MARLENE BOGGS-RUCKTAESHEL, Employee/Appellant, v. NORTHWEST AIRLINES CORP. n/k/a DELTA AIRLINES, INC., and LIBERTY MUT. GROUP, Employer-Insurer, and CENTER FOR DIAGNOSTIC IMAGING, FAMILY HEALTH SERVS. OF MINN., PARK NICOLLET HEALTH SERVS., NEUROLOGICAL ASSOCS., NORAN NEUROLOGICAL ASSOCS., PROFESSIONAL ASSOCS. OF REHAB., INC., and SUMMIT ORTHOPEDICS, LTD., Intervenors.
WORKERS’ COMPENSATION COURT OF APPEALS
OCTOBER 24, 2012
No. WC 12-5410
PRACTICE & PROCEDURE - RECORD. In the absence of an evidentiary record, that is, testimony and/or documentary evidence submitted or specifically identified at a hearing, this court has no way to determine what documents or evidence the compensation judge may or may not have considered in making the decision to dismiss the employee’s Claim Petition.
PRACTICE & PROCEDURE - DISMISSAL. Based on the procedural history of this case as reflected in the pleadings and the briefs of counsel, the judge’s dismissal of the employee’s Claim Petition, which was effectively with prejudice, was not appropriate without a hearing. The dismissal is vacated, and the case is remanded for a hearing on the dismissal.
Vacated and remanded.
Determined by: Hall, J., Milun, C.J., and Wilson, J.
Compensation Judge: Gary P. Mesna
Attorneys: Eric R. Lee, Lee Law Firm, Minneapolis, MN, for the Appellant. Kristen L. Ohlsen, Aafedt, Forde, Gray, Monson & Hager, Minneapolis, MN, for the Respondents.
GARY M. HALL, Judge
The employee appeals from the compensation judge’s Order dismissing the employee’s Claim Petition, which was served and filed March 20, 2012. We vacate the Order and remand the matter to the Office of Administrative Hearings for a hearing on the dismissal.
On November 17, 2008, the employee, through her attorney at the time, Roger D. Poehls, Jr., filed a Claim Petition. The employee alleged that on September 26, 2008, she sustained an injury to her “bilateral ulnar nerve” in the course and scope of her employment with the employer herein, Northwest Airlines Corporation, which is now known as Delta Airlines, Inc. The employer and insurer denied primary liability for the claimed injury. The case was block assigned to a compensation judge and litigation commenced. The parties participated in a settlement conference, and a hearing was eventually scheduled for November 19, 2009.
Shortly before the hearing, the employee amended her Claim Petition to allege that her bilateral ulnar nerve injury was, in fact, a Gillette injury, based on a narrative report from Dr. Ronald Tarrel. A telephone conference was held before the compensation judge on November 16, 2009, just a few days before the scheduled hearing. The employee requested that the hearing be postponed because additional claims had surfaced. The employer and insurer had no objection, and the November 16, 2009 hearing was canceled. The compensation judge issued an Order striking the case from the trial calendar.
On November 18, 2009, the employee, through attorney Poehls, filed an Amended Claim Petition alleging that the employee had sustained Gillette injuries to her shoulders, forearms, hands, and neck, culminating on September 26, 2008. The employer and insurer continued to deny liability for the employee’s claimed injury or any benefits sought.
The case remained in stricken status until April 23, 2010, at which time the employee and her attorney filed a Motion to reinstate the case on the trial calendar. The employee also filed a Pretrial Statement indicating that the issues for trial included, among other things, whether the employee sustained injuries to her neck, shoulders, forearms, hands, and bilateral ulnar nerves. She also indicated that various benefits were in dispute, including temporary total disability benefits from September 26, 2008 to April 22, 2009, a 7% permanent partial disability rating, medical benefits, rehabilitation benefits, and out-of-pocket expenses and medical mileage. The employee indicated that discovery was completed and that she was prepared to proceed to hearing. A hearing was then scheduled for September 1, 2010.
In a letter to the compensation judge, dated August 25, 2010, attorney Poehls stated that “as of 4:30 on August 25, 2010, Ms. Boggs-Rucktaeshel has terminated my representation on her above claim. She further instructed me not to withdraw nor request any continuance of her upcoming hearing set for September 1, 2010 . . . .”
At the hearing on September 1, 2010, the employee appeared on her own behalf before the compensation judge, without an attorney present. The employer and insurer appeared for the hearing as well, represented by attorney Kristen Ohlsen. At the hearing, the compensation judge urged the employee to obtain representation with a new attorney, and the employee decided that she wanted to obtain representation with a new attorney before proceeding with the hearing. The compensation judge agreed to postpone the hearing until the parties were ready to proceed.
In an Order served and filed on September 2, 2010, the compensation judge stated that the September 1, 2010 hearing had been canceled and that the case was stricken from the trial calendar. It would not be scheduled for additional proceedings until the court was “informed that the employee has an attorney to represent her in this matter” and that the parties were ready to proceed with hearing.
On September 6, 2011, the Office of Administrative Hearings served the parties, including the employee directly, with a Notice of Pending Dismissal on Stricken Pleadings. The Notice cited Minn. Stat. § 176.305, subd. 4, and stated that there had been no action taken for more than one year since the case was stricken. The Notice further stated that if no request for reinstatement was made within the next 60 days, the court would presume that the parties decided not to pursue the matter, and the case would be dismissed.
On September 14, 2011, the employer and insurer filed a Motion seeking to dismiss the employee’s claims. The employer and insurer argued that the employee had not retained a new attorney or done anything else to pursue her claims, and they argued that because the employee had failed to prosecute her claims, her claims should be dismissed in their entirety pursuant to Minn. Stat. § 176.305, subd. 4.
On September 28, 2011, the employee, acting on her own behalf, filed an objection to the employer and insurer’s Motion to Dismiss and a request for reinstatement of her case. She then retained a new attorney, Eric R. Lee, to represent her. Attorney Lee and the employee filed a Substitution of Attorney and Retainer Agreement on October 4, 2011. Also on October 4, 2011, attorney Lee filed a Motion to reinstate the case on the hearing calendar and in opposition to the employer and insurer’s Motion to Dismiss.
On October 28, 2011, attorney Lee sent a letter to the compensation judge indicating that the matter was not ready for reinstatement, and he requested that the case remain in stricken status while additional discovery continued. Attorney Lee indicated that there could be statute of limitations implications if the case was dismissed. Attorney Lee felt that the parties would be able to complete discovery in 30 to 60 days. The employer and insurer did not object to the employee’s request to extend the stricken status.
On November 16, 2011, the compensation judge served and filed an Order denying the employer and insurer’s Motion to Dismiss. In the November 16, 2011 Order, the compensation judge also extended the stricken status of the case for an additional 90 days.
Counsel for the employer and insurer wrote to the employee’s attorney on November 18, 2011, December 27, 2011, and February 1, 2012, requesting possible settlement discussions, clarification of the employee’s claims, and clarification of any outstanding discovery issues. In an email exchange on February 3 and 6, 2012, attorney Lee indicated that he hoped to provide a response to the employer and insurer’s inquiries within a week.
Attorney Lee apparently provided no further response, and on February 27, 2012, the employer and insurer filed a Motion to Dismiss the employee’s Claim Petition for failure to prosecute her claims. The Motion to Dismiss was served on attorney Lee but not directly on the employee. The Motion to Dismiss included a proposed Order.
There was no response to the employer and insurer’s Motion to Dismiss.
On March 20, 2012, the compensation judge served and filed an Order dismissing the employee’s Claim Petition. The judge signed the proposed Order as submitted by the employer and insurer with their Motion to Dismiss. There were no findings of fact included with the Order.
On March 21, 2012, attorney Lee submitted a letter to the compensation judge requesting that the judge vacate the March 20, 2012 dismissal Order. Attorney Lee apologized for not writing earlier. Attorney Lee confirmed that the employee objected to the dismissal. Attorney Lee stated that he had “hoped that we could have a Special Term Conference to address the motion,” and he noted that there may be a statute of lLimitations issue with a dismissal that could permanently bar the employee’s claims.
The compensation judge then scheduled a hearing for April 2, 2012 on the employee’s Motion to Vacate. The employer and insurer objected to vacation of the dismissal Order. On March 28, 2012, attorney Lee submitted a letter to the compensation judge indicating that he was withdrawing the employee’s Motion to Vacate in favor of filing the present appeal. As such, the April 2, 2012 hearing was canceled, and this appeal followed.
Attorney Lee conceded in the employee’s appeal brief that he did not respond to the February 27, 2012 Motion to Dismiss. Attorney Lee admitted that the current appeal is the result of his “mistake.”
A dismissal may bar the employee’s claim pursuant to the time limitations established in Minn. Stat. § 176.151. See DeMars v. Robinson King Floors, Inc., 256 N.W.2d 501, 30 W.C.D. 109 (Minn. 1977); Becerra v. Pine Valley Meats, 54 W.C.D. 304 (W.C.C.A. 1996), summarily aff’d (Minn. Apr. 29, 1996). Here, a First Report of Injury was filed with the Department of Labor and Industry on October 16, 2008. As such, the three-year statute of limitations established in Minn. Stat. § 176.151 would have run at the time of the dismissal in March 2012. Therefore, the compensation judge’s dismissal Order effectively acts as a dismissal with prejudice.
An order dismissing a claim runs counter to the primary objective of the law to dispose of cases on the merits. Johnson v. Fluoroware, 70 W.C.D. 600, 603 (W.C.C.A. 2010) (citing Firoved v. General Motors Corp., 277 Minn. 278, 152 N.W.2d 364 (1967); Burd v. Halstad Lutheran Mem’l Home, 68 W.C.D. 637 (W.C.C.A. 2008), summarily aff’d (Minn. Dec. 16, 2008); Lamkin v. JWS Homes & Contracting, Inc., No. WC06-294 (W.C.C.A. Apr. 10, 2007)). Because a dismissal with prejudice operates as an adjudication on the merits, it is the most punitive sanction that can be imposed for noncompliance with the rules or order of the court or for failure to prosecute. Id. It should, therefore, be granted only under exceptional circumstances. Id.
Procedurally, a dismissal of a claim petition, with prejudice, for failure to prosecute requires an evidentiary hearing or some other procedure so that a record is available for review by this court. Johnson, 70 W.C.D. at 603-04 (W.C.C.A. 2010); Burd, 68 W.C.D. at 640-41. In Burd, for example, the employer and insurer filed a Motion to dismiss the Claim Petition, with prejudice, on the basis that the employee had failed to diligently prosecute his claim. 68 W.C.D. at 640. The employee objected to the Motion, and a telephone pretrial was held before the compensation judge. Id. The compensation judge issued an Order finding the employee had inexcusably delayed bringing litigation of the claim to a close and that the delay had resulted in prejudice to the employer and insurer. Id. However, this court reversed the dismissal of the employee’s Claim Petition, in part, because there was no evidentiary record of the proceedings and no way to determine what evidence the compensation judge had considered in granting the dismissal. Id. at 640-41, 643-44.
Here, no evidentiary record was made with regard to the dismissal. The compensation judge’s dismissal order contains no findings of fact. There was no hearing, nor was there a pretrial proceeding on the Motion to Dismiss as there had been in Burd. The background facts included in this decision are taken, to the extent possible, from the pleadings, portions of the imaged file, and the parties’ briefs on appeal. However, the judge did not specify what pleadings or other documents or facts he reviewed in reaching the decision to dismiss the claim petition. Furthermore, arguments of counsel are not evidence. See Burd, 68 W.C.D. at 640. On appeal, it is this court’s function to review the evidentiary record and to do so, we must be able to determine what documents and evidence the judge considered in reaching his decision. See Burd, 68 W.C.D. at 640-41 (citing Beckwith v. Sun Country Airlines, 63 W.C.D. 511 (W.C.C.A. 2003)). Ultimately, there is no way to determine just what documents the judge may or may not have considered in reaching his decision here, and the dismissal Order must be vacated and the case remanded for a hearing on the dismissal.
The employer and insurer argue that the employee has failed to take action to pursue her claim. This argument is based, primarily, on Minn. Stat. § 176.305, subd. 4, which states that if “a case has been stricken from the calendar for one year or more and no corrective action has been taken, the commissioner or a compensation judge may, upon the commissioner’s or the judge’s own motion or a motion of a party which is properly served on all parties, dismiss the case.”
This court reviewed a dismissal pursuant to Minn. Stat. § 176.305, subd. 4, in the recent case of Wiirre v. Health Personnel Options, No. WC11-5331 (W.C.C.A. Jan. 6, 2012). In Wiirre, the pleadings in question had been stricken for more than one year, and the employee received proper notice of a pending dismissal. However, the employee made no request to reinstate her case, and she took no further corrective action until after the pleadings were dismissed pursuant to Minn. Stat. § 176.305, subd. 4. The employee appealed, and this court upheld the dismissal for failure to prosecute. In reviewing dismissals for failure to prosecute, this court has held that where an employee’s failure to exercise reasonable diligence in pursuing a claim is unexcused, the dismissal of a Claim Petition for failure to prosecute, even with prejudice, is within the compensation judge’s discretion. See Hanegmon v. Chisholm Health Ctr., No. WC07-100 (W.C.C.A. May 3, 2007); Ford v. Road Runner, 48 W.C.D. 251 (W.C.C.A. 1993).
The employer and insurer also rely heavily on Becerra v. Pine Valley Meats, 54 W.C.D. 304 (W.C.C.A. 1996), summarily aff’d (Minn. Apr. 29, 1996), for the proposition that the employee has failed to prosecute her claim and that the dismissal is appropriate under Minn. Stat. § 176.305, subd. 4. In Becerra, the employee himself was properly served with notice that dismissal of his stricken pleadings was pending. 54 W.C.D. at 306-08. He was given an additional 60 days to take corrective action. Id. However, he took no further corrective action, and this court, in the majority opinion, found that the dismissal was in compliance with Minn. Stat. § 176.305, subd. 4. Id. at 308-09.
Here, the pleadings seem to show that the employee took steps to reinstate her case in fall 2011, and this court is left with the assertion of the employee’s new attorney that the current appeal is the result of his “mistake.” The courts have generally been reluctant to penalize a party for conduct attributable primarily to the party’s attorney. Burd, 68 W.C.D. at 642 (citing Scherer v. Hanson, 270 N.W.2d 23, 25 (Minn. 1978); Firoved, 277 Minn. at 283, 152 N.W.2d at 368 n.8)). The problem, though, is that this court has no record to review regarding who caused the delay, the reason for the delay, or any of the other underlying facts that went into the compensation judge’s decision to dismiss the employee’s claims.
This court acknowledges that the compensation judge did attempt to schedule a hearing after the employee’s new attorney moved to vacate the dismissal Order. However, the employee’s new attorney canceled the hearing in favor of the present appeal. In cases involving dismissal orders such as this one, a timely appeal of the Order is a proper remedy. See Yang v. Caterair Int’l, slip op. n.3 (W.C.C.A. Sept. 4, 1998) (citing Minn. Stat. § 176.421, subd. 1). Unfortunately, this deprived the compensation judge of the opportunity to hold the scheduled hearing. While it may be that there are good reasons to dismiss the employee’s Claim Petition, no meaningful review of the order may be accomplished until a record is created and factual findings are made. Therefore, the March 20, 2012 Order dismissing the employee’s Claim Petition is vacated, and the case is remanded to the Office of Administrative Hearings for a hearing on the dismissal.
 A First Report of Injury was filed with the Department of Labor and Industry on October 16, 2008.
 Minn. Stat. § 176.305, subd. 4, states:
A compensation judge or the commissioner, after receiving a properly served motion, may strike a case from the active trial calendar after the employee has been given 30 days to correct the deficiency if it is shown that the information on the petition or included with the petition is incomplete. Once a case is stricken, it may not be reinstated until the missing information is provided to the adverse parties and filed with the commissioner or compensation judge. If a case has been stricken from the calendar for one year or more and no corrective action has been taken, the commissioner or a compensation judge may, upon the commissioner’s or judge’s own motion or a motion of a party which is properly served on all parties, dismiss the case. The petitioner must be given at least 30 days’ advance notice of the proposed dismissal before the dismissal is effective.
 In cases such as Hanegmon and Ford, the focus is on the employee’s own behavior and the delays such behavior may cause. Those types of cases involve documented, repeated, even “egregious,” as the behavior was described in Hanegmon, failures and delays attributable directly to the petitioner/employee.