DALE H. FIECK, deceased employee, by JUDY (FIECK) DOKKEN and NANCY NELSON, conservator of BRANDON FIECK, v. BRANDRUP & ASSOCS., and GRINNELL MUT. REINSURANCE CO., Employer-Insurer/Petitioner.
WORKERS= COMPENSATION COURT OF APPEALS
OCTOBER 6, 2004
VACATION OF AWARD - MISTAKE. Where there was no evidence in the record that the alleged mistake was both mutual and a mistake of fact, and where any arguable mistake was instead apparently a mistake in legal judgment, the court lacked authority to grant the employer and insurer=s petition to vacate the order for reallocation at issue.
Petition to vacate denied.
Determined by Pederson, J., Johnson, C.J., and Stofferahn, J.
Attorneys: Dianne E. Walsh, Fitch, Johnson, Larson, Walsh & Held, Minneapolis, MN, for the Petitioners. James R. Carlson, O=Brien & Wolf, Rochester, MN, for the Respondents.
WILLIAM R. PEDERSON, Judge
The employer and insurer petition this court to vacate an order reallocating dependency benefits on grounds that the order is voidable under principles of res judicata and collateral estoppel and on grounds of mutual mistake of fact pursuant to Minn. Stat. ' 176.461. We deny the petition.
This case arises out of the March 29, 1995, work-related death of employee Dale H. Fieck and the allocation of dependency benefits to his widow, Judy (Fieck) Dokken, two sons, Bradley and Brandon Fieck, and a daughter, Alyssa Morton, who lived with her mother and guardian Wylma Morton.
Several months after the employee=s death, and in accordance with Minn. Stat. ' 176.111, subd. 10, the employer, Brandrup & Associates, and its insurer petitioned the Department of Labor and Industry for an allocation of dependency benefits and for a determination as to the specific dollar amount of workers= compensation dependency benefits that the employee=s dependents were entitled to receive. A hearing was held before Compensation Judge Jerome G. Arnold on November 2, 1995. In a decision issued November 9, 1995, and amended November 22, 1995, Judge Arnold allocated 75% of the total dependency benefit to the employee=s dependent surviving spouse, Judy Fieck, and, commencing June 1, 1995, when Bradley Fieck=s dependency status ceased, 12.5% to Brandon Fieck and 12.5% to Alyssa Morton. Based on the employee=s weekly wage of $723.46, the judge found Judy entitled to a weekly benefit of $361.72 and each of the two dependent children entitled to a weekly benefit of $60.29. He also found that the employee=s dependent children were each receiving $148.15 weekly in social security benefits and that payments to these dependents were subject to any applicable set off. Judge Arnold=s amended decision was not appealed.
Subsequent to Judge Arnold=s decision, the employer and insurer paid the allocated dependency benefit to Judy as ordered, but they did not pay benefits to Brandon or Alyssa, claiming entitlement to a complete offset against those dependents= allocated shares pursuant to Minn. Stat. ' 176.111, subd. 21. On June 10, 1996, a claim petition was filed on Brandon=s behalf for that portion of the total dependency benefit that had been allocated to him. Wylma Morton, as guardian for Alyssa, was subsequently joined as a party. Pursuant to Minn. Stat. ' 176.322, the children=s claim for dependency benefits was submitted on stipulated facts to Settlement Judge James O=Gorman at the Department of Labor and Industry. In a decision issued July 30, 1997, Judge O=Gorman determined that Minn. R. 5220.2930, subp. 5B, sets forth the proper method for computing the offset allowed by Minn. Stat. ' 176.111, subd. 21. According to that rule, the offset is computed twice, once for the surviving spouse and the child who is dependent on the surviving spouse taken as a group, and once for the child who is not dependent on the surviving spouse. The judge concluded that Brandon was entitled to receive his allocated share of the dependency benefit but that Alyssa=s allocated share had been properly offset completely by her receipt of weekly government survivor benefits. In other words, the employer and insurer had been entitled to reduce their obligation for payment of dependency benefits by 12.5% rather than 25%. Judge O=Gorman=s decision was affirmed on appeal by this court, and this court=s decision was summarily affirmed by the Supreme Court on July 17, 1998. The employer and insurer thereafter issued a lump sum payment to Brandon for past due benefits, and they also commenced payment to him of 12.5% of the total weekly dependency benefit, continuing to pay 75% of that total benefit to Judy.
Over a year later, in December of 1999, the employer and insurer raised the question as to whether dependency benefits being paid to Judy and to Brandon were proper under the statute, apparently construing Judge O=Gorman=s decision regarding Alyssa=s interest to have resulted in her 12.5% share being Aunallocated.@ In a letter to counsel for Judy and Brandon on December 7, 1999, then-counsel for the employer and insurer stated that payment pursuant to the Court=s Order represented only 87.5% of the total weekly dependency benefit due and that she believed the remaining Aunallocated@ 12.5% interest should be paid either to Judy or to Brandon. In subsequent correspondence, counsel for the employer and insurer urged Judy and Brandon=s counsel to file a APetition for an Allocation of Benefits@ so that an Order could be obtained allowing the employer and insurer to pay the Amissing@ 12.5%.
Eventually, on June 9, 2000, another claim petition was filed on behalf of Brandon and Judy, seeking to reallocate Alyssa=s 12.5% share of the dependency benefitB9% to Judy and 3.5% to Brandon. On June 21, 2000, the employer and insurer filed their answer to the petition, admitting that a reallocation was necessary, that the proposed allocation of 84% of the total dependency benefit to Judy and 16% of that benefit to Brandon was appropriate, and that the court should Asimply issue [an] Order for reallocation of dependency benefits.@ The employer and insurer attached to their answer a proposed Order for Reallocation of Dependency Benefits. That Order, signed by Compensation Judge Penny Johnson and served and filed on October 25, 2000, provided as follows:
WHEREAS, the above-entitled matter came before the Minnesota Department of Labor and Industry, Workers= Compensation Division, pursuant to a Claim Petition For Dependency Benefits, served and filed by the Petition[er], Judy (Fieck) Dokken, on or about June 8, 2000;
WHEREAS, the Employer and Insurer admit that reallocation of dependency benefits is necessary;
WHEREAS, the Employer and Insurer do not object to a reallocation of dependency benefits to 84% to Judy Fieck and 16% to Brandon Fieck, the total representing 100%;
WHEREAS, the undersigned Compensation Judge, having reviewed the records, proceedings, files and Minnesota Workers= Compensation Act, finds that reallocation of dependency benefits is necessary in this matter.
The Employer and Insurer shall make payment of dependency benefits to the surviving dependent spouse, Judy (Fieck) Dokken, 84% and to Brandon Dale Fieck, 16% of the dependency benefits subject to any applicable set-off.
Following the issuance of Judge Johnson=s October 25, 2000, Order, the employer and insurer evidently recalculated the benefits payable to Judy and Brandon and issued checks for underpayments reflecting the presumed Aunallocated@ 12.5% share dating back to the date of the employee=s death. At that same time, the employer and insurer commenced payment of 84% of the total weekly dependency benefit to Judy and 16% of that benefit to Brandon.
On March 8, 2004, the employer and insurer filed with this court a petition to vacate the October 25, 2000, Order of Judge Penny Johnson on grounds that the Order was Avoidable under the principles of res judicata and collateral estoppel@ and was based on a mutual mistake of fact within the meaning of Minn. Stat. ' 176.461. Judy and Brandon have filed an objection to the employer and insurer=s petition.
The employer and insurer first contend that the Order for Reallocation of Dependency Benefits issued by Judge Johnson on October 25, 2000, is voidable because principles of res judicata and collateral estoppel preclude the determination that she made on that date. They argue that the issue raised in the Fiecks= 2000 claim petition, allocation of dependency benefits, was identical to the issue previously determined in Judge Arnold=s unappealed 1995 decisions. The employer and insurer assert that the facts giving rise to Judge Arnold=s allocation were unchanged. Because Judge Arnold=s decision was a final decision on the merits, and because all parties were given a full and fair opportunity to be heard on the issue, Judy and Brandon are estopped, they assert, from relitigating that issue before another compensation judge. They contend that, because it should never have been issued, the October 25, 2000, reallocation order is voidable. Moreover, they argue, because Judy and Brandon are now receiving more dependency benefits than they are entitled to and the employer and insurer are paying more benefits than they should, sufficient grounds exist to justify vacation of this voidable order. See Sondrol v. Del Hayes & Sons, Inc., 47 W.C.D. 659 (W.C.C.A. 1992); Woulfe v. Lakeside Medical Center, Inc., 53 W.C.D. 274 (W.C.C.A. 1995). We are not persuaded.
A[P]rinciples of res judicata apply in workers= compensation matters in some instances, but they do not bar further proceedings to determine claims not litigated in the prior hearing.@ Erickson v. Hulcher Emergency Servs., 50 W.C.D. 133, 140 (Minn. 1994) (order opinion), citing Westendorf v. Campbell Soup Co., 309 Minn. 550, 243 N.W.2d 157 (1976). In the present case, Judy and Brandon=s claim to entitlement to Alyssa=s share, not payable to her because of the social security offset, was not litigated in any of the earlier proceedings. Correspondence between the parties leading up to the filing of the June 2000 claim petition reflects an understanding, at least on the part of the employer and insurer, that, while the facts giving rise to the earlier allocation had not changed, the legal effect of the social security offset against Alyssa=s claim somehow resulted in an underpayment to Judy and Brandon. Because this issue was not an issue in the prior proceedings, we see no basis for application of res judicata or collateral estoppel, and we decline to vacate the order on that basis.
Mutual Mistake of Fact
The employer and insurer next contend that benefits paid pursuant to the October 25, 2000, Order were paid under a mutual mistake of fact and that therefore Acause@ exists for vacating the order under Minn. Stat. ' 176.461. They argue that the parties to the case were mutually mistaken when they thought that a portion of the dependency benefits remained unallocated and that those unallocated benefits should be paid to Judy and Brandon. Citing LaValle by LaValle v. City of Circle Pines, 358 N.W.2d 652, 37 W.C.D. 276 (Minn. 1984), in support of their petition, the employer and insurer contend that the parties did not realize that the allocation called for by the October 25, 2000, Order was incorrect and that equity requires vacation of the Order to assure that the dependents receive only the amount of compensation to which they are entitled under the Workers= Compensation Act. We are not persuaded.
This court=s authority to set aside a compensation judge=s award is found in Minn. Stat. ' 176.461. Pursuant to that statute, an award may, upon application of a party, be set aside only Afor cause.@ For awards filed after July 1, 1992, such as the reallocation order here at issue, Acause@ is limited by the statute to four circumstances, one of which is Aa mutual mistake of fact.@ Minn. Stat. ' 176.461. AA mutual mistake of fact occurs when opposing parties to the stipulation both misapprehend some fact material to their intended settlement of a claim or claims.@ Shelton v. Schwan=s Sales Enter., 53 W.C.D. 110, 113 (W.C.C.A. 1995), summarily aff=d (Minn. Sept. 5, 1995). In a mutual mistake case, the inquiry focuses on what the situation was and what was known at the time of settlement. Franke v. Fabcon, Inc., 509 N.W.2d 373, 377, 49 W.C.D. 520, 525.
In the present case, the factual mistake alleged by the employer and insurer was that they had assumed, mistakenly, that a portion of the dependency benefits remained unallocated. While the employer and insurer may well have been mistaken in this assumption, we see no evidence either that the mistake was mutual or that it was a mistake of fact as opposed to one of law. The respondents do not concede that they misapprehended any facts material to the Order issued on October 25, 2000. In fact, rather than believing that a portion of the dependency benefits remained unallocated, the dependency claim petition filed by Judy and Brandon in June of 2000 clearly reflects their claim to a reallocation of Alyssa=s 12.5% share. There is no indication in the dependency petition or elsewhere in the record before us that Judy and Brandon were mistaken as alleged by the employer and insurer. Moreover, the statute requires that an actionable mistake be one Aof fact,@ as opposed to one in legal judgment. See Eldred v. Dezurik, slip op. (W.C.C.A. Dec. 21, 1994). From our review of the record, the facts in this case are undisputed. The employer and insurer=s apparently mistaken view of the status of the dependency benefits was not based on a mistake of fact but on a mistake in legal interpretation of the offset granted pursuant to Minn. Stat. ' 176.111, subd. 21, by Judge O=Gorman=s decision. The statute does not contemplate setting aside a decision or order on the basis of a mistake of law. The statute limits mistake-based cause to a Amutual mistake of fact.@ If a compensation judge should issue an order that implies a mistake of law, an aggrieved party=s sole remedy is to file a timely appeal pursuant to Minn. Stat. ' 176.421.
As to the employer and insurer=s reliance on the LaValle case, we would note that LaValle was decided prior to the 1992 statutory amendment further defining Acause@ under Minn. Stat. ' 176.461. In LaValle there was no requirement either that the mistake be one Aof fact@ or that it also be Amutual.@ We therefore do not find LaValle to be controlling in this case.
While it does appear that the Order for Reallocation of Dependency Benefits was issued as a result of a mistake in interpretation of the law, the Order was also issued in response to an agreement by the parties. The employer and insurer provided the compensation judge with a proposed order requesting the very allocation that they now claim is in error. Finding no legal basis under the statute to vacate the Order, we must deny the petition to vacate. The employer and insurer=s remedy here is to file a petition for reallocation of the dependency benefits.
 Bradley Fieck=s entitlement to dependency benefits is not here at issue.
 Minn. Stat. ' 176.322 provides in pertinent part as follows:
AIf the parties agree to a stipulated set of facts and only legal issues remain, the commissioner or compensation judge may determine the matter without a hearing based upon the stipulated facts and the determination is appealable to the court of appeals pursuant to sections 176.421 and 176.442.@
 See Fieck v. Brandrup & Associates, Inc., 58 W.C.D. 294 (W.C.C.A. 1998), summarily aff=d (Minn. July 17, 1998).
 Neither Alyssa nor her mother and guardian Wylma Morton was served with this claim petition.
 Prior to statutory codification in 1992 (Act of Apr. 15, 1992, ch. 510, art. 2, ' 11, 1992 Minn. Laws, 589, 603) of what had previously been case law-based grounds for vacation, the Amistake@ ground had not been expressly designated as either a Amutual@ mistake or a mistake specifically of Afact.@ In Franke v. Fabcon, Inc., 509 N.W.2d 373, 377-78, 49 W.C.D. 520, 526-27 (Minn. 1993), the Supreme Court indicated that the statutory codification applies to petitions to vacate awards filed on or after July 1, 1992.