OAH Docket No. 4-1700-11483-2

 

STATE OF MINNESOTA

OFFICE OF ADMINISTRATIVE HEARINGS

FOR THE MINNESOTA DEPARTMENT OF HUMAN RIGHTS

 

 

State of Minnesota, by Dolores Fridge, Commissioner, Department of Human Rights,                             Complainant, vs.   Tim McPherson and Katherine McPherson d/b/a Continental Telemarketing,                              Respondents.

ORDER

 

The Administrative Law Judge conducted a hearing on Mr. and Mrs. McPherson’s motion to re-open the evidentiary record in this matter beginning at 9:30 a.m. on June 24, 1998, at the Office of Administrative Hearings, Suite 1700, 100 Washington Square, Minneapolis, Minnesota.  Andrea Mitau Kircher, Assistant Attorney General, 1200 NCL Tower, 445 Minnesota Street, St. Paul, Minnesota  55101-2130, represented the Department at the hearing.  Both Timothy McPherson, 1306 Fifth Street, Stillwater, Minnesota  55082, and Katherine McPherson, 10198 101st Street, Stillwater, Minnesota  55082, appeared at the hearing.  They both represented themselves, and neither was represented by an attorney.

 

 

            In view of what has occurred in this contested case proceeding,

 

            IT IS HEREBY ORDERED that the motion of Timothy and Katherine McPherson to reopen the record on both the issue of liability and the issue of damages is DENIED.

 

            Dated this _____ day of June, 1998.

 

 

                                                                        ­­­­­­­­­­­­­­­­­­­________________________________

                                                                        BRUCE H. JOHNSON

                                                                        Administrative Law Judge

MEMORANDUM

 

            The Commissioner of Human Rights began this proceeding by issuing a Notice of and Order for Hearing, along with a Complaint, on January 13, 1998.  That Notice scheduled a hearing on the matters raised by the Commissioner’s Complaint for May 5, 1998, at 9:30 a.m. at the Office of Administrative Hearings, 100 Washington Square Building (Washington Avenue South), Suite 1700, Minneapolis, Minnesota.  After the Department encountered difficulties in its attempts to serve Mr. and Mrs. McPherson by mail, the Washington County Sheriff’s Office was able to personally serve them with the Notice of and Order for Hearing and the Complaint on March 10, 1998.  After being served, Mr. and Mrs. McPherson did not file a Notice of Appearance, file an Answer to the Department’s Complaint, or appear at the May 5, 1998, hearing, as the Notice of and Order for Hearing had instructed them to do.  All these omissions violate the Office of Administrative Hearings’ rules.[1]

 

            The Department did appear at the hearing on May 5, 1998.  Based on the McPhersons’ violations of the rules, particularly their failure to appear at the hearing, the Administrative Law Judge found them to be in default.  When a party is in default, an administrative law judge may accept the allegations in the Complaint as being true and no longer in dispute without further proof.[2]  At the hearing, the undersigned Administrative Law Judge did take the allegations in the Department’s Complaint as being true and no longer in dispute because Mr. and Mrs. McPherson were in default.  The Administrative Law Judge then proceeded to receive evidence on how much to assess the McPhersons in damages.  At the Department’s request, the Administrative Law Judge kept the hearing record open until May 29, 1998, to receive further evidence on the issue of damages.

 

The Department submitted its supplemental evidence on damages on May 26, 1998, and served that information by mail on Mr. and Mrs. McPherson on May 27, 1998.  On that same day, Mr. McPherson, acting on behalf of himself and his wife, sent a letter to the Administrative Law Judge essentially asking him to consider their failure to participate in this proceeding and to appear at the hearing excusable.  They went on to request an opportunity to be heard on the merits of the Department’s Complaint — in other words, to re-open the record.  The Administrative Law Judge must now decide how to rule on that motion.

.

            Although the Administrative Law Judge has been unable to find any case law establishing criteria for whether to re-open the record in a proceeding like this, the motion the McPhersons have made is similar to a motion under Minnesota Rules of Civil Procedure, Rule 60.02, for a new trial.  In those situations, the Minnesota Supreme Court has indicated that a new trial should be allowed

 

where defendant (a) is possessed of a reasonable defense on the merits, (b) has a reasonable excuse for his failure or neglect to answer, (c) has acted with due diligence after notice of the entry of judgment, and (d) shows that no substantial prejudice will result to the other party.[3]

 

Here, the McPhersons’ defense on the merits is that the events forming the basis for the Department’s complaint simply never occurred.  At the May 7, 1998, hearing, the charging party testified under oath that those events did occur, and the Department has indicated that another witness is prepared to corroborate that testimony.  In other words, if this matter is heard again, the merits of the case will likely turn on issues of witness credibility.  Since the possibility exists that the Administrative Law Judge might find the McPhersons to be more credible than the charging party and the Department’s corroborating witness, their claimed defense should be considered reasonable.  But the inquiry cannot end here.

 

            The second factor that the Administrative Law Judge must consider is whether the McPhersons’ excuse for failing to file a notice of appearance, answer the Department’s complaint, and appear at the hearing is a reasonable one.  Their only excuse for these violations of the Office of Administrative Hearings’ rules is that they were distracted by other personal business that they considered more pressing at the time.  Because of those distractions, Mr. McPherson indicated that although the Washington County Sheriff had served him with the Notice of and Order for Hearing, he had mistakenly scheduled the hearing on his own calendar for May 12^th rather than May 5^th.  He further stated that he became aware of that oversight on May 7^th.  But even if that was the case, he did not attempt to communicate with the Administrative Law Judge until May 27^th when he sent his letter requesting the record to be re-opened.  He offered no reason for that nearly two-week delay.  This all goes to the third factor that should be considered — namely, whether the McPhersons acted diligently after finding out they had missed the hearing.  The Administrative Law Judge concludes that they did not and, further, that their excuse for inaction was not a reasonable one.

 

            Finally, the Administrative Law Judge must consider any prejudice that may result to the Department and the charging party from reopening the record.  At the hearing on their motion, the McPhersons indicated that they are deeply in debt and that they may file for bankruptcy.  In other words, if the Administrative Law Judge orders a rehearing and the Department and the charging party prevail on the merits, their victory is likely to be a futile one.  When all four of these factors are considered together, only one favors reopening the record.  Three favor allowing the record to remain closed.  The Administrative Law Judge therefore concludes that the interests of justice require him to deny the McPhersons’ motion and to allow the record in this proceeding to remain closed.

 

B. H. J.