MARY A AUGUSTINE, Applicant

LEYSE ALUMINUM CO, Employer

WORK INJ SUPPLEMENTAL BEN FUND, Insurer

The State of Wisconsin Supplemental Benefit Fund submitted a petition for commission review alleging error in the administrative law judge's order issued in this matter on November 18, 2003. The applicant submitted an answer to the petition and briefs were submitted by those two parties. At issue is the administrative law judge's discretionary decision to issue the order on November 18, 2003, which interpreted and approved the terms of a stipulation previously agreed to by the Fund and the applicant.

The commission has carefully reviewed the records and files submitted and hereby sets aside the administrative law judge's order issued on November 18, 2003. The commission makes the following:

Correspondence indicates that it took the Fund several months to locate a lab that tests for aluminum in lung tissue. When it did find such a lab in July 2003, a lung tissue sample was obtained from the applicant and sent to the lab. The results came back in August 2003, revealing a high content of aluminum in the tissue. On August 19, 2003, an assistant attorney general representing the Fund signed a Stipulation Agreement whereby the Fund agreed to pay the applicant permanent total disability beginning January 1, 1974, at the applicable rate to be calculated by the department. The applicant had claimed June 28, 1973, as her date of injury, but to facilitate the stipulation she agreed to the date of January 1, 1974. By August 26, 2003, the stipulation had been signed by the applicant and her attorney, and was thereafter submitted to the administrative law judge for approval. Shortly thereafter, the administrative law judge cancelled the scheduled hearing.

On October 13, 2003, before any further action had been taken, a different assistant attorney general who had assumed representation of the Fund wrote a letter to the administrative law judge asking that the stipulation be set aside. The second AAG asserted that the first AAG should not have entered into the stipulation because there was no evidence to support a date of disability in 1973 or 1974. The second AAG cited evidence that the employee had retired in 1973 due to a back injury rather than because of any lung condition.

The administrative law judge wrote back in a letter dated October 24, 2003, and asserted that stipulations, like compromises, will not be reopened absent gross inequity, important new evidence, fraud, duress, or mutual mistake. He noted that in her letter, the second AAG indicated that the applicant's lung disease did not seem to have arisen "until the 1990's." He wrote that if after working on the file for over a year, the closest the state could come to pegging the date of disability was "in the 1990's," he saw no reason to set aside the stipulation. On November 18, 2003, the administrative law judge issued an order implementing the terms of the stipulation. On December 2, 2003, the second AAG petitioned for review of that order.

The authority for approval or disapproval of stipulations is found in Wis. Stat. § 102.18(1)(a), which provides in relevant part:

" . . . but disposition of application may be made by compromise, stipulation, agreement, or default without hearing."

Use of the permissive word "may" in this statute vests in the department and the commission the discretion to approve or disapprove proposed stipulations, and discretionary decisions of administrative agencies are reviewed under the same abuse of discretion standard that applies to acts of judicial discretion. In Matter of Bar Admission of Altschuler, 171 Wis. 2d 1, 8, 490 N.W.2d 1 (1992); Madison Gas and Electric Company v. PSC, 109 Wis. 2d 127, 137, 325 N.W.2d 339 (1982); Kwaterski v. LIRC, 158 Wis. 2d 112, 120, 462 N.W.2d 534 (Ct. App. 1990). In Doerschinger v. Funeral Directors, 138 Wis. 2d 312, 328, 405 N.W.2d 781 (Ct. App. 1987), the court stated:

"The scope of judicial review for abuse of discretion is settled. The reviewing court may look no further than to determine whether the
decisionmaker examined the relevant facts, applied a proper standard of law, and reached a reasonable conclusion."

It is this standard, rather than the standard for reopening compromises, which is applicable to an administrative law judge's decision to approve or disapprove a proposed stipulation. In worker's compensation proceedings which take place prior to the issuance of a department order, stipulations are normally nothing more than concessions by one or both parties of certain facts or applicable legal principles. They formalize the agreement that an issue or issues which might otherwise be disputed are not to be disputed. (1)   Any agreement that includes the elements of compromise must be presented as a compromise, not as a stipulation.

Initially, the administrative law judge may have assumed that the Fund had good reason for stipulating to permanent total disability dating back to January 1, 1974, or else the Fund would not have stipulated to such substantial liability. However, when the second AAG informed him of the Fund's concern that the stipulation had been signed in error, he was thereby alerted to the fact that the Fund no longer agreed to the terms of the stipulation. Significantly, the Fund's retraction of its agreement to the stipulation was communicated before a department order had been issued approving it. At that time, the administrative law judge still retained the discretion to approve or disapprove the stipulation. It was not a reasonable exercise of discretion to issue an order interpreting and affirming the terms of the stipulation after one party had withdrawn its agreement to it. At that point, the administrative law judge effectively took it upon himself to resolve a controversy without a hearing, rather than to implement an agreement. This was not consistent with due process.

In addition, Wis. Admin. Code § DWD 80.10 provides:

"Parties to a controversy may stipulate the facts in writing, and the department may thereupon make its order or award. Stipulations must set forth in detail the manner of computing the compensation due and must be accompanied by a report from a physician stating the extent of the disability. (Emphasis added)."

The Fund has conceded that the applicant sustained a permanent total disability caused by her employment with the employer, but disputes the 1974 date of disability. The administrative law judge faulted the second AAG for her lack of specificity in writing that the date of disability was "in the 1990's." However, in order for the proposed stipulation to have been valid pursuant to DWD 80.10, it was incumbent upon the applicant to submit a physician's report with it that identified a date of disability. The applicant submitted WKC-16-B's from two physicians with her September 2002 application for hearing. Both physicians left unanswered the question which asked when the date of disability began. A vocational expert did write in a report attached to the application that the applicant told him that as of "about 1976" she could not breathe well enough to work. However, this certainly did not constitute a physician's opinion. Based on the applicant's failure to provide a physician's opinion supporting the proposed date of disability (January 1, 1974), the stipulation should not have been approved.

Accordingly, the order approving the stipulation will be set aside.

NOW, THEREFORE, this

Dated and mailed March 16, 2004
augusma . wpr : 185 : 8 ND § 10.2

/s/ David B. Falstad, Chairman

/s/ James T. Flynn, Commissioner

/s/ Robert Glaser, Commissioner

cc: 
Attorney Van Grunsven
Assistant Attorney General Jennifer Sloan Lattis

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(1)( Back ) As noted in John D. Neal and Joseph Danas Jr., Worker's Compensation Handbook, (5th ed. 2003), § 10.2: 

"When no controversy exists, the facts may be stipulated and submitted to the Department of Workforce Development, DWD, or (`the department') in writing, accompanied by a physician's report stating the extent of the disability." 

uploaded 2004/03/18