VACATION OF AWARD – MUTUAL MISTAKE; PRACTICE & PROCEDURE. When a party necessary to a claim is misapprehended during legal proceedings, is not represented during the process of the claim, and has no chance to be heard, the findings and order resulting from that claim must be vacated.
Attorneys: Blake Bauer, Fields Law Firm, Minnetonka, Minnesota, for the Employee/Respondent. Patrick T. Grove, Nissen & Grove, Schaumburg, Illinois, for the Petitioner. Yuri Jelokov, Office of General Counsel, St. Paul, Minnesota, for the Special Compensation Fund.
Petition granted.
THOMAS J. CHRISTENSON, Judge
Zurich North America petitions this court to vacate and set aside the default awards of workers’ compensation benefits and attorney’s fees pursuant to Minn. Stat. § 176.461. We find mutual mistakes of fact in the record and grant the petition.
On November 30, 2022, Zurich North America (Zurich) filed a petition at the Workers’ Compensation Court of Appeals seeking to vacate and set aside the Findings and Order of Compensation Judge Kirsten M. Marshall dated September 2, 2022, and the Order Determining Attorney’s Fees dated November 1, 2022.
Oral arguments were held on April 17, 2022, before the Workers’ Compensation Court of Appeals and appearances were made by counsel for the employee, Zurich, and the Special Compensation Fund.[1] The matter was referred to the Office of Administrative Hearings in an opinion dated June 21, 2023, which is incorporated in this decision by reference, for an evidentiary hearing to make findings of fact as to whether there was proper service of the claim petition and whether Zurich was appropriately ordered to pay benefits or whether its delay in making the no-coverage argument was reasonable.[2] Due to reasons unknown to this court, the Office of Administrative Hearings considered the matter as a remand and subsequently ordered a dismissal of the initiating claim petition and dismissed the matter without conducting the required hearing.[3]
After the court was notified of the dismissals through a separate appeal to this court, this court revoked the referral and ordered the parties to provide written sworn affidavits as to the identity of the proper employer and its insurer, if any, to this court. The court received the requested sworn affidavits from counsel for the employee, Zurich, and the Special Compensation Fund as of January 11, 2024.
Generally, this court has broad discretion in determining whether to vacate an award. Krebsbach v. Lake Lillian Coop. Creamery Ass’n, 350 N.W.2d 349, 36 W.C.D. 796 (Minn. 1984). Under Minn. Stat. § 176.461, the legislature bestowed upon the Workers’ Compensation Court of Appeals the authority to set aside a compensation judge’s award. Pursuant to that statute, an award may, upon application of a party, be set aside “for cause.” Under Minn Stat. § 176.461 (b), “for cause” is limited to: (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.
In this case, the petitioner, Zurich, argues that the findings and order determining attorney’s fees should be set aside and vacated, contending that Zurich did not provide workers’ compensation liability coverage for the claimed employer, The Cleaning Authority, on October 8, 2021, and they did not timely receive the claim petition because of improper service. Based upon the record before the court, the sworn affidavits, and the pleadings in this matter, we find that mutual mistakes of fact exist regarding the identity of the employer and the insurer at the time of the injury on October 8, 2021.
A mutual mistake of fact occurs when opposing parties both misapprehend some fact material to the claim or claims. Shelton v. Schwan’s Sales Enters., 53 W.C.D. 110, 113 (W.C.C.A. 1995), summarily aff’d (Minn. Sept. 5, 1995). A unilateral mistake arising from an oversight by a party or a party's attorney does not constitute a mutual mistake of fact for purposes of a petition to vacate. See, e.g., Shelton, 53 W.C.D. at 114. The Minnesota Supreme Court held in Monson v. White Bear Mitsubishi, 663 N.W.2d 534, 539-40, 63, W.C.D. 337, 344 (Minn. 2003), that “the development of new facts about the injury after the award, or even the subsequent discovery of facts in existence but unknown at the time the award was made, is sufficient to justify the vacation of an award.” We find that identifying the improper employer as well as the improper insurer are material mistakes and demonstrate good cause to vacate the September 2, 2022, findings and order and November 1, 2022, order determining attorney’s fees.
Through their sworn affidavits, the parties agree that on the date of injury, October 8, 2021, the employee’s proper employer was M & M Business Enterprises DBA The Cleaning Authority, and not The Cleaning Authority which was used on the claim petition, the pleadings, the findings and order, and the award on attorney’s fees. Further, the parties also agree that M & M Business Enterprises DBA The Cleaning Authority was not insured for workers’ compensation liability by Zurich and, in fact, lacked workers’ compensation coverage in Minnesota entirely on October 8, 2021. Finally, there is nothing in the record before this court evidencing an attempt by any party to amend the pleadings to indicate the proper employer and insurer prior to the issuance of the orders or the petition to vacate filed by Zurich.[4]
Our supreme court has long held that fundamental fairness is the overriding principle when determining whether to set aside an award. Krebsbach v. Lake Lillian Coop. Creamery Ass’n, 350 N.W.2d 349, 36 W.C.D. 796 (Minn. 1984); Landon v. Donovan Constr. Co., 270 N.W.2d 15, 31 W.C.D. 135 (Minn. 1978); Wollschlager v. Stand. Contr. Co., 300 Minn. 550, 220 N.W.2d 346, 27 W.C.D. 495 (1974).[5] However, unfairness is not sufficient in and of itself to provide cause to vacate. Fodness v. Stand. Café, 41 W.C.D. 1054 (W.C.C.A. 1989). In this instance, we are concerned that the facts do not conform to the general intent of the Minnesota Workers’ Compensation Act. Minn Stat. § 176.001, clearly states that:
It is the intent of the legislature that chapter 176 be interpreted as to insure the quick and efficient delivery of indemnity and medical benefits to injured workers at a reasonable cost to the employers who are subject to the provisions of this chapter.
Here, the employee was a passenger in a car driven by her boss when she sustained a work injury arising out of and in the course of her employment. Since her injury, the employee has been unable to pursue her claim either quickly or efficiently, and instead has been subjected to years of cyclical litigation as a result of the mutual mistakes of fact. The proper employer was not identified on the initiating claim petition which led to the misidentification of the insurer. The compensation judge did not make a finding indicating Zurich was the insurer and payor of the awarded benefits at issue. Even after it was discovered that both the listed employer and insurer were not the proper parties, there has been no affirmative action taken to amend the pending pleadings. Given the unwarranted litigation the parties have created in this matter, the need for the injured employee to quickly and efficiently pursue her claim, and the discovery of pertinent facts after the issuance of the awards, basic fairness dictates that the awards at issue be vacated.[6]
Finding good cause, we grant Zurich’s petition to set aside the award of benefits and vacate the findings and order dated September 2, 2022, and order determining attorney fees dated November 1, 2022.
Finally, because the petition to vacate the awards is granted under Minn. Stat. § 176.461 (b)(1), we decline to address the other arguments raised in the briefs and untimely filed motions.[7] This court recognizes its limited powers set forth under Minnesota statutes and rules, and because additional findings of fact would be required, we decline to address these additional arguments.
[1] To date neither The Cleaning Authority (the claimed employer), nor any representative on behalf of the claimed employer, has participated in any proceedings or responded to the pleadings in this matter.
[2] See Minn. R. 9800.1050 and Minn. Stat. Ch. 176. A referral under Minn. Stat. § 176.381, subd. 2, is not a remand. A remand of a case to a compensation judge under Minn. Stat. § 176.421, subd. 6(5), divests this court of jurisdiction. With a referral of a case to a compensation judge, the Workers’ Compensation Court of Appeals retains jurisdiction but requests fact finding to aid the court in execution of its appellate function, as was attempted in this case.
[3] On September 1, 2023, counsel for the employee in a written letter to the compensation judge, withdrew the claim petition filed with the Office of Administrative Hearings on May 3, 2022. The claim petition gave rise to the awards sought to be vacated by Zurich. An order dismissing pleading was issued on September 5, 2023. The Special Compensation Fund filed a timely notice of appeal of the order dismissing pleading on October 4, 2023. The court has stayed that matter so as to address the issues currently before the court.
[4] The parties’ and the compensation judge’s misapprehension of the proper insurance coverage on the date of injury which resulted in no representation of that party during the legal proceedings and no opportunity to be heard, is a basis for the vacation of a compensation judge’s decision in its entirety. Peterson v. Hibbing Taconite Co., slip op. (W.C.C.A. May 7, 2010).
[5] When a party necessary to a claim has no opportunity to be represented during the pendency of the claim, the findings and order from that litigation should be vacated. See Sanchez v. McLane Minn., slip op. (W.C.C.A. Oct. 11, 2006).
[6] This decision does not in any way resolve the issues as to causation or the nature and extent of the employee’s injury.
[7] The Special Compensation Fund filed a motion for judicial notice on February 7, 2024, twenty days after the court gave notice the record was closed. Counsel for Zurich then filed its objection to the motion on February 8, 2024. We decline to address the untimely filings. Under Minn. R. 9800.1400, subp. 2, “[A]ll requests for relief must be served and filed no later than ten days after the date on which the respondent’s brief or responsive pleading is due.” Under Minn. R. Civ. P. 201 (a), courts must take “judicial notice of adjudicative facts in civil cases.” The issues raised in the motion for judicial notice were not adjudicative facts.