SHARON L. (STENE) DUSENKA, Employee/Petitioner, v. FEDERAL EXPRESS and TRANSPORT INS. CO., Employer-Insurer.
WORKERS' COMPENSATION COURT OF APPEALS
APRIL 16, 2002
VACATION OF AWARD - FRAUD; VACATION OF AWARD - MISTAKE; VACATION OF AWARD - NEWLY DISCOVERED EVIDENCE; VACATION OF AWARD - SUBSTANTIAL CHANGE IN CONDITION. Where the employee submitted no medical evidence to corroborate her claim to mental incompetence, where the possibility that the employee might be subject to a thoracic outlet syndrome had been medically suggested prior to the stipulation at issue, where MMI and other medical reports attached to the stipulation had been available to the employee and had apparently been reviewed by her attorney at the time of the stipulation and purportedly unfamiliar parts of the stipulation were not of the sort that the employee would have relied on in deciding to sign the stipulation, and where the employee had not submitted any medical records that would permit a comparison of her condition at the time of the stipulation with her condition subsequent to the stipulation, the employee did not show good cause to vacate her award on stipulation on grounds of mistake, newly discovered evidence, fraud, or substantial change in condition.
Petition to vacate award denied.
Determined by Wilson, J., Pederson, J., and Johnson, C.J.
WILLIAM R. PEDERSON, Judge
The employee has petitioned to vacate an Award on Stipulation served and filed on February 3, 1987, on grounds of substantial change in medical condition, mistake, newly discovered evidence, and fraud. We deny vacation of the award.
Sharon L. Dusenka (Stene) [the employee] sustained an admitted work injury to her left foot and ankle on December 15, 1983, while working as a delivery driver for Federal Express [the employer]. She was apparently able to continue at work without lost wages, as benefit payment records disclose only the payment of medical expenses related to this injury. On or about August 27, 1984, the employee sustained a second work injury in her job with the employer, this time to her right upper extremity. Her weekly wage on the date of this injury was $538.78. Subsequent to the injury, the employee treated with Dr. David Dorn, who diagnosed a thoracic outlet syndrome. The employee also treated with psychiatrist Dr. Thomas Fox, for psychiatric problems allegedly caused by her 1984 work injury. The employer and insurer admitted the physical component of the injury but disputed causation of any psychological injury.
On January 28, 1986, the employee filed a medical request, seeking payment of an outstanding bill for her psychiatric treatment in the amount of $2,615.00. In a letter report dated May 8, 1986, Dr. Dorn opined that the employee had reached maximum medical improvement [MMI] from her August 1984 work injury, having sustained a 3.5% whole-body permanent impairment due to her thoracic outlet syndrome, by analogy with the rating for an injury to the cervical spine. The employer and insurer served the employee with Dr. Dorn=s report on May 17, 1986, and filed a Notice of Intention to Discontinue Workers= Compensation Benefits ninety days following that service. The employee filed a request for an administrative conference. On May 29, 1986, Dr. Fox wrote a letter expressing the opinion that the employee=s psychiatric condition was related to her work injury, that she had reached MMI from a psychiatric standpoint, but that she Acould probably use monthly visits over the next one or two years to maintain her improvement.@
An administrative conference on the proposed discontinuance was held on June 2, 1986. On June 6, 1986, a representative of the Commissioner of Labor and Industry served and filed an Administrative Decision finding that the employee=s 1984 work injury was a substantial contributing factor in the employee=s current disability and determining that temporary benefits would not be discontinued until ninety days after service of Dr. Fox=s report of MMI from the psychological condition, which service the parties had agreed occurred on the date of the administrative conference, June 2, 1986. An administrative conference on the employee=s medical request was held on June 11, 1986, before a rehabilitation and medical specialist of the Department of Labor and Industry. On August 12, 1986, a Medical Decision and Order was served and filed determining that the psychiatric treatment for which payment was sought was causally related to the employee=s 1984 work injury. The employer and insurer filed a Petition to Discontinue, Petition for Reimbursement, and Petition for Review on August 15, 1986, disputing the administrative orders and seeking formal hearing on the issue of whether the employee=s psychiatric and psychological problems were causally related to the 1984 personal injury.
On December 26, 1986, Dr. Edward Salovich, M.D., with whom the employee had treated for her 1983 work injury, opined that the employee had sustained a 5% impairment of her left foot and ankle as a result of that work injury. He further opined that the employee could work Aas tolerated.@
On January 30, 1987, the employee, the employer, and the insurer entered into a stipulation for settlement The employee alleged entitlement to permanent partial disability compensation based on the 5% Aold-law@ rating by Dr. Salovich for her 1983 work injury and the 3.5% whole-body rating by Dr. Dorn for her 1984 work injury. She further alleged that she might need additional psychiatric treatment or emotional counseling in the future as a result of the 1984 work injury. The employer and insurer denied any causal link between the employee=s 1984 work injury and any psychological condition or need for treatment and further denied the employee=s entitlement to any permanent partial disability compensation. The settlement was a full, final, and complete close-out of all claims arising out of either the 1983 or the 1984 work injury, with the sole exception of future reasonable and necessary medical care of a physical nature. The settlement expressly closed out claims for reimbursement for psychiatric, emotional, or similar counseling, past, present, and future. In return for settling her claims, the employee was paid a lump sum of $20,000.00, as well as an additional $2,139.47 over a period of 8.25 weeks, in compensation for a 5% permanent partial disability of the left foot and ankle. The employer and insurer also paid the employee=s attorney=s costs and disbursements. From the amounts payable under the stipulation, the employee=s attorney was to be paid a fee of $4,627.89, reducing the net proceeds of the settlement paid to the employee to $17,511.58. The settlement was approved by a compensation judge of the Office of Administrative Hearings, and an Award on Stipulation was served and filed on February 11, 1987.
The employee, pro se, filed a petition to this court on August 27, 2001 requesting that her stipulation for settlement be set aside on the basis of mistake of fact, newly discovered evidence, fraud and substantial change in medical condition.
The employee=s medical history since the date of her stipulation for settlement is vague, and she has not offered any medical records to support her petition, nor has she consented to execute the medical authorizations requested by the employer and insurer. She has, however, rendered testimony by deposition--on December 21, 2001. In that deposition, the employee stated that she had continued treating with Dr. Dorn for her thoracic outlet syndrome. She stated that she had also on occasion seen a few other physicians, had undergone an MRI scan and an EMG at the Noran Clinic, and had undergone physical therapy treatment. She indicated that she does not know what these physicians diagnosed, what restrictions they would place on her work activities, or whether her restrictions have changed since the date of the stipulation, except that Dr. Dorn Aprobably@ continues to diagnose her with a thoracic outlet syndrome and at least one physician has offered a further diagnosis of chronic pain syndrome. She indicated that she does not know whether or not any physician has offered the opinion that her permanent partial disability has increased.
With regard to her physical symptoms, the employee testified that she had pain in the right shoulder at the area of the collar bone at the time of the stipulation and that this pain has not gone away. She testified that its intensity varies, being Asometimes better@ and Asometimes worse@ than in 1986, but that it has generally remained Aabout the same@ since the date of the stipulation. She stated that in 1986 she also had pain that started in the back of her right arm and proceeded from there under her arm to a point under her right breast. She indicated that this pain Aleft for a while@ but now comes and goes, sometimes better and sometimes worse than at the time of the stipulation. Finally, the employee described pain running down her right arm to the elbow, together with swelling, numbness, and tingling in the fingers of her right hand. Both of these sensations were, again, sometimes better and sometimes worse than at the time of the stipulation. The only new symptom that the employee described was numbness in the right leg, which had been diagnosed as being due to osteoarthritis of Athe sacroiliac joint@and which the employee attributed to her having used her right leg to open doors or to pick up objects to compensate for the difficulties she has in using her right upper extremity.
With regard to her psychological condition, the employee testified that she had stopped going for psychiatric treatment with Dr. Fox shortly before entering into the 1987 stipulation for settlement because his bills were not being paid. She indicated that, since the date of the stipulation, she has treated off and on with various psychiatrists and has been hospitalized for psychiatric care on at least two occasions. She testified that she did not know what her psychiatric diagnosis had been prior to the stipulation for settlement but that since that time she has been diagnosed as Aunipolar,@Abipolar,@ and psychotic. She also testified that she is unaware of any work restrictions from any of the psychiatrists with whom she has treated.
The employee last worked for the employer on September 5, 1984, and was not working at the time of the stipulation in 1987. She testified that, since that stipulation, she has worked only sporadically in several jobs, each lasting from a few days to about one year. Among these jobs were a job monitoring security systems and dispatching security officers at the State Capitol, which the employee performed for about six months in 1990; a similar job monitoring cameras and alarms in the IDS tower in Minneapolis in 1991 for about a year; a job as a letter carrier for the U.S. Postal Service for a few weeks in 1993; and several short employments, each of about one or two weeks= duration, selling automobiles, selling insurance, and working as a courier. She testified that she began receiving social security benefits in 1993 but was unsure whether these were disability benefits.
This court's authority to vacate an award on stipulation executed prior to July 1, 1992, is governed by Minn. Stat. ''176.461 (1990) and 176.521, subd. 3 (1990). Under these statutes, an award may be set aside if the employee makes a showing of good cause. Case law applicable at the time of the employee=s award on stipulation held that such grounds may exist if "(a) the award was based on fraud; (b) the award was based on mistake; (c) there is newly discovered evidence; or (d) there is a substantial change in the employee's condition." Stewart v. Rahr Malting Co., 435 N.W.2d 538, 539, 41 W.C.D. 648, 649 (Minn. 1989); see also Krebsbach v. Lake Lillian Coop. Creamery Ass'n, 350 N.W.2d 349, 353, 36 W.C.D. 796, 801 (Minn. 1984). In this case, the employee contends that there is good cause to vacate the award on stipulation on all of these grounds. We will discuss each of the employee=s alleged grounds for vacation in turn.
1. Mistake of Fact
The employee argues that there was a mistake of fact with respect to her competency to enter into the stipulation for settlement. In her petition to this court, she describes a variety of factors that led her to enter into the stipulation for settlement, including financial and psychological pressures she characterizes as Aduress.@ In addition, the employee in her deposition described her mental state at the time she executed the stipulation as one of Adisassociation@ and testified that she Awas like in a blur.@ She recalled that the stipulation was read to her, but she testified that she did not really understand the words and that her attorney did not explain them to her. Although she did answer various questions about her understanding of the settlement terms in the affirmative, she also testified as follows:
I went there and we got to the document, I remember going, yes, yes. And I was going I feel like I=m losing my mind. Yes. They asked me the questions. I think they had a recorder and I said yes. And then I went yes. And I remember yes. I remember I just went yes, yes, yes, wherever they would go to, yes. . . . I don=t know if they were read to me or what. I knew I was supposed to put yes, yes, yes, to every one. . . . All I know is when I signed the piece of paper I felt the same way I did when I went to the therapy and I felt like I was in my car, I felt like I wasn=t behind the wheel, that I was by my mirror. And I thought, what, am I losing my marbles.
This court has previously stated that A[a] contract entered into by a party who lacks competency to understand the significance of the contract is null and void under the law, despite the party being >represented= by an attorney.@ See Bernard v. Marvin Lumber, 41 W.C.D. 512, 514-15 (W.C.C.A. 1988).
In the present case, however, the employee has submitted no expert psychiatric opinion or other medical evidence to support her assertion that she was mentally incompetent at the time she entered into the stipulation. The prior decisions of this court have consistently required that an employee seeking to vacate an Award on Stipulation on grounds of incompetency provide sufficient corroborating evidence in support of the claim of incompetence as of the date of the stipulation. See, McGovern v. Sanborn Mfg., slip op. (W.C.C.A. July 13, 1995) (allegations of incompetence were insufficient without corroborating evidence).
Here the employee has submitted only her own allegations of incompetence, unsupported by any corroborating evidence. Indeed, no evidence has even been submitted with respect to the diagnosis or treatment rendered by Dr. Fox, the employee=s psychiatrist, near the time of the settlement. There is no expert psychiatric opinion regarding whether the employee was or was not incompetent at the time of the stipulation. Finally, there is not even any lay evidence, other than the employee=s own allegations, to document the employee's claim of mental incompetency. As there is an insufficient evidentiary basis to support the assertion that the employee was sufficiently lacking in mental competence to render her agreement null and void under the law, we deny the employee=s request to vacate the Award on Stipulation on these grounds.
2. Newly Discovered Evidence
The employee also contends that newly discovered evidence provides a basis for the vacation of the award on stipulation. In order for evidence to be considered Anewly discovered@ for purposes of establishing cause to vacate, the evidence must have been in existence at the time of the stipulation but not discoverable through reasonable diligence. Sorenson v. Nelson County Market, slip op. (W.C.C.A. Oct. 12, 1991). The employee contends that her thoracic outlet syndrome was not a well-accepted diagnosis prior to the date of the 1986 stipulation and that, in its now more definite status, it constitutes Anewly discovered evidence.@ We note, however, that Dr. Dorn did diagnose the employee with thoracic outlet syndrome prior to the date of the stipulation. In light of that fact, we conclude that the employee has not submitted newly discovered evidence such as would warrant vacation of her Award on Stipulation.
To support a petition to vacate an award on grounds of fraud, there must have been a false representation intentionally made to induce reliance that became a proximate cause of the adverse result to the petitioner. See Fox v. Micro Machine, Inc., 43 W.C.D. 378 (W.C.C.A. 1990), citing Green v. Setterholms Fairway Foods, 42 W.C.D. 907 (W.C.C.A. 1989). As her primary complaint in her allegation of fraud, the employee contends that she does not believe that she was provided with the medical reports attached to the stipulation prior to being asked to sign it, some of which reports involve her attainment of MMI. There appears to have been no dispute that MMI had in fact been reached, however, and the reports were, in any event, certainly available to her at the time she signed the stipulation, and they had apparently also been reviewed by her attorney. There is no indication that the employer and insurer concealed the employee=s medical reports in order to induce her to settle her case. The employee also recites a few incidental statements in the stipulation with which she disagrees, but none of these appears to constitute a fraudulent misrepresentation, nor does any of them appear such as the employee would have relied upon in determining whether to execute the stipulation. As the employee has provided no evidence of fraud by the employer and insurer, we deny the employee=s petition to vacate the Award on Stipulation on that basis.
4. Substantial Change in Condition
Factors this court considers in determining whether there has been a substantial change in condition include change in diagnosis, change in the employee's ability to work, additional permanent partial disability, the necessity of more costly and extensive medical care and services than initially anticipated, and whether there is a causal relationship between the employee=s worsened condition and the injury covered by the settlement. Fodness v. Standard Café, 41 W.C.D. 1054, 1060‑61 (W.C.C.A. 1989). In this case, the employee has not submitted any medical records that would permit a comparison of her condition at the time of the stipulation with her condition subsequent to the stipulation. In addition, the employee=s own deposition testimony essentially implies that none of the Fodness factors has significantly changed. Accordingly, we conclude that the employee has failed to demonstrate a substantial change in her condition such as would warrant vacation of her Award on Stipulation.
 Unless otherwise referenced, facts contained herein have been gleaned primarily from the parties= 1987 stipulation for settlement and also from various other documents in the judgment roll.