Wis.LIRC WC Decision: Hamilton - January 30, 1997 - ND � 8.18 - Hearing Procedure; Location and Notice - failure to appear at hearing - excusable neglect - In late petition and failure to appear cases, LIRC ordinarily accepts facts alleged by petitioner unless something in the record makes them seem inherently incredible and then determines if the alleged facts meet relevant standard; if facts alleged satisfy a standard, there may still need to be hearing on question of whether facts alleged are true

STATE OF WISCONSIN
LABOR AND INDUSTRY REVIEW COMMISSION
P O BOX 8126, MADISON, WI 53708-8126 (608/266-9850)

KATHLEEN HAMILTON, Applicant

KEITH JOHNSON, Employer
d/b/a AMERICAN STEAK & SEAFOOD

WORKER'S COMPENSATION DECISION
Claim No. 96032193

On October 14, 1996, Administrative Law Judge Joseph P. Schaeve of the Workers Compensation Division of the Department of Workforce Development held a pre-hearing conference. All issues in the case were in dispute. ALJ Schaeve issued an interlocutory default order resolving all issues in favor of the applicant on November 5, 1996. On December 3, 1996, the Workers Compensation Division received the employer's petition for commission review.

The first issue before the commission is whether to accept the employer's petition for commission review as late for a reason beyond his control. If the commission decides to accept the petition, the next issue is whether it must set aside ALJ Schaeve's default order and remand this case for further hearing.

Having carefully reviewed the entire record in this matter, the Commission makes these:

FINDINGS OF FACT AND CONCLUSIONS OF LAW

The applicant filed an application for hearing on June 11, 1996, giving the uninsured employer's address as a street address in Paoli. The hearing application is marked as "served" on July 3, 1996. "Service" in workers compensation cases is accomplished by mail rather than actual physical service. Section 102.17 (1), Stats., and secs. DWD 80.05 (2) and DWD 80.07, Wis. Adm. Code.

Thereafter, a Notice of Prehearing Conference was mailed to the employer at the Paoli street address on August 21, notifying him of a prehearing conference on October 14, 1996. The employer did not appear at the October 14 conference before ALJ Schaeve. Based on the employer's nonappearance and the record before him, ALJ Schaeve issued an interlocutory default order in favor of the applicant on November 5, 1996, which was mailed to the employer at the Paoli street address. The employer hand-delivered a petition for commission review to the Worker's Compensation Division on December 3, 1996.

The employer states in his petition that he never received a notice of hearing and that he did not receive the ALJ's order until November 27, 1996. He suggests that these documents were sent to the wrong address. He claims his correct address is a Verona post office box.

In support of his allegations, the employer submits an "Independent Contractor Agreement" which appears to have been signed by the applicant back in February 1996. This document lists the Verona post office box as the employer's address. Despite this, the applicant listed in her application the Paoli street address that was used by the department in its subsequent correspondence to the employer.

In addition, the employer attached to his petition a photocopy of the envelope in which the ALJ's decision was mailed. The photocopy indicates that the envelope was forwarded by the post office from the Paoli street address to the employer's Verona post office box. The photocopy also shows the department's meter stamp on the front of the envelope; on the back is a postmark from "--ville WI" with an illegible date.

a. Action on late petition.

The first issue is whether the commission should accept or dismiss the employer's petition for commission review. Under sec. 102.18 (3), Stats., a party may petition for commission review within 21 days after the administrative law judge's findings and order are issued. The statute also directs the commission to dismiss a petition which is not timely filed, unless the petition shows probable good cause that the reason for failure to timely file was beyond the petitioner's control. In determining whether "probable good cause" is shown under sec. 102.18 (3), Stats., the commission ordinarily accepts the facts as alleged by the late petitioner, unless something in the record makes them seem inherently incredible. The commission then determines whether those alleged facts show good cause that the reason to file a timely petition was beyond the petitioner's control. (1 )

In this case, ALJ Schaeve's Findings of Fact and Interlocutory Default Order was issued November 5, 1996, so the deadline for filing a timely petition was November 26, 1996. However, the employer claims he did not receive a copy of the ALJ Schaeve's decision until November 27, 1996. Accepting this as true, as the commission must on this record, the employer has shown probable good cause that his failure to file a timely petition for commission review was beyond his control, within the meaning of sec. 102.18 (3), Stats. The commission therefore accepts the petition, and proceeds to review this case.

b. Action on default order.

The commission thus turns to the next issue, which is whether the ALJ's interlocutory default order should be set aside. Section 102.18 (1)(a), Stats., authorizes the department to issue decisions in workers compensation cases by default. The court of appeals has affirmed the practice of LIRC and DILHR to issue decisions on a hearing at which only the applicant appears on the theory that the non-appearing respondent is in default. County of Juneau v. LIRC and Skalak, court of appeals case no. 84-1746, district IV unpublished decision (October 24, 1985).

However, a non-appearing party may be entitled to relief in the form of further hearing if his or her failure to appear was the result of excusable neglect. Auclair v. LIRC and Friendly Village, Inc., court of appeals case no. 83-836, district III unpublished decision (May 22, 1984). Excusable neglect is that neglect that might have been the act of a reasonably prudent person under similar circumstances. Auclair, slip opinion at 3, and Hedtcke v. Sentry Ins. Co., 109 Wis. 2d 451, 468 (1982). Excusable neglect is not the same as neglect, carelessness or inattentiveness. Id.

For the purposes of determining whether to remand for hearing on a failure to appear issue, the commission follows a procedure similar to that followed when acting on late petitions. First, the commission assumes that statements offered by the non- appearing party to explain his nonappearance are true, unless something in the record makes the statements appear inherently incredible. The next step is to consider whether, if believed, those statements establish that the failure to appear was from "excusable neglect" (that is, an act or omission that could have been made by a reasonably prudent person under similar circumstances.) If the statements, even if believed, do not meet that standard, remand is unnecessary: the commission simply denies further hearing. If the alleged facts do show excusable neglect, the commission may either remand for a hearing to test whether the facts actually are as alleged or simply remand for testimony on the merits.

As noted above, the commission finds nothing in the record making the employer's statements in his petition for review inherently incredible. Again, it accepts the facts as he alleges them for the purposes of this decision. The employer's allegation that he did not receive the Notice of Prehearing Conference (the commission infers this is what he meant when referred to a "Notice of Hearing" in his petition), shows probable good cause for his failure to appear at the prehearing conference.

However, the commission believes it premature to conclude from this record that the employer has shown actual good cause for his failure to appear. The commission notes that while ALJ Schaeve's order was allegedly misaddressed, it did finally reach the employer; conceivably that could have happened to the notice of prehearing conference as well. The commission also cannot exclude the possibility that the employer may have been aware, at some point prior to the mailing of the pre-hearing conference, that the department had the incorrect address, but failed to notify the department of his correct address. In order to conclusively prove that the employer has good cause for his failure to appear before allowing him relief from the default order, actual testimony from the employer is necessary.

In short, while the record supports a finding of probable good cause sufficient to warrant further hearing on the employer's failure to appear, a hearing is necessary to establish whether the actual facts support setting aside ALJ Schaeve's interlocutory default order. Consequently, the commission remands this case to the department for further hearing by ALJ Schaeve on the issue of the employer's failure to appear and, provisionally, on the merits of the case. If ALJ Schaeve finds probable good cause, he may proceed to the merits in this case. If he does not, he may reinstate or reissue his default order.

NOW THEREFORE the Labor and Industry Review commission makes this

ORDER

The Labor and Industry Review Commission accepts the employer's petition for commission review. ALJ Schaeve's Findings of Fact and Interlocutory Default Order are set aside, and the case is remanded to the department for further hearing before ALJ Schaeve.

Dated and mailed January 30, 1997
hamilka.wpr : 101 : 8 ND � 8.18

Pamela I. Anderson, Chairman

Richard T. Kreul, Commissioner

David B. Falstad, Commissioner

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Footnotes:

(1)( Back ) Dennis Walker v. School District Racine, WC claim nos. 90050950, 92019893 and 93044654 (LIRC, August 31, 1994); Toni L. Palmer v. Toro Company, claim nos. 86012679 (LIRC June 10, 1993).