PRACTICE & PROCEDURE – NOTICE OF HEARING; VACATION OF AWARD – REFERRAL FOR HEARING. Where the petitioner contended that it was not properly served the claim petition and that it was not the employer’s insurer on the date of injury, the matter of whether proper service on the petitioner occurred is referred to a compensation judge for determination after an evidentiary hearing.
PRACTICE & PROCEDURE – DEFAULT AWARD – REFERRAL FOR HEARING. Where there is no finding or stipulation as to the identity of the party ordered to pay workers’ compensation benefits, the matter is referred to a compensation judge for determination.
Attorneys: Michael R. Johnson, Fields Law Firm, Minnetonka, Minnesota, for the Employee/Respondent. Patrick T. Grove, Law Office of Kristin B. Maland, Schaumburg, Illinois, for the Petitioner. Yuri Jelokov, Office of General Counsel, St. Paul, Minnesota, for the Special Compensation Fund.
Disposition: Petition to vacate findings and order and order on attorneys fees referred to OAH.
THOMAS J. CHRISTENSON, Judge
Zurich North America petitions this court to vacate and set aside the default awards of workers’ compensation benefits and attorneys fees on the basis of “newly discovered evidence.” We refer the matter to the Office of Administrative Hearings for additional findings.
On October 8, 2021, the employee, Esther Briones Parral, was injured in a car accident while traveling as part of her job for the employer, The Cleaning Authority. She sustained injuries to her neck, back, and right shoulder, which required medical care and lost time from work.
A claim petition was served and filed on May 3, 2022, for medical expenses and temporary total disability (TTD) benefits. The claim petition named The Cleaning Authority as the employer and Zurich North America as its insurer.[1] The affidavit of service that accompanied the claim petition indicated that the pleading was “properly” addressed and mailed on “May 3, 2021.”[2] However, the pleading was mailed using an incorrect zip code for Zurich North America.[3]
Subsequently, because no answer or request for an extension of time to answer was made to the claim petition by either The Cleaning Authority or Zurich North America,[4] the matter was set for an expedited default hearing pursuant to Minn. Stat. § 176.331. A notice of the expedited hearing, and notices of the case filing, case number, and judicial assignment were sent to the proper addresses for the parties by the Office of Administrative Hearings Workers’ Compensation Division. (SCF Exs. B and C.) No action was taken by Zurich North America[5] in response to these notices.
On September 1, 2022, the employee’s claim petition was considered by a compensation judge at the expedited hearing. Neither The Cleaning Authority nor Zurich North America appeared. In the Findings and Order issued on September 2, 2022, the judge found that the employee was injured while employed by The Cleaning Authority on October 8, 2021. She ordered TTD benefits and the claims of the intervenors to be paid by the “employer/insurer.” (Order 1, 2, and 3.) No specific finding was made as to whether Zurich North America was the insurer of The Cleaning Authority on the date of injury. No appeal was taken from the Findings and Order.
Counsel for the employee filed a statement of attorney’s fees on October 18, 2022, requesting an award of fees and costs. No objection was filed by The Cleaning Authority or Zurich North America, and on November 1, 2022, an order determining attorney fees was served and filed. No appeal was taken from the attorney fee order.
On November 30, 2022, Zurich North America filed a petition to set aside default awards with this court, on the basis that it did not provide workers’ compensation liability coverage to The Cleaning Authority on October 8, 2021.[6] Zurich North America requests that this court vacate the default judgment pursuant to Minn. R. Civ. P. 60.02. In the alternative, Zurich North America requests this court vacate the default award and the order determining attorney fees pursuant to Minn. Stat. § 176.461(a). Zurich North America’s petition was filed and served on the employee through her attorney and on the Special Compensation Fund (SCF),[7] but not on The Cleaning Authority or the intervenors. The employee and the SCF oppose the petition to vacate.
On appeal, the Workers’ Compensation Court of Appeals must determine whether “the findings of fact and order [are] clearly erroneous and unsupported by substantial evidence in view of the entire record as submitted.” Minn. Stat. § 176.421, subd. 1(3). Substantial evidence supports the findings if, in the context of the entire record, “they are supported by evidence that a reasonable mind might accept as adequate.” Hengemuhle v. Long Prairie Jaycees, 358 N.W.2d 54, 59, 37 W.C.D. 235, 239 (Minn. 1984). Where evidence conflicts or more than one inference may reasonably be drawn from the evidence, the findings are to be affirmed. Id. at 60, 37 W.C.D. at 240. Similarly, findings of fact should not be disturbed, even though the reviewing court might disagree with them, “unless they are clearly erroneous in the sense that they are manifestly contrary to the weight of evidence or not reasonably supported by the evidence as a whole.” Northern States Power Co. v. Lyon Food Prods., Inc., 304 Minn. 196, 201, 229 N.W.2d 521, 524 (1975).
A decision which rests upon the application of a statute or rule to essentially undisputed facts generally involves a question of law which the Workers’ Compensation Court of Appeals may consider de novo. Krovchuk v. Koch Oil Refinery, 48 W.C.D. 607, 608 (W.C.C.A. 1993), summarily aff’d (Minn. June 3, 1993).
In its petition to vacate, Zurich North America filed an affidavit asserting that the claim petition was mailed to an incorrect zip code and was either not received or received in an untimely manner. Minn. Stat. § 176.285 and case law have explicitly adopted the requirement that a mailing must be “properly addressed” to be effective service. Finley v. Taystee Baking Co., slip op. (W.C.C.A. May 7, 2004). Counsel for the employee attempted to serve the employee’s claim petition on Zurich North America by mail pursuant to Minn. Stat. § 176.285, “where service of papers is done by mail, properly addressed and stamped, service is presumed to have reached the served party.” Mayard v. Macy’s, Inc., No. WC21-6417 (W.C.C.A. Jan. 14, 2022). The statute allows a party to challenge service by providing evidence that the served document was not received. Id.; Vang v. Planna Tech, Inc., 69 W.C.D. 11, 16 (W.C.C.A. 2009). If the claim petition was not properly served on Zurich North America, the question arises whether either the court below or this court has jurisdiction to make any order requiring Zurich North America to pay benefits.
This court has the authority to consider “all questions of fact and law under the workers’ compensation laws of [Minnesota].” Minn. Stat. § 175A.01, subd 5. This authority extends to deciding questions related to insurance coverage where such a determination is ancillary to adjudication of the employee’s claims. See Peterson v. Vern Donnay Constr. Co., 48 W.C.D. 664, 669 (W.C.C.A. 1993), aff’d without opinion, 503 N.W.2d 792 (Minn. 1993). The issue of jurisdiction may be raised at any time, and an appellate court may raise and determine jurisdiction on its own motion, even though none of the parties have raised the issue. See, e.g., Davidner v. Davidner, 304 Minn. 491, 493, 232 N.W.2d 5, 7 (1975); Rhoades v. K & C Distrib., 51 W.C.D. 305, 321-22 (W.C.C.A. 1994), summarily aff’d (Minn. Aug. 3, 1994). Parties cannot by their actions or agreement confer subject matter jurisdiction on a court. See Zanmiller v. Montgomery Ward, 361 N.W.2d 59, 37 W.C.D. 391 (Minn. 1985). To assess the question of jurisdiction, factual determinations must be made regarding proper service of the claim petition and whether Zurich North America provided workers’ compensation liability coverage for The Cleaning Authority on October 8, 2021.
Fact-finding is also required to determine whether Zurich North America can show that it has satisfied the requirements for vacation of a default judgment pursuant to Minn. R. Civ. P. 60.02 (a) through (f). Flores v. Maxine L. Shaw, 71 W.C.D. 51 (W.C.C.A. 2011); Martin v. Red Owl Stores, slip op. (W.C.C.A. June 28, 2000); Betts v. M.I.L. Realty Corp., 269 N.W.2d 42, 45, 31 W.C.D. 40, 44 (Minn. 1978). The necessary factual determinations include whether Zurich North America has a reasonable case on the merits; a reasonable excuse for its failure to act; acted with due diligence after notice of the entry of judgment; and whether there would be substantial prejudice to the employee if the petition to vacate is granted.
Zurich North America also argues that it has shown grounds for vacation of the awards based on Minn. Stat. § 176.461. This provision permits “the Workers’ Compensation Court of Appeals, for cause, at any time after an award, . . . to set the award aside and grant a new hearing and refer the matter for a determination” by a compensation judge. The phrase “for cause” includes “newly discovered evidence,” which includes “the subsequent discovery of facts in existence but unknown at the time the award was made. . . .” Monson v. White Bear Mitsubishi, 663 N.W.2d 534, 539-40, 63 W.C.D. 337, 344 (Minn. 2003) (citing Dudansky v. L.H. Sault Constr. Co., 224 Minn. 369, 372, 70 N.W.2d 114, 116, 18 W.C.D. 286, 289 (1955).
During argument to this court, counsel for Zurich North America conceded that the only statutory basis on which it relied to vacate the default award and attorney fee order under Minn. Stat. § 176.461 (a)(2), was “newly discovered evidence.” Zurich North America argued that the newly discovered evidence was the discovery that it did not provide workers’ compensation coverage to The Cleaning Authority and that no workers’ compensation coverage could be identified for The Cleaning Authority on the date of the employee’s injury. Zurich North America also argued that even in the absence of an error of law, the interests of justice require that this court vacate and remand the case to the compensation judge to determine the proper payor of the employee’s awarded benefits.[8]
In order for relief to be granted on the basis of newly discovered evidence, the newly discovered evidence must: (1) be relevant and admissible; (2) have been in existence at the time of the award but not discoverable with the exercise of reasonable and due diligence; (3) be not merely collateral, impeaching, cumulative, or duplicative; and (4) be such as would have had a probable effect upon the outcome of the litigation. Gruenhagen v. Larson, 310 Minn. 454, 459, 246 N.W.2d 565, 569 (Minn. 1976). Thus, evaluation of the petition to set aside a default award requires factual determinations of Zurich North America’s processes, procedures, and the basis for its failure to advise the parties and the court that it did not provide workers’ compensation liability coverage for The Cleaning Authority until November 2022.[9]
It is not the function of this court to make factual findings. Given Zurich North America’s assertions that it was improperly served, as well as the ambiguity of the record, pleadings, and facts of the case, we refer this case to the Office of Administrative Hearings for the necessary factual determinations discussed above, and to provide all parties, including the SCF, an opportunity to submit evidence on whether there was proper service of the claim petition and whether Zurich North America is appropriately ordered to pay benefits or whether its delay in making the no-coverage determination was reasonable. The judge’s findings and order on referral shall be returned to this court for further consideration of Zurich North America’s petition to vacate the September 2, 2022, findings and order and November 1, 2022, order on attorney fees.
[1] Prior to filing the claim petition, counsel for the employee contacted the Department of Labor and Industry’s Insurance Verification section which identified Zurich North America as the workers’ compensation carrier on the risk on October 8, 2021. (Pet. Ex. 4.)
[2] We assume the correct date of service to have been May 3, 2022, not May 3, 2021, as it is assumed the pleading was not filed before the date of injury.
[3] The proper address and the address provided by the Department of Labor and Industry’s Insurance Verification section for Zurich North America is P.O. Box 968070, Schaumberg, Illinois 60196, and the address listed on the employee’s claim petition affidavit of service is P.O. Box 968070, Schaumberg, Illinois 60661-0941.
[4] The employer has not made an appearance at any of the proceedings in this case, nor has it contacted the employee or Zurich North America regarding this matter.
[5] Zurich North America acknowledged in its brief and at oral arguments that it had received the claim petition and notices at some point in time, but the date, place, and manner of receipt is unknown.
[6] Zurich North America determined that it did not provide workers’ compensation liability coverage to The Cleaning Authority on October 8, 2021, but took no affirmative action to advise the employee’s counsel, the employer, the Office of Administrative Hearings, or the compensation judge of this information. It is probable that The Cleaning Authority was uninsured on the date of injury. (Pet. Ex. 5.)
[7] The SCF was not a party at the lower court hearings but was allowed to participate in the case before this court because of the possibility that The Cleaning Authority was uninsured on the date of injury.
[8] Zurich North America and the employee confirmed during arguments that no payments have been made to the employee or the intervenors for the awarded benefits.
[9] Fundamental fairness, or lack of fundamental fairness, is not an independent basis for vacating an award. See Krebsbach v. Lake Lillian Coop. Creamery Ass’n, 350 N.W.2d 349, 36 W.C.D. 796 (Minn. 1984); see also Kulencamp v. Timesavers, Inc., 420 N.W.2d 891, 40 W.C.D. 869 (Minn. 1988).