PATRICK GRANGRUTH, Petitioner, v. CUSTOM DRYWALL, INC., and CNA/ TRANSCONTINENTAL INS. CO., Respondents.
WORKERS' COMPENSATION COURT OF APPEALS
MAY 14, 2003
VACATION OF AWARD - MISTAKE. The employee failed to establish cause based on a mutual mistake of fact regarding the nature and extent of the employee=s injury, where the reports of all of the employee=s treating physicians were available and known to both parties at the time of the mediated settlement, and there was no significant change in the employee=s diagnosis or treatment following issuance of the mediation award.
VACATION OF AWARD - FRAUD. The employee failed to show evidence of an intentionally false representation of fact by the employer or insurer, or evidence that the mediator was induced to act in reliance of a false representation of material fact. Nor does the fact that the employee may have been motivated by financial hardship to enter into the mediation agreement render the employee=s consent to the agreement ineffective on the facts of this case.
Petition to vacate denied.
Determined by Johnson, C.J., Wilson, J., and Stofferahn, J.
THOMAS L. JOHNSON, Judge
The employee petitions to vacate and set aside a mediation award filed December 19, 2000, on the basis of a mutual mistake of fact or fraud. Finding insufficient cause to vacate the award, we deny the employee=s petition.
Patrick Grangruth, the employee, is a carpenter and sheetrock worker. The employee worked through a union hall, and began working for Custom Drywall, Inc., the employer, on October 2, 2000. The employee alleged he sustained a personal injury to his back on October 23, 2000, while bending forward and lifting a twelve-foot sheet of 5/8 inch heavy green wallboard.
The employee first sought treatment from Dr. Daniel Palmquist at the Raiter Clinic in Cloquet, Minnesota, on October 25, 2000. The employee reported feeling a sudden Apop@ in his mid-back between the shoulder blades and excruciating pain following the injury, with occasional numbness in the small, ring, and middle fingers of his right hand. The doctor noted tenderness in the thoracic paraspinal musculature and along the medial scapular borders bilaterally. Dr. Palmquist diagnosed an acute muscle strain, provided pain medication and advised the employee to ice the back.
The employee was next seen on November 9, 2000, by Dr. Lisa Staber at St. Luke=s Denfeld Medical Clinic in Duluth, Minnesota. The employee stated he felt a Acrack@ in the lower back while lifting a piece of sheet rock, and reported continuing back pain radiating down both legs and occasional numbness going down the right lower extremity. Dr. Staber noted tenderness on palpation of the thoracic and lumbar vertebra and paraspinal muscles with lumbar muscle spasm bilaterally. The doctor diagnosed thoracic and lumbar muscle sprain/strain with radiculopathy, noting the possibility of a disc herniation. She prescribed medications and physical therapy, and imposed work restrictions including no lifting, pushing or pulling over ten pounds, no twisting, bending, kneeling or squatting, avoiding overhead work and uneven ground, and taking stretch breaks every two hours. Dr. Staber=s chart note was copied to Dr. Palmquist.
The insurer then directed the employee to the Duluth Clinic where he was seen by Dr. Lynn Quenemoen on November 13, 2000. The employee complained of constant low back pain with muscle tightness radiating into the upper back, but denied radiating symptoms into the lower extremities. On examination, the doctor again noted significant thoracic and lumbar paraspinal muscle spasm. Dr. Quenemoen reviewed an x-ray report from the Denfeld Clinic reading it as showing mild narrowing at the L5-S1 interspace. Dr. Quenemoen diagnosed a lumbosacral sprain, prescribed medications and physical therapy, and took the employee off work, indicating he did not think the employee was capable of light duty at that time.
On November 16, 2000, the employer and insurer served a notice denying primary liability asserting, following investigation, that the alleged injury was not work-related. The following day, Dr. Palmquist completed a Health Care Provider Report at the request of the insurer. The doctor reported a diagnosis of thoracic spine strain treated on October 25, 2000. Dr. Palmquist indicated no further treatment was planned and opined the employee had reached maximum medical improvement as of November 15, 2000, with no permanent disability.
On December 7, 2000, the employee and a claims representative from the insurer participated in a telephone mediation session, conducted by a staff member at the Department of Labor and Industry. The employer and insurer maintained a denial of primary liability, but agreed to pay for medical treatment provided to the employee between October 23 and December 7, 2000. The insurer further agreed to pay, and the employee agreed to accept, $2,950.00 in full, final and complete settlement of all claims related to the alleged personal injury, including future medical expenses and rehabilitation. The following day, December 8, 2000, the claims representative faxed to the mediator copies of the employee=s medical treatment records relating to the alleged injury on October 23, 2000. A Mediation Resolution/Award was prepared by the mediator and signed by the claims representative and the employee on December 18, 2000. The mediator, as the representative of the commissioner, approved the settlement, and issued the mediation award on December 19, 2000.
On February 6, 2001, the employee returned to Dr. Quenemoen, reporting worsening back pain going up to the base of the neck, but without any radicular pain or dysesthesias in the lower extremities. On examination, tenderness was again noted in the lumbar and thoracic spine, along with a decreased right ankle reflex. The doctor ordered an MRI scan to rule out a disc injury, again prescribed physical therapy, and advised the employee to remain off work for the time being. The MRI scan of February 24, 2001, showed mild lumbar spine degenerative changes. At a follow up appointment on March 2, 2001, Dr. Quenemoen diagnosed mechanical and myofascial low back pain and told the employee he needed to find a way to get physical therapy. The employee was to be seen for a recheck after two weeks of physical therapy.
The employee was last seen by Dr. Quenemoen on April 5, 2001. The employee reported he did not go to physical therapy because his back pain and symptoms had resolved and he was Afeeling great.@ (Ee Ex. 11.) The employee was, instead, seeking treatment for a non-work related injury involving a physical altercation on April 1, 2001, in which the employee was struck in the face with a bottle, knocked unconscious, and kicked in multiple areas, sustaining injuries primarily to the neck and upper back. The following day, the employee was seen at St. Mary=s Medical Center Walk-In Clinic reporting a blunt trauma injury to his back as a result of the altercation. An acute lumbar strain with associated lumbar contusion was diagnosed. The employee was given medications and taken off work for five days.
The employee returned to the Raiter Clinic in July 2001, reporting he had flipped and rolled his four-wheeler, and complaining of pain from his neck all the way down his back. Some areas of tenderness and muscle spasm in the mid-neck and mid-thoracic areas were noted on examination. The diagnosis was ATV accident with acute back pain for which muscle relaxants and pain medication were prescribed. The employee was seen again at the Raiter Clinic on June 18, 2002, reporting low back pain and some mild pain into the right leg. X-rays showed a slight anterior wedge in the mid-thoracic spine and mild degenerative changes in the thoracic and lumbar spines.
On January 9, 2003, the employee petitioned the court for vacation of the mediation award on the basis of a mutual mistake of fact and/or fraud. The employer and insurer filed a timely objection to the petition.
This court may set aside an award Afor cause@ pursuant to Minn. Stat. ' 176.461 and Minn. Stat. ' 176.521, subd. 3 (2000). ACause@ is limited to four grounds, including a substantial change in medical condition; mutual mistake of fact; newly discovered evidence; or fraud. Minn. Stat. ' 176.461; Franke v. Fabcon, Inc., 509 N.W.2d 373, 376, 49 W.C.D. 520, 523 (Minn. 1993). The employee seeks vacation of the mediation award on the grounds of a mutual mistake of fact and/or fraud.
1. Mutual Mistake of Fact
Under Minn. Stat. ' 176.461, this court=s authority to vacate an award on the ground of mistake extends not to any mistake, but only to a mutual mistake of fact by the parties to the agreement. A mutual mistake of fact occurs when the parties to the agreement both misapprehend some fact material to their intended settlement of a claim. Shelton v. Schwan=s Sales Enters., 53 W.C.D. 110, 113 (W.C.C.A. 1995). In a mutual mistake case, the inquiry focuses on what the situation was, and what was known at the time of the agreement settling the case. Franke at 377, 49 W.C.D. at 525.
The employee argues the parties misapprehended the nature and extent of the employee=s injury at the time of the mediated agreement based on the unfounded and mistaken opinion of Dr. Palmquist. The employee further points to the MRI scan of February 24, 2001, asserting neither party could have appreciated the seriousness of the employee=s condition prior to that time. We are not persuaded.
At the time of the mediation session, the reports of Dr. Palmquist, Dr. Staber and Dr. Quenemoen were available and known to both parties. The employee had reported significant back pain to all three doctors, and had described radiating pain into the lower extremities to Dr. Staber causing her to diagnose radiculopathy and note the possibility of a herniated disc. All three doctors had diagnosed a sprain/strain-type injury to the back as of the time of the mediated settlement. The post-mediation lumbar spine MRI scan showed mild degenerative changes only, and Dr. Quenemoen=s post-MRI diagnosis, mechanical and myofascial low back pain, does not reflect any substantial change as a result of the scan. Moreover, at the time of the mediated agreement, both parties knew that Dr. Staber had imposed significant work restrictions and that Dr. Quenemoen did not believe the employee was capable of even light duty work. Shortly after the settlement, by April 5, 2001, the employee reported his back pain and symptoms had resolved.
The question is not whether Dr. Palmquist -- or even the mediator -- misapprehended the situation. Rather, the issue is whether the parties to the agreement misapprehended some material fact. It is clear the parties were fully aware of employee=s treatment with, and the work restrictions imposed by, Dr. Staber and Dr. Quenemoen at the time of the mediation session. We conclude there is insufficient evidence of a mutual mistake of fact by the parties regarding the nature and extent of employee=s alleged personal injury, and we must, therefore, deny the employee=s petition on that ground.
The employee further asserts that the employer and insurer acted fraudulently by pre-senting and relying upon Dr. Palmquist=s Health Care Provider Report when they knew it was unfounded. Because Dr. Palmquist=s report was the only medical evidence Apresented@ during the mediation session, the employee argues, the mediator must have believed the employee was doing fine, even though both Dr. Staber and Dr. Quenemoen had restricted the employee from doing his usual work. If the mediator had known the employee=s actual situation, the employee argues, he would not have approved the mediated agreement.
The mediation session was conducted by telephone on December 7, 2000. The following day, on December 8, 2000, the insurer faxed to the mediator copies of all of the employee=s medical records, including those of Dr. Staber and Dr. Quenemoen. The Mediation Resolution/Award was not issued until December 19, 2000, after the parties returned the signed mediation documents to the department. The employee presented no evidence of an intentionally false representation of fact on the part of the employer and insurer, or evidence that the mediator was induced to act in reliance on a false representation of material fact by the employer or insurer. See Strande v. Women=s Club of Minneapolis, 50 W.C.D. 527 (W.C.C.A. 1994).
The employee further asserts that, at the time of the settlement, he was no longer able to work, had no income, and was living in a motel and relying upon the Salvation Army to survive. He argues the claims adjuster took advantage of his financial hardship and lack of representation, inducing him to accept an unreasonably low settlement by waving a check in his face a few weeks before Christmas. Although the employee was not represented by counsel at the time of the mediated agreement, lack of representation, without more, is not sufficient Acause@ upon which to vacate an award. Stewart v. Rahr Malting Co., 435 N.W.2d 538, 41 W.C.D. 648 (Minn. 1989). Moreover, that an employee may have been motivated by financial hardship to enter into a settlement agreement does not render the employee=s consent to the agreement ineffective. See, e.g., Criss v. Fidelity Bldg. Servs., Inc., slip op. (W.C.C.A. Jan. 30, 2002); Croissant v. Merit Gage, Inc., slip op. (W.C.C.A. Feb. 3, 1994). The employee has failed to establish fraud, coercion or overreaching in this case, and we decline to vacate the mediation award on such a basis.
 The employee belonged to a managed care organization and was advised after seeing Dr. Palmquist and, again, after seeing Dr. Staber, that they were not authorized medical providers under the plan.