LUIS F GARCIA, Applicant

AMP ELECTRIC INC, Employer

THE CINCINNATI INSURANCE CO, Insurer

AMP Electric, Inc. and The Cincinnati Insurance Company (respondents) submitted a petition for commission review alleging error in the administrative law judge's Findings and Interlocutory Order issued in this matter on April 25, 2003. Briefs have been submitted by the parties. The threshold issue is whether the commission should uphold the department's determination that the respondents would not be allowed to amend their answer to raise the issue of whether the applicant sustained an injury arising out of and in the course of his employment with AMP Electric. If the department's refusal to allow the amended answer were to be upheld, the nature and extent of disability and liability for medical expense attributable to the alleged work injury of December 6, 2001, would be at issue.

The commission has carefully reviewed the entire record in this matter and hereby sets aside the administrative law judge's Findings and Interlocutory Order. The commission makes the following:

On September 27, 2002, the applicant submitted an application for hearing alleging a compensable left shoulder injury. Respondents submitted an answer on October 7, 2002, in which they conceded all issues except the extent of disability and wage rate. In December 2002, respondents notified the applicant that they had scheduled an adverse exam for him with Dr. Mark Aschliman on January 13, 2003. On January 7, 2003, the department issued a notice of hearing in the matter, with the hearing scheduled for March 18, 2003.

The applicant was examined by Dr. Aschliman on January 13, 2003, and on January 21, 2003, Dr. Aschliman gave an opinion indicating that he did not believe the applicant's shoulder condition was work-related. On January 24, 2003, respondents submitted to the department a copy of Dr. Aschliman's report, together with a letter indicating that based on that report they wished to amend their answer to deny work causation. The applicant's attorney immediately wrote a letter objecting to the requested amendment, because it had been requested after the notice of hearing had been issued. Wis. Admin. Code ch. DWD 80.08 provides:

Amendment may be made to the application or answer by letter mailed to the department prior to the date the notice of hearing was mailed. Copies of the letter shall be sent directly to the other parties. The letter shall state the reasons for the amendment.

On January 30, 2003, a department representative wrote a letter to the parties indicating that the requested amendment was not timely. The representative further wrote that unless the applicant waived his objection, the requested amendment would not be allowed. At the hearing, respondents asked the administrative law judge to allow the amendment based on the circumstances of the case, but he refused. Nevertheless, the hearing went forward, and it appears that most if not all of the evidence from both sides with regard to the issue of causation was received. In his decision, the ALJ did not mention the issue of whether the answer could be amended. He reviewed the evidence, including Dr. Aschliman's opinion that the condition was not work-related. He found that in accordance with the opinion of the applicant's physician, the shoulder condition was work-related.

Respondents petitioned on the merits of the causation issue, and the applicant raised the defense that causation was not properly at issue because the amended answer was not accepted. Respondents countered that under the circumstances of this case it should have been accepted.

Use of the permissive word "may" in Wis. Admin. Code ch. DWD 80.08, and in the statute which provides the alternatives for disposition of claims (Wis. Stat. § 102.18(1)(a)), makes the department's decision to allow or disallow an amended answer a discretionary decision. Verhaagh v. LIRC, 204 Wis. 2d 154, 160, 554 N.W.2d 678 (Ct. App. 1996). The standard for review of an exercise of administrative discretion is cited in Verhaagh at 204 Wis. 2d 160:

. . . whether the exercise of discretion was made based upon the relevant facts by applying a proper standard of law and represents a determination that a reasonable person could reach. (Citations omitted).

In Verhaagh, the court reviewed the commission's refusal to issue a default order against an employer that had filed its answer four days late. The court affirmed the commission. It noted that the law does not look kindly on defaults, and also noted that no real prejudice attached to the applicant due to the late answer, because the hearing was not scheduled to be held until almost a year after the late answer was received.

In the case at hand, respondents filed a timely answer to the application. They proceeded with due diligence to schedule a medical exam, and then to request an amendment to their answer once the results of that exam were known. The scheduled hearing was still almost two months away when the respondents made their request to amend their answer, and the applicant had already secured Dr. Sellman's opinion, which contradicted Dr. Aschliman's opinion. Neither in applicant's counsel's letter to the department objecting to the proposed amended answer, nor in counsel's brief to this commission, was any practical reason given for why the applicant could be considered prejudiced by allowing the amended answer. The issue of causation in this case is intertwined with the medical opinions, and a fair resolution of the matter would most reasonably include medical opinions from both sides of the controversy.

The commission understands the department's interest in discouraging amended answers once a notice of hearing has been issued. However, the department and applicants also have an interest in discouraging respondents from routinely submitting answers in which they deny liability for every issue raised. That would be the most prudent policy for respondents were there to be no reasonable exercise of discretion in allowing amended answers.

In this case respondents proceeded with due diligence, and no particular prejudice to the applicant has ever been identified as a consequence of allowing the amended answer. In addition, a fair resolution of the case could best be secured by receiving the medical evidence offered from both sides of the controversy. These circumstances make this case appropriate for the reasonable exercise of discretion to allow the amended answer.

The administrative law judge did not address the issue of the amended answer in his decision. He reviewed the evidence submitted and made a finding that the applicant sustained a work-related, left-shoulder injury. This finding will be set aside and opportunity for new hearing allowed. Thereafter, the department shall issue a new decision. Should the parties wish to forego another hearing in this matter they may stipulate to allowing the department to accept new briefs, and to thereafter issue a new decision based on the evidence previously submitted. Of course, the department's new decision shall be appealable as normally provided in Wis. Stat. § 102.18(3)(a).

NOW, THEREFORE, this

The Findings and Interlocutory Order of the administrative law judge are set aside. The matter is remanded to the department for opportunity for new hearing and for a new decision.

Dated and mailed April 15, 2004
garcilu . wrr : 185 : 2 ND § 8.8

/s/ David B. Falstad, Chairman

/s/ James T. Flynn, Commissioner

/s/ Robert Glaser, Commissioner

cc: 
Attorney Bruce F. Ehlke
Attorney David L. Styer

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