Can administrative agencies refuse to set aside default judgments for last-minute withdrawals? Duran v. Labor Commission Explained

The Utah Court of Appeals in Duran v. Labor Commission provides important guidance on when administrative agencies may refuse to set aside default judgments in workers’ compensation proceedings.

Background and Facts

Maria Duran sought additional workers’ compensation benefits from an alleged workplace injury. After her expert witness was excluded for untimely disclosure, she attempted to withdraw her hearing application by fax the afternoon before the scheduled hearing. The administrative law judge (ALJ) did not receive the fax until the morning of the hearing, and opposing counsel had already traveled from Salt Lake City to St. George for the proceeding. When Duran failed to appear, the ALJ entered her default and proceeded to conduct an evidentiary hearing on the merits, ultimately denying her claim.

Key Legal Issues

The case presented two primary issues: (1) whether the Labor Commission abused its discretion in refusing to set aside the default judgment under rule 60(b), and (2) whether the Commission properly dismissed Duran’s claims with prejudice after conducting a hearing on the merits.

Court’s Analysis and Holding

The Court of Appeals applied an abuse of discretion standard of review, granting administrative agencies the same considerable discretion afforded to trial courts in setting aside default orders. The court found that Duran’s eleventh-hour withdrawal attempt and failure to appear did not constitute “mistake, inadvertence, surprise, or excusable neglect” under rule 60(b). The court emphasized that the faxed withdrawal notice failed to reach the ALJ before the hearing and that opposing counsel incurred travel expenses without notice. Additionally, under Utah Code section 63-46b-11(4)(a), once default was entered, the ALJ was required to conduct proceedings to determine all issues, including those affecting the defaulting party.

Practice Implications

This decision underscores the importance of timely communication in administrative proceedings. Practitioners should provide adequate notice when seeking to withdraw or continue hearings, particularly when opposing parties have incurred travel expenses. The case also clarifies that administrative agencies have substantial discretion in evaluating motions to set aside defaults, and last-minute tactical maneuvers will not excuse failure to appear at properly noticed hearings.