PAUL O. HUDACEK, Employee/Petitioner, v. LORAM MAINT. OF WAY, INC., and LIBERTY MUT. INS. CO., Employer-Insurer/Respondents, and SPECIAL COMP. FUND, Intervenor.

This court has jurisdiction over a petition to vacate an order dismissing the employee’s claim petition where the compensation judge reviewed documents establishing that no dispute existed, where the order was a decision on the merits, and where the order to dismiss with prejudice was a final determination of the claim.

By filing a petition to vacate an order based on fraud pursuant to Minn. Stat. §176.461, the employee carries the burden of proving that the order should be vacated. Where the employee submits no evidence to establish fraud, the petition to vacate is denied.

The pro se employee, Paul Hudacek, injured his knee at work on May 4, 1987. His employer, Loram Maintenance of Way, and insurer, Liberty Mutual, paid wage loss benefits to the employee for approximately five to six weeks.

The employee filed a claim petition on March 17, 2014, against his former employer, its insurer, and against Burlington Northern Santa Fe Railroad (BNSF). That claim petition was dismissed without prejudice on August 25, 2014. On April 22, 2015, the employee filed another claim petition naming the employer and insurer and BNSF in which he alleged underpayment of temporary total, permanent total, and medical benefits which he said were “covered up.” In describing the nature of the injury, the employee indicated “a conspiracy to get Al Ventura fired.” The pro se employee’s April 22, 2015, claim petition alleges what appears to be an employment law claim against the employer. The Special Compensation Fund was joined as party to the litigation.

The employer and insurer filed a motion to dismiss the April 22, 2015, claim petition for failure to identify an injury, failure to state a claim under the workers’ compensation claim, and for lack of subject matter jurisdiction over railroad claims and wrongful termination claims.

A special term hearing was set for June 15, 2015, where, after reviewing the employee’s voluminous filings, the compensation judge could identify only one issue which fell within the jurisdiction of the Workers’ Compensation Act. That issue was a possible underpayment of the employee’s five or so weeks of temporary total disability benefits that were paid immediately following the 1987 work injury based on an incorrect compensation rate. The judge adjourned the special term hearing to permit the parties to attempt to locate and review additional information pertinent to the disposition of the motion to dismiss.

Following the special term hearing, the employee filed a “motion of petition for motion of court order to release information.” The employee requested an order to release “Al Ventura’s medical records” and “separation and severance notices” of several Loram employees. He also requested information from the Department of Employment and Economic Development. The compensation judge denied the motion having found no basis to order production of the information sought. In the memorandum, he wrote:

Much of the remainder of the Claim Petition and Amended Claim Petition deals with the employee’s grievances regarding his employment situation and the circumstances of his separation from employment. The Workers’ Compensation Division and the Workers’ Compensation Section of the Office of Administrative Hearings have jurisdiction over only the employee’s alleged work injury. A determination of the nature and extent of the employee’s work injury and the employee’s entitlement to workers’ compensation benefits, if any, does not appear to require information regarding individuals other than the employee. The employee may request information pertaining to himself directly from the organization possessing that information without an Order from the compensation judge.

The Special Compensation Fund located records showing that the employer and insurer previously paid the employee a total of $1,960.03 for five to six weeks of wage loss benefits in 1987 at a recorded compensation rate of $186.67. Because the employee’s average weekly wage (AWW) was $532.00, the recorded compensation rate was plainly incorrect. The compensation rate according to Minn. Stat. § 176.101, subd. 1, for an AWW of $532.00 is $354.68. The available evidence indicates that the employer and insurer paid the higher compensation rate in benefits. Based on these calculations, it appeared that the employee did not have a claim for underpayment of benefits.

A subsequent special term conference was set for September 14, 2015. Because the additional information regarding benefits paid had been provided to all parties, the compensation judge cancelled the September 14, 2015, special term hearing and instead issued an order, served and filed on August 12, 2015, dismissing, with prejudice, the employee’s claim petition. In the order’s memorandum, the compensation judge found on the basis of the record, including the information contained in exhibits from the special compensation fund, that the employee was fully compensated. As the order did not specifically dismiss BNSF, the employer and insurer filed a subsequent motion to dismiss based on the lack of subject matter jurisdiction. An order dismissing BNSF was filed on August 24, 2015.

The appeal period from the order expired with no appeal taken. Eight months after the order dismissing the claim petition, the pro se employee filed a petition to vacate the compensation judge’s order dismissing the claim petition. Citing fraud as the basis for vacation of the order, the employee argues that there was an error in calculating his benefits, that he was wrongfully terminated from his employer, and that medical bills were unpaid. The specific relief sought by the employee is to “round-up all the yahoos involved, so I can confront them in a court of law.”^[1] Attached to the petition to vacate are multiple documents including a statement from the State of Wyoming’s workers’ compensation division, an emergency room chart note of January 4, 2004, a criminal complaint listing the employee as a defendant in a domestic dispute in 2003, a letter from the employer and insurer’s attorney regarding the history and calculation for wage loss payment, and various court documents including a reemployment decision indicating that the employee was discharged for misconduct in 1995.

Responding to the petition to vacate, the employer and insurer make three arguments. First, they argue that because the compensation judge issued an order dismissing the claim, there is no award over which this court has jurisdiction. Second, the employer and insurer argue that the employee’s remedy was to appeal the order and not petition to vacate that order. Third, they argue that if jurisdiction is established to review the petition to vacate, the employee failed to establish “cause” to vacate the order on the basis of fraud.

The Special Compensation Fund also filed a response to the employee’s petition to vacate arguing that the employee has the burden of proof to establish that fraud had occurred and had failed to do so.

In arguing that the order dismissing the claim petition was not an award within the meaning of Minn. Stat. § 176.421, the employer and insurer rely on the Minnesota Supreme Court decision in DeMars v. Robinson King Floors, Inc., 256 N.W.2d 501, 504 (Minn. 1977). In DeMars, the employee’s claim petition had been voluntarily dismissed by a settlement judge and the statute of limitations had expired before a new claim petition had been filed. Thus, the employee’s claim petition was time-barred, unless the dismissal order could be vacated to reinstate the earlier, timely claim petition. In affirming this court’s decision that there was no jurisdiction to consider the petition to vacate, the Supreme Court stated:

The employer and insurer rely on the second sentence to contend that, as the employee’s claim petition was dismissed by order, this court has no jurisdiction. This reliance is unfounded, as the critical issue in DeMars was the voluntariness of the dismissal. The distinction is clear in this case, as the order issued by the compensation judge explicitly found that the employee was fully compensated and denied the relief sought. That the mechanism was an order of dismissal is irrelevant to the nature of the order. As this court previously noted in Becerra v. Pine Valley Meats, 54 W.C.D. 304 (W.C.C.A. 1996), summarily aff’d (Minn. Apr. 29, 1996):

In this matter, the compensation judge considered an evidentiary record and arguments regarding the validity of the employee’s claim and determined that the claim had no merit. The compensation judge dismissed the claim petition with prejudice, which entitled the employee to pursue an appeal. See Minn. Stat. § 176.421, subd. 1; see also Firoved v. Gen. Motors Corp., 277 Minn. 278, 283, 151 N.W.2d 364, 368 (1967). Most importantly, the effect of the order of dismissal is to foreclose further litigation on that issue under those facts under the doctrine of res judicata. See Salverda v. City of Roseville, slip op. (W.C.C.A. July 21, 1993)(distinguishing DeMars as the order of dismissal was final, on the merits, and appealable).

Having determined that this court has jurisdiction to hear the employee’s petition to vacate, we turn to the merits of the employee’s case. To vacate the order of dismissal, the employee bears the burden to show cause under Minn. Stat. § 176.461 by way of one or more of the following:

1.   a mutual mistake of fact;
2.   newly discovered evidence;
3.   fraud; or
4.   a substantial change in medical condition since the time of the award that was clearly not anticipated and could not reasonably have been anticipated at the time of the award.

The employee petitioned this court to vacate the compensation judge’s order on the basis of fraud. As this court cannot decide matters on issues not presented, the employee’s burden is to present a prima facie case of fraud that led to the issuance of the order to dismiss. The elements required to prove fraud in a workers’ compensation case are as follows:

1.   a false representation of fact;
2.   that false representation must deal with a past or present fact;
3.   the fact must be susceptible of knowledge;
4.   the representing party must know that the fact is false;
5.   the representing party must intend that another be induced to act based on the false misrepresentation;
6.   the other person must in fact act on the false misrepresentation; and
7.   the misrepresentation must be the proximate cause of actual damages.

See, Bramscher v. City of Perham Police Dep’t, slip op. (W.C.C.A. Feb. 27, 1995) (citing Weise v. Red Owl Stores, Inc., 286 Minn. 199, 202, 175 N.W.2d 184, 187 (1970)).