RANDY KEUTEN, Employee, v. VIELE CONTRACTING, INC., and FEDERATED MUT. INS. CO., Employer-Insurer/Petitioners, and SPECIAL COMPENSATION FUND.
WORKERS= COMPENSATION COURT OF APPEALS
NOVEMBER 18, 2004
VACATION OF AWARD - SUBSTANTIAL CHANGE IN CONDITION. Where there was insufficient evidence of a substantial change in condition, pursuant to the factors listed in Fodness v. Standard Cafe, 41 W.C.D. 1054, 1060‑61 (W.C.C.A. 1989), the employee's petition to vacate the award on stipulation is denied.
VACATION OF AWARD - FRAUD. Where about seven years separate the employee=s representations as to the nature and extent of his symptoms from the contradictory evidence of videotapes, these are simply too remote in time from each other to support vacation of an award on the basis of fraud
Petition to vacate denied.
Determined by Stofferahn, J., Rykken, J., and Pederson, J.
Attorneys: Karen R. Swanton, Fitch, Johnson, Larson & Held, Minneapolis, MN, for the Petitioners.
DAVID A. STOFFERAHN, Judge
The employer and insurer petition to set aside a determination that the employee is permanently and totally disabled. Finding no basis to vacate the award, we deny the petition.
The employee, Randy Keuten, sustained an admitted low back injury on September 20, 1991, while employed as a laborer with Viele Contracting, the employer. At the time of his injury, the employee was 29 years old and earned a weekly wage of $241.50.
The employee was diagnosed with a lumbosacral strain and treated with pain medications and physical therapy. Due to complaints of pain into the left leg and foot, an MRI scan was done on October 4, 1991. The scan showed disc bulging but no nerve root impingement. However, degenerative changes were present in the facet joints and an unsuccessful attempt was made in 1992 to alleviate the employee=s pain using facet block injections. He subsequently received physical therapy and chiropractic treatment but his subjective symptoms failed to improve. He developed further symptoms affecting various parts of his body and was diagnosed as suffering from chronic pain syndrome. The employee=s treating physicians recommended treatment at a pain clinic.
In May 1992, the employer and insurer served notice of intention to discontinue temporary total disability compensation (ANOID@) based on their medical examiner=s opinion that the employee had reached maximum medical improvement (AMMI@). The employee did not contest the NOID at that time and benefits were discontinued as of August 1992.
Vocational rehabilitation services began in late 1991 and by mid-1992 were focused on job search activities, as the employee=s rehabilitation consultant had concluded that the employee=s condition precluded a return to work with the employer. However, at about the same time that his benefits ceased, the employee stopped cooperating with vocational rehabilitation and failed to pursue attendance at the pain clinic due to transportation problems and other issues.
Some time in 1994, the employee changed his mind and decided he needed to cooperate with rehabilitation assistance and attend the pain clinic. He sought reinstatement of rehabilitation services and claimed temporary total disability compensation for various periods. He further alleged that he had sustained a consequential cervical injury during an examination by the employer and insurer=s medical expert on May 3, 1993.
Following a hearing in the matter, a compensation judge issued his findings and order on September 7, 1994. The compensation judge found that the employee had not yet reached maximum medical improvement in light of his treating physician=s recommendation for a pain control program. The compensation judge further found that while the employee had failed to cooperate with vocational and medical rehabilitation for certain periods, he was now cooperating. Temporary total disability benefits were awarded from the date the employee was found to have resumed cooperation with rehabilitation. The compensation judge found that the expenses of treatment of the employee=s cervical symptoms were compensable. The compensation judge=s decision was not appealed.
The employee participated in a pain control clinic in the late summer and autumn of 1994. During this treatment, which included physical therapy, the employee claimed to have sustained a muscle strain in his chest which required additional medical treatment.
In 1995 the employee was referred to the Dr. Holmes at the Sister Kenny Institute where he was diagnosed with a chronic cervical, thoracic and lumbar sprain/strain with myofascial pain. Dr. Holmes further noted that the employee had a right iliac up slip with tight musculature across the pelvis, which adversely influenced the employee=s spine behavior in a compensatory pattern.
The employee=s vocational history consists solely of heavy physical labor. In 1994, he underwent vocational testing which showed very limited transferrable skills and an overall general learning ability below the 15th percentile. His QRC concluded that, although the employee would be physically capable of sedentary work, he possessed almost none of the skills associated with sedentary employment and likely did not have sufficient abilities to permit him to learn such skills. She concluded that a job search in the competitive labor market would be futile.
The employee reached maximum medical improvement effective May 27, 1995. He then filed a claim petition on June 26, 1995 alleging entitlement to permanent total disability and to permanent partial disability in accordance with ratings offered by his treating physician, Dr. John E. Downs.
A hearing on the claim petition was held before a compensation judge on February 8, 1996. As of the date of the hearing, the employee continued to complain of symptoms of constant and intense spasm and pain in his neck, mid back and lower back and spasm on the left side of his chest and rib cage. In medical examinations before the hearing, his neck flexion and extension were limited to 25 degrees and he was unable to tolerate static neck postures. Cervical rotation was limited at only five degrees to the right and 50 degrees to the left. Lateral bending was limited to 25 degrees to the right and left. The employee testified that he constantly wore a back brace and, as a result of low back and leg pain, could bend only slightly at the waist and had problems climbing stairs or walking more than one block. Sitting gave him discomfort after about 15 minutes. His neck pain limited him from turning his neck to the right and gave him pain in bending his head forward. Accordingly he had given up driving a car. He stated that he had difficulty lifting more than about 15 pounds. He had given up recreational activities like hunting and fishing and relied on family and friends for such daily living activities as grocery shopping, vacuuming or snow shoveling.
The employer and insurer relied principally on the report of their medical expert, Dr. Richard Strand, who opined in his 1994 and 1995 reports that the employee=s problems primarily resulted from psychophysiologic pain syndrome or perhaps even secondary gain on a conscious level, rather than an ongoing physical problem.
Following the hearing, the compensation judge issued his findings and order on March 26, 1996. The compensation judge found the employee permanently totally disabled as of March 14, 1994, as a result of his 1991 work injury. The compensation judge also found that the employee had sustained a 3.5 percent permanent partial disability to the lumbar spine and a 3.5 percent permanent partial disability to the cervical spine. The employer and insurer filed an appeal from the compensation judge=s findings and order but the appeal was untimely and was dismissed. Keuten v. Viele Contracting, Inc., slip op. (W.C.C.A. May 17, 1996), summarily affirmed, September 23, 1996.
The employee was treated by his treating physician, Dr. Downs, in April 1997, but the nature of his condition at that time is not apparent. He went to St. Mary=s Medical Center in May 1999 for treatment of an episode of left-sided thoracic and lumbar spasm, and then saw Dr. Downs on May 6, 1999, reporting left-sided pain, particularly in the chest and ribs. Dr. Downs noted various positive findings and diagnosed an exacerbation of chronic mechanical and myofascial pain. On July 17, 2000, Dr. Downs saw the employee for reevaluation of his back and neck pain. The employee reported right chest pain and low back pain as well as significant neck pain. Dr. Downs diagnosed chronic mechanical back pain with severe myofascial hypertonicity and recent exacerbation. He noted that chiropractic treatment of the employee=s neck had increased his ability to rotate the neck to the right from about 5 to about 15 degrees.
In June 2001, the employee again returned to Dr. Downs with an increase in his chronic pain complex after being involved in an altercation. Dr. Downs was concerned over a possible C7-T1 or T1-2 disk herniation. The employee was given a prescription for prednisone. On July 3, 2001, the employee returned noting left chest wall pain and arm dysesthesia. Dr. Downs referred the employee for a suprascapular nerve block, which was performed on July 11, 2001.
Beginning in January 2003, the employee was surreptitiously videotaped by his neighbor, Martin Anderson. Mr. Anderson operated a business in his home located across the street from the employee=s residence. He installed three video cameras on his business for security early in 2003 and over the next year observed and videotaped the employee on an apparent regular and active basis at various hours of the day and night. The employer and insurer have submitted eight videotapes compiled from the taping by Mr. Anderson to this court in support of their petition. The employer and insurer also hired an investigation firm to conduct further surveillance, which was performed on dates in March and October 2003. Reports and two additional videotapes prepared by the investigators have also been submitted to this court. The videotapes taken by Mr. Anderson show the employee walking and driving a vehicle, as well as engaged in activities such as working on a vehicle in his front yard, digging and planting flowers, and lifting and carrying various objects.
On February 20, 2004, the employee was reexamined by Dr. Richard Strand, the employer and insurer=s medical expert. Dr. Strand also reviewed one of the videotapes compiled by Mr. Anderson. Dr. Strand concluded that the employee showed no objective signs of significant cervical, thoracic or lumbar spine disease or injury. The employee was well-muscled and had callouses on his hands. The employee showed pain behaviors on examination which Dr. Strand believed was an obvious attempt to appear worse than he was. Dr. Strand=s conclusion was that Aafter reviewing the tape and examining Mr. Keuten, my opinion is exactly the same as it was in 1995, that this is out-and-out malingering.@
On June 29, 2004, the employer and insurer petitioned this court to set aside the March 26, 1996 determination that the employee is permanently and totally disabled.
Minn. Stat. '' 176.461 and 176.521, subp. 3, govern this court's authority over petitions to vacate. For awards on stipulation issued after July 1, 1992, good cause is limited to (1) a mutual mistake of fact, (2) newly discovered evidence, (3) fraud, or (4) a substantial change in medical condition since the time of the award that was clearly not anticipated and could not reasonably have been anticipated at the time of the award. Franke v. Fabcon, Inc., 509 N.W.2d 373, 49 W.C.D. 520 (Minn. 1993). "Provisions for reopening and modifying workers' compensation awards are a recognition of the obvious fact, that no matter how competent a commission's diagnosis of the claimant's condition and earning prospects at the time of the hearing may be, that condition may later change markedly for the worse, or may improve, or may even clear up altogether." Monson v. White Bear Mitsubishi, 663 N.W.2d 534, 63 W.C.D. 337 (Minn. 2003).
The employer and insurer have alleged that there is evidence of fraud sufficient for this court to vacate the 1996 finding of permanent total disability. To establish fraud, there must be (1) a false representation of fact; (2) the representation must deal with a past or present fact; (3) the fact must be material and 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).
The employer and insurer argue that the employee=s clinical presentation and complaints of symptoms, both at and before the date of the 1996 hearing and at the medical examination by Dr. Strand on February 20, 2004, differ dramatically from his physical abilities as reflected on the 2003 videotapes. They note further that Dr. Strand, who in his 2004 report offered the opinion that the employee is likely malingering, had previously raised the possibility of malingering in his 1994 and 1995 reports. This evidence, the appellants argue, establishes that the employee knowingly misrepresented his physical condition at the time of the 1996 hearing. We are not persuaded.
Circumstantial evidence may be sufficient to show that an employee committed fraud in procuring an award or settlement, and in appropriate circumstances, such fraud may be inferred from evidence of conduct subsequent to the award. Here, however, the videotapes taken in 2003 do not demonstrate a level of activity by the employee which would allow us to conclude that the employee misrepresented his condition in 1996. Accordingly, we decline to vacate the 1996 findings and order on that basis. The employer and insurer=s petition, to the extent based on fraud, is denied.
2. Substantial Change in Condition
In determining whether a substantial change in the employee=s medical condition has occurred, this court in the past has examined such factors as (1) change in diagnosis; (2) change in the employee=s ability to work; (3) additional permanent partial disability; (4) necessity of more costly and extensive medical care/nursing services than initially anticipated; (5) causal relationship between the injury and the current condition; and (6) contemplation of the parties at the time of settlement or award. Fodness v. Standard Café, 41 W.C.D. 1054, 1060-62 (W.C.C.A. 1989) (citations omitted). Fodness and related decisions have most frequently involved an employee=s request to vacate a settlement on the basis of a worsened medical condition. The case at hand involves a less common situation, a petition by an employer and insurer asserting an improvement in the employee=s medical condition.
The employer and insurer contend that the videotapes and recent examination by Dr. Strand show that the employee has experienced a substantial improvement in his medical condition since the 1996 hearing. They note that the employee testified at that time that he constantly wore a back brace, could bend only slightly at the waist, had problems climbing stairs or walking more than one block, was unable to sit more than 15 minutes, could not turn his neck to the right or bend his head forward, and had given up driving. He claimed difficulty lifting more than about 15 pounds. The employer and insurer point to portions of the videotapes showing the employee driving a car, working on a truck, digging and planting flowers, lifting tires and a truck battery, and helping to carry speakers, dresser frames, bed parts, and a box spring and mattress. In the course of these activities he is seen to bend forward at the waist, sit and stand in stationary positions, stretch, squat, twist, and lift without apparent discomfort. When seen working shirtless outside in summer, the employee does not seem to be wearing a back brace.
However, while the videotapes certainly show the employee engaged briefly in activities which are more strenuous than those he testified he could do in 1996, we do not find the evidence sufficiently compelling to warrant vacation of the award. The videotapes total about 12 hours in length, mostly compiled from ongoing observation and videotaping performed by the employee=s neighbor, Mr. Anderson, over the course of almost a year. Those portions of the tapes in which the employee engages in activities which may be inconsistent with his claimed symptomology in 1996 are not significant. The activities are generally of relatively short duration, and the employee seems to take frequent breaks.
The tapes compiled by Mr. Anderson show the employee on several specific dates in various seasons of the year at hours from early morning into the night and late evening. We note that the camera regularly zooms in and out or pans to track the activities of the employee and others present in front of his home. These factors, and the statements in his affidavit, indicate that Mr. Anderson had the employee in fairly continuous, active observation during the entire year the taping was done. Mr. Anderson=s affidavit also lists the more strenuous activities he observed the employee performing during that year; we note, however, that the list contains no examples beyond those contained in the videotapes submitted.
Comparing the nature and extent of the opportunity for observation with the very limited number and duration of the activities portrayed, the tapes thus appear to be a compilation of a small number of relatively rare exceptions, rather than a fair representation of the employee=s ongoing abilities during the year. In addition, many of the most significant activities shown are performed by the employee over the course of a couple of days in December when he was being assisted by a friend or relative in moving out of his home, a relatively unusual circumstance in which an employee might be prone to overexertion and some lack of caution in observing his medical restrictions.
The employer and insurer also rely on Dr. Strand=s examination findings on February 20, 2004, and his opinion that the employee can work without restrictions, as further evidence that the employee has had a change in condition and is no longer permanently totally disabled.
We note, however, that Dr. Strand=s opinion has not, in fact, significantly changed from that which he previously offered prior to the 1996 hearing, and which the compensation judge rejected in favor of contrary medical opinions. Dr. Strand specifically states that Amy opinion [as to the employee=s diagnosis and condition] is exactly the same as it was 1995.@ Thus the opinion of Dr. Strand does not, in and of itself, support the presence of the factors of change in diagnosis or condition. We note, also, that the significance of an absence of physical findings during the examination by Dr. Strand is not unexpected, and does not clearly establish a change in condition; most of the physicians prior to the 1996 hearing similarly reported principally subjective examination findings, and the prior determination of disability was largely based on medical opinions attributing much if not all of the employee=s disability to chronic pain syndrome rather than to the physical effects of the employee=s injury.
Finally, as the underlying issue is one of permanent total disability, the question presented is not solely a medical one. Total disability exists if the employee=s physical condition, in combination with his training and experience and the type of work available in the community, causes him to be unable to secure anything more than sporadic employment resulting in an insubstantial income. Schulte v. C.H. Peterson Constr. Co., 153 N.W.2d 130, 24 W.C.D. 290 (Minn. 1967). Thus, permanent and total disability depends not only on the severity of the employee=s medical disability but on vocational components as well.
In the present case, the employee=s limited skills, ability and experience were major factors in the finding of permanent total disability; the employee was physically capable of sedentary work, but was deemed to have insufficient skills and abilities to obtain such employment. While some of the employee=s activities in the videotapes might be consistent with some degree of improvement in his physical ability, it is by no means clear that the level of improvement shown is such as to render him capable of finding and performing sustained gainful employment. He is not shown engaged in sustained, continuous activities consistent with the demands of any specific job, even of a light duty job. There was no expert vocational opinion or other evidence to suggest that the employee has been working, or might be able to work, at substantial gainful employment at any time subsequent to the 1996 determination of permanent total disability.
Because we conclude that the employer and insurer have not established that the employee=s condition has substantially changed since the 1996 findings and order, so that he is likely no longer permanently totally disabled, we deny the petition to vacate.
 The employer and insurer provided certain medical records with their petition. Their brief, and the office note of Dr. Downs from May 6, 1999, mention that the employee was seen on April 21, 1997, but the materials submitted by the employer and insurer do not include the office notes for that date.
 The pro se employee, although served with the employer and insurer=s petition and the notices of this court, has failed to appear or respond.
 Citing 8 Arthur Larson & Lex K. Larson, Larson's Workers' Compensation Law, ' 131.01 (2002).