In re Worker's Compensation Claim of Sweetalla

          Appeal from the District Court of Laramie County The Honorable Thomas T.C. Campbell, Judge

          Representing Appellant: Elizabeth B. Lance and M.J. Hall, Lance & Hall, LLP, Cheyenne, Wyoming.

          Representing Appellee: Bridget L. Hill, Attorney General; Michael J. McGrady, Deputy Attorney General; J.C. DeMers, Senior Assistant Attorney General; Peter Howard, Assistant Attorney General.

          Before DAVIS, C.J., and FOX, KAUTZ, BOOMGAARDEN, and GRAY, JJ.

          BOOMGAARDEN, JUSTICE

         [¶1] Jody J. Sweetalla appeals from the district court's order affirming the Office of Administrative Hearings' (OAH) order upholding the Department of Workforce Services, Workers' Compensation Division's (Division) Final Determination Regarding Compensability. OAH affirmed the Division's final determination denying benefits on the basis that Mr. Sweetalla did not file a claim for benefits within the one-year statute of limitations set forth in Wyoming Statute § 27-14-503(a). Because OAH erred in its determination that equitable estoppel did not bar the Division from asserting the statute of limitations as a defense, we reverse and remand.

         ISSUE

         [¶2] Did OAH err when it upheld the Division's final determination because Mr. Sweetalla did not file a claim for benefits within the one-year statute of limitations set forth in Wyoming Statute § 27-14-503(a)?

         FACTS

         [¶3] On January 16, 2014, Mr. Sweetalla injured his left shoulder when he attempted to open a garage door while working for Legend Services, Inc. (Legend Services). Mr. Sweetalla immediately notified Legend Services of the injury and sought medical care the same day. Legend Services requested that Mr. Sweetalla not file an injury report with the Division. In exchange for not filing an injury report, Legend Services kept Mr. Sweetalla on salary and paid his out-of-pocket medical expenses. Mr. Sweetalla subsequently underwent two shoulder surgeries and extensive rehabilitation, but he did not return to work. On December 28, 2015, Legend Services terminated Mr. Sweetalla's employment and told him it would no longer pay his medical expenses.

         [¶4] On February 14, 2016, Mr. Sweetalla signed and filed a Report of Injury with the Division. Approximately one week later, a claims analyst for the Division spoke with Mr. Sweetalla. The claims analyst recorded the following relevant details regarding their conversation:

[It] was explained [to Mr. Sweetalla] that because of our statutes of limitations, an injury report must be filed within one year of the date of injury to be determined compensable. Because this claim is more than 2 years old, [Mr. Sweetalla] was told that the claim will be denied once a signed injury report is received from the ER. [Mr. Sweetalla] understands that he will need to request a hearing once he receives his denial letter.

         Over the next couple of weeks, the Division requested additional information from Mr. Sweetalla.

         [¶5] In April 2016, the Division issued a Final Determination Regarding Compensability in reference to "Claim Number: 201601767." In the letter, the Division informed Mr. Sweetalla that it had reviewed his injury report and did not approve payment of benefits for two reasons:

■ An injury report was not filed before one year of the date the injury occurred. Your reported injury occurred on 1/16/2014 and an injury report was not submitted until 02/16/2016. W.S. 27-14-503(a)

■ A work injury arising out of the course and scope of your employment could not be determined because the requested medical records were never received by the Division. (Wyoming Statute 27-14-102(a)(xi))

         The Division made no reference to a claim for benefits or lack thereof. Rather, the Division informed Mr. Sweetalla that he could object to the determination and request a hearing.

         [¶6] Mr. Sweetalla requested a contested case hearing and objected to the Division's final determination, stating: "My employer instructed me not to file for worker[']s compensation. Both my employer and the Division are estopped from raising the delay in filing as a bar to the claim." (Emphasis added.)

         [¶7] The Division submitted a Statement of Issues and Defenses to OAH in June 2016. Although the Division could not provide "[a] precise list of issues" because it had "very limited information," it identified several "possible issues," including, for the first time, whether Mr. Sweetalla, "in addition to the proper and timely filing of an injury report, file[d] an application or claim for benefits within one (1) year after the injury occurred, as required by W.S. § 27-14-503(a)[.]"

         [¶8] In the Disclosure Statement the Division filed on January 9, 2017, approximately two weeks before the hearing, the Division identified the following narrower issue regarding Mr. Sweetalla's failure to file a claim for benefits:

Did the Claimant, in addition to the proper and timely filing of an injury report, file an application or claim for benefits within one (1) year after the injury occurred, as required by W.S. § 27-14-503(a)? (According to a review of the file by the Claim[]s Analyst [], there have been no requests for benefits filed in this matter. ([Exhibit] S-U).)

         [¶9] After the contested case hearing on January 26, 2017, ^[1] OAH issued its Findings of Fact, Conclusions of Law, and Order upholding the Division's final determination. At the beginning of its analysis, OAH found:

There is no dispute that Sweetalla failed to file a claim for benefits within one year of the date that Sweetalla's injury occurred as is required by Wyoming Statute § 27-14-503 (LexisNexis). Sweetalla admitted he knew he had suffered a work-related injury on January 16, 2014, and that it was more than just a minor injury. Sweetalla had surgery on his left shoulder on April 1, 2014. As of the date of the hearing, January 26, 2017, Sweetalla had not filed a claim for benefits or an application for benefits with the Division.

         [¶10] OAH acknowledged that Mr. Sweetalla could "avoid the application of the workers' compensation statute of limitations" if he "prove[d] that equitable estoppel applies." It then evaluated whether Mr. Sweetalla met his burden to "prove by a preponderance of the evidence: (a) Legend's statements and actions amounted to actual or legal fraud or constituted providing incorrect information to Sweetalla; (b) Sweetalla relied on Legend's fraud or incorrect information to his detriment; and (c) Sweetalla's reliance on Legend's fraud or incorrect information was justifiable and reasonable under the circumstances of the case as a whole." OAH found that Mr. Sweetalla proved each of these requirements. In particular, OAH found that Mr. Sweetalla "relied on [Legend Services'] fraud or incorrect information to his detriment" because, as a result of not filing a claim, he "was paid less than he was earning at the time of his injury" and "without workers' compensation coverage for his left shoulder injury, [he] lost access to potential awards for permanent partial impairment award, permanent partial disability, and permanent total disability." After OAH determined that equitable estoppel applied, it concluded that equitable estoppel "prevent[ed] application of Wyoming Statute ...