MICHAEL J. MULHOLLAND, Employee/Petitioner, v. NORTH AMERICAN ENG=G & MFG., SELF-INSURED/BERKLEY RISK ADM=RS CO., Employer-Insurer.
WORKERS' COMPENSATION COURT OF APPEALS
MARCH 18, 2002
VACATION OF AWARD - SUBSTANTIAL CHANGE IN CONDITION. The evidence offered in this case demonstrates a substantial change in the employee=s medical condition, his diagnosis and his ability to work, since the 1992 Award on Stipulation, sufficient to warrant vacation of the Award.
Petition to vacate award on stipulation granted.
Determined by: Rykken, J., Wilson, J., and Pederson, J.
MIRIAM P. RYKKEN, Judge
The employee petitions this court to set aside an Award on Stipulation, served and filed on April 15, 1992. We conclude the employee has established a sufficient basis to set aside the award and, accordingly, grant the employee=s motion.
The employee, Michael J. Mulholland, was born in 1966 and is 35 years old. After graduating from high school in 1984, the employee served in the U.S. Navy until 1989, after which he worked first for eight or nine months for a geophysics firm setting up equipment to measure oil cavities and then for six months as a corrections officer for the Wyoming State Penitentiary. He began working as an assembler for the employer, North American Engineering & Manufacturing, on November 5, 1990, earning a weekly wage of $240.00. He sustained an admitted injury to his low back on January 29, 1991, while lifting an 86-pound drive shaft. (Er Ex. W; Judgment Roll: 3/24/92 stipulation for settlement.)
The employee was apparently treated with physical therapy and medication and was off work for about one week, after which he returned to his regular duties with the employer. On March 11, 1991, the employee bent over at work and experienced sudden, sharp back pain. He was seen by Dr. Bruce Agneberg, M.D., who diagnosed a recurrence of low back strain, took the employee off work and prescribed additional physical therapy. On April 1, 1991, Dr. Agneberg authorized the employee to return to work but imposed a 15-pound lifting restriction until April 15, 1991. (Er Exs. D, M, W; Judgment Roll: 3/24/92 stipulation for settlement.)
A CT scan of the employee=s lumbar spine was performed on April 15, 1991, and showed central disc protrusions at the L3-4, L4-5 and L5-S1 levels, with the most pronounced being at L3-4, resulting in mild stenosis at that level. The radiologist noted that the protrusions might be described either as prominent disc bulges or minimal herniations, and recommended that an MRI scan be done. (Er. Ex. D.)
The employee again returned to work for the employer in his regular job. On July 22, 1991 the employee sustained a third admitted specific injury to the low back, again while lifting a drive shaft, when he experienced sudden pain in the lower back and into both legs. He was seen the same day by Dr. Gordon Aamoth, to whom he had been referred by Dr. Agneberg. Straight leg raising was markedly positive. Dr. Aamoth restricted the employee from work, recommended that the employee undergo an MRI scan and noted that the employee might need job retraining in light of the heavy nature of his current job duties. (Er. Ex. T.)
An MRI scan of the employee=s lumbar spine was done on July 23, 1991. The scan showed multi-level degenerative lumbar spondylosis, suggestive of old underlying juvenile disc disease, and small herniations without neural impingement at levels L1-2, L3-4, L4-5 and L5-S1. (Er. Ex. V.)
On August 14, 1991, Dr. Aamoth saw the employee and advised him that his chronic multiple level lumbar disc problems would likely preclude him from returning to heavy labor. Dr. Aamoth believed that the employee would require restrictions against prolonged sitting, squatting, standing, bending, stooping and heavy lifting, with a maximum weight limit of 25-30 pounds and a repetitive limit of 15 pounds. He continued the employee off work Awhile they try and obtain a different job.@ (Er. Ex. T.)
The employee began treating with Dr. Maria Zorawska, M.D. on September 6, 1991. As of that date he was complaining of constant low back pain with intermittent bilateral posterior thigh pain. Dr. Zorawska recommended physical therapy and gravity lumbar traction. The employee then underwent a physical therapy program directed at stabilization exercise and lumbar and hip mobilization until November 25, 1991. Neither the physical therapy treatment nor the lumbar traction provided the employee with significant improvement, so on December 5, 1991, Dr. Zorawska recommended that the employee undergo facet nerve injection. On that date Dr. Zorawska also noted that, in her opinion, the employee should never return to his pre-injury job, as it required too much bending and lifting for an individual with four degenerated discs. The employee underwent facet nerve blocks on December 13, 1991, but obtained no pain relief from this procedure. (Er. Exs. M, T.)
On February 13, 1992 Dr. Zorawska recommended that the employee be evaluated by Dr. Richard Salib, a surgeon, to determine whether the employee might be a surgical candidate. She also suggested that if Dr. Salib considered surgery inadvisable, the employee might benefit from a pain program. (Er. Ex. T.)
Dr. Salib saw the employee on February 24, 1992. He determined that the employee was not a good candidate for surgical treatment because he had 3-level disc disease, noting that, in his experience, following surgery to a symptomatic disc the adjacent discs frequently become symptomatic soon afterwards. Dr. Salib suggested that the employee should undergo vocational rehabilitation or retraining for a Awhite collar job,@ and that a chronic pain clinic should be considered, as he believed the employee would continue to have intermittent flare-ups of pain in the future, usually with uncontrolled sudden movements. He noted in his report that the employee was thinking about enrolling in a business school and was not interested in a pain program. (Er. Ex. T.)
On March 13, 1992, Dr. Zorawska concluded that the employee had reached maximum medical improvement (MMI), with a diagnosis of four herniated discs. The employee informed her that he was scheduled to start school in April. Dr. Zorawska restricted the employee to very light work, eight hours per day. The return-to-work order form described Avery light work@ as work involving no lifting or bending, limiting carrying, pushing and pulling to 10 pounds, and permitting position changes and stretching as needed. In an MMI report signed on March 16, 1992, Dr. Zorawska rated the employee=s permanent partial disability at 29 percent, consisting of 5 percent for each of three injured disc levels and 14 percent for the fourth and worst affected level. (Er. Ex. T.)
The self-insured employer had been paying temporary total disability benefits to the employee since July 22, 1991. According to the employee's deposition testimony, he received a telephone call at home, in late February or early March 1992, from the self-insured employer's former chief executive officer, Hardy Morningstar. Mr. Morningstar allegedly told him that he had learned that the employee's doctors had determined that he had reached MMI, and that, as a result, the employee would not be entitled to receive further workers' compensation disability checks. When the employee replied that he would need to consult an attorney, Mr. Morningstar allegedly told him that he would arrange to "drag it out forever" and then offered the employee $15,000 to settle his case. The employee testified that he felt intimidated by Mr. Morningstar=s comments in that and later conversations. (Er. Ex. W, Ee. Depo., Sept. 11, 2001, p. 63-65.)
According to the employee, Mr. Morningstar told him to call attorneys until he found one who would sign the stipulation, for which Morningstar would agree to pay the attorney a flat fee of $1,000. The employee testified that he contacted several attorneys and eventually found an attorney who apparently agreed to draft and sign the stipulation, but that the attorney offered him no advice about the settlement, other than to read it over to him and explain what the language meant. (Er. Ex. W.) On March 24, 1992, the employee signed and initialed the stipulation, which was also signed by the attorney and by a representative of the self-insured employer=s third-party insurance administrator. The stipulation was a full, final, and complete close-out of claims arising from the three 1991 dates of injury, except for future reasonable and necessary medical treatment expenses, in return for a lump sum payment in the amount of $16,000.00. The stipulation was reviewed and approved by a compensation judge of the Office of Administrative Hearings and an Award on Stipulation was served and filed on April 15, 1992. (Judgment Roll.) The employee was paid $15,000, and the attorney who signed the stipulation was paid $1,000 directly by the employer=s third-party administrator.
In April 1992, the employee entered a court reporter training program at the Minnesota School of Business, later transferring to the Rasmussen Business College. He continued in this program for five years, but did not successfully complete it because he did not attain a sufficiently high transcription rate. He further testified that, toward the end of the program, the amount of sitting required was becoming a problem. During the time that the employee was studying court reporting, he also worked as a switchboard operator, mostly full time, for Anderberg Communications earning $8.50 per hour by the time he left that job in 1997. (Er. Ex. W.)
The employee did not return to Dr. Zorawska for medical treatment for his low back problems until September 10, 1993, when he reported that he had developed severe back pain about one week before. By the date of his appointment, the pain had significantly improved. (Er. Ex. T.) The employee was again seen by Dr. Zorawska briefly for flare-ups of low back pain in September and November 1994, the first flare-up occurring when he picked up his pet dog and the second when he coughed as he stepped out of the shower. The increases in symptoms abated with medication and short periods of physical therapy. (Er. Ex. T.)
On January 5, 1995 the employee was seen in the emergency room at Mercy Hospital for an acute flare-up of low back pain which started while running with his dog. He consulted Dr. Zorawska on January 17, who prescribed Naprosyn and scheduled the employee for physical therapy exercises. On February 10, 1995, the employee again returned to Dr. Zorawska for severe low back pain which had started three days before, with no obvious injury. His lumbar range of motion was markedly decreased. Dr. Zorawska again referred the employee to physical therapy.
Another MRI scan of the employee=s low back was done on March 27, 1995. The scan showed multilevel degenerative disc disease from L1-2 through L5-S1. At L5-S1 there was a small contained herniation with mild flattening of the ventral aspect of the thecal sac. At L4-5 there was a broad-based small to moderate-sized central disc herniation producing mild central stenosis and mild compression of the L5 nerve roots bilaterally. At L3-4 there was a posterior annular tear with mild bulging of the annulus. The L2-3 level showed a broad-based posterior annular tear and a central and right-sided bulging of the annulus. At L1-2 there was a left-paramidline annular tear and mild posterior bulging of the annulus. There was no impingement at the L1-2, L2-3 or L3-4 levels. Comparison with an exam of July 23, 1991, showed progression of the employee=s degenerative disc disease with progressive loss of disc height at L3-4 through L5-S1 and the appearance of a small central disc herniation at the L2-3 level with mild disc space narrowing and moderate degeneration. (Ee. Ex. C.)
In April 1995, Dr. Zorawska referred the employee for a low back rehabilitation program. The employee completed the program on May 12, 1995, and when seen by Dr. Zorawska on June 14, 1995, reported significant improvement. (Er. Exs. L, T.) The employee returned to Dr. Zorawska once more in August 1995 complaining of increased back pain over the last few days. He was treated with Naprosyn and thereafter did not return again to Dr. Zorawska until February 1997, when he reported that he had experienced severe back pain the previous morning with no specific injury. His pain had come on gradually after he had bent over to dry himself off after showering, and was confined to the lower lumbar region with radiation to the hips but not down the legs. The employee was again treated with physical therapy. (Er. Exs. M, T.)
The employee left his job with Anderberg Communications and moved from the Twin Cities area in Minnesota to Sioux Falls, South Dakota, in May 1997. Shortly thereafter, in July 1997, he began working for AAA Collections as a legal collector, filing for and executing judgments. After moving to Sioux Falls the employee began treating with a family practitioner, Dr. Timothy Donelan, M.D. (Er. Exs. G, W.)
On February 23, 1998, the employee reported to the emergency room due to severe low back pain; Dr. Donelan saw the employee on February 25 for an aggravation of his low back pain, which apparently abated. On March 29, 1998, the employee again reported to the emergency room, and was prescribed pain medication. In May 1998, the employee returned to Dr. Donelan, complaining of another aggravation to his low back pain. According to the employee's testimony, by September 1998 his back pain worsened and, unlike prior flare-ups he had experienced since 1992, did not gradually abate within a few weeks but instead continued to worsen. On October 26, 1998, the employee underwent another MRI scan of his low back, which indicated that the central disc herniation at the L3-4 level was now producing moderate central spinal canal stenosis, a finding not indicated on earlier MRI scans. (Ee. Ex. D; Er. Exs. G, W.)
Dr. Donelan referred the employee to Dr. Joseph Cass, for evaluation as to whether surgery should be considered. Dr. Cass initially felt the employee was not a surgical candidate, and prescribed an epidural block and physical therapy. However, when his increased back pain still failed to resolve, Dr. Cass performed surgery on October 27, 1998, in the form of a microlumbar discectomy at L3-4 on the right. During surgery a large disc herniation was found to be present and was removed in several fragments. (Er. Exs. B, G; Ee. Ex. E.)
In February 1999, the employee returned to Dr. Cass with left-sided low back pain, somewhat lower than previously. Straight-leg raising caused pain bilaterally. Dr. Cass ordered a new MRI scan. The MRI scan, done on February 11, 1999, was compared to another scan done in 1998 shortly before the employee=s surgery. At L3-4, the level at which surgery had been performed, there was moderate disc narrowing and dessication with reactive signal changes in the adjacent vertebral marrow and mild generalized disc bulging. A moderate-sized focal right paracentral disc herniation was present which compressed the thecal sac and right L4 nerve root. These findings were read as consistent with a recurrent right paracentral disc herniation. Dr. Cass recommended additional surgery and on February 19, 1999, performed another microlumbar discectomy at L3-4. During surgery some mild scarring was found to be present and there were fragments throughout the inferior two-thirds of the inferior facet. Dr. Cass decompressed the nerve root. (Ee Exs. F, G, H.)
In October 1999 the employee experienced a return of Aextreme@ low back and leg pain and was diagnosed with a second recurrence of his L3-4 disc extrusion. Dr. Cass recommended further surgery, and Dr. Michael Puumala, M.D., who saw the employee for a second surgical opinion at the request of the employer, reached the same conclusion. On December 9, 1999, the employee underwent a discectomy and posterior lumbar interbody fusion at the L3-4 level. (Ee Exs. H, I, J, R).
The employee testified that fusion surgery did not fully relieve his low back pain, although his level of pain was returned to that which he had been experiencing before it became extreme in October 1999 and before he underwent the fusion surgery. He testified that he has since continued to experience significant flare-ups of back pain, during which he has been unable to work. (Ee Ex. M; Er Ex. W.)
As a result of his repeated absences from work, the employee agreed to leave his job with AAA Collections in May 2001, as the employer needed the job to be filled by a worker with more dependable attendance and as the employee, for his part, was finding the sitting required in the job too difficult. Since that date, the employee has remained unemployed. He has made limited efforts to seek other employment, including registering with the job service and "talking to" temporary employment agencies, but indicated at his deposition that he was really unable to think of any jobs that he might try to find that would be consistent with both his light-duty restrictions and his inability to sit or stand for prolonged periods. He was only able to identify one prospective employer at which he had actually submitted an application, and he had not been hired there. As of the date of the employee's deposition on September 11, 2001, an application on his behalf for social security
disability benefits had been submitted and was pending. (Er Ex. W.)
The employee was evaluated by Dr. Robert Wengler on October 20, 2000. Dr. Wengler determined that the employee=s low back problems developed in 1991 as a function of his work activities, with the L3-4 disc eventually extruding and necessitating the two microdiscectomies and the fusion. He rated the employee with a 33.5 percent permanent partial disability. At the time of his evaluation, Dr. Wengler concluded that the employee was making satisfactory progress and did not require further orthopedic attention. In a subsequent letter dated March 12, 2001, Dr. Wengler further expressed the opinion that the employee=s condition had substantially deteriorated since 1992. He recommended that the employee=s work be limited by a 10-pound weight restriction and involve no repetitive bending, stooping, heavy pushing or pulling or working in positions requiring prolonged postural stress. (Ee Exs. K, L.)
On June 22, 2001, the employee filed with this court his Notice of Motion and Motion to Set Aside Award on Stipulation on the grounds of a substantial change in medical condition and coercion. On October 4, 2001, the self-insured employer filed an objection to the motion.
This court's authority to vacate an award on stipulation executed before July 1, 1992 is governed by Minn. Stat. ''176.461, and 176.521, subd. 3 (1990). Pursuant to Minn. Stat. ' 176.461, an award may be set aside if the employee makes a showing of good cause. Case law applicable to this version of the statute 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); Krebsbach v. Lake Lillian Coop. Creamery Ass'n, 350 N.W.2d 349, 353, 36 W.C.D. 796, 801 (Minn. 1984).
1. Substantial Change in Condition.
The employee seeks to vacate the award on stipulation on the basis of a substantial change in medical condition. Factors this court considers in making this determination include change in diagnosis, change in 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 condition and the injury covered by the settlement. Fodness v. Standard Café, 41 W.C.D. 1054, 1060‑61 (W.C.C.A. 1989) (citations omitted).
Considering these factors in turn, we first address whether there has been a change in diagnosis since the award on stipulation. The employee=s MRI scans and medical records reveal that prior to the 1992 award on stipulation he was diagnosed with degenerative discs at multiple spinal levels, with disc bulges or contained herniations noted at several levels, but none clearly resulting in nerve root impingement or stenosis. The employee=s testimony indicates, and his medical records reflect, that between 1992 and 1998, his condition was quite similar to that which Dr. Zorawska predicted; the employee noted periodic flare-ups of pain, which he treated with pain medication, and these flare-ups were bearable but not disabling. In late 1997 and early 1998, the employee continued to notice periodic flare-ups, but experienced no radiating leg pain. By April 1998, he first noticed radicular pain in his legs. By October 1998, the employee experienced a significant flare-up of his pain, which he stated Anever subsided.@ The employee testified that he Acouldn=t take it anymore. I was bent over and immobile,@ (Er Ex. W. 72) and he therefore sought emergency room medical treatment on October 25, 1998. On October 26, 1998, the employee underwent another MRI scan of his low back, which indicated that the central disc herniation at the L3-4 level was now producing moderate central spinal canal stenosis. By the date of the employee=s first discectomy at L3-4 on October 27, 1998, Dr. Cass had diagnosed a herniated nucleus pulposis at the L3-4 level, and performed a microlumbar discectomy at that level. During surgery, the disc was in fact found to be extruded and fragmented. The employee subsequently was diagnosed with a recurrent herniation and then a second recurrence at this level, necessitating the two further surgeries performed in February and December 1999.
The employee=s diagnosis at the time of the 1992 settlement was degenerative discs at multiple levels. MRI scans taken in 1998 and 1999 showed stenosis at the L3-4 and L4-5 level. By 2000, the employee=s diagnosis included Achronic lumbar disc syndrome, status post microdiscectomy times three and interbody fusion,@ (Ee. Ex. K), with the fusion resulting in a change made to the structure of the employee=s spine. We conclude that the employee=s diagnosis has changed since the award on stipulation.
With respect to the second factor, a change in the employee=s ability to work, the evidence shows a decrease in the employee=s ability to work since the award on stipulation. The employee was temporarily totally disabled at the time of the settlement, but was thought to be able to perform light duty work within restrictions, and in fact his subsequent job history demonstrates that he was able to do so until May 2001. Even though the employee=s formal restrictions have not appreciably changed from those he had as of the date of the award on stipulation, the employee contends that he has become progressively less able to tolerate sitting, and the medical records and his employment history are consistent with this contention.
At approximately the same time the award on stipulation was issued, the employee enrolled in court reporting school. During his first two years of school, the employee worked full-time for Anderberg Communications, then part-time for one year. After that point, he returned to full-time work for two more years during school. After moving to Sioux Falls, South Dakota, in 1997, the employee worked full-time for AAA Collections until May 2001, and also worked part-time as a bartender, typically working one day per week. He ended his bartending position in December 2000, because the standing bothered his back. At AAA Collections, the employee first worked as a legal collector, but because he could not meet required deadlines because of the days he missed due to his low back symptoms he was transferred to a position as a team leader supervisor. The employee=s attendance was severely affected by his low back condition. After his third surgery in December 1999, he returned to work in February 2000, and testified that many times during 2000 and 2001 he missed work for periods ranging from one day to a full week. Apparently by mutual agreement, the employee left his job at AAA Collections. He has not worked since May 2001, even though he has registered with the Job Service and has talked with temporary agencies. The employee testified that since that surgery in December 1999, his pain has continued. He notices significant pain after walking approximately two blocks or after standing 15 minutes. He finds that he cannot drive a car very long without stopping to move around. The employee is unable to perform physical labor, and because he had difficulty with prolonged standing and prolonged sitting, he has not located a job, and has applied for very few positions, as he has not located a position that he feels he could perform in view of his current symptoms. (Er Ex. W, 39-40.)
The employee testified that he continues to have lifting and bending restrictions assigned by his physicians, but that his physicians have not advised him that he Aabsolutely can=t work for medical reasons.@ (Er Ex. W, 39.) Dr. Cass limited the employee=s lifting to 15 pounds, and limited his bending, prolonged standing and prolonged sitting. The employer argues that there are no documented changes in the employee=s physical work restrictions, and therefore no change in his ability to work, since the time of the settlement. Although the employee is currently assigned physical work restrictions from Dr. Cass which are similar to those assigned by Dr. Zorawska in 1992, it does appear that there has been a change in the employee=s functional ability, based upon his deposition testimony.
An additional factor to consider is the change in the employee=s permanency ratings since the time of the 1992 award on stipulation. Just prior to that award, Dr. Zorawska rated the employee=s permanent partial disability at 29 percent, with 14 percent of that rating apparently being the portion attributable solely to the L3-4 disc, the level to which substantial change most clearly has taken place. The only recent rating submitted is that of Dr. Wengler, who gave a 33.5 percent permanency rating for the L3-4 disc and who did not address the other three disc levels previously rated by Dr. Zorawska at 5 percent each. While we are not fully persuaded that Dr. Wengler=s rating is appropriate, as it seems to improperly Astack@ two ratings to cover a single condition, there appears to be no dispute that the employee had a recurrent disc herniation and that he underwent fusion surgery. While we cannot here reach a determination as to the extent of the employee=s permanency, it is apparent that the permanency would exceed the previous 14 percent rating when considering the employee=s three surgeries to the L3-4 level and his multi-level degenerative disc disease.
We conclude that the apparent changes in the employee=s diagnosis, his level of permanent partial disability and his ability to work are sufficient to demonstrate a substantial change in his condition since the 1992 award on stipulation. We therefore grant the employee=s motion to set aside the 1992 award on stipulation. However, nothing in this decision should be construed as an opinion as to the employee=s entitlement to benefits for periods subsequent to the award on stipulation. The burden of proof in this regard remains with the employee.
As we have determined that good cause exists to vacate the award on stipulation based on the above factors, we do not address the employee=s claim that the employee was induced to enter into a settlement, due to coercion by the employer=s former chief executive officer.
 The employee testified at his deposition that AI believe [the attorney] drew up the papers in his office, brought them over to my apartment, I signed them, and that was that. I never actually spoke to him about the case or was advised by him or, you know, whether this was a good settlement or not a good settlement.@ (Ee. Ex. W, p. 66.)
 See Fry v. Twin City Concrete Prods., slip op. (W.C.C.A. Nov. 29, 2000).