BRYAN HODGSON, deceased, by LYNN HODGSON, Employee/Appellant, v. AL'S TREE SERV., UNINSURED, Employer, and SPECIAL COMPENSATION FUND, and LINDA HANENBURG on behalf of LEAH HANENBURG.
WORKERS= COMPENSATION COURT OF APPEALS
SEPTEMBER 8, 2004
DEPENDENCY BENEFITS - CALCULATION. The statute governing payments of benefits to dependents of an employee killed as a result of a work-related injury, Minn. Stat. '176.111, does not differentiate between surviving spouses based upon whether the employee=s dependent children live with them or are supported by them. Therefore, the compensation judge erred by allowing discontinuance of the surviving spouse=s benefits in this case.
PETITION TO VACATE. Where the party which sought a default order, which was not enforced, seeks to vacate that order as improvidently granted since the ultimate amount to be paid was uncertain, the petition to vacate the default order is granted.
Determined by Rykken, J., Johnson, C.J., and Wilson, J.
Compensation Judge: Jennifer Patterson
Attorneys: Frank J. Rajkowski, Rajkowski Hansmeier LTD, St. Cloud, MN, for the Appellant. John R. Baumgarth, Attorney at Law, Duluth, MN, for the Special Compensation Fund. Thomas D. Mottaz and David B. Kempston for the Respondent.
MIRIAM P. RYKKEN, Judge
The surviving spouse of the employee appeals the compensation judge=s determination that the spouse is not entitled to dependency benefits after October 19, 2003. We reverse. In addition, the Special Compensation Fund petitions this court to set aside an order served and filed April 21, 1995. We conclude that the Fund has established a sufficient basis to set aside the order and, accordingly, grant the Fund=s motion.
On October 19, 1993, Bryan Hodgson, the employee, died as a result of a work-related injury while working for Al=s Tree Service, the employer, which was uninsured for workers= compensation liability. The Special Compensation Fund (Fund) was therefore obligated to pay dependency benefits to the employee=s dependents. At the time of his death, the employee was also working for Federal Cartridge, and earned a total weekly wage of $701.58. The employee left two dependents: his surviving spouse, Lynn Hodgson, and a minor child from a prior relationship, Leah Hanenburg, who lived with her mother, Linda Hanenburg. At the time of his death, the employee was obligated to pay child support of $414.65 per month pursuant to a court order. After the employee=s death, the child began receiving social security benefits of $772.00, which had increased to $949.00 as of October 2003.
Before any dependency benefits were paid, Ms. Hanenburg, the child=s mother, petitioned for allocation of the dependency benefits, claiming the payments should be divided on a 50/50 basis. Ms. Hodgson objected. A special term hearing was held on August 18, 1994, before Compensation Judge Jerome Arnold, who found that the Fund should pay dependency benefits of 60% of the employee=s weekly wage, allocated 84% to the surviving spouse and 16% to the minor child. Ms. Hanenburg appealed and requested an evidentiary hearing. Before the hearing was held, Ms. Hanenburg and Ms. Hodgson agreed to request a continuance of the hearing until October 2003. The Fund objected, but the continuance was granted and the Fund paid the benefits as ordered by Judge Arnold. The child=s portion of the allocated dependency benefits was offset by her receipt of social security benefits.
In December 1994, the Fund filed a petition for reimbursement for benefits paid, plus the present value of benefits to be paid until the minor child was 18 and an additional ten years, against the uninsured employer. No objection was filed and the Fund filed a motion for a default judgment. An Order of Default and Order for Entry of Judgment in District Court issued by Compensation Judge Paul Rieke was served and filed April 21, 1995.
In August 2003, the Fund filed a notice of discontinuance on the surviving spouse, Ms. Hodgson, indicating that benefits would be discontinued as of October 18, 2003, based on its interpretation of Minn. Stat. ' 176.111 as limiting payments to surviving spouses to ten years. Ms. Hodgson objected. On October 23, 2003, a hearing was held on this objection and on the continuation of Ms. Hanenburg=s appeal of the 1994 allocation order before Compensation Judge Jennifer Patterson. In Findings and Order served and filed December 17, 2003, the compensation judge upheld the original allocation, allowed discontinuance of benefits payable to the surviving spouse, and held that the Fund was not estopped from claiming that benefits for the surviving spouse should stop after ten years after indicating in their petition for reimbursement and motion for default judgment that payments would continue. The surviving spouse, Ms. Hodgson, appeals.
On February 4, 2004, the Fund filed a petition to vacate the April 1995 Order of Default and also filed a motion to consolidate the petition to vacate with the pending appeal. There was no objection to consolidation, and this court granted the motion for consolidation.
STANDARD OF REVIEW
A decision which rests upon the application of a statute or rule to essentially undisputed facts generally involves a question of law which the Workers' Compensation Court of Appeals may consider de novo. Krovchuk v. Koch Oil Refinery, 48 W.C.D. 607, 608 (W.C.C.A. 1993), summarily aff=d (Minn. June 3, 1993).
The statute governing payments of benefits to dependents of an employee who has died as a result of a work-related injury, Minn. Stat. '176.111, does not differentiate between situations where the surviving spouse and any dependent children are related and living in the same household and situations where the surviving spouse and any dependent children are not related and are not living in the same household. Minn. Stat. ' 176.111, subd. 7 provides:
If the deceased employee leaves a surviving spouse and one dependent child, there shall be paid to the surviving spouse for the benefit of the spouse and child 60 percent of the daily wage at the time of the injury of the deceased until the child is no longer a dependent as defined in subdivision 1. At that time there shall be paid to the dependent surviving spouse weekly benefits at a rate which is 16-2/3 percent less than the last weekly workers= compensation benefit payment, as defined in subdivision 8a, while the surviving child was a dependent, for a period of ten years, including adjustments as provided in section 176.645.
In this case, the Fund has paid benefits for ten years based upon an allocation of benefits under Minn. Stat. ' 176.111, subd. 10, which states:
In all cases where compensation is payable to the surviving spouse for the benefit of the surviving spouse and dependent children, the commissioner, compensation judge, or workers= compensation court of appeals or district court in cases upon appeal shall determine what portion of the compensation applies for the benefit of dependent children and may order that portion paid to a guardian. This subdivision shall not be construed to increase the combined total of weekly government survivor benefits and workers= compensation beyond the limitation established in subdivision 21.
Following a special term hearing in 1994, a compensation judge allocated the 60% of the employee=s weekly wage as 84% to the surviving spouse and 16% to the child. At the hearing held in 2003, Ms. Hanenburg argued that the minor child should have received a larger allocation of the dependency benefits paid during the initial ten years. Following the hearing in 2003, the compensation judge found that the original allocation for that ten-year period was appropriate, and this finding was not appealed.
The compensation judge also found that dependency benefits for the surviving spouse should be discontinued and that the child=s benefits, subject to the social security offset, should be paid at 55% percent of the employee=s weekly wage pursuant to Minn. Stat. ' 176.111, subd. 12 (applicable to dependent orphans). Ms. Hodgson, the surviving spouse, appeals, arguing that the statute does not address this situation any differently than where a dependent child lives with a surviving spouse. The Fund argues that Ms. Hodgson has not provided any support for the minor child, and therefore should not be treated differently from surviving spouses with no dependent children under Minn. Stat. ' 176.111, subd. 6 (which provides that surviving spouses with no dependent children are paid 50% of the employee=s weekly wage for ten years). We disagree. The legislature chose not to differentiate between surviving spouses based upon whether the employee=s dependent children live with them or are supported by them. See Sander v. IFP, Inc., 53 W.C.D. 1, 3 (W.C.C.A. 1995) (statute does not distinguish between children who have lost one parent and those who have lost both parents in order to be considered an orphan under Minn. Stat. ' 176.111, subd. 12, regardless of who had supported the child), summarily aff=d (Minn. July 5, 1995).
Minn. Stat. ' 645.16 provides that A[w]hen the words of a law in their application to an existing situation are clear and free from all ambiguity, the letter of the law shall not be disregarded under the pretext of pursuing the spirit.@ Moreover, pursuant to Minn. Stat. ' 645.08(1), words and phrases are to be construed according to their plain meaning, and we must be guided by the presumption that the legislature does not intend an absurd or unreasonable result. Owens v. Water Gremlin Co., 60 W.C.D. 16, 28 (W.C.C.A. 1999). Minn. Stat. ' 176.111, subd. 7 refers to a surviving spouse and dependent children, and makes no differentiation between a child residing with the employee at the time of his death and a child who does not. The compensation judge erred by allowing discontinuance of the surviving spouse=s benefits. The judge placed her focus on the relationship between the surviving spouse and the dependent child. Instead, the statute focuses on the relationship between the child and the deceased employee, not on the relationship between the surviving spouse and the child. Benefits should continue pursuant to Minn. Stat. ' 176.111, subd. 7. Whether a different allocation for payment of ongoing benefits is appropriate under Minn. Stat. ' 176.111, subd. 10, is not before us.
The appellant, Ms. Hodgson, also claimed that the Fund was estopped from asserting that her benefits should be discontinued after ten years since the Fund had asserted in its 1994 petition for reimbursement that they were entitled to reimbursement for benefits paid. They asked a pension consultant to calculate the maximum dollar value of dependent=s benefits under various circumstances, including whether the dependent child continued to be entitled to benefits until age 25, and whether the surviving spouse collected benefits for ten years after benefits to the child ceased, utilizing various rates of inflation. The Fund presented those estimated calculations to a compensation judge, requesting a default judgment against the uninsured employer. An Order of Default and Order for Entry of Judgment in District Court issued by Compensation Judge Paul Rieke was served and filed April 21, 1995. This judgment, however, apparently was not docketed in District Court and has not been enforced. Given our resolution of the statutory interpretation issue, however, we need not decide the estoppel issue.
Petition to Vacate
On February 4, 2004, the Fund filed a petition to vacate the April 1995 default order. The Fund=s attorney indicated that the default order was improvidently sought by the Fund and improvidently granted by the compensation judge since the ultimate amount to be paid was uncertain at that time. The attorney also indicated that the default order was not docketed in any district court and no efforts had been made to enforce the default order. We grant the Fund=s petition to vacate the April 1995 default order.