Traylor Bros., Inc./Frunin-Colnon v. Overton, FRUNIN-COLNON and C
| Decision Date | 12 May 1987 |
| Docket Number | FRUNIN-COLNON and C,No. 860241-CA,860241-CA |
| Citation | 736 P.2d 1048 |
| Parties | TRAYLOR BROTHERS, INCORPORATED/ommercial Union Insurance Companies, Plaintiffs, v. Darrell W. OVERTON and, The Industrial Commission of Utah, Defendants. |
| Court | Utah Court of Appeals |
Henry K. Chai, II, Larry R. Laycock, Snow, Christensen & Martineau, Salt Lake City, for plaintiffs.
Susan B. Diana, Black & Moore, Salt Lake City, for defendants.
Darrell W. Overton, pro se.
Before GARFF, JACKSON and BILLINGS, JJ.
Plaintiffs Traylor Brothers, Inc. ("the employer") and its insurance carrier, Commercial Union Insurance Companies, seek review of the Industrial Commission's order that employee Darrell Overton's ("Overton's") temporary total disability compensation benefits should not have been reduced 15 percent under Utah Code Ann. § 35-1-14 (1974). We reverse in part and vacate and remand in part.
On August 16, 1983, Overton sustained industrial injuries when he rolled a company vehicle while driving to work. In connection with the accident, Overton was cited for driving under the influence of alcohol.
The employer reduced Overton's temporary total disability compensation benefits 15 percent pursuant to Utah Code Ann. § 35-1-14 (1974) claiming Overton's intoxication caused the industrial accident. In June, 1984, ten months after the industrial accident, the employer proposed a compensation agreement which terminated Overton's temporary total disability benefits and commenced permanent partial disability benefits.
Overton as a result filed an Application for Hearing before the Industrial Commission claiming his temporary total disability benefits should not be terminated. In his application, Overton did not challenge the 15 percent reduction of his temporary total disability compensation. The employer's Answer to Overton's application affirmatively alleged any benefits awarded for the August 16, 1983 industrial accident must be reduced 15 percent because the accident was alcohol related.
On numerous occasions prior to and during the administrative hearing, the administrative law judge requested the parties to identify the issues to be adjudicated. Neither party listed the 15 percent reduction. The administrative law judge, in her own lists of issues made before and during the administrative proceeding, never identified the 15 percent reduction as an issue. Moreover, the record reflects the parties agreed at the hearing that Overton was entitled to the maximum compensation less the 15 percent reduction. The administrative law judge addressed the propriety of the 15 percent reduction for the first time in her Findings of Fact and Conclusions of Law submitted after the hearing concluded. The administrative law judge found that Utah Code Ann. § 35-1-14 (1974) requires "willful" intoxication by the employee. The judge further found that the employer failed to establish the requisite causal relationship between Overton's industrial injuries and his intoxication. Therefore, the administrative law judge concluded that the employer had wrongfully reduced Overton's compensation.
The employer filed a petition for review with the Industrial Commission. The petition was denied without opportunity for further hearing and the findings and conclusions of the administrative law judge affirmed. The employer then filed a writ of review with this Court.
Two issues are presented on appeal. First, are the parties entitled to notice of the issues that will be adjudicated in Industrial Commission proceedings before an administrative law judge, and if so, did the employer receive fair notice that the 15 percent reduction was at issue in this case? Second, does Utah Code Ann. § 35-1-14 (1974) require "willful" intoxication by the employee before compensation can be reduced 15 percent?
In this case the employer contends that it never had notice that the 15 percent reduction of Overton's compensation was at issue. The "notice" issue presents a question of general law and we therefore review it under a correction-of-error standard. Utah Dep't. of Admin. Servs. v. Pub. Serv. Comm'n., 658 P.2d 601, 608 (Utah 1983).
Interested parties are entitled to notice of proceedings and an opportunity to present testimony and cross-examine witnesses at hearings before the Industrial Commission or its designated administrative law judge. Utah Code Ann. § 35-1-82.51 (1974). It is fundamental that pleadings in administrative proceedings should fairly notify the interested parties of the issues to be decided. See Grindstone Butte Mut. Canal Co. v. Idaho Power Co., 98 Idaho 860, 865, 574 P.2d 902, 907 (1978) (); Board of Trustees of Billings School District No. 2 of Yellowstone County v. State Bd. of Personnel Appeals, 185 Mont. 104, 107, 604 P.2d 778, 780 (1979) (); White v. Bd. of Trustees of Western Wyo. Community College District, 648 P.2d 528, 536 (Wyo.1982) (quoting Glen v. Bd. of County Comm'rs., Sheridan County, 440 P.2d 1, 4 (Wyo.1968) ().
Moreover, orders of administrative agencies issued without notice to affected individuals violate due process. Wagner v. Salt Lake City, 29 Utah 2d 42, 50, 504 P.2d 1007, 1013 (1972) (citing Morris v. Pub. Serv. Comm'n., 7 Utah 2d 157, 170, 321 P.2d 644, 646 (1958)); Denver & Rio Grande Western R. Co. v. Indus. Comm'n of Utah, 74 Utah 316, 319, 279 P. 612, 612 (1929). In order to afford parties due process, the hearing must be prefaced by timely notice which adequately informs the parties of the specific issues they must be prepared to meet. Nelson v. Jacobsen, 669 P.2d 1207, 1213 (Utah 1983) (quoting State v. Gibbs, 94 Idaho 908, 914, 500 P.2d 209, 215 (1972)).
In Morris v. Public Service Commission, the Utah Supreme Court found that since the notice given by the Public Service Commission dealt only with the issue of whether Morris could assume the operating rights of Watson, the Commission could not cancel the operating rights held by Watson as that issue was not before the Commission. The court in finding that the Commission was acting without authority states:
[The Commission's] findings must be based on evidence presented in the case, with an opportunity to all parties to know of the evidence to be submitted or considered, to cross-examine witnesses, ... to offer evidence in explanation or rebuttal....
....
If the commission had intended to entertain the issue of unqualified cancellation, it should have notified Watson and informed him specifically of the grounds upon which cancellation was being sought.
Morris, 7 Utah 2d at 171, 321 P.2d at 646 (quoting in part from Los Angeles and Salt Lake R.R. Co. v. Pub. Utils. Comm'n, 81 Utah 286, 17 P.2d 287 (1932)).
In this case, the employer received notice that a hearing would be held on the termination of Overton's temporary total disability and medical expenses, and the requisite contribution, if any, from the Second Injury Fund. The employer was never given notice that it must defend its reduction of Overton's compensation.
We acknowledge that the employer, through its attorney, was present at the administrative hearing. However, such presence was to establish the propriety of terminating Overton's temporary total disability and medical expenses. The employer was not present to establish the propriety of the 15 percent reduction. 1
Our conclusion that the employer received inadequate notice that the 15 percent reduction was at issue is compelled by a review of the evidence the employer did not introduce at the hearing. 2 For example, the employer did not introduce the police report made moments after Overton's accident. This report claims that Overton, while driving under the influence of alcohol, was traveling 88 miles per hour on wet roads when he lost control of his vehicle, crossed the center line, and rolled the vehicle on the opposite shoulder of the road. The employer also did not introduce Overton's September 8, 1983 handwritten statement in which Overton acknowledged paying the $300.00 bond for his DUI citation because he expected to be convicted of this offense. Had this evidence been introduced at the hearing, the administrative law judge may well have concluded that Overton's industrial injuries were caused by his intoxication.
Overton contends he was not required to give notice that he objected to the 15 percent reduction because intoxication is an affirmative defense which must be plead and proved by the employer. The burden of proof of intoxication, and the requisite causal connection between the intoxication and industrial injuries, is on the employer. 1A Larson, Larson's Workmen's Compensation Law § 34.31 (1985). However, the employer in this case affirmatively alleged in its Answer that any benefits awarded for the August 16, 1983 industrial accident must be subject to a 15 percent penalty pursuant to Utah Code Ann. § 35-1-14 (1974). Neither in his Application for Hearing in identifying disputed issues before the hearing, nor at any time during the hearing did Overton or the administrative law judge challenge this affirmative defense.
The record of the hearing in fact reflects agreement that Overton's compensation should be reduced 15 percent because the accident was alcohol related:
Mr. Chai [the employer's counsel]: Excuse me. I don't know that we have any dispute with what the proper rate would be. I think it would be the maximum, less 15 percent, that we have been paying for the alcohol-related accident.
Ms. Diana [Overton's counsel]: Thank you. Just to make it clear, because there was a little bit...
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