WORKERS'COMPENSATION DIV. v. Hodgdon

Decision Date19 July 2000
Docket NumberNo. 99-254.,99-254.
Citation759 A.2d 73
CourtVermont Supreme Court
PartiesWORKERS' COMPENSATION DIVISION v. Darcy HODGDON and Quick Fix Truck Parts, Inc.

PRESENT: AMESTOY, C.J., and DOOLEY, MORSE, JOHNSON and SKOGLUND, JJ.

ENTRY ORDER

Darcy Hodgdon appeals on his own behalf and on behalf of Quick Fix Truck Parts, Inc. from a decision of the Commissioner of the Department of Labor and Industry, which imposed a $5,000 fine for failure to maintain workers' compensation insurance from September 13, 1996, through July 4, 1997. He argues that the Commissioner (1) erred in imposing the fine against Hodgdon personally because he is not the employer; (2) should be estopped from imposing a fine because the Department failed to provide Quick Fix notice, as it had in the past, that its coverage had lapsed; and (3) abused his discretion in imposing a $5,000 fine without revealing the factors to be considered in determining the amount and without providing Hodgdon an opportunity to address them. We reverse the Commissioner's decision because the Commissioner failed to promulgate rules identifying the guidelines used to determine the amount of the fine as required by 21 V.S.A. § 688(b).

As best we can discern from the record, the facts are as follows. In 1995, Hodgdon Brothers, Inc. received a citation because it failed to carry workers' compensation insurance. At that time, Hodgdon Brothers was having difficulty obtaining insurance. After discussion with the Department, Hodgdon Brothers transferred all its employees, except corporate officers, to Quick Fix in order to obtain insurance coverage. Quick Fix obtained workers' compensation insurance effective September 13, 1995. Hodgdon owns both Hodgdon Brothers and Quick Fix.

On July 24, 1996, the insurance company sent Quick Fix a renewal notice and a bill, which required payment by September 13, 1996, to continue the coverage. No payment was received, and the insurance expired on September 13, 1996. The insurance company sent Quick Fix a termination notice. On June 30, 1997, an employee filed a workers' compensation claim, and the Department discovered that Quick Fix had been uninsured for several months. On July 1, 1997, the Department ordered Quick Fix to obtain workers' compensation insurance and provide proof of coverage. Quick Fix obtained the insurance and provided the Department with proof that coverage was effective July 4, 1997. On July 7, 1997, the Department cited Hodgdon and Quick Fix for failure to have workers' compensation from September 13, 1996, to July 4, 1997, and imposing a $5,000 fine. Hodgdon and Quick Fix requested a hearing.

At the hearing, Hodgdon argued that the fine was unreasonably high because turnover in office personnel, lack of notice clearly marked "cancellation," and failure of the Department to provide notice of the lapse in coverage all militated against a $5,000 fine. The Commissioner rejected all of Hodgdon's arguments and held that the $5,000 fine was within the Department's discretion given that Quick Fix was without coverage for a lengthy period, Hodgdon had experience with the workers' compensation system due to the previous citation against Hodgdon Brothers, and Quick Fix had received notice from the insurance company about the impending expiration of coverage if payment was not made. Hodgdon and Quick Fix appeal.

First, Hodgdon claims that the Department erred in imposing a fine against him personally because he is not the employer; rather, Quick Fix is the employer. The Department agrees. Consequently, we do not consider whether a fine could have been imposed against Hodgdon personally, but rather reverse the Commissioner's decision to the extent that it imposed personal liability. Hodgdon also claims that he is entitled to a jury trial if the fine is imposed against him personally. Because we reverse the fine against Hodgdon, we need not address whether he would be entitled to a jury trial on a claim against him personally.

Second, Hodgdon contends that the Department is partially responsible for the lapse in insurance because it failed to send Quick Fix any notice of the lapse as it always had in the past. Essentially, we understand Hodgdon's argument to be that Quick Fix relied to its detriment on the Department to provide notice of a lapse of workers' compensation coverage, a claim of equitable estoppel. Thus, according to Hodgdon, it is inequitable to allow the Department to impose upon Quick Fix the maximum fine. Estoppel against the government is rare but may be applied where the four elements of estoppel are met and "the injustice that would result from a failure to uphold an estoppel is of sufficient magnitude to justify any effect upon public interest or policy that would result from raising estoppel." See Stevens v. Department of Social Welfare, 159 Vt. 408, 419, 620 A.2d 737, 743 (1992). Hodgdon cannot meet the elements of estoppel.

The four essential elements of estoppel are: (1) the party to be estopped must know the facts; (2) the party to be estopped must intend that its conduct shall be acted upon or the acts must be such that the party asserting the estoppel has a right to believe it is so intended; (3) the party asserting estoppel must be ignorant of the true facts; and (4) the party asserting estoppel must detrimentally rely on the conduct of the party to be estopped.

Id. at 421, 620 A.2d at 744. Here, Hodgdon has failed to show that Quick Fix was ignorant of the true facts. As the Commissioner found, due to the previous citation against Hodgdon Brothers, this employer had enough experience with the workers' compensation system to understand that the renewal notice meant exactly what it said: a failure to pay the premium would result in a lapse of coverage.

Consequently, we hold that estoppel does not apply.

Finally, Hodgdon contends that the Commissioner abused his discretion in imposing the maximum fine without providing Hodgdon an...

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5 cases
  • Martin v. STATE, DEPT. OF MOTOR VEHICLES, 01-214.
    • United States
    • Vermont Supreme Court
    • 7 Febrero 2003
    ...ch. II, § 4, administrative bodies have only the adjudicatory authority conferred on them by statute." Workers' Comp. Div. v. Hodgdon, 171 Vt. 526, 529, 759 A.2d 73, 77 (2000) ¶ 9. Even assuming that DMV stood on par with this Court in terms of insulating § 304(d) from constitutional attack......
  • Larkin v. City of Burlington
    • United States
    • Vermont Supreme Court
    • 13 Abril 2001
    ...magnitude to justify any effect upon public interest or policy that would result from raising estoppel.'" Workers' Comp. Div. v. Hodgdon, 171 Vt. ___, ___, 759 A.2d 73, 75 (2000) (quoting Stevens v. Dep't of Soc. Welfare, 159 Vt. 408, 419, 620 A.2d 737, 743 (1992)); see Wesco, Inc. v. City ......
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  • Clayton v. J.C. Penney Corp.
    • United States
    • Vermont Supreme Court
    • 22 Septiembre 2017
    ...the Constitution, administrative bodies have only the adjudicatory authority conferred on them by statute." Workers' Comp. Div. v. Hodgdon, 171 Vt. 526, 529, 759 A.2d 73, 77 (2000) (mem.) (citation omitted) (distinguishing Commissioner of the Department of Labor and Industry's discretion in......
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