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CLAIMS MANAGEMENT CORP. v. TOLL2/7/2001
Claimant-appellant, Gary Toll, appeals the district court ruling on judicial review reversing the industrial commissioner's decision which upheld entry of default judgment against Claims Management Corporation (CMC). Toll claims the district court erred in finding CMC's default should be set aside for excusable neglect. We affirm.
I. Background. Gary Toll was employed by V.O.S. Express (V.O.S.) as a truck driver. In February of 1995, he was injured in a motor vehicle accident. He filed a claim for worker's compensation benefits in October of 1996. He named V.O.S. as the employer and Claims Management Corporation (CMC) as the insurance carrier on his original notice and petition filed before the Iowa Industrial Commissioner . He served both V.O.S. and CMC with notice, but neither filed an answer. Instead, CMC contacted the industrial commissioner's office by telephone and in writing indicating it was not V.O.S.'s workers' compensation insurance carrier, and forwarded a copy of the original notice and petition to Custard Insurance Adjusters, the workers' compensation administrator for Landstar System, Inc., the lessee of V.O.S.'s trucks. In a letter to Toll's attorney, CMC denied it was a proper party in the proceeding and asked to be dismissed from the case. Toll's attorney sent CMC a letter indicating he would dismiss CMC if V.O.S. or CMC would disclose the identity of the workers' compensation insurance carrier for the claim. Neither party provided that information.
On February 17, 1997, Toll filed a motion for default judgment but did not send notice of the motion to either V.O.S. or CMC because neither had filed a responsive pleading in the case. On March 17, 1997, V.O.S. and CMC were found to be in default and a hearing was set to determine the amount of benefits due. Copies of the default judgment were mailed to V.O.S. and CMC. CMC sent a copy of the default to Custard. A prehearing conference order issued May 13, 1997, and a hearing assignment order issued July 1, 1997, listing the insurance carrier as "unknown" were mailed to CMC which forwarded them to Custard.
Only Toll and his attorney attended the hearing in November of 1997 to determine benefits owed. The arbitration decision filed on January 16, 1998, awarded relief only against V.O.S. and expressly found the "insurance coverage status . . . unknown." At the request of Toll's attorney, the deputy commissioner issued a nunc pro tunc order on February 3, 1998, clarifying that the award of benefits was entered against both CMC and V.O.S.
CMC filed a motion to set aside the default on March 12, 1998. It alleged good cause to excuse its default. CMC also asked for leave to present additional evidence. The commissioner found CMC failed to show good cause to set aside the default judgment, determined evidence that came into existence after the initial hearing was not admissible pursuant to Iowa Administrative Code rule 873-4.28, and denied the motion. CMC sought judicial review.
The district court ruled the commissioner's decision refusing to set aside the default was contrary to Iowa Rule of Civil Procedure 236 as it had been interpreted in recent cases, and ruled CMC established good cause for setting aside the default judgment. Toll appeals.
II. Scope of review. When we review the decision of a district court rendered pursuant to Iowa Code section 17A.19, we apply the standards of that section to the agency action to determine whether our conclusions are the same as those of the district court. Jackson County Pub. Hosp. v. Public Employment Relations Bd., 280 N.W.2d 426, 429-30 (Iowa 1979). A reviewing court gives deference to agency findings of fact. Cerro Gordo County Care Fa
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