JESUS LAYTON, Applicant

ALLOTECH INTL, Employer

SENTRY INSURANCE A MUTUAL CO, Insurer

The employer submitted a petition for commission review alleging error in the administrative law judge's Findings and Default Order issued on September 19, 2003. The commission has carefully reviewed the entire record in this matter and hereby reverses the findings and default order below and remands the matter to the department for further proceedings.

The applicant sustained a compensable work-related injury on or about March 5, 2003, and filed a claim for worker's compensation. The Department's Safety and Buildings Division conducted an accident investigation involving the circumstances surrounding the applicant's injury and filed a report on June 5, 2003, which found that the facts in the case demonstrated cause to conclude that the employer failed to be in compliance with OSHA standards and the Wisconsin Safe Place statute, § 101.11, at the time of the work-related injury. On June 13, 2003, the department sent the employer a letter notifying the employer that the department's investigation found that the applicant's injury occurred because of the employer's violation of a safety order. The department's letter informed the employer that the law provided that when an injury happens because of a violation of a safety order or safety law, the employer must pay a 15 percent increase in compensation directly to the insured employee, and that these payments must be made by the employer and not by its insurance carrier. The department asked the employer to immediately inform the department if it will pay the 15 percent increased compensation, and also if the employer denied there was a violation, the case will be scheduled for a formal hearing before one of the law judges. There is no indication in the file that the employer informed the department in response to the letter that it would begin making payments of the increased compensation requested, or if the employer denied that there was a safety violation involved in the applicant's injury. There is no indication that the employer filed any response to the department's letter dated June 13, 2003.

Subsequently, the department issued a default order on September 19, 2003, which found that the applicant sustained a compensable work-related injury on or about March 5, 2003, and that a safety investigation by the department's Safety and BuildingsDivision reported that the applicant's injury was caused by the failure of the employer to comply with the Wisconsin Safe Place statute. The department ordered the employer to pay $150.53 as 15 percent increased penalty pursuant to Wis. Stat. § 102.57.

The commission found in the case of Brown v. Select Staff, Commission decision dated July 2, 1990, that in cases in which an order awarding compensation is issued against an employer pursuant to the department's authority to issue default orders under Wis. Stat. § 102.18(1)(a), the materials in the file of the case on review before the commission must adequately demonstrate that the party against whom the order is issued was (1) provided written notice by the department that it was required, unless certain action was earlier taken, to provide certain information or explanations to the department within a stated period of time; (2) the party was warned that failure to do so could result in the issuance without notice or hearing of an order by the administrative law judge which could, in the case of an order awarding compensation, be reduced to a court judgment upon becoming final; and (3) the party did not in fact respond within the required time period.

In the current case, the department's letter dated June 13, 2003, did not meet the criteria set down in the Brown decision, since the letter does not provide any warning to the employer that if it failed to respond to the department's letter that such failure could result in the issuance without notice or hearing of an order awarding compensation as a default order. The department's letter simply informs the employer that a department investigation had found that the applicant's injuries resulted from a safety violation, and asked the employer to inform the department if it will immediately begin paying 15 percent increased compensation, or to inform the department if the employer denies any safety violations had taken place. The fact that the report from the Department of Safety and Buildings investigation constitutes prima facie evidence of the matters contained therein does not establish that the employer was not entitled to a warning that a default order could be issued if it failed to respond to the department's order dated June 13, 2003. Given the fact the employer was not given the proper warning that a default order could be issued in this matter if it failed to respond to the department's letter, the commission hereby reverses the department's order and remands to the department for further proceedings.

NOW, THEREFOR, this

The administrative law judge's default order is hereby reversed and the commission's findings and order substituted therefore. The matter is remanded to the department for further proceedings.

Dated and mailed May 26, 2004
laytoje . wrr : 175 : 8   ND § 8.9

/s/ James T. Flynn, Chairman

/s/ David B. Falstad, Commissioner

/s/ Robert Glaser, Commissioner

cc: Attorney Matthew C. Siderits

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