Johnson v. Safety

• Decision Date: 17 February 2012
• Docket Number: No. 20110159.,20110159.
• Citation: 2012 ND 27,812 N.W.2d 467
• Parties: Edith JOHNSON, Appellant, v. NORTH DAKOTA WORKFORCE SAFETY AND INSURANCE, a/k/a W.S.I., Appellee.
• Court: North Dakota Supreme Court

812 N.W.2d 467

2012 ND 27

Edith JOHNSON, Appellant,

v.NORTH DAKOTA WORKFORCE SAFETY AND INSURANCE, a/k/a W.S.I., Appellee.

No. 20110159.

Supreme Court of North Dakota.

Feb. 17, 2012.

Ariston Edward Johnson (argued), Watford City, N.D. and Thomas A. Dickson (appeared), Bismarck, N.D., for appellant.

Lolita G. Hartl Romanick, Special Assistant Attorney General, Grand Forks, N.D., for appellee.

VANDE WALLE, Chief Justice.

[¶ 1] Edith Johnson appealed from a district court judgment affirming an administrative law judge's (“ALJ”) order dismissing her claim for benefits from Workforce Safety and Insurance (“WSI”). Johnson argues the ALJ improperly set aside the parties' stipulated specification of issues and abused its discretion by dismissing her claim for benefits as a sanctionfor failing to comply with discovery. We affirm.

I

[¶ 2] In 2009, Johnson's employer, Bremer Bank, filed a first report of injury with WSI for Johnson, claiming Johnson suffered from post-traumatic stress disorder (“PTSD”) after the bank was robbed while she was working as a bank teller. WSI denied Johnson's claim for benefits, ruling she did not have a physical injury and a compensable injury as defined by N.D.C.C. § 65–01–02(10) does not include a mental injury arising from mental stimulus. Johnson requested WSI reconsider its decision. WSI denied the claim, ruling Johnson's injury was not compensable because it was a mental injury arising out of a mental stimulus, Johnson failed to prove she sustained a compensable injury and was entitled to benefits, and, as an alternative conclusion, ruled Johnson's injury was not a compensable injury under N.D.C.C. § 65–01–02(10)(a)(6) because the injury was a mental or psychological condition preexisting the alleged work injury.

[¶ 3] Johnson appealed WSI's decision. Before a hearing was held on Johnson's appeal, the ALJ filed the specification of issues, advising the parties of the issues that would be considered and decided at the hearing. The parties filed a stipulation to amend the specification of issues to state that the issue was, “[w]hether Workforce Safety and Insurance correctly applied N.D.C.C. § 65–01–02(10)(b)(10) in determining that Edith Johnson's PTSD is a mental injury arising from a mental stimulus and thus is not a compensable injury.” The ALJ ordered the specification of issues be amended as the parties requested.

[¶ 4] WSI requested discovery, including production of Johnson's medical records and information about preexisting conditions. Johnson objected and refused to provide some of the requested information because she claimed the information was not relevant to the issue before the ALJ and was unlikely to lead to relevant discovery. WSI moved to compel discovery. After a hearing, the ALJ granted WSI's motion to compel and set aside the parties' stipulated specification of issues, ruling it was confusing and did not “provide clarity, focus attention, or simplify proof.” The ALJ stated the issue to be heard and decided at the hearing was, “whether [Johnson's] PTSD is a compensable work injury.” The ALJ said this phrasing of the issue was “broad enough to allow [Johnson] to argue for benefits under all available statutory theories and also encompasses WSI's position that [Johnson's] PTSD is not a compensable injury under § 65–01–02(10)(b)(10) and § 65–01–02(10)(a)(6).”

[¶ 5] Johnson petitioned the district court for a writ of mandamus vacating the ALJ's order granting WSI's motion to compel and requiring the parties abide by the stipulated specification of issues through the remainder of the proceedings. After a hearing, the district court denied Johnson's petition, ruling she had not exhausted her administrative remedies.

[¶ 6] Johnson continued to refuse to provide the requested discovery. WSI moved for sanctions for Johnson's failure to comply with the discovery order and requested an order dismissing Johnson's claim. Johnson did not respond to WSI's motion but filed a motion to reconsider, requesting the ALJ reconsider its order granting WSI's motion to compel. Johnson attached two proposed orders to her motion to reconsider, one granting her motion and vacating the order to compel, and one denying the motion to reconsider and granting WSI's motion to dismiss. The ALJ denied Johnson's motion to reconsider and granted WSI's motion to dismiss.

[¶ 7] Johnson appealed the ALJ's decision to the district court, arguing the ALJ erred in setting aside the parties' stipulated specification of issues. The court affirmed the ALJ's decision.

II

[¶ 8] Courts exercise limited review in appeals from an administrative agency's decision. Sloan v. North Dakota Workforce Safety & Ins., 2011 ND 194, ¶ 4, 804 N.W.2d 184. On appeal from the district court, this Court reviews an administrative agency decision in the same manner that the district court reviewed the decision. N.D.C.C. § 28–32–49. Under N.D.C.C. § 28–32–46, the district court must affirm an 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.

[¶ 9] This Court does not make independent findings or substitute our judgment for the ALJ's judgment in reviewing the ALJ's findings of fact. Sloan, 2011 ND 194, ¶ 5, 804 N.W.2d 184. We do not give deference to the ALJ's legal conclusions, and questions of law are fully reviewable on appeal. Id.

III

[¶ 10] Johnson argues the ALJ erred in setting aside the parties' stipulated specification of issues and the order incorporating the parties' stipulation. She claims the proceedings were procedurally unfair because the parties were bound by their stipulation, WSI waived any arguments not relating to the stipulated issue, and she relied on the stipulation to prepare for the evidentiary hearing. Johnson contends that even if WSI did not waive any issues outside the stipulation, it was required to follow appropriate procedures to have the ALJ amend the specification of issues and give Johnson notice if it wanted to raise other issues at the evidentiary hearing.

[¶ 11] Section 28–32–21(3)(c), N.D.C.C., provides notice requirements for adjudicative proceedings before an administrative agency, and states:

A hearing under this subsection may not be held unless the parties have been properly served with a copy of the notice of hearing as well as a written specification of issues for hearing or other document indicating the issues to be considered and determined at the hearing. In lieu of, or in addition to, a specification of issues or other document, an explanation about the nature of the hearing and the issues to be considered and determined at the hearing may be contained in the notice.

This Court has said notice is adequate when it informs the parties of the nature of the proceedings so there is not unfair surprise. Saakian v. North Dakota Workers Comp. Bureau, 1998 ND 227, ¶ 11, 587 N.W.2d 166. “Basic notions of fundamental fairness dictate a person challenging an agency action must be adequately informed in advance of the questions to be addressed at the hearing so the person can be prepared to present evidence and arguments on those questions.” Id.

[¶ 12] In this case, the ALJ's initial specification of issues advised the parties there were two issues that would be considered and determined at the hearing:

1) Whether WSI correctly applied N.D.C.C. § 65–01–02(10)(b)(10) in determining that Edith A. Johnson's PTSD is a mental injury arising from a mental stimulus and thus not a compensable injury, and 2) Whether WSI correctly applied N.D.C.C. § 65–01–02(10)(a)(6) in determining that Edith A. Johnson's PTSD is not a compensable injury because it is a mental/psychological condition preexisting the alleged work injury.

The parties submitted a stipulation agreeing to amend the specification of issues to strike the second issue and include only the first issue. The ALJ ordered the specification of issues be amended as the parties requested.

[¶ 13] WSI requested discovery, including production of Johnson's medical records and information about preexisting conditions. Johnson refused to comply with WSI's discovery request, arguing some of the requested discovery was irrelevant to the stipulated issue. WSI moved to compel discovery. A hearing was held on WSI's motion, and WSI argued the stipulated issue was broad enough to cover its discovery request and the requested discovery was relevant to the stipulated issue because the exclusion for mental injuries did not apply until the rest of the statute was addressed and Johnson proved her injury was a compensable injury as defined by N.D.C.C. § 65–01–02(10)(a). WSI requested the ALJ set aside the stipulation if its interpretation of the stipulated issue was incorrect. Johnson argued that WSI knowingly waived all issues except the stipulated issue and that she intended to present evidence at the evidentiary hearing that her injury was a compensable injury as defined by N.D.C.C. § 65–01–02(10)(a).

[¶ 14] The ALJ granted WSI's motion and amended the specification of issues, ruling:

Both sides agree that the basic issue is whether [Johnson's] PTSD is a compensable work injury. However, [Johnson] insists that WSI should be held to the issue it stipulated to, even though...