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Dec 10, 2021

SC Appellate Court Chides Commission for Summarily Dismissing Appeal

In a stinging decision, the Court of Appeals of South Carolina ruled that the state’s Workers’ Compensation Commission had abused its discretion in summarily dismissing the appeal by an insurance carrier where the a paralegal for the carrier’s attorney made a calendaring error that caused the carrier to miss a deadline for filing the appellate brief to the commission [Jordan v. Hartford Fin. Group, 2021 S.C. App. LEXIS 154 (Dec. 8, 2021)]. The appellate court acknowledged that rules are rules, but stressed that “the rule of good cause was also a rule”[Opinion, p. 3]. Here, the commission had failed to articulate how, or even whether, it had used its discretion in coming to its decision to dismiss the appeal. In a strongly-worded opinion, the appellate court didn’t merely send the matter back to the commission for an articulation of its decision, it reinstated the appeal and told the commission to move forward with the case.

Background

Hartford sought to enforce a lien against a settlement received by Jordan. A single commissioner denied Hartford’s motion, and Hartford appealed to the full commission. A Form 31 Briefing Schedule and Notice of Appellate Hearing was served on all parties April 12, 2019. The Form advised that Appellant’s brief was due on May 12, 2019, and that Regulation 67-705(A) required Appellant to file a brief. The Form further stated that Respondent “may” file a brief within fifteen days of service of Appellant’s brief. The Form did not state that an appeal could be dismissed for failure to timely file a brief. The Form did not identify who the Appellants or Respondents were.

Upon receiving the Form 31, Hartford’s counsel asked his paralegal to log the relevant dates on his calendar. The paralegal mistakenly thought Hartford was the Respondent and accidentally calendared that its brief was due on May 27, 2019. On May 23, 2019, the commission dismissed Hartford’s appeal for failure to file its brief by May 12. The next day, Hartford’s counsel moved to reinstate its appeal. The motion, which included the paralegal’s affidavit explaining the mix-up, asked the commission to reinstate the appeal for good cause due to the “honest human mistake.” On June 17, 2019, the commission, without explanation, denied Hartford’s motion to reinstate. Hartford appealed.

Good Cause

The appellate court initially indicated that the reason the commission failed to deem Hartford’s miscalendaring good cause was “a mystery,” that the appellate court could not determine if the commission recognized that it had discretion to consider Hartford’s “all too human blunder” to be sufficient good cause to allow the appeal to move forward. Citing earlier precedent, the court stressed that it was an equal abuse of discretion to refuse to exercise discretionary authority when it is warranted as it was to exercise the discretion improperly. The court also noted:

The good cause standard exists to ensure the interests of justice are protected even when a party missteps, so a harmless procedural foot fault does not spring a trap door that mindlessly jettisons innocent parties out of court, regardless of the circumstances [Opinion, p. 3].

Rules are Rules; Good Cause is Also a Rule

The court added that “[r]ules are rules, and due dates matter. The rule of good cause is also a rule” [Opinion, p. 3]. According to the court, a tribunal cannot strictly enforce due dates but ignore good cause. When that happens, said the court, “the decision has left discretion’s range and wandered into the arbitrary

[Opinion, p. 4].

Citing Mictronics, Inc. v. S.C. Dep’t of Rev., 345 S.C. 506, 511, 548 S.E.2d 223, 226 (Ct. App. 2001), the court noted that it had held that an ALJ acted arbitrarily by dismissing an appeal when a party’s lawyer did not appear for court due to a calendar mishap. In a particularly bitting statement, the court continued:

These cases recognize, as we do again today, that the practice of law is challenging enough without having to endure the overbearing enforcement of technicalities when prejudice is absent from the scene [Opinion, p. 5].

Not all mistakes, of course, are excusable, as the court stressed:

To be sure, miscalendaring is not always good cause. But a reflexive refusal to consider that a calendaring mistake could be good cause is an abuse of discretion. Some decisions have refused to find the neglect of a party’s lawyer or agent in forwarding a summons or other time-triggering paperwork sufficient good cause to set aside a default, but those cases dealt with degrees of carelessness and periods of inattention far greater than we have here, and none tossed a party out of court for not timely filing a brief at a later stage of a perfected case [Opinion, p. 5].

Touchstone is Good Cause

The court concluded by stressing that administrative agencies may insist upon strict compliance with filing deadlines. In order to survive a challenge of arbitrariness, however, they must act consistently and with a rationale that reflected the appropriate discretionary factors were considered and touched upon. Citing South Carolina Ins. Co. v. James C. Greene & Co., 290 S.C. 171, 188, 348 S.E.2d 617, 626 (Ct. App. 1986), the court said “the touchstone here is good cause, a standard designed to excuse honest, harmless human mistakes so a case may be judged on its merits rather than its missteps” [Opinion, p. 6].

The court held the commission’s summary denial of Hartford’s motion without rational analysis of the good cause standard was arbitrary and an abuse of discretion, warranting reinstatement of the appeal and remand so that the appeal could proceed.