Court of Appeals Reverses Commissioner's Decision Excluding Late-Filed Reports

 Hagen v. Serta/National Bedding Co., LLC No. 22-0684 (App. March 29, 2023)

In this action, claimant failed to provide timely notification of his expert physician and voactional expert.  The reports from the experts were also filed in an untimely manner, with both reports being provided approximately two weeks before the arbitration hearing.  Prior to the hearing, the employer asserted that the experts were not timely identified and their reports were not timely produced.  The employer argued that admission of the reports would be unduly prejudicial under 876 IAC 4.19 and urged that the use of the reports be precluded.  Claimant argued that the reports, although not timely produced, did not give rise to undue prejudice and that the remedy should be allowing defendants to produce rebuttal evidence.  The deputy decided to exclude the reports and claimant requested rehearing on the issue, which was denied.  The commissioner affirmed, finding that although defendants' argument that they were "completely surprised" by the reports was not correct, there was some element of surprise.  The commissioner also noted that leaving the record open was often the preferred remedy for late-submitted reports, but concluded that the deputy did not excuse his discretion in not exercising that option.  A 60% industrial disability award was affirmed (claimant had argued he was permanently and totally disabled).

The district court entered a ruling reversing the commissioner's decision and remanded for further proceedings.  The court found that the agency had not made the necessary finding that the reports were "unfairly prejudicial" to defendants, but had assumed that the late submission of the reports was sufficient to support exclusion.  Alternatively, the court concluded there was no evidence in the record to support a finding of unfair prejudice.

The Court of Appeals reviewed the claim on the basis of the irrational, illogical or wholly unjustifiable standard of 17A.19(10)(m).  The Court noted that the question before them was whether the reports were correctly excluded because they were unfairly prejudicial.  The Court noted that the defendants knew of the potential for the expert evidence approximately ten months prior to the hearing.  The Court found that defendants' "trial by ambush" theory was unsupported by the evidence.  The Court also noted that defendants had experts' reports on the issues that could have been used as rebuttal evidence and also found that the experts could have submitted rebuttal reports.  Defendants also argued that rebuttal reports would have entailed additional delay.  The Court rejects this argument as not demonstrating unfair prejudice to defendants.  The Court also noted that in Schoenfeld and Trade Professionals, cases involving late-submitted reports, those reports had been submitted six and four days before hearing and the reports were still admitted.  Ultimately, the Court found that defendants had failed in meeting their burden of demonstrating that they were unfairly prejudiced by the admission of the late-submitted reports.  The judgment of the district court was affirmed and the case was remanded to the commissioner.

Judge Greer dissented, stating that although the commissioner had only generally stated that defendants were unfairly prejudiced, that finding could be inferred from the commissioner's findings.  The late submission of the reports were also seen to be prejudicial.  Judge Greer stated the following with respect to the majority's findings:

    More broadly, it strikes me that some might use this majority opinion as a map to ignore deadlines and     navigate areound the rules.  I think an agency should have discretion to apply the standards so that does     not become the pattern.

Judge Greer would affirm the decision of the commissioner.