JAMES D. VUKELICH, Employee/Appellant, v. POTLATCH CORP., SELF-INSURED, adm=d by COMP COST, INC., Employer, and SPECIAL COMPENSATION FUND.
WORKERS= COMPENSATION COURT OF APPEALS
MARCH 21, 2005
PRACTICE & PROCEDURE - ESTOPPEL. Although the self-insured employer had paid benefits for many years calculated on the employee=s 1992 work injury, the employer was not, on the facts of this case, barred by the doctrines of laches or estoppel from later asserting that the employee=s 1997 work injury was in fact the controlling injury for purposes of determining and calculating an overpayment of permanent total disability benefits.
Determined by: Stofferahn, J., Wilson, J., and Pederson, J.
Compensation Judge: Ronald E. Erickson
Attorneys: John W. Person, Brainerd, MN, for the Appellant. James R. Waldhauser, Minneapolis, MN for the Respondent.
DAVID A. STOFFERAHN, Judge
The employee appeals from the compensation judge=s failure to apply estoppel and require that the employer continue to pay benefits at the compensation rate associated with the 1992 work injury. We affirm.
The employee, James D. Vukelich, began working for Potlatch Corporation in 1981. He sustained admitted low back injuries while working for this employer in 1982 and 1992, each time returning to work with minimal time loss. In 1997 the employee sustained a third low back injury in the employer=s service. Initially, there was some question whether the occurrence was a new injury, or whether the employee=s symptoms after that date simply constituted a flare-up of the prior work injuries. The employee was able to return to work for the employer after the 1997 work injury, but lost time from work due to his symptoms from March 25, 1997 through April 14, 1997. The employer initially denied temporary total disability benefits on the basis that wage loss was due to the 1992 injury and that MMI had been reached from that injury. In 1998, the parties entered into a to-date stipulation for settlement in which the employer admitted that Athe employee sustained at least a further temporary aggravation@ in 1997.
The employee later claimed entitlement to a 12 percent permanent partial disability (PPD) from the combined effects of his injuries on January 1, 1982, February 6, 1992 and March 22, 1997. The employer denied any PPD greater than 10 percent. In February 2000, the parties entered into a second stipulation for settlement. In this stipulation, the parties agreed that the employee had reached MMI from all three injuries, and the employee accepted a lump sum payment for a full, final and complete settlement of any and all claims for PPD to the extent of 12 percent of the whole body.
The employee=s symptoms continued to worsen, and eventually the medical restrictions imposed by his physicians resulted in his termination by the employer on February 14, 2001. Thereafter, the employer made certain payments of temporary total disability compensation, calculated on the basis of the compensation rate in effect from the 1992 work injury. On August 1, 2001, the employee began receiving Social Security disability benefits. Subsequently, the employee filed a claim petition alleging permanent total disability.
In 2003 the parties, together with the Special Compensation Fund, entered into another stipulation for settlement, agreeing that the employee had been permanently totally disabled as of February 14, 2001, and that the employee had been paid $25,000 in weekly benefits as of November 13, 2001, so that the employer had thereafter been entitled to an offset for Social Security benefits paid to the employee. The stipulation acknowledged that the reclassification of benefits resulted in the employer having overpaid compensation, and that the employer had a right to recover any overpayments it had made. The parties further noted that there was a dispute over whether supplementary benefits were payable, and agreed that such benefits would not be payable Auntil such time as the Minnesota Supreme Court issues its decision in the case of Busch.@ In addition, the employer agreed to compensate the employee for an additional 10 percent PPD claimed by the employee from the combined effects of all injuries; this was, however, credited against the overpayments.
On April 24, 2003, the Minnesota Supreme Court issued its decision in Busch v. Advanced Maintenance, 659 N.W.2d 772, 63 W.C.D. 277 (Minn. 2003). Pursuant to that decision, a new factual issue arose between the parties as to whether the employee=s 1997 work injury was the Acontrolling event@ for determination of the employee=s benefits entitlement. Specifically, the issue was whether the 1997 work injury was a new and separate injury, as opposed to a recurrence or mere temporary aggravation. The self-insured employer took the position that the 1997 work injury was the controlling event, resulting in a larger overpayment and a lower compensation rate for the employee than if the 1992 work injury was the controlling event.
The employee filed an Objection to Discontinuance to object to the employer=s position and the associated reduction in benefit rates, resulting in a hearing before a compensation judge on September 14, 2004. At the hearing, the employee alleged that the 1997 work injury had not constituted a new and separate injury, or, in the alternative, that the self-insured employer, having long paid benefits based on the 1992 date of injury, should be estopped from changing its position and paying benefits based on the 1997 work injury. In his Findings and Order issued on November 1, 2004, the compensation judge found that the medical and other evidence established the 1997 work injury as a new and separate injury and the controlling event for purposes of benefit entitlement and calculation. The compensation judge denied supplemental benefits and ordered that the employer=s calculation of benefits and overpayments be affirmed. The employee appeals from the compensation judge=s failure to apply estoppel against the employer.
The employee does not appeal from the factual determination that the 1997 work injury was a new and separate injury and constituted the controlling event for purposes of benefit entitlement and calculation. Rather, the employee argues on appeal that, regardless of this factual finding, the self-insured employer should be estopped from applying the finding because the employer initially disputed the 1997 work injury and because the employer, prior to issuance of the Busch decision, had always based benefit payments and calculations on the 1992 work injury.
Specifically, the employee relies on the doctrine variously called Ajudicial estoppel@ or Aestoppel by judicial record.@ Generally, that doctrine forbids a party from assuming inconsistent or contradictory positions on questions of fact during the course of a lawsuit. See generally 28 AmJur 2d Estoppel '' 71-75 (2000). The elements of judicial estoppel, and its application, have not been clearly defined in Minnesota.
In the present case, the alleged inconsistency is that the employer calculated the employee=s benefits based on the employee=s 1992 work injury, only taking the position that the employee=s 1997 work injury was controlling after the Minnesota Supreme Court issued its decision in Busch. Since the issue of law involved was unsettled until the issuance of that decision, and since the evidence reveals early uncertainty over the extent and nature of the employee=s 1997 work injury, the change in the employer=s position can be seen as a reaction to a prior mistake of law and fact rather than a shift between clearly inconsistent positions.
In addition, although the issues in the cases were not framed specifically in terms of Ajudicial estoppel,@ prior Minnesota workers= compensation case law has long rejected the view that a period of gratuitous or mistaken payment of benefits constitutes a basis on which to estop employers and insurers from ceasing to pay benefits for which they are not liable, after discovery of the mistake. See, e.g., Toenberg v. Harvey, 235 Minn. 50, 49 N.W.2d 578, 17 W.C.D. 58 (Minn. 1951); Kingbird v. Anderson Fabrics, slip op. (W.C.C.A. Dec. 13, 2002).
Finally, we note that Minn. Stat. '176.179 expressly provides that an employer or insurer may recover overpayments based on a mistake of fact or law, in the form of a credit against future compensation. In Drechsel v. Metz Baking Co., slip op. (W.C.C.A. July 14, 1993), we concluded that, where such a remedy is explicitly provided by statute, an employer and insurer which had paid benefits for more than five years based on its erroneous calculation of the employee=s weekly wage was Anot barred by the doctrines of laches or estoppel from litigating the employee=s average weekly wage.@ We believe the same reasoning is applicable in this case.
We therefore conclude that the compensation judge=s failure to address the employee=s estoppel argument is not reversible error under the facts of the present case, and affirm.