JANICE E. BAKER, Employee/Appellant, v. DEB SHOPS and LIBERTY MUT. INS. CO., Employer-Insurer, and POLINSKY MEDICAL REHABILITATION CTR., DULUTH CLINIC, and ST. MARY=S MEDICAL CTR., Intervenors.
WORKERS= COMPENSATION COURT OF APPEALS
JANUARY 10, 2002
EVIDENCE - RES JUDICATA. Where it is not clear from the evidence that the compensation judge=s decision in 1997 addressed the same issues presented at this time, res judicata does not apply to preclude the employee from proceeding with her claim; therefore we vacate the compensation judge=s dismissal of the employee=s claim and remand for reconsideration on the merits.
Vacated and remanded.
Determined by: Rykken, J., Wheeler, C.J. and Pederson, J.
Compensation Judge: Donald C. Erickson
MIRIAM P. RYKKEN, Judge
The employee appeals the compensation judge=s finding that the employee=s claim for various benefits, based upon two herniated discs and related surgery, was barred by res judicata. We vacate and remand.
On June 1, 1993, Janice Baker, the employee, sustained a work-related injury to her low back while working for Deb Shops, the employer, a retail clothing store. On that date, the employer was insured for workers= compensation liability by Liberty Mutual Insurance Company, the insurer. Although sustaining no specific traumatic injury on that date, Athe employee began experiencing a strange, aching, gripping sensation in her low back on the right extending into the buttock area@ as she repeatedly climbed a ladder to change a clothing display. The employer and insurer admitted primary liability for a low back injury and initially paid temporary total disability benefits for a period of time in 1993.
This case was earlier litigated, with previous hearings held in 1995 and 1997. The initial hearing was held on February 9, 1995, at which Compensation Judge Gregory Bonovetz presided. Multiple issues were addressed at that hearing, including whether and when the employee had reached maximum medical improvement; whether the employee was medically unable to continue working; whether the employee was temporarily totally and temporarily partially disabled for periods of time between 1993 and 1995; whether the employee had sustained 10.5 percent permanent partial disability of the whole body as a result of her work injury; whether certain medical expenses were compensable; and whether the employee should be referred for physical therapy. In his findings and order served and filed June 19, 1995, the compensation judge denied the employee=s claim for temporary total disability benefits, and awarded a portion of her claim for temporary partial disability benefits. In addition, he awarded certain medical expenses, and made findings concerning a change in treating physician and referral to physical therapy. The compensation judge also found that the employee had not reached maximum medical improvement and, therefore, that assignment of a rating for permanent partial disability was premature. He found that
Although the employee may have sustained some permanent partial disability as a result of the June 1, 1993, admitted injury the employee=s treating physician has recommended additional care and treatment which he believes will improve the employee=s condition. As such assignment of a permanent partial disability rating at this time is premature.
(Finding 21, Findings and Order served and filed June 19, 1995.)
On March 27, 1997, a second hearing was held before Judge Catherine Dallner. The issues at that hearing included whether certain chiropractic treatment was reasonable and necessary, whether the employee had sustained an injury to her neck and thoracic spine, and whether the employee had sustained permanent partial disability to the low back, and, if so, the extent of that disability. According to the employee=s medical records introduced into evidence at that hearing, the employee=s low back condition was diagnosed both as mild degenerative changes at lower lumbar levels and a pelvic instability condition. Medical evidence at that hearing included a report from a 1993 MRI which indicated mild degenerative changes at the L4-5 and L5-S1 levels. According to Dr. Jed Downs, the employee=s treating physician since June 1994, the employee=s diagnosis of her low back condition was Achronic sacroiliac and iliosacral instability.@
In her findings and order served and filed on July 7, 1997, the compensation judge found that the employee did not sustain an injury to her neck or thoracic spine on June 1, 1993, while climbing a ladder in order to change displays, and that this ladder climbing/merchandising incident of June 1, 1993 was not a substantial contributing cause of the employee=s neck and thoracic spine complaints and problems. The compensation judge denied the employee=s claim for payment of chiropractic expenses incurred for treatment to her low back. The compensation judge found that the employee=s low back injury was Ain the nature of pelvic dysfunction or instability with both an innominate and a sacroiliac dysfunction,@ and that the employee had suffered a 3.5% permanent partial disability of the whole body as a result of her pelvic dysfunction or instability condition, relying on Weber v. City of Inver Grove Heights, 461 N.W.2d 918, 43 W.C.D. 471 (Minn. 1990). (Findings and Order served and filed July 7, 1997.)
In her memorandum, Compensation Judge Dallner stated that the diagnosis of the employee=s work-related injury of June 1, 1993, was Ain the nature of a low back injury or relating to the low back.@ She explained that although the employee suffered from a permanent functional impairment as a result of that injury, as evidenced by repeated findings on examination of restricted range of motion of the lumbar spine and by the restrictions on her work activities, including weight-lifting limitations, the diagnosed pelvic instability injury was not specifically contained within the permanent partial disability schedules. The compensation judge referred to the category in the permanency schedules which provides for a 3.5 percent rating for a healed sprain, strain or contusion with pain associated with rigidity (loss of motion or postural abnormality) or chronic muscle spasm substantiated by objective clinic findings without associated demonstrable degenerative changes. The compensation judge noted that the employee=s 1993 MRI indicated mild degenerative changes in her lumbar spine, but that there was no medical opinion explaining the basis for any causal connection between the work injury and those degenerative changes.
The employee appealed from the compensation judge=s denial of payment for chiropractic expenses, the finding that the employee had sustained no cervical or thoracic spine injury on June 1, 1993, and the finding that the employee had sustained only a 3.5 percent permanent partial disability of the whole body. The employee later withdrew the portion of the appeal relating to the extent of the permanent partial disability. The Workers= Compensation Court of Appeals affirmed the remaining issues. Baker v. Deb Shops, slip op. (W.C.C.A. Feb. 19, 1998).
The employee=s low back symptoms increased between 1997 and 1999. She also experienced burning pain and numbness in her right leg and later her left leg. At hearing in 2001, the employee testified that her low back pain and pain extending into her right leg would Acome and go@ since her injury on June 1, 1993, but that she had noticed right buttock pain continuously since her injury. On June 23, 1998, Dr. Downs indicated that the employee had Achronic instability at L5-S1, secondary to an annular tear at L5-S1, and incompetent disc at that level.@ (Ee Ex. A.) On December 8, 1999, the employee underwent an MRI scan which indicated degenerative changes of lumbar interspaces and facet joints at low lumbar levels, most prominent at L4-5, and mild stenosis at L4-5 with bilateral L-5 lateral recess narrowing, but no definite neural compression at any level examined. (Er Ex. 8.) Dr. Downs referred the employee to Dr. Robert Donley, a neurosurgeon, in December 1999. In his report of December 16, 1999, Dr. Donley stated that the employee reported increased pain in both legs during the past month, along with a Aright sciatica.@ She also reported considerable improvement from a trigger point injection at L4-5 that she received a month earlier. Dr. Donley diagnosed Alumbar spondylosis with relative stiffness at L4-5 with right-sided L4 disc herniation with superior fragment migration, superior extruded.@ He concluded that it was quite likely that the employee would eventually need decompressive laminectomy. (Ee. Ex. A.)
The employee continued to experience flare-ups of her condition. On March 30, 2000, Dr. Downs determined that the employee had an annular tear at L4-5, which had Aprogressed to the point where she may be considered to have a herniated disc.@ Dr. Downs referred the employee to Dr. Scott Dulebohn, another neurosurgeon, in the spring of 2000; Dr. Dulebohn recommended surgery, and on June 1, 2000, performed a fusion surgery for herniated discs at L4-5 and L5-S1. In his September 22, 2000, report, Dr. Downs concluded that the employee=s entire low back condition was related to the employee=s June 1, 1993, work injury.
On June 14, 1999, the employee filed a claim petition alleging entitlement to wage loss benefits, medical expenses and chiropractic expenses. A hearing was held on January 30, 2001, before Compensation Judge Donald C. Erickson. In his findings and order, served and filed April 27, 2001, the compensation judge denied the entire claim based upon principles of res judicata, stating that the causation issue raised at the 2001 hearing was the same issue which Compensation Judge Dallner had decided against the employee at the prior hearing held in 1997, and that determination of the causation issue precluded all of the claims presented at this third hearing. The compensation judge found that
Judge Dallner, in not awarding benefits for the degenerative changes at L4-5 and L5-S1, necessarily determined that the employee had not met her burden of proof in establishing that the changes were causally related to the admitted injury of June 1, 1993.
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As the parties to the current claim and the previous claims are the same and as Judge Dallner necessarily determined that the employee failed to sustain her burden of proof that her degenerative condition at L4-5 was causally related to the admitted injury of June 1, 1993, the employee is precluded by the doctrines of res judicata and collateral estopped from now relitigating that her degenerative condition at L4-5 is causally related to the admitted injury of June 1, 1993. (Findings Nos. 9 and 14, Findings and Order served and filed April 27, 2001.)
The employee appeals.
STANDARD OF REVIEW
On appeal, the Workers' Compensation Court of Appeals must determine whether "the findings of fact and order [are] clearly erroneous and unsupported by substantial evidence in view of the entire record as submitted." Minn. Stat. ' 176.421, subd. 1. Substantial evidence supports the findings if, in the context of the entire record, "they are supported by evidence that a reasonable mind might accept as adequate." Hengemuhle v. Long Prairie Jaycees, 358 N.W.2d 54, 59, 37 W.C.D. 235, 239 (Minn. 1984). Where evidence conflicts or more than one inference may reasonably be drawn from the evidence, the findings are to be affirmed. Id. at 60, 37 W.C.D. at 240. Similarly, findings of fact should not be disturbed, even though the reviewing court might disagree with them, "unless they are clearly erroneous in the sense that they are manifestly contrary to the weight of the evidence or not reasonably supported by the evidence as a whole.@ Northern States Power Co. v. Lyon Food Prods., Inc., 304 Minn. 196, 201, 229 N.W.2d 521, 524 (1975). Questions of law may be reviewed de novo. Krovchuk v. Koch Oil Refinery, 48 W.C.D. 607, 608 (W.C.C.A. 1993), aff=d (Minn. June 3, 1993).
Res judicata or claim preclusion is essentially a finality doctrine in which Aa final judgment on the merits bars a second suit for the same claim by parties or their privies.@ Kaiser v. Northern States Power Co., 353 N.W.2d 899, 902 (Minn. 1984). It is well-settled that principles of res judicata are applicable in workers= compensation proceedings, and "bar subsequent proceedings to determine claims which were litigated in a prior proceeding." Alexander v. Kenneth R. LaLonde Enters., 288 N.W.2d 18, 20, 32 W.C.D. 312, 314 (Minn. 1980). The doctrine, however, precludes only litigation of issues and claims that were in fact decided in an earlier decision. Fischer v. Saga Corp., 498 N.W.2d 449, 450, 48 W.C.D. 368, 369 (Minn. 1993); Westendorf v. Campbell Soup, 243 N.W.2d 157, 28 W.C.D. 460 (Minn. 1976).
Several issues were addressed at hearing in 1997, but the only issue applicable to this appeal is the employee=s claim for permanent partial disability benefits, since it is Compensation Judge Dallner=s determination in 1997 relative to permanent partial disability on which Compensation Judge Erickson based his conclusion concerning the applicability of res judicata. The employee argues that the current claim is based on a different condition than was her claim that was litigated in 1997. She argues that whereas her claim in 1997 for permanent partial disability benefits was for Aa permanent >soft tissue= condition of loss of motion with pain, possibly with the addition of degenerative changes at one or more levels in the lumbar spine,@ that is not the employee=s current claim. (Ee. Brief, p. 11.) The employee=s condition has progressed since 1997 to the point that she had herniated, symptomatic discs at L4-5 and L5-S1 which required fusion surgery. At the hearing held in 2001, and based on her worsened condition, the employee asserted a claim for wage loss benefits, medical expenses and chiropractic expenses. She argued that she had not yet reached maximum medical improvement post-surgery, but that she would be entitled to a minimum of 16 percent permanent partial disability of the whole body, based on herniated, symptomatic discs at L4-5 and L5-S1, radicular pain, and fusion surgery, all of which she claims resulted from a progression of her 1993 work-related injury.
At the 1997 hearing, the employee presented evidence that her low back condition, including the degenerative changes, was causally related to her 1993 work injury. For example, in April 1994 and April 1996, Dr. Duane Person diagnosed the employee with chronic musculoligamentous strain with multilevel degenerative disc disease of the lumbar spine, which he rated at 10.5% permanent partial disability of the whole body, and which he determined was causally related to her June 1, 1993, work injury. In a February 7, 1995, deposition, Dr. Jed Downs testified that the employee would be eligible for a 10.5% permanent partial disability rating for her low back condition, and that the employee=s work injury was a substantial cause of the employee=s condition or a substantial permanent aggravation of her preexisting condition. Following the 1997 hearing, the compensation judge found that the employee=s work-related injury was to the low back and Aspecifically, was in the nature of pelvic dysfunction or instability with both an innominate and sacroiliac dysfunction.@ The compensation judge awarded 3.5% permanent partial disability of the whole body, based on a Weber rating, for the employee=s pelvic dysfunction or instability. In her memorandum, the compensation judge stated that there was no Aopinion explaining the basis for any causal connection between the employee=s work injury and the mild degenerative changes@ noted on the July 1993 MRI of her lumbar spine, and did not award permanency for the degenerative changes. The compensation judge did not specifically issue a finding that the degenerative changes were not causally related to the work injury, but denied permanent partial disability for that condition at that time.
The employee clearly has sustained a low back injury as a result of her work injury. The employee=s condition has worsened considerably since the 1997 hearing. At the 2001 hearing, the employee presented additional medical causation evidence from Dr. Downs, who indicated in March 2000 that the employee=s condition had worsened, and who stated in September 2000 that AI maintain my opinion that I have held over the course of the past five plus years that [the employee=s] problems are related to her June 1, 1993 injury.@ (Ee Ex. A.) The employee argues that the issue to be determined is not whether the work injury caused the employee=s degenerative disc disease, but whether the injury either substantially contributed to it or significantly and permanently aggravated it. Since it is not entirely certain that the compensation judge=s decision in 1997 squarely addressed the issue presented at this time, we conclude that the doctrine of res judicata does not apply to preclude the employee from proceeding with her claim.
Application of res judicata requires that the same issues and claims were previously litigated between the same parties. The claims asserted in 2001 are different from the claims asserted in 1995 and 1997. The present claim is for a different condition and diagnosis than those litigated in 1997. Accordingly, res judicata does not bar the employee from now litigating whether her condition at the L4-5 level, which necessitated surgery, is causally related to her admitted work-related injury of June 1, 1993. See Abrahams v. University of Minnesota-Duluth, 61 W.C.D. 103 (W.C.C.A. 2001); Johns v. Modern Tool Co., slip op. (W.C.C.A. Feb. 8, 1994); Kenow v. The King Co., slip op. (W.C.C.A. Aug. 20, 1997).
As previously stated by the Minnesota Supreme Court,
While we are mindful of maintaining a consistent rule of law, we also recognize that res judicata is an equitable doctrine that must be applied in light of the facts of each individual case. We have previously held that because res judicata is a flexible doctrine, the focus is on whether its application would work an injustice on the party against whom estoppel is urged. See Johnson v. Consolidated Freightways, Inc., 420 N.W.2d 608, 613-14 (Minn. 1988); AFSCME Council 96 v. Arrowhead Regional Corrections Bd., 356 N.W.2d 295, 299 (Minn. 1984).
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Based on [the facts of this case], it would be contrary to the notion and appearance of justice to invoke the doctrine of res judicata.
R.W. v. T.F., 528 N.W.2d 869, 872, n. 3 (Minn. 1995).
Therefore, we vacate the compensation judge=s finding that the employee=s claim is barred by res judicata, and remand for reconsideration on the merits. At his discretion, the compensation judge may take additional evidence.
 Finding 4, Findings and Order, June 19, 1995.
 Pursuant to Minn. R. 5223.0070, Subp.1A(3)(b), which refers to a healed sprain, strain, or contusion, pain associated with rigidity (loss of motion or postural abnormality) or chronic muscle spasm, with that chronic muscle spasm or rigidity substantiated by objective clinical findings and associated with demonstrable degenerative changes at multiple vertebral levels.
 The employee underwent an MRI of her lumbar spine on July 29, 1993, which was interpreted as showing, among other findings, a small annular bulge or a tiny central herniated nucleus pulposis at L5-S1, with no neural compression, and mild diffused bulge of the annulus at the L4-5 level. The MRI was determined to show:
Degenerative changes of lumbar interspaces and facet joints at low lumbar levels, most prominent at L4-5. Although there is mild spinal stenosis at L4-5 with bilateral L-5 lateral recess narrowing, amount of spinal stenosis and lateral recess narrowing present in unlikely to cause significant compression of neural structures. . . .
 The employee had also filed a claim petition, on January 12, 1999, relative to an injury to her upper extremities that she claimed to have sustained on June 2, 1998. That claim petition was consolidated for hearing with the June 14, 1999, claim petition. However, prior to hearing, the parties settled the employee=s claims relative to her 1998 injury, so the issues presented at the hearing on January 30, 2001, related solely to the employee=s June 1, 1993, injury.