RICHARD TOMASZEWSKI, Employee/Petitioner, v. WORLD AEROSPACE CORP. and THE HARTFORD, Employer-Insurer, and MN DEP=T OF JOBS & TRAINING and BLUE CROSS/BLUE SHIELD OF MINN., Intervenors, and SPECIAL COMPENSATION FUND.
WORKERS= COMPENSATION COURT OF APPEALS
OCTOBER 30, 2002
VACATION OF AWARD - FRAUD. The employee=s petition to vacate an award on stipulation on the ground of the alleged fraudulent conduct of his former attorney must be denied where there is no evidence of fraud on the part of the employer or the insurer.
Petition to vacate award denied.
Determined by Johnson, C.J., Pederson, J. and Stofferahn, J.
THOMAS L. JOHNSON, Judge
The employee has petitioned this court to vacate and set aside the award on Stipulation served and filed October 13, 1992, on the basis of fraud. We conclude the employee has failed to establish cause for vacation of the award and deny the employee=s petition.
On or about March 5, 1990, Richard Tomaszewski, the employee, sustained a personal injury to his lumbar spine and his right shoulder, arm and hand while working for World Aerospace Corporation, the employer, then insured by The Hartford. On the date of his injury, the employee earned a wage of $500.00 per week. The employer and insurer admitted liability for the employee=s personal injury and paid wage loss, medical and rehabilitation benefits.
The employee later filed a claim petition seeking permanent partial disability benefits and alleging he had been permanently and totally disabled since March 5, 1990. In their answer, the employer and insurer denied liability for further benefits and alleged the employee was able to work, without restrictions, until he was laid off for reasons unrelated to the personal injury. Ultimately, the parties entered into a stipulation for settlement. In consideration of a lump sump payment of $75,000.00, the employee settled, on a full, final and complete basis, all claims for benefits arising out of the March 5, 1990 injury, with the exception of reasonable and necessary medical expenses. Chiropractic treatment, psychiatric and psychological treatment were, however, specifically closed out in the settlement agreement. The agreement further provided Dr. Steven Trobiani would not be the employee=s treating physician. The parties agreed attorney fees of $6,500.00 would be deducted from the lump sum payment and paid to the employee=s attorneys, Stephen J. Beseres and Helen A. Dovolis. An Award on Stipulation was filed on October 13, 1992.
On June 20, 2002, the employee filed a petition to vacate the October 19, 1992 Award on Stipulation on the grounds of fraud. The employee contends he was fraudulently induced by his former attorney, Ms. Dovolis, to enter into the stipulation for settlement and that his former attorney failed to inform him of material facts in the stipulation and misstated other facts regarding the settlement. Specifically, the employee contends Ms. Dovolis told him if he went to hearing and lost, he would be required to pay the employer and insurer=s attorney fees. At the time of the settlement, the employee was treating with Dr. Steven Trobiani. The stipulation for settlement provided Dr. Trobiani would no longer be the employee=s treating physician. The employee contends he objected to this provision but stated he was told by Ms. Dovolis to sign the stipulation for settlement and she would have the provision removed from the stipulation for settlement which was not done. The employee contends he was also treating with a psychiatrist at the time of the settlement, but was not informed the stipulation for settlement closed out claims for psychiatric care. Finally, the employee contends Ms. Dovolis failed to explain that if the employee prevailed in his claim, he would receive permanent and total disability benefits for as long as he was disabled. Had he known that fact, the employee contends, he would not have entered into the settlement since he has not worked since the award on stipulation. For these reasons, the employee asks this court to vacate the award on stipulation.
This court may set aside an Award on Stipulation for Acause@ pursuant to Minn. Stat. '' 176.461 (Supp. 1993) and 176.521, subd. 3 (1992); Stewart v. Rahr Malting Co., 435 N.W.2d 538, 539, 41 W.C.D. 648, 649 (Minn. 1989). "Good cause" is limited to four grounds, including fraud. Minn. Stat. ' 176.461(4). The Minnesota Supreme Court has enumerated the following elements of fraud: (1) there must be a false representation of facts; (2) the representation must deal with a past or present fact; (3) the fact must be susceptible of knowledge; (4) the representing person must know the fact is false; (5) the representing party must intend that another be induced to act based on the false representation; (6) the other person must in fact act on the false representation; and (7) the misrepresentation must be the proximate cause of actual damages. Weise v. Red Owl Stores, Inc., 286 Minn. 199, 202, 175 N.W.2d 184, 187, (1970).
We conclude the employee has not established fraud for the purpose of vacating the settlement agreement. Fraud under Minn. Stat. ' 176.461 generally refers to fraud by one party against another party. Strande v. Women=s Club of Minneapolis, 50 W.C.D. 527 (W.C.C.A. 1994), aff=d 518 N.W.2d 555, 50 W.C.D. 532 (Minn. 1994). In Patterson v. Reliant Employment Group, slip. op. (W.C.C.A. Feb. 4, 2002), this court addressed a similar case in which the employee also contended she was induced to enter into an improvident settlement based upon the fraud, misrepresentations, concealment and deceit of her counsel. Absent evidence the employer and insurer were aware of, or parties to the fraud, the court declined to vacate the stipulation. In this case, the employee does not allege he was defrauded by the employer or insurer nor does he allege the employer or insurer were aware of, or a party to, the alleged fraudulent conduct of his attorney. We acknowledge Ms. Dovolis was disbarred by the Supreme Court and are sympathetic to the employee=s claim. We conclude, however, the employee has failed to establish fraud. We must, accordingly, deny the petition to vacate.