DREW T. LAMKIN, Employee/Appellant, v. JWS HOMES & CONTRACTING, INC., UNINSURED, Employer, and ALLINA HEALTH SYS., MN DEP’T OF LABOR & INDUS./VRU, and COLUMBIA MARK MED. GROUP., Intervenors, and SPECIAL COMPENSATION FUND.
WORKERS’ COMPENSATION COURT OF APPEALS
APRIL 10, 2007
No. WC06-294
HEADNOTES
PRACTICE & PROCEDURE - DISMISSAL. An order of dismissal on procedural grounds should be granted only under exceptional circumstances. The primary factor to be considered is the prejudicial effect of the order upon the parties to the action. In this case, the prejudicial effect of dismissal of the employee’s claim without a hearing on the merits outweighs the expense of appearing at the hearing, at which the employee failed to appear, to the employer.
Reversed and remanded.
Determined By: Johnson, C.J., Wilson, J., and Stofferahn, J.
Compensation Judge: Cheryl LeClair-Sommer
Attorneys: Eric R. Lee, Milavetz, Gallop & Milavetz, Coon Rapids, MN, for the Appellant. Andrew J. Morrison and Sarah D. Squillace, Koll, Morrison, Charpentier & Hagstrom, St. Paul, MN, for the Employer. Thaddeus V. Jude, St. Paul, MN, for the Special Compensation Fund
OPINION
THOMAS L. JOHNSON, Judge
The employee appeals the compensation judge’s dismissal, with prejudice, of his claim petition. We reverse and remand.
BACKGROUND
Drew T. Lamkin, the employee, broke his ankle on January 20, 2001, while working for JWS Homes & Contracting, Inc. On that date, the employer was uninsured for workers’ compensation liability.
The employee filed a claim petition on September 6, 2001, seeking workers’ compensation benefits from the employer and/or the Special Compensation Fund. A hearing on the employee’s claim petition was scheduled for April 15, 2003, at the Office of Administrative Hearings. That hearing date was continued by agreement of the parties and rescheduled to July 15, 2003. The employee requested a continuance of the July 15 hearing which was rescheduled to August 28, 2003. Prior to that date, a tentative settlement was reached by the parties and the hearing date was cancelled.
The case did not settle and the employee filed a Motion to Reinstate the case on the trial calendar. A hearing was scheduled for October 5, 2006, at the Office of Administrative Hearings. A hearing notice was served upon the parties, including the employee and his attorney, on June 14, 2006.
The employee did not appear for the hearing on October 5, 2006. Apparently, the employee was working in Duluth, Minnesota, that day. At the hearing, counsel for the employer moved for dismissal of the employee’s case, with or without prejudice. In a Findings and Order filed November 28, 2006, the compensation judge found the employee’s continued delay and failure to attend the scheduled hearing when provided proper notice represented failure to prosecute his claim. Accordingly, the compensation judge dismissed the employee’s claim petition, with prejudice. The employee appeals.
DECISION
A compensation judge may impose sanctions, including the dismissal of a proceeding, pursuant to Minn. R. 1420.3700.[1] In DeMars v. Robinson King Floors, Inc., 256 N.W.2d 501, 504, 30 W.C.D. 109, 114 (Minn. 1977), the Supreme Court observed that:
[P]ublic 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.
In Firoved v. General Motors Corp., 277 Minn. 278, 283, 152 N.W.2d 364, 368 (1967), the Supreme Court stated, however, that:
An 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. (Emphasis added.)
The prejudicial effect of the order upon the employee is obvious.[2] Counsel for the employee asserted his client’s failure to appear was inadvertent rather than willful, and the attorney attempted to ameliorate the employee’s absence at the time of the scheduled hearing. The employer countered that it expended substantial sums in attorney fees and costs in preparation for the hearing and witnesses were subpoenaed who had to be away from work to appear at the hearing. Accordingly, the employer contends it has suffered prejudice due to the employee’s failure to appear and the judge’s order should be affirmed.
We acknowledge the employer raises legitimate concerns. However, on balance, we conclude the prejudicial effect on the employee outweighs the expense incurred by the employer.[3] Therefore, the compensation judge’s order of dismissal is reversed, and the case is remanded to the Office of Administrative Hearings to schedule a hearing on the employee’s claim petition. We caution, however, that over six years has now elapsed since the date of the injury and the issue should be resolved without further delay by the employee.
[1] Minn. Rule 1420.3700, subps. 1 and 2, provides:
Subpart 1. Generally. Failure to comply with the order of a judge, or the willful failure to comply with the applicable provisions of this chapter or other applicable law, may subject a party or attorney to any of the following sanctions:
A. continuance of the proceeding;
B. striking of pleadings;
C. preclusion of evidence;
D. evidence sought deemed proven, where a party fails to comply with an order compelling discovery;
E. dismissal of proceedings;
F. to pay the reasonable expenses, including attorney fees, incurred by the other parties due to failure to appear, prepare, or participate in good faith; or
G. other sanction permitted by rule, statute, or case law, as the judge deems just or appropriate under the circumstances.
Subp. 2. Procedures. A motion to impose sanctions may be brought by a party under part 1420.2250 or upon the judge’s own motion. An order for sanctions issued without a hearing is a summary decision under Minnesota Statutes, section 176.305, subdivision 1a.
[2] Even a dismissal without prejudice may well bar the employee’s claim pursuant to Minn. Stat. § 176.151.
[3] We note subp. 3 of Minn. R. 1420.3700 specifically addresses failure to appear, providing that if a “party seeking cancellation [of a proceeding] fails to take reasonable steps to notify the other parties and a party makes an appearance, the office may impose a reasonable sanction payable to the appearing party to cover the expense incurred by the appearing party.