Title: STATE OF WYOMING, ex rel., WYOMING WORKERS' SAFETY AND COMPENSATION DIVISION

State: wyoming

Issuer: Wyoming Supreme Court

Document:

STATE OF WYOMING, ex rel., WYOMING WORKERS' SAFETY AND COMPENSATION DIVISION2011 WY 61Case Number: No. S-10-0156Decided: 04/12/2011NOTICE: This opinion is subject to formal revision before publication in Pacific Reporter Third. Readers are requested to notify the Clerk of the Supreme Court, Supreme Court Building, Cheyenne, Wyoming 82002, of any typographical or other formal errors so correction may be made before final publication in the permanent volume.
APRIL 
TERM, A.D. 2011

STATE OF WYOMING, ex 
rel., WYOMING WORKERS' SAFETY AND COMPENSATION DIVISION,

Appellant 
(Respondent),

 
 
v.

 
 
ROBERT C. 
CARSON,

Appellee 
(Plaintiff).

 
 
 
 
Appeal 
from the District Court of Teton County

The 
Honorable Nancy J. Guthrie, Judge

 
Representing 
Appellant:

Bruce A. Salzburg, 
Attorney General; John W. Renneisen, Deputy Attorney General; James Michael 
Causey, Senior Assistant Attorney General.  

 
 
Representing 
Appellee:

Katherine Mead, Mead 
and Mead, Jackson, Wyoming.

 
 
 
 
Before KITE, C.J., 
and GOLDEN, HILL, VOIGT, and BURKE, JJ.

 
 
BURKE, 
Justice.

 
 

[¶1]        
Appellant, 
Wyoming Workers' Safety and Compensation Division (Division), appeals the 
district court's reversal of a decision by the Office of Administrative Hearings 
(OAH) denying a Motion to Reopen Claim submitted by Robert Carson.  The Division contends the district court 
erred in supplementing the record pursuant to W.R.A.P. 12.08 and in ordering 
that Mr. Carson's worker's compensation claim be reopened pursuant to W.R.C.P. 
60(b).  The Division also contends 
the hearing examiner did not abuse her discretion in denying Mr. Carson's Motion 
to Reopen Claim.  We affirm the 
district court's decision to supplement the record, reverse the order to reopen 
Mr. Carson's claim, and remand to the district court with instructions to remand 
to the OAH for consideration of the supplemented record.

 
 
ISSUES

 
 

[¶2]                        
            
1.  Whether the district 
court erred when it granted Mr. Carson's motion to supplement the record 
pursuant to W.R.A.P. 12.08.

 
 
            
            
2.  Whether the district 
court erred when it reversed the OAH's decision to deny Mr. Carson's Motion to 
Reopen Claim without remanding to the agency for consideration of the 
supplemented record.

 
 
                        
3.  Whether the hearing 
examiner abused her discretion in determining that Mr. Carson's Motion to Reopen 
Claim should be denied.

 
 
FACTS

 
 

[¶3]        
On January 19, 2006, 
Mr. Carson was involved in a car accident in the Snake River Canyon between 
Alpine and Jackson, Wyoming.  The 
accident resulted in the death of Mr. Carson's passenger and severe injuries to 
Mr. Carson, including head injuries which affected his memory of the events 
leading up to the accident.  Mr. 
Carson was transported to a hospital in Salt Lake City and remained in a coma 
for over a month.  While Mr. Carson 
was still in a coma, his wife submitted a Wyoming Report of Injury form to the 
Workers' Safety and Compensation Division indicating that he had experienced a 
work-related injury as a result of the accident on January 19, 2006, while in 
the course of his employment with Metrocities Mortgage, LLC (Metrocities).  On February 28, 2006, the Division 
issued a final determination denying worker's compensation benefits to Mr. 
Carson.  The final determination 
stated several reasons for the decision to deny benefits, including the fact 
that Mr. Carson's injury did not meet the definition of "injury" under the 
Wyoming Worker's Compensation Act because he had not proven that the injury 
arose out of and in the course of his employment with 
Metrocities.

 
 

[¶4]        
Metrocities objected 
to the Division's final determination and requested a contested case hearing 
before the OAH.  During the time 
that Mr. Carson's worker's compensation claim was pending before the OAH, 
however, a wrongful death action was filed against Mr. Carson in federal 
district court by his passenger's widow.  This action alleged that Metrocities was 
vicariously liable for Mr. Carson's negligence due to the fact that Mr. Carson 
was acting within the course and scope of his employment with Metrocities at the 
time of the accident.  Metrocities 
withdrew its objection to the Division's final determination in the worker's 
compensation case. 

 
 

[¶5]        
At the contested case 
hearing in the worker's compensation case, Metrocities argued that Mr. Carson's 
claim should be denied.  Based on 
the deposition testimony of Shane Gunderson and other information learned after 
the accident, Mr. Carson claimed he was traveling to Jackson to refinance a 
house for Mr. Gunderson and Patricia Reynolds.  Mr. Gunderson's deposition was introduced 
at the hearing but Ms. Reynolds' deposition was not taken and she did not 
testify.  On September 26, 2007, the 
OAH issued an order upholding the Division's decision to deny benefits, finding 
that Mr. Carson had failed to establish that his injury arose out of and in 
the course of his employment with Metrocities.  The hearing examiner noted that Mr. 
Gunderson's deposition testimony was not credible and that there was no evidence 
to establish any other connection between Mr. Carson's trip to Jackson and his 
employment with Metrocities.  Mr. 
Carson did not appeal the OAH's decision.

 
 

[¶6]        
In May of 2008, 
approximately eight months after the decision by the OAH upholding the denial of 
worker's compensation benefits to Mr. Carson, the jury sitting in federal court 
found that Mr. Carson was acting within the course and scope of his employment 
with Metrocities at the time of the accident.  Mr. Carson subsequently filed a motion to 
reopen his worker's compensation claim under W.R.C.P. 60.  Rule 60(b)(2) states that a court may 
relieve a party from a final judgment based on "newly discovered evidence which 
by due diligence could not have been discovered in time to move for a new trial 
under Rule 59(b)."  Mr. Carson 
argued that the judgment entered in federal court and the testimony of Ms. 
Reynolds constituted newly discovered evidence under W.R.C.P. 60(b)(2) that 
warranted relief from the order upholding the Division's final determination. 
 He submitted a copy of the federal 
jury verdict form with his motion, but did not provide copies of transcripts or 
other evidence from the federal court proceedings.  Mr. Carson also argued that judicial 
estoppel should operate to prevent Metrocities from opposing his worker's 
compensation claim after having initially assisted him in filing the claim.

 
 

[¶7]        
Mr. Carson's motion 
was assigned to the same hearing examiner who had previously issued the order 
upholding the Division's decision to deny benefits.  Neither the Division nor Metrocities 
responded to Mr. Carson's motion.  
No hearing on the motion was held.  
On October 29, 2008, the hearing examiner issued an Order Denying Motion 
to Reopen, finding that Mr. Carson did not provide an explanation, aside from 
noting his memory loss prior to and after the accident, as to when or how Ms. 
Reynolds' testimony was discovered or why it could not previously have been 
discovered.

 
 

[¶8]        
Mr. Carson appealed 
the hearing examiner's decision to district court and filed a motion to 
supplement the record pursuant to W.R.A.P. 12.08.  The district court granted 
Mr. Carson's motion and supplemented the record with (1) the deposition and 
federal trial testimony of Ms. Reynolds, (2) the federal trial testimony of two 
Metrocities employees, and (3) a subscription agreement between Metrocities and 
Salt River Financial, a company affiliated with Metrocities that also employed 
Mr. Carson.  The district court 
reviewed this evidence and determined that Mr. Carson's case should be reopened, 
noting that the hearing examiner denied the motion to reopen without receiving 
any response from Metrocities or the Division.  The district court concluded as follows: 

 
 
Rule 60 is remedial 
and should be liberally construed.  
There was new evidence which by due diligence could not have been 
discovered prior to Car[s]on's Workers' Compensation case.  The testimony of Trisha Reynolds, the 
new evidence, was discovered during the federal case.  Rule 60(b) is applicable and the 
requirements are met.

 
 
IT IS ORDERED that 
this matter is hereby reversed and rema[nd]ed to the Office of Administrative 
Hearings to reopen Carson's claim.

 
 
The Division appealed 
the district court's decision to this Court.

 
 
DISCUSSION

 
 

[¶9]        
 The Division contends the district court 
erred in supplementing the record pursuant to W.R.A.P. 12.08.  It further argues that the district 
court compounded this error by failing to remand the case to the OAH to consider 
the supplemented record.  Finally, 
the Division argues that the district court erred in reversing the hearing 
examiner's decision to deny Mr. Carson's Motion to Reopen Claim under W.R.C.P. 
60(b).

 
 

[¶10]     
W.R.A.P. 12.08 
governs a reviewing court's ability to supplement the record in an appeal from 
an administrative agency decision.  
The rule allows additional evidence to be presented on appeal from an 
administrative decision when (1) that evidence is material and (2) there is good 
cause for the failure to present it in the proceeding before the agency.  W.R.A.P. 12.08 states, in its entirety, 
as follows: 

 
 
            
If, before the date set for hearing, application is made to the reviewing 
court for leave to present additional evidence, and it is shown to the 
satisfaction of the court the additional evidence is material, and good cause 
for failure to present it in the proceeding before the agency existed, the 
reviewing court, in contested cases, shall order the additional evidence to be 
taken before the agency upon those conditions determined by the reviewing 
court.  The agency may adhere to, or 
modify, its findings and decision after receiving such additional evidence, and 
shall supplement the record to reflect the proceedings had and the decision 
made.  Supplemental evidence may be 
taken by the reviewing court in cases involving fraud, or involving misconduct 
of some person engaged in the administration of the law affecting the 
decision.  In all cases other than 
contested cases, additional material evidence may be presented to the reviewing 
court.

 
 

[¶11]     
We review a decision 
to supplement the record pursuant to W.R.A.P. 12.08 for an abuse of 
discretion.  In 
re Worker's Compensation Claim of Shryack, 3 P.3d 850, 856 (Wyo. 2000).  With regard to W.R.A.P. 12.08, we 
have stated that "[a]lthough the rule mandates the acceptance of new evidence if 
the requirements are met, the reviewing court has broad discretion in 
determining whether there is good cause for the failure to present the evidence 
before the agency.'"  Id. (quoting Frank v. State By & Through the Wyoming 
Bd. of Dental Exam'rs, 965 P.2d 674, 680 (Wyo. 1998)).

 
 

[¶12]     
The Division contends 
the district court erred in supplementing the record because the materiality and 
good cause requirements of W.R.A.P. 12.08 were not established.  It argues that the district court did 
not specifically find the evidence to be material and did not note any good 
cause which may have existed to justify supplementation of the record.  Based on the district court's broad 
discretion in determining whether to supplement the record in an appeal from an 
administrative decision, and the interest in flexibility of supplementation 
processes on appeal from administrative proceedings, we find that the district 
court did not abuse its discretion in supplementing the record pursuant to 
W.R.A.P. 12.08.

 
 

[¶13]     
First, we have no 
difficulty determining that the supplemented evidence, which included the 
testimony of Ms. Reynolds and two Metrocities employees, was material to Mr. 
Carson's motion to reopen his worker's compensation claim.  "Material evidence is such evidence as 
is offered to help prove a proposition which is a matter in issue."  In 
re Harris, 900 P.2d 1163, 1166 (Wyo. 1995) (citing 1 John William Strong, McCormick on Evidence § 185 (4th ed. 
1992)).  The Division does not 
seriously contend that the evidence was not material.  Rather, it seems to acknowledge that the 
evidence was material in its brief when it states "the materials in question 
were clearly part of the federal civil litigation, which was at the heart of 
Carson's Motion to Reopen Claim."  
Indeed, the federal trial testimony of Ms. Reynolds and the Metrocities 
employees, and the subscription agreement between Metrocities and Salt River 
Financial, were offered to help prove that Mr. Carson's injury arose out of the 
course of his employment with Metrocities at the time of his accident, an issue 
that was central to Mr. Carson's claim for worker's compensation benefits.  The supplemented evidence reveals that 
Ms. Reynolds, not Mr. Gunderson, was the owner of the property which Mr. Carson 
alleges was the subject of his meeting in Jackson on the date of his 
accident.  Ms. Reynolds testified in 
the federal proceedings that she was aware that she had an appointment with Mr. 
Carson at her store in Jackson on the morning of his accident and that the 
appointment was to discuss refinancing on her home in Alpine.  The supplemented evidence was material 
to the question of whether Mr. Carson experienced an "injury" in the course and 
scope of his employment.

 
 

[¶14]     
Second, we find the 
district court did not abuse its discretion in determining that good cause 
existed to justify supplementation of the record.  We note initially that we have 
previously recognized that flexibility in supplementation of the record on 
appeal from administrative decisions is desirable.  In Louisiana Land & Exploration Co. v. 
Wyoming Oil & Gas Conservation Comm'n, 809 P.2d 775 (Wyo. 1991) we 
contrasted the requirements of W.R.A.P. 12.08 and W.R.C.P. 60 and noted that 
supplementation processes in an appeal from an administrative decision under 
W.R.A.P. 12.08 should be more flexible than in appeals from a judgment rendered 
at trial:

 
 
In 
order to clarify the status of the law, it is first necessary to identify the 
argument from submitted briefing and recognize that the good cause inquiry in 
W.R.A.P. 12.08 is quite dissimilar from the motion for new trial/good cause 
shown concept of W.R.C.P. 59 and 60 and W.R.Cr.P. 34. Administrative agency 
proceedings should be less formalized and more flexible than courtroom trials. 
 Inflexibility of supplementation 
processes in appropriate cases would require extended pre-hearing discovery 
which would introduce delay and decisional deterrents inappropriate for 
administrative agency review.           

 
 

Id. 
at 782.  We have also expressed a 
policy in favor of full development of the record in administrative 
proceedings.  In Board of County Comm'rs v. Teton County 
Youth Servs., 652 P.2d 400 (Wyo. 1982) we noted that 

 
 
A 
basic purpose of the [Wyoming Administrative Procedure Act] is to assure that 
the controverted issues underlying such a proceeding . . . will be fully 
developed and supported on the record by material and substantial evidence and 
upon which the agency, as the finder of fact, must adjudicate the matter.  The objective, of course, is to avoid 
agency action upon an assumption of facts undisclosed by such evidence.  Without reasonable adherence to that 
objective the contemplated safeguards of a direct and convenient court review, 
even though somewhat limited, would be frustrated. 

 
 

Id. 
at 
413-14 (citing Glenn v. Board of County 
Comm'rs, 440 P.2d 1, 3 (Wyo. 1968)).

 
 

[¶15]     
In 
this case, Mr. Carson's efforts to gather evidence to prove he was eligible for 
worker's compensation benefits were frustrated from the inception of his 
claim.  Initially, discovery was 
inhibited by the fact that he was in a coma for an extended period, and later, 
because of memory loss resulting from his head injuries.  Indeed, there is no indication in the 
record that Mr. Carson recovered any recollection of the events giving rise to 
his claim as of the time he filed his Motion to Reopen Claim and subsequently 
appealed to the district court.  The 
federal trial testimony of Ms. Reynolds, however, revealed additional evidence 
bearing on the question of whether Mr. Carson was injured while in the course 
and scope of his employment with Metrocities, an issue at the heart of the 
Division's decision to deny benefits.  
After this testimony was brought out in the federal proceedings, Mr. 
Carson filed his Motion to Reopen Claim, arguing that the newly discovered 
evidence warranted relief from the OAH's order upholding the Division's final 
determination.  Metrocities and the 
Division did not file a pleading opposing the motion.  Rather than holding a hearing on the 
motion, however, the hearing examiner relied on her knowledge of the previous 
contested case hearing in denying Mr. Carson's request for relief:  

 
 
            
Carson now contends that newly discovered evidence in the form of Trish 
Reynolds' testimony would have verified or further explained this 
appointment.  Carson contends that 
this evidence was not known to him or his attorney at the time of the 
administrative hearing.  He does not 
explain however, when or how it was discovered and why it could not have been 
discovered before, other than to note Carson's memory loss.  Without such additional evidence 
however, this Hearing Officer is not persuaded that the evidence could not have 
been discovered earlier since this Hearing Officer is aware that Mr. Gunderson's 
deposition was taken and presented at the administrative hearing.  It is this Hearing Officer's 
recollection that Mr. Gunderson discussed his girlfriend/wife's involvement in 
the matter and even produced some documents that were in her possession.  

 
 

[¶16]     
On 
appeal from the OAH's decision, Mr. Carson provided further explanation, in 
addition to his memory loss, for his failure to depose Ms. Reynolds.  In his brief to the district court, Mr. 
Carson attached an affidavit from his former attorney setting forth the reasons 
for the attorney's failure to discover the evidence.  The attorney, who had relocated to North 
Carolina after handling Mr. Carson's initial claim, stated as 
follows:

 
 
I, 
[Appellant's former attorney], do solemnly swear under oath that [] the 
foregoing statements are true and accurate:

 
 
1. 
     I was the 
attorney of record for Robert [C]. Carson for his case before [the hearing 
examiner] and the Office of Administrative Hearings on June 28, 
2007.

 
 
2.      I was present at 
the deposition of Shane Gunderson.

 
 
3.      At all times 
during the deposition of Mr. Gunderson and at all times since that date I was 
under the belief that Mr. Gunderson was married to Trish 
Reynolds.

 
 
4.      As such, I 
believed that Mr. Gunderson was speaking on behalf of he and Ms. Reynolds as a 
spouse during his deposition.

 
 
5.      I was also under 
the understanding that the house refinancing that was being handled by Mr. 
Carson was both Mr. Gunderson's and Ms. Reynolds['].

 
 
6.      I was never made 
aware by anyone that the actual person that was refinancing the house was Ms. 
Reynolds and that it was hers and not jointly owned with Mr. 
Gunderson.

 
 
7.      Mr. Gunderson's 
testimony during the deposition made it appear that the house belonged to the 
two of them.

 
 
8.      As a result, I 
was under the impression that when Mr. Gunderson was discussing the 
appointment in question during [] his deposition that the appointment was for he 
and his wife, and not just for Ms. Reynolds.

 
 
9.      Also, it was my 
understanding that Mr. Gunderson owned Reyson Tile.

 
 
10.    I was only made aware today, 
from [counsel for Appellant], that in fact it was Trish Reynolds that owned 
Reyson Tile.

 
 
11.    If I had known these facts, I 
would have deposed Ms. Reynolds and compelled her appearance [at] the 
hearing.

 
 
The 
district court, confronted with the fact of Mr. Carson's memory loss and the 
affidavit from Mr. Carson's former attorney, determined that the record should 
be supplemented with evidence gathered during the federal proceedings.  As noted above, the district court is 
afforded broad discretion in determining whether the good cause requirement of 
W.R.A.P. 12.08 has been met.  In 
light of our deferential standard of review, the recognized preference in favor 
of flexibility of supplementation processes on review of administrative agency 
decisions, and the policy in favor of full development of the record in 
administrative agency proceedings, we find no abuse of discretion in the 
district court's decision to supplement the record.

 
 

[¶17]     
The 
Division next argues that the district court erred in ruling on the merits of 
Mr. Carson's motion to reopen his worker's compensation claim, rather than 
remanding the case to the OAH for consideration of the supplemented record.  The Division contends that the district 
court's failure to return the case to the OAH for consideration of the 
supplemented record is contrary to the plain language of the rule.  It argues that if the matter had been 
remanded to the OAH, the hearing examiner could have properly found that Mr. 
Carson still did not prove the claim should be reopened pursuant to W.R.C.P. 
60(b).

 
 

[¶18]     
Mr. 
Carson concedes that W.R.A.P. 12.08 requires the reviewing court to return the 
matter to the administrative agency to consider the supplemented record.  He asserts, however, that the district 
court's failure to return the case to the OAH constitutes harmless error because 
"[r]eturning the matter to the OAH to consider the new evidence is tantamount to 
requiring the OAH to reopen the claim."  Mr. Carson, however, has provided no 
authority for the proposition that we should evaluate this case under the 
harmless error standard identified in W.R.A.P. 9.04.  Indeed, we do not agree that harmless 
error is the appropriate standard of review.  Rather, because this issue involves the 
construction and interpretation of a court rule, which is a question of law, we 
review de novo.  Andersen v. Hernandez, 2005 WY 142, ¶ 7, 
122 P.3d 950, 951 (Wyo. 2005).

 
 

[¶19]     
We 
agree with the Division and Mr. Carson that the failure to remand the case to 
the OAH for consideration of the supplemented evidence was error.  The plain language of W.R.A.P. 12.08 
requires additional evidence "to be taken before the agency," and states that 
"[t]he agency may adhere to, or modify, its findings and decision after 
receiving such additional evidence."  
The rule allows for the possibility that the agency will receive the 
supplemented record and subsequently decide to "adhere to" its findings.  In any event, the rule clearly places 
the decision whether to alter its findings in the hands of the administrative 
agency.  We agree with the Division 
that the purpose of returning the supplemented evidence to the administrative 
agency under W.R.A.P. 12.08 is to allow the agency to retain control over 
disposition of the matter and to preserve the district court as a venue for 
appellate review.  

 
 

[¶20]     
 We affirm the district court's decision 
to supplement the record, reverse the district court's order reopening Mr. 
Carson's claim, and remand to the district court with instructions to remand to 
the OAH to consider the supplemented record.