JUDITH (GLADHILL) BURNSED, Employee/Appellant, v. VEHICULAR TESTING SERV. and BERKLEY RISK ADM=RS CO., Employer-Insurer, and LEECH LAKE GAMING/NORTHERN LIGHTS CASINO/PALACE CASINO and AMERICAN COMP./RTW, Employer-Insurer, and NORTH COUNTRY REGIONAL HOSP., Intervenor.
WORKERS= COMPENSATION COURT OF APPEALS
NOVEMBER 9, 2004
PRACTICE & PROCEDURE - DISMISSAL. Where the occurrence of a work injury was undisputed, where there appeared to be numerous issues of fact as to the nature and extent of the employee=s disability, where it had been by agreement of the parties that the matter be originally stricken from the calendar only for the purpose of mediation, where, at the time of the filing of the operative motion to dismiss, the matter had not yet been stricken from the calendar for a full year pursuant to provisions of Minn. Stat. ' 176.305, subd. 4, and where there was no definitive finding or evidence of full compliance with the notice provisions of that subdivision, the compensation judge erred in dismissing the employee=s claim with prejudice, and her decision doing so was reversed and remanded for a hearing on the employee=s claim petition.
Reversed and remanded.
Determined by Pederson, J., Johnson, C.J., and Wilson, J.
Compensation Judge: Jeanne Knight
Attorneys: John P. Bailey. Bailey Law Office, Bemidji, MN, for Appellant. Christine L. Tuft, Arthur, Chapman, Kettering, Smetak & Pikala, Minneapolis, MN, for Respondent Vehicular Testing Serv./Berkley. Susan M. Pasch, Cousineau, McGuire,& Anderson, Minneapolis, MN, for Respondent Leech Lake Gaming/Am. Comp/RTW.
WILLIAM R. PEDERSON, Judge
The employee appeals from the compensation judge=s order dismissing the employee=s claim petition with prejudice for failure to prosecute her claims. We conclude that a dismissal with prejudice was not appropriate, and we remand the case to the Office of Administrative Hearings for an evidentiary hearing on the merits of the employee=s claims.
Litigation in this matter began on July 10, 2000, with the filing of a claim petition, two separate medical requests, and a rehabilitation request, all rather vaguely alleging entitlement to workers= compensation benefits resulting from an injury sustained on January 8, 1997, while the employee, Judith Burnsed (Gladhill), was employed by Vehicular Testing Service. The employee=s filings identified physical injuries to the employee=s back, neck, right shoulder, and right leg and a consequential psychological injury. The medical requests sought approval for physical therapy and referral to a chronic pain facility, and the rehabilitation request sought the recommencement of rehabilitation services, which had been terminated in November 1998. The claim petition set forth no claims for disability benefits, listed medical benefits with three medical providers in amounts Ato be determined,@ and made a request for only unspecified retraining pursuant to Minn. Stat. ' 176.102, subd. 11(c). The employee filed a third medical request on July 14, 2000, for payment of $257.65 in prescription medication. All of the employee=s claims were purportedly supported by a report dated April 18, 2000, from the employee=s treating physician, Dr. William Dicks.
On July 26, 2000, Vehicular Testing Service [VTS] filed an answer to the employee=s claim petition, admitting that the employee sustained a work-related temporary aggravation to pre-existing neck and low back conditions on January 8, 1997, but denying that that injury involved the employee=s right shoulder or right leg or caused a consequential psychological injury. VTS also asserted that the employee had been paid all benefits to which she was entitled as a result of her injury, that the employee=s petition failed to state a claim upon which relief could be granted, that the employee had reached maximum medical improvement [MMI] with regard to the injury pursuant to a December 11, 1998, medical report of Dr. Larry Stern, and that all benefits paid to or on behalf of the employee after December 11, 1998, were paid under a mistake of fact. VTS also responded to the employee=s medical and rehabilitation requests by denying primary liability for any ongoing claims.
On August 16, 2000, a compensation judge issued an order consolidating the employee=s claim petition, medical requests, and rehabilitation request for purposes of hearing. The caption was amended on November 15, 2000, to reflect the intervention of North Country Regional Hospital, and VTS proceeded to obtain the employee=s deposition on December 4, 2000, completing that deposition on February 12, 2001. On March 16, 2001, VTS had the employee evaluated again by Dr. Stern, and on March 20, 2001, it obtained a psychiatric evaluation of the employee by Dr. John Rauenhorst.
Evidently relying on the medical reports of Drs. Stern and Rauenhorst, on July 26, 2001, VTS filed a motion for joinder of Leech Lake Gaming/Northern Lights Casino/Palace Casino [Palace] as a party to this case, based on an alleged injury sustained by the employee while working for Palace on January 29, 2000. In response, Palace admitted that the employee had sustained a temporary aggravation of a pre-existing low back condition on January 29, 2000, but it denied that the employee had sustained injury to any other body part as a result of that incident, based in part on a September 27, 2000, report of independent medical examiner Dr. Donald Starzinski. An order for joinder was signed by a compensation judge and issued on August 20, 2001.
In an effort to obtain consideration of her claim on an expedited basis, the employee filed an affidavit of significant financial hardship status on August 13, 2001. A hardship pretrial conference was held on October 10, 2001, subsequent to which, on December 28, 2001, the employee underwent a second evaluation for Palace by Dr. Starzinski. At another pretrial conference, on February 4, 2002, the employee=s attorney advised the court that his client was being treated by a different doctor and that new information was needed before proceeding to trial. Therefore, the employee=s attorney requested that the case be stricken from the active trial calendar until such time as the employee was ready to proceed and the other parties to the action were given opportunity to prepare for hearing. Accordingly, an order striking the case from the calendar was issued on February 6, 2002.
About seven months later, on September 24, 2002, Palace filed a motion to dismiss the employee=s claim petition and medical and rehabilitation requests, pursuant to Minn. R. 1415.1700, which provides at subpart 2 that a Ajudge may, on the judge=s own motion or upon motion of a party with notice to the parties, dismiss an action or claim for failure to prosecute; or to substantially comply with this chapter, the act, or an order of a judge.@ Minn. R. 1415.1700, subp. 2. On that same date, counsel for VTS sent a letter to the court joining in Palace=s motion. On September 27, 2002, counsel for the employee objected to the motion and requested a conference on the matter.
A pretrial on Palace=s motion to dismiss was held by telephone conference on November 12, 2002. At this conference, the employee=s attorney apparently explained to the court that the employee had stopped treating with Dr. Dicks for a period of time and that Dr. Dicks was not responding to requests for information. The judge did not rule on Palace=s motion but continued the matter for sixty days. At the next conference, held on January 21, 2003, both Palace and VTS renewed their dismissal motions. Because the employee=s counsel evidently advised the court that he was ready to proceed to trial, the matter was scheduled for a May 12, 2003, pretrial, to be followed by a hearing on June 10, 2003.
At the pretrial conference on May 12, 2003, the parties advised the presiding judge that they had agreed to explore settlement through private mediation and that the hearing scheduled for June 10, 2003, could be stricken from the trial calendar. Consequently, on May 16, 2003, the judge issued an order striking the matter from the active trial calendar, Asubject to reinstatement upon notification to the Office of Administrative Hearings that all efforts at mediation have failed, and the case is ready for hearing.@ The parties= efforts to arrive at settlement by way of mediation were unsuccessful. Mediation sessions scheduled for June 10 and September 11, 2003, were cancelled, as discussions preliminary to an actual mediation session had proved unfruitful.
On December 4, 2003, almost seven months after the case was stricken from the calendar to pursue mediation, VTS filed a Notice of Motion and Motion to Dismiss Claim Petition, along with an affidavit of counsel and a proposed order. The motion was again brought on grounds that the employee had failed to prosecute her claims. The affidavit of service by mail accompanying the motion indicated that both counsel for Palace and the employee had been served with the motion on December 3, 2003. The employee did not respond to VTS=s motion, and, on January 12, 2004, Compensation Judge Jeanne Knight signed the proposed order, which provided for dismissal of the employee=s claim petition with prejudice.
Two days later, on January 14, 2004, counsel for the employee faxed a letter to Judge Knight, requesting that she rescind the order for dismissal. In his letter, the attorney asserted that he was not aware that there were any proceedings pending to dismiss the employee=s petition. By letter dated January 21, 2004, counsel for VTS objected to the employee=s informal motion to rescind the order. In Judge Knight=s absence, Judge Janice Culnane issued an order staying the dismissal order for up to sixty days to allow Judge Knight to hear and decide the employee=s motion to rescind.
On February 26, 2004, Judge Knight conducted an informal hearing on the employee=s motion to rescind the order for dismissal. At the hearing, Judge Knight heard oral arguments from the parties relative to the January 12, 2004, dismissal order and to the employee=s January 14, 2004, motion to rescind that order. In an order denying the motion to rescind the order of dismissal issued April 6, 2004, Judge Knight concluded that Aafter consideration of the various arguments, including [employee=s counsel=s] insistence that he is ready to proceed to trial on this matter, the Order served and filed January 12, 2004, is not rescinded, and the stay issued February 6, 2004, is lifted.@ The employee appeals.
The compensation judge=s order of January 12, 2004, dismissing the employee=s claim petition, was evidently issued pursuant to Minn. R. 1415.1700, subp. 2, which provides that a Ajudge may, on the judge=s own motion or upon motion of a party with notice to the parties, dismiss an action or claim for failure to prosecute; or to substantially comply with this chapter, the act, or an order of a judge.@ The judge=s order in this case was issued with prejudice. In such cases, where the judge=s order is in effect a final determination on the merits of the case, this court must carefully scrutinize the order to assure that the parties were afforded reasonable notice and opportunity to be heard. See Kulenkamp v. Timesavers, Inc., 420 N.W.2d 891, 40 W.C.D. 869 (Minn. 1988). Here, where the employee=s claims were dismissed without a hearing on the record, we must conclude that the order for dismissal was not appropriate.
In Firoved v. General Motors Corp., the Minnesota Supreme Court explained that
[a]n order of dismissal on procedural grounds runs counter to the primary objective of the law to dispose of cases on their merits. Since a dismissal with prejudice operates as an adjudication on the merits, it is the most punitive sanction which can be imposed for non-compliance with the rules or order of the court, or for failure to prosecute. It should therefore be granted only under exceptional circumstances. The primary factor to be considered in determining whether to grant a dismissal with or without prejudice is a prejudicial effect of the order upon the parties to the action.
Firoved v. General Motors Corp., 277 Minn. 278, 283, 152 N.W.2d 364, 368 (1967). The prejudicial effect of the order upon the employee is obvious. In an affidavit accompanying VTS=s motion for dismissal, VTS=s counsel alleged that the employers and insurers Ahave incurred legal expenses to prepare for and attend multiple conferences and should not be required to continue to defend this claim.@ We conclude that the prejudicial effect on the employee in this case outweighs the expense factor raised by the employer.
We also find it significant in this case that the matter was stricken from the calendar in May of 2003, pursuant to agreement by the parties to pursue private mediation. The judge=s order at that time stated that the case was Asubject to reinstatement upon notification to the Office of Administrative Hearings that all efforts at mediation have failed, and the case is ready for hearing.@ At the time the matter was stricken from the calendar, the parties were apparently ready to proceed to a hearing. Rather than notify the court that all efforts at mediation had failed, VTS filed a notice of motion and motion to dismiss. Under such circumstances, particularly where no findings were issued on the factual dispute, a dismissal with prejudice appears unreasonably punitive and would clearly run counter to policies favoring disposition of claims on their merits.
While a hearing was conducted by a compensation judge on the employee=s motion to rescind the order for dismissal, and the employee was afforded an opportunity to present arguments to the judge at that time, no record was made of the proceedings leading to the order denying the motion to rescind. The judge=s April 6, 2004, order does not set forth the reasons for the judge=s decision, and, without a record for our review, we are unable to determine whether the judge=s decision is clearly erroneous or unsupported by substantial evidence in the record as a whole. There is, in fact, no way for us to determine exactly what the judge considered in arriving at her decision.
Under the circumstances of this case, where the occurrence of a work injury is undisputed, where there appear to be numerous issues of fact as to the nature and extent of the employee=s disability, where it was by agreement of the parties that the matter be originally stricken from the calendar only for the purpose of mediation, where, at the time of the filing of the operative motion to dismiss, the matter had not yet been stricken from the calendar for a full year pursuant to provisions of Minn. Stat. ' 176.305, subd. 4, and where there is no definitive finding or evidence of full compliance with the notice provisions of that subdivision, we believe the judge erred in dismissing the employee=s claim with prejudice. We therefore reverse that dismissal and remand the matter to the compensation judge for a hearing on the employee=s claim petition.
 There is no official record of the proceedings in this matter. The background facts in this case have been gleaned from documents in the imaged file and, in some instances, from the briefs and affidavits of counsel.
 It is not clear from the record what benefits have been paid to the employee by VTS. According to a July 1, 1998, NOID, the employee has received at least about 63 weeks of intermittent wage loss benefits and almost $20,000 in medical benefits. The record does not reflect what benefits may have been paid to the employee subsequent to the July 1, 1998, NOID or to Dr. Stern=s December 11, 1998, report.
 North Country=s intervention interest was in the amount of $208.94, related to treatment for chronic lower back pain on February 5, 2000.
 According to the brief filed by Palace, the employee had been paid intermittent wage loss benefits between February 7 and August 21, 2000, in the total sum of $1,473.58, as well as $5,789.15 in medical benefits.
 This court is hampered by the lack of formal record for our review. We would be remiss, however, if we did not comment briefly on the obvious inadequacy of the petitions filed by the employee=s counsel. As noted in our decision, the petition filed on July 10, 2000, over three years after the employee=s injury, essentially stated no claim for benefits. We note that a second claim petition, filed by the employee on February 6, 2004, similarly set forth no claim for disability benefits, requested medical benefits only Ato be determined,@ and asserted a claim for retraining that was without any specifics. It is perplexing, to say the least, that, at this point in the litigation, the employee=s counsel has not pleaded the employee=s claim with more specificity.