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


RICHARD WEIBEL, Applicant

MIRON CONSTRUCTION INC, Employer

LIBERTY MUTUAL INSURANCE CO, Insurer

WORKER'S COMPENSATION DECISION
Claim No. 94058902


The employer submitted a petition for commission review alleging error in the administrative law judge's findings of fact, conclusions of law and interlocutory order, issued without a hearing on July 21, 1995. The issue in dispute before the administrative law judge was whether the applicant was entitled to receive 15 percent increased compensation due to a safety violation by the respondent under 102.57, Stats.

Having carefully reviewed the entire record in this case, the commission has concluded, for the reasons set out in the attached Memorandum Opinion, that the administrative law judge's findings and order must be set aside.

NOW, THEREFORE, the Labor and Industry Review Commission makes this

ORDER

The Findings of Fact, Conclusions of Law and Interlocutory Order of the administrative law judge dated July 21, 1995, are set aside and this case is remanded to the Worker's Compensation Division for hearing before another administrative law judge.

Dated and mailed January 31, 1996
weiberi.wpr : 101 : 0  ND 8.9

Pamela I. Anderson, Chairman

Richard T. Kreul, Commissioner

David B. Falstad, Commissioner

MEMORANDUM OPINION

The dispute before the commission is whether the administrative law judge properly issued a default order awarding an increased compensation for a safety violation under sec. 102.57, Stats. In support of his order, the administrative law judge cited a report from a DILHR (1) investigator finding that a safety violation caused the applicant's injury. The administrative law judge pointed out such reports are prima facie evidence as to matters contained therein. Section 102.17 (1)(h), Stats.

However, the report from the DILHR investigator is not in the file forwarded to the commission by the worker's compensation division. Nor is it in the residual file retained by the division for cases on appeal. On the other hand, the respondent-employer concedes, at page 2 of its brief, that such a report exists and in fact concludes that the applicant's work injury was caused by the employer's safety violation. Nonetheless, in the absence of the investigator's report, the commission is disinclined to simply affirm the administrative law judge's decision.

The employer's main argument is that the employer should be given a chance to rebut the prima facie evidence of the DILHR investigator's report. Because the ALJ decided the case without a hearing by default order, the employer was denied its chance to rebut to do so.

The department has the authority to order payment of compensation on default without a hearing, even though no formal application for hearing has been filed, under certain circumstances. Sections 102.17 (2) and 102.18 (1)(a), Stats.; Valentine v. Industrial Commission, 246 Wis. 297, 300-01 (1944); and Enus Brown v. Select Staff and Firemans Fund Insurance Company, claim no. 89-043390 (LIRC, July 2, 1990). However, under Enus Brown, the commission requires that before issuing a default order, the department must warn the employer that failure to respond to its worksheet or other document demanding payment of compensation within a certain time will result in the issuance of an enforceable default order by an administrative law judge.

In this case, the department sent the insurer a worksheet demanding payment of a seven percent permanent partial disability at the elbow by letter dated April 13, 1995. The department next sent the employer a letter demanding payment of an additional sum for the safety violation by letter dated May 10, 1995. This document indeed informed the employer that if no response was received within 14 days, the department would issue an order assessing the payment.

By letter dated May 18, the insurer sent the department a copy of its IME report assessing permanent partial disability at 1.5 percent. The department then sent the insurer a "revised" worksheet dated June 14, 1995, splitting the difference and ordering permanent partial disability in the reduced amount of 4.25 percent. The revised worksheet noted an additional sum for the safety violation penalty. Finally, the revised worksheet instructed the insurer to disregard the previous worksheet.

As far as the commission can determine, no further documents were sent to either the employer or the insurer after this, until the administrative law judge issued his default order against the employer assessing the increased payment for the safety violation.

The problem here is clear. Since no application has been filed in this case, the employer may not be held in default for failing to file an answer. Nor can the commission conclude that the employer's failure to respond to the May 10, 1995 letter may be viewed as grounds for default.

On the one hand, the department's May 10 letter did provide the employer with notice of the increased payment for the safety violation, and that the department would issue a final order assessing the fifteen percent increased payment if it did not receive a response. On the other hand, the employer could argue that the June 14, letter to the insurer "trumped" the May 10 letter, and expressly told the employer to disregard the May 10 letter. The response would be that the June 14 letter did not tell the employer anything, but replaced the April 13 letter sent to the insurer, so that the May 10 demand letter was never "trumped."

There is some basis for this position. The fifteen percent increased compensation and the underlying disability compensation are separate assessments; the insurer is liable for the disability compensation, but the employer is primarily liable for the increased penalty and the insurer only secondarily liable after efforts to execute the judgment against the employer have failed. Section 102.62, Stats.

However, that argument is too technical a basis for a default award. The fact is that by changing the amount of the underlying disability award on June 15, the department changed the amount of the increased compensation due under sec. 102.57, Stats. Under these circumstances, particularly when coupled with the absence of the report of the DILHR investigator, the commission cannot conclude that the Enus Brown standard was met in this case.

cc: ATTORNEY WILLIAM E MCCARDELL
DEWITT ROSS & STEVENS SC


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Footnotes:

(1)( Back ) Department of Industry, Labor and Human Relations.