MARK LEVINGS, Employee, v. PARK INN INT=L and ACCEPTANCE INDEM., Employer-Insurer/Appellants, and HRI FOR MEDICA CHOICE, Intervenor.
WORKERS= COMPENSATION COURT OF APPEALS
MAY 6, 2002
EVIDENCE - RES JUDICATA. Under the circumstances of this case, the compensation judge erred in determining that a prior decision by a compensation judge was res judicata or Alaw of the case@ as to medical causation regarding the employee=s subsequent need for a total hip replacement.
PENALTIES. Where the compensation judge=s award of penalties was based on the erroneous conclusion that a prior findings and order was res judicata as to the employer and insurer=s liability for subsequent surgery, the penalty award was reversed as clearly erroneous and unsupported by substantial evidence.
Vacated, reversed, and remanded.
Determined by Wilson, J., Stofferahn, J., and Pederson, J.
Compensation Judge: Donald C. Erickson.
DEBRA A. WILSON, Judge
The employer and insurer appeal from the compensation judge=s findings that a prior findings and order was res judicata as to legal causation for a subsequent surgery and resulting temporary total disability, and from the judge=s award of penalties for imposition of a frivolous defense. We reverse the award of penalties and vacate and remand for redetermination as to causation for the surgery and temporary total disability, in keeping with this decision.
The employee sustained an injury to his right lower extremity, including his right hip, on April 7, 1994, while working for Park Inn International [the employer] as a maintenance worker. X-rays taken on that date revealed that the thirty-six year old employee was suffering from advanced degenerative changes in the right hip, a condition not previously symptomatic or diagnosed. The employee was told on that date that he would eventually need a right hip replacement. The employee did not lose time from work or seek further treatment for the April 7, 1994, injury.
On November 29, 1994, the employee sustained another injury to his right lower extremity, including his right hip, while working for the employer. On December 7, 1994, when the employee first treated for that injury, restrictions were imposed as a result of his right hip condition. On January 20, 1995, the employee was seen by Dr. Peter G. Goldschmidt for an orthopedic consultation. The doctor=s office notes of that date indicated, AI feel he will likely require a total hip arthroplasty at some point in the future, but cautioned him as to postponing this for as long as possible in view of his young age.@ The employee continued to work for the employer, and, between the summer of 1995 and mid-November of 1996, his symptoms worsened. On November 4, 1996, Dr. Goldschmidt again opined that the employee would Aprobably require total hip arthroplasty at some point in the future, but I certainly would not recommend one at this time, particularly since he is doing so well with nonoperative treatment.@ The employee resigned his position with the employer on or about November 15, 1996.
The employee subsequently worked for the employer again from April 1, 1997, through the end of May of 1997. He next worked for a real estate management company from June 15, 1997, through February 8, 1998, and then for the Census Bureau from about July 28, 1998, through September 20, 1998.
An amended claim petition filed by the employee on October 31, 1997, came on for hearing on October 16, 1998. Issues at that hearing included whether the employee was entitled to wage loss benefits, permanent partial disability benefits, and payment of a medical bill in the amount of $198.00, as a result of one or both work injuries. In findings filed on March 10, 1999, Compensation Judge Gregory A. Bonovetz found that the employee had sustained a work-related injury to his right hip on April 7, 1994, that was Aa temporary aggravation of the previously quiescent, asymptomatic degenerative right hip condition.@ Judge Bonovetz also found that the employee had sustained a work-related injury to his right hip on November 29, 1994, that required treatment from Dr. Goldschmidt and resulted in temporary total and temporary partial disability and a 6% permanent partial disability of the body as a whole. The employer and Acceptance appealed from that findings and order to the Workers= Compensation Court of Appeals, and, in a decision filed on September 8, 1999, this court affirmed the compensation judge=s decision.
The employee=s condition continued to deteriorate after the October 16, 1998, hearing, and, when he returned to Dr. Goldschmidt on January 10, 2000, the employee was able to walk less than a block, even using a cane. The doctor=s plan at that time was to proceed with a total hip arthroplasty.
The employee filed a claim petition on May 26, 2000, seeking approval from the employer and Acceptance for the surgery recommended by Dr. Goldschmidt as a result of the November 1994 work injury. The employee also sought temporary total disability benefits related to the surgery and penalties for imposition of a frivolous defense. The employer and Acceptance denied liability for the surgery, contending that the need for surgery arose from causes wholly unrelated to the November 29, 1994, work injury and alleging that any need for medical care was a direct result of the employee=s pre-existing degenerative arthritic condition.
On December 11, 2000, Acceptance had the employee examined by Dr. Thomas Litman, who diagnosed bilateral osteoarthritis and opined that the right hip arthroplasty was reasonable and necessary surgery, but he stated that the November 1994 injury was not a significant contributing factor in the right hip osteoarthritis or the need for surgery. Dr. Goldschmidt performed the right hip arthroplasty on May 4, 2001. The employee=s attorney later wrote to Dr. Goldschmidt, asking whether the November 1994 work injury was a substantial contributing factor in the employee=s hip condition and need for hip surgery. By letter of June 20, 2001, Dr. Goldschmidt responded that A[the employee=s] fall in  was likely a contributing factor to his hip condition. In reviewing my notes I did also find a reference to Mr. Levings being a recovering alcoholic. As you likely know, alcoholism is a risk factor for avascular necrosis and could have resulted in his arthritis.@
The matter proceeded to hearing on July 24, 2001, before Compensation Judge Donald C. Erickson. In findings and order filed on October 16, 2001, Judge Erickson found that Ait is the law of the case that the injury of November 29, 1994, significantly and permanently aggravated the employee=s right hip condition@ and that the employer and Acceptance were therefore liable for the expenses associated with the right hip surgery, temporary total disability, and penalties. The employer and Acceptance appeal.
STANDARD OF REVIEW
A[A] decision which rests upon the application of a statute or rule to essentially undisputed facts generally involves a question of law which [the Workers= Compensation Court of Appeals] may consider de novo.@ Krovchuk v. Koch Oil Refinery, 48 W.C.D. 607, 608 (W.C.C.A. 1993).
Acceptance contends that res judicata does not apply with regard to the employee=s claim for the right hip replacement, as that issue was not previously litigated. We agree.
Res judicata applies in workers= compensation matters in some instances, but the principle does not bar further proceedings to determine claims not litigated in the prior hearing. See Westendorf v. Campbell Soup Company, 309 Minn. 550, 243 N.W.2d 157, 28 W.C.D. 460 (1976); see also 3 Larson, The Law of Workmen=s Compensation'79.72(f) at 15-426.272(100) (1992) (A[R]es judicata does not apply if the issue at stake was not specifically decided in the prior proceeding@).
Review of the present matter discloses that the hearing in 1998 involved claims for wage loss benefits, permanent partial disability benefits, and a medical bill in the amount of $198.00. The medical bill at issue appears to have been related to treatment for a right knee condition. Under the circumstances of this case, the fact that the employee=s 1994 work injury may have permanently aggravated the employee=s underlying right hip condition does not automatically mean that the surgery performed in 2001 was substantially necessitated by the work injury. As that issue was not at stake at the 1998 hearing, the judge=s decision from that hearing is not res judicata as to liability for the subsequent right hip surgery or resulting disability. See Lindberg v. J & D Enterprises, 543 N.W.2d 90, 54 W.C.D. 44 (Minn. 1996); Erickson v. Hulcher Emergency Servs., 50 W.C.D. 140 (Minn. 1994) (order opinion).
The employer and Acceptance contend that this court should reverse Judge Erickson=s decision and deny the employee=s claim for surgery, in that Dr. Litman has opined that the employee=s need for the right hip surgery was not causally related to the November 1994 work injury, and the employee has not presented any evidence to establish that it was related. However, the evidence is not quite so clear cut, and it is not our function to make factual findings in the first instance. We therefore vacate Judge Erickson=s decision as to the Alaw of the case@ effect of Judge Bonovetz=s findings and remand the matter for redetermination of the issue of whether the employee=s need for the right hip replacement and resulting temporary total disability was causally related to the November 29, 1994, work injury, based on the existing record. We reverse the judge=s award of penalties, as that award was premised on the judge=s conclusion that penalties were appropriate Abecause the employer and insurer seek to relitigate matters that are now final.@
 The employer was then insured for workers= compensation liability by Minnesota Assigned Risk Plan/Berkley Administrators.
 At that time, the employer was insured for workers= compensation liability by Acceptance Indemnity Insurance Company/Preferred Works [Acceptance].
 The judge awarded temporary total disability benefits from May 4, 2000, through August 4, 2000. We assume that the judge=s decision contains typographical errors and should read May 4, 2001, through August 4, 2001.
 In his memorandum, the compensation judge stated,
[a]s for the employer and insurer on the risk at the time of the November 1994 injury being liable for the medical care and treatment provided to the employee as a result of right knee symptomatology, both the employee=s treating orthopedic surgeon, Dr. Peter Goldschmidt and Dr. Thomas Litman were of the opinion that the right knee symptomatology, the bursitis, was a consequence of the right hip injury.