Rojas v. Workforce Safety and Ins.

Decision Date28 July 2005
Docket NumberNo. 20040352.,20040352.
Citation2005 ND 147,703 N.W.2d 299
PartiesMark ROJAS, Claimant and Appellee v. WORKFORCE SAFETY AND INSURANCE, Appellant and Holland Enterprises, Inc., Respondent.
CourtNorth Dakota Supreme Court

Stephen D. Little, Dietz & Little Lawyers, Bismarck, N.D., for claimant and appellee.

Leo F.J. Wilking, Special Assistant Attorney General, Nilles, Ilvedson, Stroup, Plambeck & Selbo, Ltd., Fargo, N.D., for appellant.

MARING, Justice.

[¶ 1] Workforce Safety and Insurance ("WSI") has appealed from a district court judgment reversing WSI's final order, which denied Mark Rojas's reapplication for disability benefits, and remanding for entry of an order allowing further disability benefits. We modify the judgment and affirm as modified.

I

[¶ 2] In January 2000, Rojas injured his left knee when he slipped on ice at a truck stop in Gary, Indiana. Rojas was at the time employed as an over-the-road truck driver by Holland Trucking of Fargo, North Dakota, and was a resident of Maryland. Rojas filed a claim for workers compensation benefits, and WSI accepted the claim and paid medical and disability benefits.

[¶ 3] WSI alleges that, on May 10, 2000, it mailed a Notice of Intention to Discontinue/Reduce Benefits ("NOID") to Rojas at his last known address in Maryland advising him that his disability benefits would be terminated as of May 31, 2000. Rojas claims he never received the NOID. When Rojas realized he was no longer receiving disability benefit checks, he attempted to contact his claims analyst at WSI by telephone to determine the status of his claim. Neither the claims analyst, nor anyone else from WSI, ever returned any of Rojas's calls to WSI.

[¶ 4] Faced with discontinuation of his disability benefits and WSI's failure to return his telephone calls seeking information on his claim, Rojas eventually hired an attorney. Rojas's counsel contacted WSI, explaining that Rojas had never received the NOID and wished to appeal the decision terminating his benefits. WSI responded that its prior decision to terminate Rojas's disability benefits was final, and Rojas's only option was to file a reapplication for disability benefits.

[¶ 5] Rojas filed a reapplication for disability benefits in June 2001. On July 10, 2001, WSI entered its Notice of Decision denying his reapplication. Rojas requested reconsideration and a formal hearing.

[¶ 6] In October 2001, Rojas underwent arthroscopic surgery on his knee. The surgeon diagnosed Rojas with synovial hypertrophy and atrophy of the left quadriceps. WSI paid the medical costs of the surgery and the subsequent physical therapy.

[¶ 7] A hearing before an administrative law judge ("ALJ") was held on August 20, 2003. The ALJ subsequently issued recommended findings of fact, conclusions of law, and order. The ALJ specifically found Rojas had never received the NOID. The ALJ also found Rojas had proved he had suffered a significant change in his medical condition and a resulting actual wage loss, and Rojas was therefore entitled to ongoing disability benefits from May 2001.

[¶ 8] WSI adopted some of the ALJ's recommended findings of fact and conclusions of law, and rejected others. WSI adopted the ALJ's finding that Rojas did not receive the NOID, but rejected the ALJ's findings that Rojas had shown a significant change in his medical condition and had suffered an actual wage loss. WSI therefore concluded Rojas had failed to show he was entitled to any further disability benefits under the reapplication statute.

[¶ 9] Rojas appealed from WSI's final order to the district court. The district court determined WSI had failed to adequately address the evidence favorable to Rojas and to adequately explain its rationale for rejecting the ALJ's decision. The court also found there had been improper communications between WSI's litigation counsel, WSI's in-house counsel, and WSI's final adjudicator. The district court therefore reversed WSI's order and directed WSI to reinstate the ALJ's recommended decision. WSI moved for reconsideration, seeking clarification of the court's order. In a written order, the district court responded in part that Rojas's failure to receive notice and an opportunity to respond "place[d] a greater burden on him." A final judgment was entered, and WSI appealed.

II

[¶ 10] Under N.D.C.C. § 28-32-46, the district court must affirm an order of an administrative agency unless it finds any of the following are present:

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.

On appeal from the district court's decision on an administrative appeal, this Court reviews the agency order in the same manner. N.D.C.C. § 28-32-49; Ringsaker v. Workforce Safety & Ins. Fund, 2005 ND 44, ¶ 9, 693 N.W.2d 14.

III

[¶ 11] The right to continuing disability benefits under the Workers Compensation Act is a property right protected by the due process clauses of the federal and state constitutions. Sjostrand v. North Dakota Workers Comp. Bureau, 2002 ND 125, ¶ 9, 649 N.W.2d 537; Jacobson v. North Dakota Workers Comp. Bureau, 2000 ND 225, ¶ 19, 621 N.W.2d 141. Before WSI terminates ongoing disability benefits, it must provide notice of the contemplated action and a meaningful pretermination opportunity to respond:

We addressed the due process implications of termination of disability benefits in Beckler v. North Dakota Workers Compensation Bureau, 418 N.W.2d 770 (N.D.1988). We concluded in Beckler that the continuing right to workers compensation disability benefits was a property right protected by the due process clause. Analyzing the due process requirements for termination of ongoing benefits under Goldberg v. Kelly, 397 U.S. 254, 90 S.Ct. 1011, 25 L.Ed.2d 287 (1970) and Mathews v. Eldridge, 424 U.S. 319, 96 S.Ct. 893, 47 L.Ed.2d 18 (1976), we concluded workers compensation disability benefits could be discontinued without a pretermination hearing only when there were "elaborate" pretermination procedural safeguards and a right to a timely post-termination evidentiary hearing. The pretermination procedure must include, at a minimum, pretermination notice of the contemplated action, a summary of the evidence supporting the proposed termination, and a pretermination opportunity to respond in writing to the alleged grounds for termination.

Stewart v. North Dakota Workers Comp. Bureau, 1999 ND 174, ¶ 12, 599 N.W.2d 280 (citations omitted); see also Sjostrand, at ¶ 10.

[¶ 12] Before Rojas's continuing disability benefits could be terminated, he was entitled to pretermination notice of the contemplated action, a summary of the evidence, and an opportunity to respond. WSI alleges it mailed the NOID to Rojas's last known address by regular mail. The ALJ and WSI specifically found, however, that Rojas never received the NOID.

[¶ 13] This Court has repeatedly stated that "notice of an opportunity for a hearing sent by regular mail is insufficient to guarantee due process when the presumption of receipt raised by Section 31-11-03(24), N.D.C.C., is rebutted." State v. Egan, 1999 ND 59, ¶ 7, 591 N.W.2d 150; In re Estates of Gustafson, 381 N.W.2d 208, 211-12 n. 5 (N.D.1986); State v. Tininenko, 371 N.W.2d 762, 763 (N.D.1985); State v. Knittel, 308 N.W.2d 379, 384 (N.D.1981). The potential risks of delivery of notice by regular mail have been noted:

But, there is also some frailty in notice by ordinary mail. As Justice O'Connor dissenting in Greene [v. Lindsey], 456 U.S. [444,] 460, 102 S.Ct. [1874,] 1883, [72 L.Ed.2d 249 (1982)] observed, there is risk of "loss, misdelivery, lengthy delay, or theft" of ordinary mail and "unattended mailboxes are subject to plunder." When a statutory regime relies on the economy and efficiency of ordinary mail for the notice required by procedural due process, its purpose may fail if there is no actual notice. Where presumptive evidence "that a letter duly directed and mailed was received in the regular course of the mail" is "contradicted by other evidence," N.D.C.C. § 31-11-03(24), the issue of actual notice is for the trier of fact to decide.

Tininenko, at 766 (Meschke, J., specially concurring). In this case, both the ALJ and WSI made a finding of fact that Rojas did not receive any notice before his disability benefits were terminated in May 2000.

[¶ 14] WSI contends it is statutorily authorized to send notice of its decisions by regular mail under N.D.C.C. § 65-01-16. Compliance with the statute does not, however, relieve WSI of its duty to comport with due process, or trump a claimant's constitutional due process right to adequate notice and an opportunity to be heard. Sending the NOID to the claimant by regular mail under N.D.C.C. § 65-01-16 "is insufficient to guarantee due process when the presumption of receipt raised by Section 31-11-03(24), N.D.C.C., is rebutted." Egan, 1999 ND 59, ¶ 7, 591 N.W.2d 150; Gustafson, 381 N.W.2d at 211-12 n. 5; Tininenko, 371 N.W.2d at 763; Knittel, 308 N.W.2d at 384.

[¶ 15] Furthermore, this Court has repeatedly held that a claimant's due process rights are violated if the NOID does not adequately advise the claimant of the reason for the proposed termination and include a summary of the evidence relied upon by WSI. See, e.g., Jaco...

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  • Drayton v. Workforce Safety and Ins.
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