Jonida Trucking, Inc. v. Hunt

Decision Date26 June 1997
Docket NumberNo. 96-3472,96-3472
Citation124 F.3d 739
PartiesJONIDA TRUCKING, INCORPORATED, Petitioner, v. Robert F. HUNT; Director, Office of Workers' Compensation Programs, United States Department of Labor, Respondents.
CourtU.S. Court of Appeals — Sixth Circuit

John G. Paleudis (argued and briefed), Hanlon, Duff, Paleudis & Estadt, St. Clairsville, OH, for Petitioner.

Robert F. Hunt, Quaker City, OH, Respondent pro se.

Kathleen M. Bole (argued and briefed), Patricia Nece (briefed), U.S. Department of Labor, Office of the Solicitor, Washington, DC, for Respondent Director, Office of Workers' Compensation Programs, United States Department of Labor.

Before: JONES, SUHRHEINRICH, and SILER, Circuit Judges.

OPINION

SILER, Circuit Judge.

Petitioner, Jonida Trucking, Inc. (Jonida), seeks review of a decision of the Benefits Review Board (the Board), finding it liable to Robert F. Hunt, claimant, for black lung benefits. Jonida claims that the Administrative Law Judge's (ALJ's) refusal to permit withdrawal of Hunt's claim was in error. Alternatively, Jonida contests the award of benefits to Hunt and the requirement that Jonida secure payment of the total amount of the award. For the reasons set forth below, we affirm the decision of the Board.

I.

Hunt was employed by Kovacs Trucking Company as a truck driver hauling coal. On February 2, 1986, Hunt had a heart attack and quit his job as a truck driver. He now works as a part-time watchman for Jonida. Jonida is the corporate reorganization of the partnership formerly known as Kovacs Trucking Company.

The Department of Labor's Office of Workers' Compensation Programs (OWCP) notified Jonida by letter dated July 20, 1987, that Hunt had filed a claim for black lung benefits on June 6, 1987, and that it had begun developing evidence to determine his eligibility. This letter informed Jonida that it had been identified as the party potentially responsible for the payment of Hunt's benefits. Jonida never responded to notice of the claim.

OWCP denied Hunt's claim and served a copy of the denial letter on Jonida. Hunt requested a formal hearing on the matter. Before the claim was forwarded for the formal hearing, OWCP held an informal conference, which was attended by Hunt and his attorney. No one appeared on Jonida's behalf. OWCP affirmed its previous denial and notified the parties that they had thirty days to respond. Neither party responded within that time period.

Seven months later, Hunt's counsel wrote to OWCP inquiring about the status of Hunt's "appeal." OWCP treated the inquiry as a request to modify the denial and denied the request. After Hunt again requested a hearing, OWCP forwarded the case to the ALJ, who held a hearing on June 4, 1990. No appearance was entered by Jonida. The ALJ found evidence sufficient to establish that Hunt was totally disabled due to pneumoconiosis within the meaning of 20 C.F.R. Part 718 and held Jonida liable for payment of the benefits.

Jonida began making interim benefits payments to Hunt. Because the owner of Jonida, John Kovacs, was a long-time friend of Hunt and because Jonida had provided Hunt with a job and medical coverage after his disability, Hunt did not wish to receive benefits payments unless they came from the Black Lung Disability Trust Fund (the Trust Fund). Hunt therefore returned every monthly check, along with a release, waiver, and discharge of any claim he or his heirs might have against Jonida and Kovacs Trucking arising out of the ALJ's decision. He reserved any rights he may have against the Trust Fund.

Jonida moved the ALJ to reconsider the award of benefits. Kovacs submitted an affidavit explaining that Jonida had previously failed to contest the claim because it had relied on information from Hunt that any award would run against the Trust Fund and not against Jonida or Kovacs. Hunt, in turn, apparently received this misinformation from an employee of the St. Clairsville, Ohio OWCP office. Jonida argued that Hunt desired to withdraw his claim.

Mrs. Hunt wrote letters to the ALJ explaining that she and her husband only wanted benefits from the Trust Fund. When she was told that this was not possible, she expressed a desire to have the claim withdrawn. Eventually, counsel for Hunt filed a motion for withdrawal of the claim. The ALJ denied the request for withdrawal and rejected Jonida's arguments on the merits. The ALJ ordered Jonida to secure the payment of $150,000. Jonida appealed to the Board, which affirmed the ALJ's rulings. Jonida now appeals to this court.

II.

A decision by the Board must be affirmed on appeal if the Board has not committed any legal error or exceeded its statutory scope of review of the ALJ's factual determinations. Director, OWCP v. Quarto Mining Co., 901 F.2d 532, 536 (6th Cir.1990). Review on appeal should be focused on whether the ALJ--not the Board--had substantial evidence upon which to base his or her decision. Zimmerman v. Director, OWCP, 871 F.2d 564, 566 (6th Cir.1989). Substantial evidence is relevant evidence that a reasonable mind would accept as adequate to support a conclusion. Ramey v. Kentland Elkhorn Coal Corp., 755 F.2d 485, 488 (6th Cir.1985).

A. Withdrawal of Hunt's Claim

20 C.F.R. section 725.306 provides for the withdrawal of a claim:

(a) A claimant or an individual authorized to execute a claim on a claimant's behalf ..., may withdraw a previously filed claim provided that:

(1) He or she files a written request with the appropriate adjudication officer indicating the reasons for seeking withdrawal of a claim;

(2) The appropriate adjudication officer approves the request for withdrawal on the grounds that it is in the best interests of the claimant ..., and;

(3) Any benefits previously paid with respect to the claim are reimbursed.

(b) When a claim had [sic] been withdrawn under paragraph (a) of this section, the claim will be considered not to have been filed.

Jonida claims that the Board should have allowed withdrawal of Hunt's claim because there was a written request for withdrawal and because there are no benefits to repay Jonida, as Hunt has refused to accept all payments tendered. Jonida contends that the ALJ and the Board erred in determining that withdrawal, an action that Hunt apparently desires, is not in Hunt's best interests.

The Director of OWCP counters that Jonida does not have standing to assert the withdrawal claim on behalf of its employee, Hunt. The Supreme Court has fashioned certain prudential principles that bear on the question of standing. "[T]he plaintiff generally must assert his own legal rights and interests, and cannot rest his claim to relief on the legal rights or interests of third parties." Warth v. Seldin, 422 U.S. 490, 499, 95 S.Ct. 2197, 2205, 45 L.Ed.2d 343 (1975). The Court has required that the plaintiff's complaint fall within "the zone of interests to be protected or regulated by the statute or constitutional guarantee in question." Association of Data Processing Serv. Organizations v. Camp, 397 U.S. 150, 153, 90 S.Ct. 827, 830, 25 L.Ed.2d 184 (1970).

Here, Jonida attempts to avoid liability by resting its claim for relief on the conditional right of the claimant to withdraw under section 725.306. However, Hunt has not appealed the Board's decision to deny the request for withdrawal. Section 725.306(a)(2)'s requirement that the appropriate adjudicative authority determine that withdrawal is in the best interests of the claimant protects claimants from ill-advised or coerced decisions to abandon litigation in exchange for less money or continued employment. Considering this purpose, it is clear that an employer is not the proper party to argue that its employee's best interests are served by allowing him to forfeit payments from the employer. Because Jonida's interests are at odds with the concerns of the provision in issue, Jonida is not within the zone of interests that the Department of Labor sought to protect in promulgating section 725.306(a)(2). Therefore, Jonida does not have standing to appeal the withdrawal issue. Accordingly, we now turn to the merits of Hunt's claim for black lung benefits.

B. Award of Benefits
1. Failure to Apply the Modification Standard of Review

Hunt's claim for benefits was denied by the Director on September 17, 1987. Hunt then requested a hearing on November 13, 1987. Instead of a hearing, however, the case went to an informal conference on December 29, 1987. By letter of January 6, 1988, Hunt was informed that he had thirty days to request a hearing. On July 26, 1988, an attorney, Thomas Hampton, informed the Department of Labor that he had obtained additional medical evidence. Hampton explained, however, that he was not representing Hunt, but rather was attempting to help him secure other legal counsel to pursue his claim. Because of the confusion over the relationship between Hampton and Hunt and because of Hunt's original request for a hearing, the ALJ treated Hampton's contact with the department as a timely appeal rather than a request for modification, even though more than thirty days had passed since the letter denying Hunt benefits.

Jonida argues that the ALJ should not have considered the evidence anew, but rather should have applied the modification standard of review. Accordingly, Jonida contends that the ALJ's decision (and the Board's order affirming that decision) should be vacated. This argument is unavailing. Even if the ALJ should have treated the submission of new evidence as a request for modification, rather than an appeal, the intended purpose of modification is to vest the fact-finder with broad discretion to correct mistakes, whether demonstrated by wholly new evidence, cumulative evidence, or merely after further reflection on the evidence initially submitted. O'Keeffe v. Aerojet-General Shipyards, Inc., 404 U.S. 254, 256, 92 S.Ct. 405, 407, 30 L.Ed.2d 424 (1971). A claimant need not specifically plead a...

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