Larry McMurran, d/b/a Lar's Plumbing, Inc.

Plain-English summary

An administrative law judge entered default against Lar's Plumbing after the company did not respond to a show-cause order concerning an unfinished settlement agreement. The default affirmed nine serious items and restored the original $12,400 proposed penalty instead of the settlement amount of $3,640. Afterward, the owner's daughter told the Commission that required documents had been sent, the company had already made two $1,000 payments, and the owner's medical conditions impeded administrative work. The payment records suggested that the company intended to comply with the settlement rather than abandon the case, and the Secretary had not claimed prejudice. The Commission set aside the default and remanded for evidence about whether the signed settlement was sent to the wrong OSHA office and whether the other assertions were accurate.

Decision snapshot

• Cited standard(s): None identified in the decision.
• Outcome: Default judgment set aside and case remanded to examine the settlement-related evidence.
• Key point: Dismissal is inappropriate when payment and medical evidence may show settlement compliance rather than abandonment, especially without prejudice to the Secretary.

Full text (OSHRC public release)

LARRY MCMURRAN, dba LARS PLUMBING, INC., Docket No.14-1806

Walter, J. David
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Walter, J. David
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EN-US
X-NONE
X-NONE

United
States of America

OCCUPATIONAL SAFETY AND HEALTH REVIEW
COMMISSION

1120
20th Street, N.W., Ninth Floor

Washington,
DC 20036-3457

SECRETARY OF LABOR,

Complainant,

v.

OSHRC Docket No. 14-1806

LARRY M c MURRAN, dba LAR’S
PLUMBING, INC.,

Respondent.

APPEARANCES:

Suzanne
F. Dunne, Attorney; Christine Z. Heri, Regional Solicitor; M. Patricia Smith,
Solicitor; U.S. Department of Labor, Washington DC and Chicago, IL

For
the Complainant

Larry
McMurran; Shannon Kent; Lar’s Plumbing, Inc., Park Ridge, IL

For
the Respondent

DIRECTION
FOR REVIEW AND REMAND ORDER

Before: ATTWOOD, Acting
Chairman and M acdougall, Commissioner.

BY THE COMMISSION:

On May 6, 2015, Administrative Law Judge John H. Schumacher issued a
default judgment against Larry Mc M urran,
dba Lar’s Plumbing, Inc., based on its failure to respond to a show cause
order. For the reasons that follow, we direct this case for review, set aside
the judge’s decision, and remand this case for further proceedings in a manner
consistent with this opinion.

BACKGROUND

Following an inspection, the Occupational
Safety and Health Administration issued Respondent a nine-item serious
citation. Respondent, appearing pro se, timely filed a notice of contest
(“NOC”). On December 9, 2014, the Secretary requested an extension of time to
file his complaint to allow the parties additional time to explore settlement.
On December 18, 2014, the Secretary’s counsel sent Respondent copies of a
Stipulation and Settlement Agreement, with instructions to sign, then return
the agreement to the Solicitor of Labor’s Chicago office. According to the
Secretary’s correspondence, the agreement reduced the citation’s total proposed
penalty amount from $12,400 to $3,640. Upon receiving notification of the
pending settlement, the judge issued an order on December 30, 2014, cancelling
a previously scheduled teleconference and giving the parties until January 30,
2015, to file the signed agreement.

On March 24, 2015, after the Secretary advised
the judge that Respondent had not yet finalized the agreement and could not be
reached by phone, the judge issued Respondent an Order to Show Cause for
Failure to File Settlement Agreement requiring a response within ten days of
the issuance of the order. In the show cause order, which was sent by certified
mail with return receipt requested, the judge directed Respondent to explain
its failure to: (1) “participate with the [Secretary’s counsel] in finalizing a
previously-agreed to settlement agreement,” (2) respond to the Secretary’s
counsel’s telephone messages, and (3) advise the judge of any changes to its
business telephone number. See 29 C.F.R. § 2200.6 (requiring any
change in contact information be communicated to the Commission); 29 C.F.R.
§ 2200.101(a) and 101(d) (setting forth default procedure for a party’s
failure to proceed and requirement that show cause order be served by certified
mail, return receipt requested). The judge received the signed return receipt
for the show cause order on April 3, 2015, showing a March 30, 2015, delivery
date and an illegible signature.

On May 6, 2015, having received no response
to the show cause order from the Respondent, the judge issued a decision
vacating the NOC and affirming the citation together with the $12,400 total
proposed penalty. The case was docketed with the Commission and on May 23,
2015, Shannon Kent, the daughter of Respondent’s owner, sent the Commission a
letter along with copies of two cancelled checks made payable to and stamped
received by OSHA. In the letter, which she addresses to the “OSHA Review
Board,” Ms. Kent thanks the Commission for “taking a look at this [case]
and . . .  plea[ds] for you to mak[e] the amount owed back
to $3640.00.” See 29 C.F.R. § 2200.91(b) (procedures for filing
petition for discretionary review).

DISCUSSION

“Whether dismissal is appropriate
in any situation depends on whether a party’s behavior demonstrates contumacy,
whether the other party was prejudiced, and whether other aggravating
circumstances were present.” Caterpillar, Inc. , 17 BNA OSHC 1507, 1509,
1995-97 CCH OSHD ¶ 30,972, p. 43,156 (No. 94-347, 1996) (citations omitted).
Here, the judge found that Respondent’s actions “demonstrate either that it has
abandoned this case or that it treats the Commission’s Rules . . . with
disdain.” In her letter to the Commission, however, Ms. Kent asserts that: (1)
she “followed everything that [she] was instructed to do and sent all the
required documents that OSHA requested”; (2) “we have been faithful in making
payments totaling $2000.00 up to this point”; and (3) the owner of the company
has specified medical conditions, which she suggests have impeded his ability
to attend to administrative matters, such as those at issue here.

Ms. Kent does not indicate to
which OSHA office she sent “the required documents.” It is therefore possible
that rather than sending them to the Solicitor of Labor’s Chicago office in
accordance with the Secretary’s instructions, she may have erroneously sent
them to the OSHA office in Des Plaines, Illinois, where she submitted the two
checks. These checks reflect payments to OSHA of $1,000 each on January 13,
2015, and April 20, 2015, which suggests Respondent was complying with the
terms of the pending settlement agreement and thus did not intend to abandon
this case. Although Respondent failed to avail itself of the opportunity
afforded by the show cause order to present this information to the judge prior
to his default decision, we are mindful of Ms. Kent’s assertions regarding the
owner’s medical conditions. In addition, we note that the Secretary has never
claimed he was prejudiced by Respondent’s alleged failure to timely file the
settlement documents or respond to the show cause order.

Under these circumstances, of
which the judge was not aware when he issued his decision, we conclude that a
sanction of dismissal is not appropriate. See WR Exterior Design
Construction, Inc. , 22 BNA OSHC 1391, 1392, 2004-09 CCH OSHD ¶ 33,006,
p. 54,232 (No. 08-0474, 2008) (citing Samuel Filisko , 20 BNA OSHC 2204,
2206, 2005 CCH OSHD ¶ 32,855, p. 52,962-63 (No. 04-1465, 2005) (“[L]ate filing
alone without evidence of prejudice, contumacious conduct and/or a pattern of
disregard for Commission rules would not be a basis for dismissing this case.”));
see also Merchant’s Masonry Inc., 18 BNA OSHC 1936, 1937, 1999 CCH OSHD
¶ 31,931, p. 47,369 (No. 99-0189, 1999) (stating that the Commission has
allowed remand where a small pro se employer makes some factual claims that
might justify remand).

Accordingly, we direct this case
for review, set aside the judge’s decision, and remand this case to the judge
for further proceedings. See 29 C.F.R. § 2200.90(b)(3) (relief from
default); 29 C.F.R. § 2200.101(b) (motion to set aside sanctions). On remand,
we instruct the judge to allow the parties an opportunity to present any
relevant evidence regarding the claims in Ms. Kent’s May 23, 2015 letter to the
Commission, including evidence that a signed copy of the settlement agreement
was among those documents that Respondent asserts were signed and “sent.”

SO ORDERED.

/s/                                                        

Cynthia L. Attwood

Acting
Chairman

/s/                                                        

Heather L. MacDougall

Dated: June 5,
2015                                                   Commissioner

SECRETARY
OF LABOR, 

Complainant, 

v. 

LARRY MCMURRAN, dba
LAR’S PLUMBING, INC., 

Respondent.  

OSHRC Docket No.: 14-1806

DECISION AND ORDER OF DEFAULT FOR FAILURE TO SHOW CAUSE

On
March 24, 2015 , the undersigned issued an Order to Show Cause and
ordered

Respondent
to show cause within 10 days of the date of the order , (1) why it had
failed to participate with the Solicitor of Labor in finalizing a
previously-agreed to settlement agreement in the above-styled case; (2) why it
failed to return multiple phone calls from Complainant’s representative, and
(3) why it failed to keep the Court advised of any changes to its business
telephone number.

Respondent was advised that failure to comply with the
Order to Show Cause would result in the dismissal of its Notice of Contest, the
affirming of the citation, and the assessing of the proposed penalties without
a hearing. The Order to Show Cause was sent by first class certified mail,
return receipt requested. The return receipt card that accompanied the
certified mail was returned to the Commission on April 3, 2015, with a
signature and receipt date of March 30, 2015.

The record in this case reveals that
Respondent has failed to reply to the Order to Show Cause. Respondent’s actions
demonstrate either that it has abandoned this case or that it treats the
Commission’s Rules of Procedure (“Rules”) with disdain. This cannot be
countenanced, as it seriously impedes the administration of justice.

Rule
101(a) of the Commission’s Rules, 29 C.F.R. 2200.101(a), provides in pertinent
part as follows:

Sanctions. When any party has failed to plead or otherwise proceed as
provided by these rules or as required by the … Judge, he may be declared to be
in default … on the initiative of the … Judge, after having been afforded an
opportunity to show cause why he should not be declared to be in
default….Thereafter, the … Judge, in [his or her] discretion, may enter a
decision against the defaulting party.

There is clear evidence in the record that
Respondent has received a copy of the Order to Show Cause. A judge has very
broad discretion in imposing sanctions for noncompliance with the Commission’s
Rules or the judge’s orders. See Sealtite Corp. , 15 BNA OSHC 1130, 1134
(No. 88-1431, 1991). In view of the record before me, the undersigned finds
that Respondent has been given proper notice of the administrative proceedings
in this matter and that it had been advised of its opportunity to respond to
the Order to Show Cause.

ORDER

Based
upon the foregoing Findings of Fact and Conclusions of Law, it is ORDERED that Respondent
is declared in DEFAULT, its Notice of Contest is DISMISSED, and the citation
items issued in this matter are AFFIRMED, and that all proposed penalties are
hereby assessed.

/s/ 

JOHN
H. SCHUMACHER

Judge,
OSHRC

Dated: May 6, 2015

Denver, CO