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DUE PROCESS

The commission's adjudication of claimant's application, with no prior notice to employer, deprived employer of due process and did not comply with the commission's procedures set forth in its own rules. See Rules 1.2 through 1.6, and 2, Rules of the Virginia Workers' Compensation Commission; see also Sergio's Pizza v. Soncini, 1 Va. App. 370,376, 339 S.E.2d 204, 207 (1986) ("The procedure utilized [by the commission] must afford the parties minimal due process safeguards.").

"Due process is flexible and calls for such procedural protections as the particular situation demands." Duncan v. ABF Freight System, Inc., 20 Va. App. 418, 422, 457 S.E.2d 424, 426(1995) (citing Mathews v. Eldridge, 424 U.S. 319, 334 (1976)). It is well settled that [a]n elementary and fundamental requirement of due process in any proceeding which is to be accorded finality is notice reasonably calculated, under all the circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections. Crystal City Oil Co. v. Dotson, 12 Va. App. 1014, 1018, 408 S.E.2d 252, 254 (1991) (citing Mullane v. Central Hanover Bank &Trust Co., 339 U.S. 306, 314 (1950)) (other citations omitted). "Pleading requirements in administrative proceedings before [the commission] are traditionally more informal than judicial proceedings." Sergio's Pizza v. Soncini, 1 Va. App. 370, 376,339 S.E.2d 204, 207 (1986). However, the commission must use procedures that "afford the parties minimal due process safeguards." Id. Where the commission modifies a claim at the hearing or review stage without advising the employer in advance, "the dispositive issue . . . is whether the employer was prejudiced" by the lack of notice. Crystal City Oil Co., 12 Va. App. at 1018, 408 S.E.2d at 253-54 (amendment adding claim at change-in-condition hearing did not prejudice employer because "employer had sufficient notice reasonably calculated under the circumstances to advise it of the pending claim"). See Oak Hill Nursing Home, Inc. v. Back, 221 Va. 411, 270 S.E.2d 723 (1980)(consolidation with the original claim at the hearing stage gave the employer sufficient notice for the claim to be treated as a change of condition rather than an original application); Sergio's Pizza v. Soncini, 1 Va. App. 370, 339 S.E.2d 204 (1986)(procedure for treating benefits claim as change-in-condition claim at review stage did not provide employer a reasonable opportunity to present evidence or defend).

The commission's procedure "precluded an adequate opportunity to defend [against an award for this time period] since it was litigated only as [a claim for benefits beginning February 1, 1996]." Sergio's Pizza, 1 Va. App. at 376, 339 S.E.2d at 208. Although employer collected and presented medical evidence to support its causation defense, the evidence is ambiguous regarding claimant's degree and duration of disability from October through December 1995. Had employer been on notice that it would be required to defend against a claim for wage benefits during this time, it could have addressed this period in detail and obtained additional information. The commission's sua sponte award of unrequested benefits denied employer this opportunity and "fails to comport with due process notions of fair play and substantial justice." Id. at 377, 339 S.E.2d at 208.

The commission did not err by 1) finding that a de facto award of benefits existed between March 20 and September 14, 1996; and 2) holding that claimant's January 13, 1998 supplemental change in condition application related back to her May 14, 1997 application. Pursuant to the decision in National Linen Service v. McGuinn, 5 Va. App. 265, 362 S.E.2d 187 (1987) (en banc), the commission had the authority to determine that a de facto award of benefits existed. Additionally, the County's procedural due process rights were not violated when the commission ruled that claimant's January 13 filing related back to her May 14 application.
    Claimant sustained a compensable injury to her back and leg on January 7, 1993. On July 21, 1995, the commission entered an award approving the memorandum of agreement filed by the County providing for payment of temporary total benefits to Taylor through May 14, 1995.  Taylor returned to work, but the County terminated her employment on March 19, 1996, after she was unable to perform her pre-injury duties. The County then voluntarily paid Taylor the equivalent of her temporary total disability award from March 20 through September 14, 1996.  The County unilaterally ceased making payments to Taylor effective September 15, 1996.  On May 14, 1997, claimant notified the commission of the County's voluntary payments to her. She also requested "ongoing temporary partial compensation benefits."  Two days prior to her January 15, 1998 hearing before the deputy commissioner, Taylor notified the commission that, while she was seeking temporary partial disability benefits beginning September 26, 1996, she would be seeking temporary total disability benefits effective on or about October 4, 1996 and continuing to the present.
    In McGuinn, the court addressed the consequences of an employer's failure to submit a memorandum of agreement to the commission where the employer voluntarily paid disability benefits to the claimant. After the claimant injured his ankle at work, the employer voluntarily paid him total disability benefits for a period of thirteen months. The employer did not, however, submit a memorandum of agreement to the commission. After the employer ceased paying benefits, the claimant filed an application for hearing seeking continued benefits. The employer defended on the ground that the claimant had failed to market his residual capacity. See McGuinn, 5 Va. App. at 267-68, 362 S.E.2d at 188. In allocating the burden of proof, the court noted that, had the employer filed the memorandum of agreement with the commission, the employer would have shouldered the burden of proving that the claimant was not entitled benefits. The court concluded that Code Sections 65.1-45 and 65.1-93 required the employer to submit a memorandum of agreement to the commission when it voluntarily decided to compensate the claimant for his injuries. See McGuinn, 5 Va. App. at 270, 362 S.E.2d at 189-90. The court further held that a de facto award of disability benefits arose when the employer paid the claimant benefits for thirteen months without filing the memorandum of agreement with the commission. See id. at 269-70, 362 S.E.2d at 189. The holding in McGuinn does not just relate to initial claims for benefits.  Whether an agreement between the parties pertains to an initial award or a supplemental award following a change of condition, the employer is still obligated to file a memorandum of agreement with the commission. Code Sec. 65.2-701 refers to agreements reached "after injury" and does not expressly state or imply that the employer's obligation to file memoranda of agreement is limited to the initial award. See Commission Rule 4 ("All agreements as to payment of compensation shall be reduced to writing by the employer and promptly filed with the Commission." Code Sec. 65.2-708 does not require a claimant to file an application for change of condition if she can reach a satisfactory agreement with her employer regarding her entitlement to continuing disability benefits. Claimant was not required to file a change of condition application in March 1996 because the County voluntarily paid the equivalent of temporary total disability benefits to her. Having evidently conceded that claimant was entitled to these benefits, it was the County's responsibility to file a supplemental memorandum of agreement with the commission.
    A finding of a de facto award does not depend upon a showing of fraud or concealment. See McGuinn, 5 Va. App. at 269-70, 362 S.E.2d at 189. As the court explained in Ryan's Family Steak Houses, Inc. v. Gowan, 32 Va. App. 459, 528 S.E.2d 720 (2000), where the employer has stipulated to the compensability of the claim, has made payments to the employee for some significant period of time without filing a memorandum of agreement, and fails to contest the compensability of the injury, it is "reasonable to infer that the parties ha[ve] reached an agreement as to the payment of compensation," and a de facto award will be recognized. Id. at 463, 528 S.E.2d at 722 (quoting McGuinn, 5 Va. App. at 269-70, 362 S.E.2d at 189). Therefore, that the presence of fraud or concealment by the employer is not a requisite precondition for determining that a de facto award should be recognized.
    The commission did not err when it held the 1998 filing related back to 1997 for purposes of calculating the ninety-day period of Rule 1:2(B). two days prior to the hearing before the deputy commissioner, claimant formally declared she would be claiming entitlement to temporary total disability benefits during much of the period of time she had previously indicated she was entitled to partial disability benefits. The correspondence authored by counsel for the County in July and September 1997 reflects the County knew claimant would be attempting to prove entitlement to total disability benefits. In its January 14, 1998 letter to the commission, the County neither objected to the deputy considering the January 13 filing nor sought a continuance to review the medical records. The County merely requested that the record be held open for it to gather additional evidence pertaining to claimant's claimed total disability. Finally, the amendment did not seek any benefits outside of the time period identified in the 1997 application. Cf. WLR Foods, Inc. v. Cardosa, 26 Va. App. 220, 227, 494 S.E.2d 147, 151 (1997). "Consolidation of claims at the hearing is permissible and in accordance with due process, provided the 'employer had notice of the time, location and subject matter of the proceeding which was reasonably calculated to afford the employer an opportunity to be heard.'" Crystal Oil Co., Inc. v. Dotson, 12 Va. App. 1014, 1017, 408 S.E.2d 252, 253 (1991) (quoting Sergio's Pizza v. Soncini, 1 Va. App. 370, 373, 339 S.E.2d 204, 205 (1986).  Where the commission permits the consolidation of claims with little or no advance notice, the dispositive issue is whether the employer suffered prejudice. Id. at 1018, 408 S.E.2d at 253-54. In Crystal Oil, the employer challenged the commission's ruling that permitted an amendment to the claimant's change of condition application and permitted the amendment to relate back to the date of that application. On October 26, 1989, the claimant filed a change in condition application seeking partial disability benefits effective September 11, 1989. At the hearing before the deputy commissioner, the claimant sought to amend his application by claiming total disability benefits from July 25 through September 10, 1989. See id. at 1015-16, 408 S.E.2d at 252-53. the employer had defended the application with significant success. See id. at 1018-19, 408 S.E.2d at 254. The court also found that the employer had been given advance notice of some of the claimant's contentions from prior proceedings. See id. at 1019, 408 S.E.2d at 254. But see WLR Foods, 26 Va. App. at 227, 494 S.E.2d at 151 (holding that, where the change of condition application sought benefits effective February 1, 1996, and where the commission, sua sponte and without notice to the employer awarded benefits predating February 1, the employer was prejudiced). County of Henrico Public Utilities v. Susan Taylor, Record No. 1214-00-2 (January 23, 2001). WP Version.

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