GINA S. ENGELSTAD, Employee/Appellant, v. HIBBING ELEC. and STATE FUND MUT. INS. CO., Employer-Insurer, and HIBBING ELEC. and EBI COS., Employer-Insurer, and THE ROBBINS GROUP, EPIC LIFE INS. GROUP, MN DEP'T OF HUMAN SERVS., DULUTH CLINIC, MN DEP'T OF LABOR & INDUS./VRU, U CARE MINN., Intervenors.

 

WORKERS= COMPENSATION COURT OF APPEALS

MAY 19, 2004

 

HEADNOTES

 

PRACTICE & PROCEDURE - DISMISSAL.  In this particular case, because Minn. R. 1415.1700, subp. 2, contains no time limit for filing a response to a motion to dismiss, and because no hearing was held on the motion, the employee was effectively denied due process when the compensation judge dismissed her claim petition.

 

Reversed and remanded

 

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

Compensation Judge: Gregory A. Bonovetz

 

Attorneys: Michael J. Cuzzo, Cuzzo, Bradt & Envall, Duluth, MN, for the Appellant. Gina M. Stanaway, Brown & Carlson, Minneapolis, MN, and John M. Hollick, Lynn, Scharfenberg & Assocs., Minneapolis, MN, for the Respondents.

 

OPINION

 

THOMAS L. JOHNSON, Judge

 

The employee appeals from the compensation judge=s Order Dismissing Claim Petition.  We reverse the dismissal of the employee=s claim petition and remand the case to the compensation judge for a hearing.

 

BACKGROUND

 

In August 1999, the employee filed a claim petition seeking workers= compensation benefits and asserting three dates of injury: July 8, 1996, October 4, 1997, and May 19, 1998.  State Fund Mutual Insurance Company insured the employer on the first two claimed dates of injury and EBI Companies was the insurer on the date of the third claimed injury.  State Fund denied liability for the 1996 injury and admitted liability for the 1997 injury.  EBI denied liability for a 1998 injury.  In her claim petition, the employee sought payment for intermittent days of temporary total disability since July 8, 1996.  Claims for temporary partial, permanent total and permanent partial disability benefits were AReserved.@  The employee also claimed entitlement to certain medical benefits in an amount ATo be shown.@

 

Following the filing of the claim petition, the Office of Administrative Hearings apparently scheduled ten settlement conferences.  On several occasions, counsel for the employee requested that the settlement conference be reset, contending that the employee was scheduled for surgery and/or that the employee=s condition had not yet stabilized, making a settlement conference premature.  By letter dated March 18, 2002, counsel for the employee wrote to Judge Jerome G. Arnold at the Office of Administrative Hearings requesting another continuance of a scheduled settlement conference due to a proposal by a treating physician for additional surgery.  In that letter, counsel stated,^[1]

 

I see that we have no choice but to request another continuance of the Settlement Conference until final treatment options are concluded or, in the alternative, that the matter be stricken from the active trial calendar with the employee=s right to ask that it be reinstated on the active trial calendar at some point in the future.

 

By order dated July 10, 2002, the case was referred to the Chief Administrative Law Judge to schedule a hearing.

 

A pretrial conference was held on October 7, 2002, before Compensation Judge Gregory A. Bonovetz.  EBI Companies contends that the compensation judge declined to set the matter for hearing until the employee=s attorney provided the insurers with a detailed itemization of the employee=s claim, including a listing of the employee=s claims for each alleged injury date, and until the employee filed an amended claim petition itemizing her claim.  Apparently, the compensation judge issued no order following the pretrial.  EBI contends that no amended claim petition or itemization of the claim has yet been filed.^[2]

 

On October 23, 2003, EBI Companies served and filed a motion to dismiss the employee=s claim petition, contending that the employee had failed to prosecute her claim.  By order filed November 21, 2003, Compensation Judge Bonovetz dismissed the employee=s claim petition.  As of the date of the dismissal, the employee had not filed a response to EBI Companies= motion to dismiss.  In an affidavit appended to the appellant=s brief, Michael J. Cuzzo, counsel for the employee, stated that he had assumed that he had 30 days in which to respond to the motion to dismiss as provided by Minn. Stat. ' 176.305, subd. 4.^[3]  The employee appeals from the compensation judge=s dismissal of the claim petition.

 

DECISION

 

Nearly four years have passed since the claim petition was  filed, and the employee has apparently yet to specify the nature and extent of her claims.  EBI Companies argues that it has been prejudiced by the employee=s long delay in prosecuting her claim in that it will be difficult to defend the claim because of potential problems with availability or memory of witnesses.  The  employee, on the other hand, argues that a dismissal of a claim petition on technical grounds is a drastic remedy and is contrary to public policy.  Further, the employee contends that her claim was not ripe for a final determination because of the changing nature of her medical condition.  Accordingly, the employee seeks reversal of the compensation judge=s dismissal order.

 

The compensation judge dismissed the employee=s claim pursuant to Minn R. 1415.1700, subp. 2, which provides:

 

The judge 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.

 

Furthermore, in DeMars v. Robinson King Floors, Inc., 256 N.W.2d 501, 504, 30 W.C.D. 109, 114 (Minn. 1977), the supreme court stated:

 

This Court has long recognized that public policy requires a reasonable diligence in bringing litigation to a close and will not allow parties to delay suits for an unreasonable length of time.  Since witnesses die or disappear and memories fade, trial of an action should never be negligently or unreasonably delayed.  Consequently, a trial court has the discretion to dismiss a suit where the plaintiff=s failure to exercise reasonable diligence is unexcused, and the nature of the claim requires the exercise of such diligence.

 

See also Minn. R. Civ. P. 41.02(a); Lampert Co. v. Joyce, 405 N.W.2d 423 (Minn. 1987).  We note, however, that if the dismissal order in the present case is affirmed, the statute of limitations may bar claims as to the 1996 and 1998 injuries.  Thus, the judge=s order is, in effect, a dismissal with prejudice, as to at least some claims, and additional considerations are relevant in such cases.

 

In Firoved v. General Motors Corp., 277 Minn. 278, 283, 152 N.W.2d 364, 368 (1967), the 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 . . . .

 

We have previously noted that Minn. R. 1415.1700, subp. 2, does not specify the allowable time for filing a response to a dismissal motion, nor does the rule provide for a hearing on such motions.  In considering application of the rule, we observed that,

 

[t]he question of what procedures are most appropriate in this setting is one properly addressed by the legislature or under the rule-making authority of the chief administrative law judge.  We therefore limit our review solely to whether due process was met by the notice and opportunity for a hearing provided to the employee here.

 

Michaelson v. Twin Cities Real Estate Co., 42 W.C.D. 964, 968 (W.C.C.A. 1990).  Subsequently, in O=Neil v. Cemstone Prods. Co., slip op, (W.C.C.A. Dec. 5, 1995), this court stated,

 

There is no provision in either the statute or the rules mandating that hearing be held on motions in general or motions to dismiss in particular, and it is not this court=s function to develop procedural rules for other agencies.  However, it seems to us that many motions, particularly those involving factual disputes, cannot be resolved properly without some more formal procedure than is currently in place.  In any event, this court will carefully scrutinize dismissal orders when no hearing has been held, and the absence of a record in such cases may very well prompt us to reverse if the dismissed claim appears otherwise meritorious.

 

ADue process fundamentally means notice and an opportunity to be heard.@  Collins v. Cochrane & Bresnahan, P.A., 415 N.W.2d 715, 718 (Minn. App. 1987).  Basic fairness requires that parties be afforded reasonable notice and opportunity to be heard before decisions concerning entitlement to benefits are made.  Kulenkamp v. Timesavers, Inc., 420 N.W.2d 891, 40 W.C.D. 869 (Minn. 1988).  Because the rule at issue, Minn. R. 1415.1700, subp. 2, provides no time limit for response to a motion to dismiss, and because no hearing was held on the motion, the employee was effectively denied due process.  The compensation judge=s order is therefore reversed and the case is remanded for a hearing on the motion to dismiss.