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


RAYMOND PODGORSKI, Applicant

ABB PAINT FINISHING INC, Employer

WORKER'S COMPENSATION DECISION
Claim No. 95035783


On May 15, 1996, an administrative law judge (ALJ) for the division of workers compensation (division) in the department of workforce development (1) (the department) issued an order finding the employer liable to the applicant for lost wages under sec. 102.35 (3), Stats. The order was based on the applicant's testimony following a hearing at which the employer did not appear.

The employer has filed a petition for commission review of the administrative law judge's order. The employer contends that the ALJ erred by rendering findings and an order in default on the employer's failure to appear. The employer also asserts the amount awarded in the order is based on a mistake of fact due to an inaccuracy in the applicant's sworn testimony at the hearing. The applicant filed an answer to the petition, together with affidavits from both the applicant and his attorney.

In a subsequent letter, the applicant's attorney stated: "If the commission will allow this request at this time, I am requesting a briefing schedule at which time I will submit affidavits, if that is what the commission wants." Because the commission believes the issues were fully briefed in the petition and the answer, and that formal affidavits are not necessary to resolve the issues before it, no briefing schedule was ordered.

This case, then, involves two issues. The first is whether the ALJ and the commission may decide this case by default order based only on the applicant's testimony following the employer's failure to appear at the hearing. If the commission decides a default order may be issued it must reach the second issue, which is whether the record supports the default order.

On the first issue, after reviewing the employer's brief and the file in this case, the commission takes the following:

ACTION ON ISSUE OF EMPLOYER'S NONAPPEARANCE

a. Facts as represented in employer's PCR.

In its petition for commission review, the employer's attorney sets out the following factual scenario. The employer is an independent contractor which was under contract with General Motors to put in a "paint and bake" system at the GM plant in Janesville. Sometime before June 1995, the employer put a temporary trailer near the Janesville GM plant, and the trailer had a mailing address of 1434 South Jackson Street, Janesville.

The trailer was removed from the site upon completion of the project on or before September 20, 1995. The employer then provided forms to the Janesville post office directing it to forward mail sent to the trailer to the employer's permanent address in Michigan.

The employer concedes the applicant sustained a work injury on June 2, 1995, and that he was fired that day. It also concedes that a copy of the application for hearing was received at the Janesville trailer on July 12, 1995. Dwayne Drys, a union employe of the employer, then forwarded the application to the employer's worker's compensation insurer (WC insurer) as he had been told to do by the employer.

The WC insurer wrote back to Mr. Drys telling him that it was not liable for an unreasonable refusal to rehire claim, and that the WC insurer recommended that the employer hire its own lawyer. The WC insurer's letter also indicated that a copy was sent to the employer's Michigan address. However, the employer now claims that copy was never received in Michigan.

According to the employer's factual scenario, Mr. Drys took no further action on the belief that the employer's main office was handling the situation. On March 4, 1996, the employer's copy of the hearing notice was sent to the Janesville trailer, but by then, of course, it had been abandoned. The employer asserts that this notice was never forwarded by the post office. The applicant's attorney then sent a letter dated March 7, 1996 to the employer and the insurer. The employer never got this letter, again sent to the Janesville trailer, but the insurer did. It wrote to the applicant's attorney on March 23, indicating it had no liability on the refusal to rehire claim, and copied the employer, again at the Janesville trailer. The employer never got this letter either.

Unaware that there was a hearing, therefore, the employer failed to appear.

In response, the applicant's attorney states that he sent letters to the employer at the Janesville trailer in September 1995 and twice in March 1996 and that none of these were ever returned as undeliverable. All three of these letters would have been sent within six months after the employer removed the trailer from the Janesville address and instructed the Janesville post office to forward the mail to Michigan.

The division's files indicate that the division received its copies of the letters from the applicant's attorney shortly after they were mailed. In addition, the division's files indicate that its March 4, 1996 hearing notice sent to the Janesville trailer street address was not returned by the postal service.

b. The law on failures to appear.

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 the commission and the department 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 first step is to assume that statements offered in explantion by the non-appearing party are true, unless something in the record makes them appear inherently incredible. The next step is to consider whether, if believed, the 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 of the failure to appear actually are as alleged or simply remand for a hearing on the merits.

c. Discussion.

In this case, the commission concludes that the employer failed to establish excusable neglect. The commission was initially troubled by the employer's claim that it never received any of the letters sent to the trailer when the post office should have been forwarding them. In addition, the employer asserts that the letter the WC insurer sent directly to the Michigan office when the applicant first filed his application for hearing also was not delivered.

The employer's assertion of a repeated failure of the postal service borders on being inherently incredible. Moreover, the commission cannot understand why Mr. Drys and the WC insurer did not forward the correspondence they did receive to the employer's home office. That may be viewed either as a failure of the employer's agent (the WC insurer or Mr. Drys) to send the letters to the Michigan address, or of the employer itself to require the WC insurer or Mr. Drys to do so.

The commission reiterates that the hearing application was physically received by the employer's representative at the trailer's street address in Janesville, as well as by the insurer. The fact it was not processed properly must ultimately trace back to the employer's procedures. While the trailer had been removed by the time the hearing notice was sent, the trailer was the employer's last known address in Wisconsin, and the record does not show that the department had reason to know the employer had removed the trailer. Under these circumstances, the commission must conclude that a reasonably prudent employer doing short-term contracting work would have taken better steps to protect itself in the event of an ongoing workers compensation claim.

In its petition, the employer argues that its proper address was the Michigan home office. It contends that, by sending the application and hearing notices to the Janesville trailer, the department contributed to the employer's failure to appear at the hearing. However, the law requires that hearing notices be sent to an employer's last known address. Section 102.17 (1)(a), Stats., goes on to provide that "[i]n case a party in interest is located without the state, and has no post-office address within this state, the copy of the application and copies of all notices shall be filed in the office of the secretary of state and shall also be sent by registered or certified mail..." The commission interprets the statute to mean that, when an employer is last known to have a post office address in Wisconsin, the department may mail hearing notices to that address, particularly when the worker is injured at that location. (2)

In short, the commission cannot conclude that departmental error contributed to the employer's failure to appear. The hearing application and hearing notice were sent to an appropriate address for the employer. The commission cannot view the employer's failure to appear, despite this notice, as excusable neglect.

The commission thus concludes the employer is not entitled to further hearing in this matter. It therefore turns to the issue of whether the record at the hearing supports the applicant's claim under sec. 102.35 (3), Stats.

ACTION ON ALJ'S FINDINGS OF FACT AND ORDER ON THE MERITS

The commission has carefully reviewed the entire record in this case, including the petition for review and accompanying correspondence. Based on its review, the commission agrees with the ALJ decision dated May 15, 1996, and it adopts the Findings and Order in that decision as its own.

ORDER

The employer's request for further hearing is denied. The Findings of Fact and Order of the administrative law judge are affirmed.

Dated and mailed August 29, 1996
ND 8.18

Pamela I. Anderson, Chairman

Richard T. Kreul, Commissioner

David B. Falstad, Commissioner

MEMORANDUM OPINION

a. Record at the hearing; facts of discharge.

The issue is whether the record from the May 1996 hearing that the employer did not attend establishes an unreasonable refusal to rehire under sec. 102.35 (3), Stats. The commission concludes it does.

The applicant testified he injured his foot at work on June 2, 1995. After attempting to work for a short while, he decided he needed medical treatment, and reported to the employer's superintendent, Dwayne Drys, who asked him "What's the matter now?" When the applicant told him he hurt his foot, Mr. Drys responded, according to the applicant, "I hope you broke all your fucking toes."

The applicant sought medical treatment and was released without restrictions. He returned to the jobsite, still on June 2, and resumed work. After about an hour, he was discharged by Harry Jones, the employer's foreman.

The applicant testified that no explanation was given, but also that he was told he was laid off due to lack of production. This apparently was a reference to the applicant's production, as he went on to testify that before then his performance or production had not been questioned.

The applicant's union steward also testified. He stated that before the date of fire, he heard no criticism of the applicant from the employer.

In its petition for commission review, the employer admits that the applicant was injured on June 2, and fired on that date. However, the employer asserts he was not fired because of the work injury but because his performance was poor and he tried to steal a coworker's tools. The employer also contends it sent a letter on June 19 notifying the union of the reasons for the discharge. Since the employer did not appear, no testimony on these points was introduced into the record at the hearing.

b. Law.

In an unreasonable refusal to rehire case, the applicant has the burden of proving he was an employe with a compensable injury who was denied rehire or discharged. The burden then is on the employer to show reasonable cause for the failure to rehire or for the discharge. (3) The reasonable cause may either be that the work injury prevents the applicant from doing available work, or that the discharge was for a reason unrelated to the injury (such as misconduct, poor performance or a work slowdown. (4)) Obviously, an employer who fails to appear at hearing will have a hard time meeting its burden.

In this case, the applicant has met his burden of proving that he was an employe with a compensable injury who was denied rehire. The employer, because it did not appear, did not establish a reasonable cause for the failure to rehire.

c. Award.

Finally, the employer claims in its petition that the applicant failed to report employment and wages earned at a subsequent employer (DuMont). As a result, the employer contends, the extent of accrued damages in the ALJ's award are based on a mistake of fact.

The applicant contends that he only worked for DuMont for a day before he sustained a conceded work injury. He also contends that ALJ Schaeve was informed of this at the hearing on May 2, 1996, even though his notes do not reflect it. Thus, the applicant reports, the ALJ's finding that "the applicant was off work without earnings from June 2, 1995 until September 18, 1995 (except for one day)" is accurate and that the "one day" was June 26.

The commission examined the ALJ's synopsis in this case, as well as the division's file in the DuMont case. Neither indicates that the ALJ's finding on this point was in error. The commission therefore affirms the award without modification.

cc: ATTORNEY JAMES A MEIER
MEIER WICKHEM SOUTHWORTH & LYONS SC

ATTORNEY AHMED J QUERESHI
CRIVELLO CARLSON MENTKOWSKI & STEEVES SC

NATIONAL UNION FIRE INSURANCE COMPANY
C/O CRAWFORD & COMPANY


Appealed to Circuit Court. Affirmed May 2, 1997.

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Footnotes:

(1)( Back ) Before July 1, 1996, the department of industry, labor and human relations.

(2)( Back ) See Derrick Cook v. Nationwide Warehouse and Storage, Inc.. WC claim no. 93068744 (LIRC, April 28, 1995).

(3)( Back ) Dielectric Corp. v. LIRC, 111 Wis. 2d 270, 278 (Ct. App., 1982). The "very correct standard" set out by the court of appeals in Dielectric was adopted by the supreme court in West Bend v. LIRC, 149 Wis. 2d 110, 121 (1989), stating: "after an employe shows that she has been injured in the course of employment and subsequently is denied rehire, it becomes the burden of the employer to show reasonable cause for not rehiring the employe." West Bend, at 149 Wis. 2d 123.

(4)( Back ) See Great Northern Corp. v. LIRC, 189 Wis. 2d 318-19 (Ct. App., 1994); Ray Hutson Chevrolet v. LIRC, 186 Wis. 2d 118, 123 (Ct. App., 1994).