to do so would be purely advisory.

cc: 
Attorney Daniel J. Kelley
Attorney Michael C. Frohman

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(1)( Back ) Wis. Stat. § 102.03(5) deals with situations where a worker, while outside the territorial limits of Wisconsin, is hurt in an injury that would have been compensable had it occurred in Wisconsin. Under that statute, the worker may still bring a claim in Wisconsin if: (a) His or her employment is principally localized in this state. (b) He or she is working under a contract of hire made in this state in employment not principally localized in any state. (c) He or she is working under a contract made in this state in employment principally localized in another state whose worker's compensation law is not applicable to that person's employer. (d) He or she is working under a contract of hire made in this state for employment outside the United States. (e) He or she is a Wisconsin law enforcement officer acting under an agreement authorized under s. 175.46. At the conclusion of the hearing, the attorney for the Fund conceded that based on the testimony at the hearing, it appeared that the Fund paid compensation in error as the contract of hire was in Illinois.

(2)( Back ) Cranston v. Industrial Commission, 246 Wis. 287, 289 (1944); Eisenberg v. ILHR Department, 59 Wis. 2d 98, 105 (1973). While Wis. Stat. § 102.01(1)(intro.) defines "worker's compensation" fairly broadly to "allowances, recoveries and liabilities under this chapter," the term was already so defined well before 1973 when Eisenberg was decided.

(3)( Back ) Sandridge v. Mid- American Long Distance, WC Claim No. 89023179 (LIRC, Jul. 17, 1996); Jared Gagnon-Palick v. United Sewer & Water Inc., WC Claim No. 92000536 (LIRC Aug. 27, 1997); Gifford v. Gifford Enterprises, WC Claim No. 1987046225 (June 30, 2000). See also: Neal & Danas, Worker's Compensation Handbook § 5.43 (5th ed. 2003).

uploaded 2003/10/06