Carlson v. Workforce Safety & Ins.

• Decision Date: 01 October 2012
• Docket Number: No. 20110163.,20110163.
• Citation: 821 N.W.2d 760,2012 ND 203
• Parties: Merwin CARLSON, Appellant v. WORKFORCE SAFETY AND INSURANCE and GMR Transportation, Inc., Appellees.
• Court: North Dakota Supreme Court

821 N.W.2d 760

2012 ND 203

Merwin CARLSON, Appellant

v.WORKFORCE SAFETY AND INSURANCE and GMR Transportation, Inc., Appellees.

No. 20110163.

Supreme Court of North Dakota.

Oct. 1, 2012.

Bruce A. Schoenwald, Moorhead, MN, for appellant.

Jacqueline Sue Anderson, Special Assistant Attorney General, Fargo, N.D., for appellee Workforce Safety and Insurance.

Timothy George Richard, Fargo, N.D., for appellee GMR Transportation, Inc.

C. Nicholas Vogel, Fargo, N.D., for amicus curiae American Trucking Associations and North Dakota Motor Carriers Association.

CROTHERS, Justice.

[¶ 1] Merwin Carlson appeals from a judgment affirming a Workforce Safety and Insurance (“WSI”) decision denying his claim for workers' compensation benefits after remand in Carlson v. Workforce Safety & Ins., 2009 ND 87, 765 N.W.2d 691 (“Carlson I ”). Under Carlson I and the law of the case, we hold an administrative law judge (“ALJ”) erred in concluding WSI properly exercised its continuing jurisdiction under N.D.C.C. § 65–05–04 to deny Carlson benefits on remand. We reverse and remand for WSI to award Carlson benefits based on the ALJ's calculation that Carlson's average weekly wage was $722.

I

[¶ 2] Relevant facts in this case are set forth in Carlson I, and will not be repeated except as necessary to resolve the issues raised in this appeal.

[¶ 3] Carlson was injured in an out-of-state traffic accident on July 8, 2005, while hauling freight as an over-the-road trucker under contract with GMR. Carlson I, 2009 ND 87, ¶ 2, 765 N.W.2d 691. Carlson filed a claim with WSI for benefits on July 5, 2006, identifying GMR as his employer. Id. GMR submitted a WSI form with employer information stating Carlson was not an employee but was instead an independent contractor. Id. On October 3, 2006, WSI issued a notice of decision finding Carlson was a GMR employee at the time of the accident and awarded him benefits based on an average weekly wage of $252. Id.

[¶ 4] GMR thereafter notified WSI that Ohio attorneys would serve as its “special counsel” for Carlson's claim. In late October 2006, the Ohio attorneys, who were neither licensed to practice law in North Dakota nor admitted pro hac vice at the time, requested reconsideration of WSI's October 3, 2006 decision. In November 2006, the Ohio attorneys submitted legal briefs and additional documents to WSI, supporting GMR's reconsideration request and arguing Carlson was an independent contractor. Id. at ¶ 3. Based on that additional information, WSI issued a notice of decision in January 2007, reversing the October 3, 2006 decision and denying Carlson benefits. Id. at ¶ 4. WSI concluded Carlson was, in fact, an independent contractor and ordered him to repay the benefits WSI had already paid him. Id.

[¶ 5] Carlson requested reconsideration, arguing he was GMR's employee and WSI had improperly accepted GMR's reconsideration request because its attorneys were not licensed to practice law in North Dakota. Id. In February 2007, WSI issued an order, concluding Carlson was an independent contractor under N.D. Admin. Code § 92–01–02–49 and was not entitled to WSI benefits, and requiring Carlson to repay the previously paid disability and medical benefits. Id. at ¶ 5. Carlson requested rehearing under N.D.C.C. § 65–01–16(7). Id. at ¶ 6. A North Dakota licensed attorney subsequently filed a notice of appearance on GMR's behalf and moved for pro hac vice admission for GMR's Ohio counsel, which Carlson opposed. Id. An ALJ granted the pro hac vice admission motions and, in deciding several pre-hearing motions, rejected Carlson's objection to GMR's reconsideration request by unlicensed attorneys. Id. at ¶¶ 6–7. After a September 2007 evidentiary hearing on the merits, the ALJ recommended finding Carlson was an independent contractor and was not entitled to benefits. Id. at ¶ 8. WSI adopted the ALJ's recommendation, and the district court affirmed. Id.

[¶ 6] In Carlson I, Carlson argued WSI erred in deciding GMR's request for reconsideration because GMR's request was made by attorneys not authorized to practice law in North Dakota. 2009 ND 87, ¶ 12, 765 N.W.2d 691. In resolving the issue, we explained, “The issue revolve[d] around a corporate entity's employment of attorneys not licensed to practice law in North Dakota in the context of the procedure for WSI decisions in N.D.C.C. § 65–01–16 and the standards for the unauthorized practice of law under N.D.R. Prof. Conduct 5.5 and for pro hac vice admission under Admission to Practice R. 3.” Carlson I, at ¶ 13. We ultimately concluded that because GMR's nonresident attorneys failed to timely comply with pro hac vice admission requirements, GMR's reconsideration request by non-attorney agents was void. Id. at ¶ 34. Based on GMR's failure to file any timely and sufficient reconsideration request under N.D.C.C. § 65–01–16(4), we held WSI's October 3, 2006 notice of decision was final and could not be reheard or appealed. Carlson I, at ¶ 35. We further held WSI erred in considering GMR's request for reconsideration. Id. at ¶ 36. We remanded for “further proceedings for calculation of Carlson's average weekly wage” because WSI had not addressed Carlson's argument that WSI erred in calculating his average weekly wage. Id.

[¶ 7] On remand, however, instead of only addressing Carlson's average weekly wage calculation, WSI wrote a letter to the parties in July 2009, stating WSI was considering exercising its continuing jurisdiction under N.D.C.C. § 65–05–04 and asking the parties to submit any documentation and argument WSI should consider in evaluating the facts and in reaching a decision. After further submissions, WSI issued an order on October 2, 2009, concluding WSI had continuing jurisdiction to review an award of benefits under N.D.C.C. § 65–05–04 and deciding WSI had accepted and paid Carlson's claim in error.

[¶ 8] In its October 2009 order, WSI again concluded Carlson was an independent contractor, rather than GMR's employee, using the “common law” test under N.D. Admin. Code § 92–01–02–49. WSI ordered no further workers' compensation benefits were payable on the claim beyond those previously awarded and paid. WSI alternatively concluded that if Carlson was later determined to be GMR's employee, his average weekly wage was “reasonably and fairly determined to be $252.00 per week.” WSI further ordered, “Because accepted in error, WSI shall not seek repayment of benefits erroneously paid on this claim.” Carlson requested a hearing on WSI's October 2, 2009 order. A hearing before an ALJ was scheduled for April 6, 2010.

[¶ 9] Before the hearing, Carlson moved for summary disposition on whether administrative res judicata barred litigation of his employment status, whether Carlson suffered due process violations and whether Carlson was entitled to attorney's fees under N.D.C.C. § 28–32–50. Carlson's counsel also filed a motion to intervene on behalf of Blue Cross Blue Shield of North Dakota, Carlson's medical insurer, to recover payments of his medical expenses. On April 5, 2010, the ALJ ruled on Carlson's pre-hearing motions and denied summary disposition, concluding res judicata did not bar litigation of his status as either an independent contractor or GMR's employee. The ALJ denied summary disposition on his claimed violations of due process, concluding that although WSI should have reinstated benefits under its October 3, 2006 decision after Carlson I, Carlson had not established WSI acted in an arbitrary, unreasonable or discriminatory manner. The ALJ also denied Carlson's request for attorney's fees and Blue Cross Blue Shield's motion to intervene. The parties subsequently stipulated to the admission into evidence of certain exhibits and the transcript of testimony from the prior hearing, and the ALJ heard testimony from one additional witness.

[¶ 10] In July 2010, the ALJ issued findings of fact, conclusions of law and an order, deciding the issues remaining after the ALJ's pre-hearing order. The ALJ affirmed WSI's decision that Carlson was an independent contractor and was not entitled to benefits. The ALJ also concluded Carlson's average weekly wage was $722, in the event Carlson was later determined to be GMR's employee. The ALJ further concluded that WSI's failure to reinstate Carlson's benefits after Carlson I constituted a violation of procedural due process, but that Carlson was not entitled to a net monetary award because the benefits that should have been paid from October 3, 2006 through October 2, 2009 were offset by the amount WSI was entitled to recoup from Carlson under N.D.C.C. § 65–05–29. Carlson appealed and WSI cross-appealed to the district court. In April 2011, the district court ultimately issued an order affirming the ALJ's decision. A final judgment was entered in June 2011.

II

[¶ 11] Courts exercise limited review in appeals from decisions by an administrative agency under the Administrative Agencies Practice Act, N.D.C.C. ch. 28–32. Sloan v. North Dakota Workforce Safety & Ins., 2011 ND 194, ¶ 4, 804 N.W.2d 184. Under N.D.C.C. § 28–32–46, a district court must affirm an administrative agency order unless:

“1. The order is not in accordance with the law.

2. The order is in violation of the constitutional rights of the appellant.

3. The provisions of this chapter have not been complied with in the proceedings before the agency.

4. The rules or procedure of the agency have not afforded the appellant a fair hearing.

5. The findings of fact made by the agency are not supported by a preponderance of the evidence.

6. The conclusions of law and order of the agency are not supported by its findings of fact.

7. The findings of fact made by the agency do not sufficiently address the evidence presented to the agency by the appellant.

8. The conclusions of law and order of the agency do not sufficiently explain the agency's rationale for not adopting any contrary recommendations by a hearing officer or an administrative law judge.”

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