LOUIS D. CANNATA, Employee/Appellant, v. BORCHERT-INGERSOLL, INC., and MIGA / GAB ROBINS, Employer-Insurer, and MN DEP=T of LABOR AND INDUS./WORKERS COMPENSATION DIV., COMPLIANCE SERVS. UNIT.

WORKERS= COMPENSATION COURT OF APPEALS

MARCH 8, 2004

HEADNOTES

PRACTICE & PROCEDURE - PENALTY ASSESSMENT; APPEALS - RECORD.  A party objecting to a penalty assessment is entitled to a formal hearing pursuant to Minn. Stat. ' 176.85, subd. 1.  A compensation judge conducting a settlement conference pursuant to Minn. Stat. ' 176.306, subd. 3, has no authority to summarily decide disputed issues without affording the parties a full evidentiary hearing.  Further, this court is unable to review decisions issued following a settlement conference because there is no evidentiary record of the proceedings.

Vacated and remanded.

Determined by Johnson, C.J., Pederson, J., and Wilson, J.

Compensation Judge: John Ellefson

Attorneys: Louis D. Cannata, pro se Appellant.  James S. Pikala, Arthur, Chapman, Ketterling, Smetak & Pikala, Minneapolis, MN, for the Respondents.

OPINION

THOMAS L. JOHNSON, Chief Judge

The employee appeals from the compensation judge=s Order Dismissing Penalty and Order Amending Order Dismissing Penalty denying a penalty assessment sought by the Department of Labor and Industry.  We vacate the compensation judge=s orders and remand the case to the Office of Administrative Hearings for further proceedings.

BACKGROUND

Louis D. Cannata, the employee, sustained personal injuries on July 27, 1972, October 27, 1972, and March 22, 1983, while employed by Borchert-Ingersoll, Inc., the employer.  In March 2003, the parties submitted a signed Stipulation for Settlement to Compensation Judge Jerome G. Arnold and an Award on Stipulation was filed on March 17, 2003.  Apparently, payment was not made within 14 days of the award as required by Minn. Stat. ' 176.221, subd. 8.  On May 20, 2003, the Department of Labor and Industry filed a Notice of Penalty Assessment seeking penalties against Home Insurance Company under Minn. Stat. '' 176. 221, subd. 3a, and 176.225, subd. 1(b).

Home Insurance Company filed an objection to the penalty assessment.  A settlement conference was held on October 1, 2003.  By order filed October 9, 2003, Compensation Judge Ellefson dismissed the penalty claim.  In the order, the compensation judge stated the Supreme Court of New Hampshire appointed a Rehabilitator for Home Insurance Company on March 5, 2003, and that the order prohibited transferring any property of Home Insurance Company without express authorization of the Rehabilitator and stayed proceedings against Home Insurance Company.^[1]  The compensation judge concluded the State of Minnesota had to give full faith and credit to the order of the New Hampshire Supreme Court and, therefore, dismissed the department=s penalty request.  The compensation judge further advised that any party aggrieved by the decision could request a formal hearing by filing a request with the Department of Labor and Industry within 30 days after the date of the decision resulting in a de novo hearing.

On October 31, 2003, the compensation judge issued an Order Amending Order Dismissing Penalty in which the compensation judge stated the prior order Ainadvertently contained an incorrect appeal paragraph.@  The compensation judge then amended the order to provide that Aany party aggrieved by the decision herein may appeal the decision, or any portion thereof, to the Workers= Compensation Court of Appeals.@  See Minn. Stat. ' 176.421.  The employee appeals the compensation judge=s denial of the penalty.

DECISION

Minn. Stat. ' 176.85, subd. 1, provides, in part:

If the commissioner has assessed a penalty against a party subject to this chapter and the party believes the penalty is not warranted, the party may request that a formal hearing be held on the matter.  The request must be filed within 30 days of the date that the penalty assessment is served on the party.  Upon receipt of a timely request for a hearing the commissioner shall refer the matter to the chief administrative law judge for assignment to a compensation judge or administrative law judge.

The employer and insurer filed an Objection to Penalty Assessment within 30 days of service of the notice of penalty assessment.  Accordingly, the Office of Administrative Hearings was statutorily required to afford the parties a formal hearing.  The compensation judge was free to schedule a settlement conference on the issue under Minn. Stat. ' 176. 306, subd. 3.  However, there is no authority under Minn. Stat. ' 176. 306, subd. 3, for the compensation judge conducting the settlement conference to summarily decide the disputed issues without affording the parties a full evidentiary hearing.  A settlement conference is not the equivalent of an evidentiary hearing and is not intended to be the forum for the adjudication of disputed questions of fact or law.  See Clay v. Residential Mortgage Corp., 56 W.C.D. 37 (W.C.C.A. 1996).  Finally, as we have stated in the past, this court is unable to review decisions issued after administrative conferences because there is no formal evidentiary record of those proceedings.  See, e.g., Alberts v. Midwest Nat=l, 57 W.C.D. 189 (W.C.C.A. 1997); Schultz v. Wholesale Produce Supply Co., Inc., slip op. (W.C.C.A. September. 4, 2003).  Accordingly, we vacate the compensation judge=s October 9 and October 31, 2003, orders and remand the case to the Chief Administrative Law Judge for assignment to a compensation judge for a formal hearing.