SING VANG, Employee, v. PLANNA TECH.,INC., UNINSURED, Employer/Petitioner, and SPECIAL COMP. FUND, and NORTH MEM’L MED. CTR., ANESTHESIOLOGY, P.A./PHOENIX MGMT., MINNEAPOLIS RADIOLOGY, and COLLINS HAND THERAPY, Intervenors.
WORKERS’ COMPENSATION COURT OF APPEALS
MAY 20, 2009
No. WC 08-137
VACATION OF AWARD - FRAUD. Where there was no evidence to support the petitioner's arguments that representatives of the Special Compensation Fund were instrumental in denying the petitioner a hearing on the merits, and where the petitioner's arguments did not comport with the necessary elements of fraud, the uninsured employer's petition to vacate the compensation judge's findings and order on grounds of fraud was denied.
PRACTICE & PROCEDURE - NOTICE OF HEARING; VACATION OF AWARD - REFERRAL FOR HEARING. Where the petitioner contended that it received notice neither of the hearing nor of the judge’s findings and order, and where the record reflected that it was not served with the findings and order, the matter of whether notice of hearing was served on the petitioner was referred to a compensation judge for determination after an evidentiary hearing, with the burden of proving nonreceipt being on the petitioner.
Petition to vacate findings and order referred to OAH.
Determined by: Pederson, J., Rykken, J., and Johnson, C.J.
Compensation Judge: Bradley J. Behr
Attorneys: Frances S.P. Li, Brooklyn Center, MN for the Employee. Planna Technoloyg, Inc., Minneapolis, MN, pro se Petitioner. Thaddeus V. Jude, St. Paul, MN, for the Special Compensation Fund.
WILLIAM R. PEDERSON, Judge
Planna Technology, Inc., through its sole owner, Susan Carol, petitions to vacate the findings and order of Compensation Judge Bradley J. Behr served and filed June 12, 2006, on grounds of fraud and on grounds that the compensation judge erred by proceeding with a hearing without service of the notice of hearing on the petitioner. The petitioner contends also that it was not served with Judge Behr’s findings and order. We deny the petition as based on the alleged fraud, but we refer the matter to a compensation judge at the Office of Administrative Hearings for further proceedings consistent with this decision.
This matter arises from a dispute as to the employment status and the extent of the injury sustained by Sing Vang on January 21, 2005. Mr. Vang alleges that he was employed by Planna Technology, Inc. [the petitioner], as an assembler/machine operator when he sustained and an injury to his right hand when he reached into a machine at the petitioner’s facility and was cut by a machine blade. Mr. Vang thereafter obtained medical treatment in the emergency department at North Memorial Medical Center. Four days later, surgery was performed by plastic surgeon Dr. Allen Van Beek. The petitioner, which was not insured against workers’ compensation liability on January 21, 2005, evidently contended from the outset (1) that Mr. Vang was an independent contractor and not an employee, (2) that Mr. Vang was engaged in a prohibited act when he cut his finger, and (3) that the surgery performed by Dr. Van Beek was neither reasonable nor necessary.
On April 13, 2005, Mr. Vang, through his attorney, filed a claim petition with the Minnesota Department of Labor and Industry. Mr. Vang named the petitioner as his employer and, because the petitioner was not insured at the time of his injury, he named also the Special Compensation Fund [the Fund] as a party to the claim as provided for by Minnesota Statutes section 176.183, subdivision 1. The employee’s claim petition was evidently served on the petitioner at its worksite address of 725 North Second Avenue in Minneapolis. Medical providers were subsequently provided with notice of their right to intervene in the proceeding, and the matter was evidently referred to the settlement division at the Office of Administrative Hearings [OAH] by June of 2005.
According to the imaged file pertaining to Mr. Vang’s claim petition, on September 2, 2005, OAH served on the parties a Notice of Settlement Conference on the employee's claim petition. The “proof of service” of this notice identifies the petitioner as being served at the same address as that listed on the employee’s claim petition. The settlement conference was scheduled for November 16, 2005, but on November 28, 2005, OAH served a notice resetting the settlement conference for January 18, 2006.
The petitioner’s owner, Susan Carol, evidently attended the settlement conference at OAH on January 18, 2006. The parties were unable to reach a settlement, and two days later OAH served on the parties at their addresses of record a Notice of Certification and Judge Assignment. This was followed on February 9, 2006, by a Notice of Pretrial and Notice of Hearing on Claim Petition. According to the accompanying proof of service, these notices were served on the petitioner at the address identified on the employee’s claim petition and subsequent notices. The pretrial conference was set for April 10, 2006, and the hearing was scheduled for May 12, 2006.
The employee’s claim for benefits came on for hearing before Compensation Judge Bradley J. Behr on May 12, 2006. Mr. Vang was the only witness to appear at the hearing before Judge Behr and was represented by attorney Frances S.P. Li. The Fund was represented by attorney Thaddeus Jude, and North Memorial Medical Center was represented by attorney Kris A. Wittwer. There was no appearance on behalf of the petitioner or the other listed intervenors.
In findings and order issued June12, 2006, the compensation judge found that Sing Vang was the petitioner’s employee on January 21, 2005, and was not an independent contractor. He found also that the evidence failed to demonstrate that the employee was performing a prohibited act when he sustained his injury. He awarded the benefits claimed by Mr. Vang, as well as the reimbursement claimed by the intervenors. The judge determined that the petitioner was liable for the workers’ compensation benefits awarded. Because the petitioner was uninsured, the judge ordered that payments were to be made by the Fund. He ordered further that the petitioner was to reimburse the Fund for all payments made to or on behalf of the employee and was to pay a penalty to the Fund in the amount of sixty-five percent of all benefits paid by the Fund to or on behalf of the employee. The proof of service accompanying Judge Behr’s findings and order now listed the petitioner’s address as “undeliverable.”
On April 15, 2008, the petitioner filed with the Workers’ Compensation Court of Appeals a petition to vacate the findings and order issued on June 12, 2006. On April 21, 2008, this court advised the petitioner that, in order to initiate a petition to vacate at the Workers’ Compensation Court of Appeals, it must serve a copy of its petition upon the employee and upon the Fund. About five months later, on September 15, 2008, the petitioner resubmitted its petition to vacate, along with an affidavit of service by mail. By this time, the Fund had already filed a Response to the petition to vacate on May 27, 2008, and had filed it a second time on September 17, 2008.
The petitioner contends in its submissions that the compensation judge erred in proceeding with a hearing on the employee’s claim petition without service of notice on the petitioner. It contends also that Judge Behr’s subsequent findings and order were also never served on the petitioner, thus depriving it of an opportunity to appeal. The petitioner contends further that the findings and order of the compensation judge were procured through various misrepresentations to the court by the Fund and its representatives, those misrepresentations constituting “fraud” under Minnesota Statutes section 176.461, resulting in actual damages to the petitioner in the form of worker’s compensation benefits, penalties, and costs. The Fund objects to the petition to vacate, denies the allegations of fraud, and asserts that the judge's findings and order were appropriate given the evidence presented. It asserts further that, if notice to the petitioner was deficient in this case, the cause was the petitioner’s failure to maintain the necessary contact with the court during the pendency of litigation.
This court may vacate an award on stipulation or a decision of a compensation judge for good cause, including fraud. Minn. Stat. § 176.461. “To support a petition for vacation on grounds of fraud, there must have been an intentionally false statement of material fact, made to induce reliance thereon, which was the proximate cause of the adverse result to the petitioner.” Bueford v. Sather Trucking Corp., slip op. at 3 (W.C.C.A. Apr. 13, 1993). This court has indicated that the intentionally false statement of material fact must be susceptible of knowledge and there must be damages proximately caused by the misrepresentation. See Green v. Setterholm Fairway Foods, 42 W.C.D. 907, 909 (W.C.C.A. 1989) (citing Specialized Tours, Inc. v. Hagen, 392 N.W.2d 520, 532 (Minn. 1986)).
We have carefully reviewed the petitioner’s allegations of fraud by the Fund. As we understand the petitioner’s argument, representatives of the Fund were allegedly instrumental in denying the petitioner a hearing on the merits of Mr. Vang’s claim so that Mr. Vang’s allegedly unnecessary medical expenses could be paid and the Fund could assess costs and penalties against the petitioner. According to the petitioner, the Fund failed to send “hearing documents” and intentionally failed to contact the petitioner by phone or e-mail. We find no evidence to support the petitioner's arguments, nor do the allegations here comport with the necessary elements of fraud. Therefore we decline to vacate the Findings and Order on that basis.
The petitioner also contends that it was denied due process under the Minnesota and U.S. Constitutions when a hearing was conducted without its knowledge. This court lacks jurisdiction to determine constitutional questions, Irwin v. Surdyk’s Liquor, 599 N.W.2d 132, 59 W.C.D. 319 (Minn. 1999), but basic fairness requires notice and reasonable opportunity to be heard before decisions as to benefit entitlement may be made. Kulenkamp v. Timesavers, Inc., 420 N.W.2d 891, 894, 40 W.C.D. 869, 872 (Minn. 1990). Minnesota Statutes section 176.341 provides that “the chief administrative law judge shall mail notice of the time and place of hearing to each interested party.” Minn. Stat. § 176.341, subd. 3. Minnesota Rules 1415.0700 provides that "[t]he division and the office must serve all notices, findings, orders, decisions, or awards upon the parties by first class mail at their addresses of record or by personal service." Minn. R. 1415.0700, subp. 1. Minnesota Statutes section 176.285 provides in part that
[s]ervice of papers and notices shall be by mail or otherwise as the commissioner or chief administrative law judge may by rule direct. Where service is by mail, service is effected at the time mailed if properly addressed and stamped. If it is so mailed, it is presumed the paper notice reached the party to be served. However, a party may show by competent evidence that that party did not receive it or that it had been delayed in transit for an unusual or unreasonable period of time. In case of nonreceipt or delay, an allowance shall be made for the party’s failure to assert a right within the prescribed time.
Minn. Stat. § 176.285.
In the present case, the petitioner contends that it received notice neither of the hearing nor of the judge’s findings and order. Our review of the imaged file supports the petitioner’s contention that it was not served with the June 12, 2006, findings and order. The proof of service for the judge’s findings and order lists the petitioner’s address as “undeliverable.” The notice of pretrial and hearing were evidently served on the petitioner at the address contained in the file. It is not the function of this court to make factual findings. Given the petitioner’s allegations that notice of the hearing was not received, we conclude that the matter should be referred to a compensation judge for determination, allowing all parties to submit evidence on the issue. The burden of proving nonreceipt is on the petitioner. The judge should address all issues deemed relevant to the alleged service and nonreceipt of both the notice of hearing and the judge’s findings and order. The judge's determination should specifically include findings as to what mailing address or addresses the petitioner provided to OAH and whether, at any time, the Fund received notice from the petitioner of a change of address. The judge should also determine whether the petitioner filed any documents before June 12, 2006, with the Workers' Compensation Division, the Department of Labor and Industry, the Office of Administrative Hearings, or the Workers' Compensation Court of Appeals, as contemplated by Minnesota Statutes section 176.275. If the judge determines that either the notice of hearing or the findings and order was not received by the petitioner, the judge should make findings as to who was responsible for that nonreceipt. The judge should also determine when and how the petitioner received a copy of the June 12, 2006, findings and order. The findings and order on referral are subject to the right of any party to appeal. The judge’s findings and order on referral shall be returned to this court for further consideration of the petitioner’s request to vacate the June 12, 2006, findings and order.