KAREN DAVIS, Employee/Petitioner, v. TREVILLA OF GOLDEN VALLEY/UNITED HEALTHCARE and OLD REPUBLIC INS. CO./THE N. GROUP/YORK CLAIMS MGMT. SERVS., Employer-Insurer.
WORKERS’ COMPENSATION COURT OF APPEALS
JANUARY 21, 2010
VACATION OF AWARD – SUBSTANTIAL CHANGE IN CONDITION. Where the employee’s several post-award surgeries, including a three-level lumbar fusion, could not reasonably have been anticipated at the time of her award on stipulation, and where the employee’s petition reasonably satisfied all other factors of a substantial change in condition established in Fodness v. Standard Cafe, 41 W.C.D. 1054 (W.C.C.A. 1989), other than causation, which remained clearly arguable, the court referred the matter of causation to the Office of Administrative Hearings for an evidentiary hearing and an appealable finding on solely that issue.
Referred to OAH for evidentiary hearing.
Determined by: Pederson, J., Johnson, C.J., and Wilson, J.
Attorneys: Steven P. Christensen, Roseville, MN, for the Petitioner. Randall S. Lane and Elizabeth Chambers-Brown, Heacox, Hartman, Koshmrl, Cosgriff & Johnson, St. Paul, MN, for the Respondents.
WILLIAM R. PEDERSON, Judge
The employee petitions this court to vacate an Award on Stipulation served and filed July 15, 1993. Requiring the conclusion of a factfinder, we refer the matter to the Office of Administrative Hearings for an evidentiary hearing and an appealable finding on the sole issue of causation.
On March 22, 1991, Karen Davis sustained a work-related injury to her low back in the course of her employment as a licensed practical nurse [LPN] with Trevilla of Golden Valley. Ms. Davis [the employee] was thirty-nine years old on that date and was earning a weekly wage of $256.32. Trevilla of Golden Valley [the employer] and its insurer at the time, Old Republic Insurance Company, admitted liability for the injury and commenced payment of benefits. The employee came under the care of orthopedic surgeon Dr. Patrick Kraft, who ordered an MRI scan, which was conducted on July 1, 1991, and was read to reveal spinal stenosis at L4-5 secondary to a congenitally small spinal canal and a diffusely bulging disc, together with a herniated disc on the right side at L5-S1. Dr. Kraft eventually referred the employee to neurosurgeon Dr. Edward Hames, who, upon examination of the employee in May of 1992, diagnosed chronic pain syndrome, recommended a chronic pain program in treatment of that syndrome, and declined to recommend surgical intervention. The employee was subsequently examined on June 10, 1992, by pain specialist Dr. Loran Pilling, who recommended a modified treatment program in his pain clinic, but the employee evidently did not enroll in one.
In December of 1992 the employee apparently experienced an increase in her pain, and on January 18, 1993, she underwent a repeat MRI scan. The scan was read to reveal the disc protrusion on the right at L5-S1 and the spinal stenosis at L4-5, both unchanged from the 1991 MRI, together with an increased disc protrusion on the left at L3-4 and another on the left at T12-L1. On February 11, 1993, after administering a steroid injection the previous week for the employee's continuing pain, Dr. Kraft diagnosed disc protrusion with spinal stenosis and advised the employee “very frankly that I really don’t think that there is a lot that is going to significantly alter her current situation. I think that she is going to have to live with the pain and get use[d] to this.” Upon follow-up on March 3, 1993, concluding that there was little new in the employee’s January 18, 1993, MRI scan, as compared with the 1991 scan, Dr. Hames opined again, in a report to Dr. Kraft, that “it would be fruitless and foolish to enter into a surgical procedure without very aggressive chronic pain management in [the employee’s] case.”
On April 22, 1993, the employee was reevaluated by Dr. Pilling at the request of Drs. Kraft and Hames. In his report to Dr. Kraft on that date, Dr. Pilling agreed that the employee was not a surgical candidate and recommended that more be done otherwise to help her to function at a higher level. He suggested specifically that she should improve her exercise program, learn some more effective relaxation therapies, get a better hold on pain and stress management, and try to get along with less medication. To these ends he recommended again that the employee be treated in his pain clinic, on a full-time basis for four weeks with some aftercare, noting that the employee seemed motivated to proceed with such treatment. About a week later, on April 29, 1993, after examining the employee once again, Dr. Kraft rated the employee’s permanent impairment at 14% of the whole body under Minnesota Rules 5223.0070, subpart 1.B.(1)(b), for a single herniated lumbar disc not surgically treated. He indicated also that he had been in consultation with Dr. Hames, and he reiterated that they had agreed that “certainly at this point in time, surgical intervention does not appear to [be] appropriate.” With that, Dr. Kraft released the employee into Dr. Pilling’s care, and on May 20, 1993, he certified that the employee had reached maximum medical improvement [MMI] on April 29, 1993.
On July 8, 1993, the parties entered into a stipulation for full, final, and complete close-out of all workers’ compensation claims related to the employee’s work injury of March 22, 1991, except for claims for reasonable and necessary medical expenses. At the time of the settlement, the employee was once again employed as an LPN, performing light duty work at Metro Home Health Care. It was the employee’s position at the time of the settlement that she was in need of ongoing rehabilitation services in order “to find substantial gainful employment.” She claimed also that she was entitled to compensation for a 14% permanent partial disability of the body as a whole. The employee based her position on an unidentified medical report of Dr. Hames and on the MRI scan conducted on January 18, 1993, which reflected a focal disc protrusion at L3-4 of her spine. The employer’s position at the time of settlement was that the employee had reached maximum medical improvement capable of maintaining gainful employment at her pre-injury wage and so was not in need of any further or ongoing rehabilitation assistance. It was also the employer’s position that the employee was subject to a work-injury-related permanent partial disability ratable at no more than 10.5% of the whole body, based on degenerative changes at multiple vertebral levels of her lumbar spine. Pursuant to the parties’ stipulation for settlement, the employee was paid $40,000.00 stipulated to represent $21,404.00 to close out compensation for a 14% permanent partial whole body disability, $13,596.00 to close out future temporary total and/or temporary partial disability compensation, and $5,000.00 to close out future rehabilitation expenses. An award on this stipulation was issued and filed on July 15, 1993.
Subsequent to her award on stipulation, the employee continued to work at light duty for Metro Home Health Care until 1995. Her back symptoms eventually grew worse and became radicular into her right lower extremity. Dr. Kraft referred her for a surgical consultation with his associate Dr. Paul Crowe, who recommended and on November 9, 1995, performed a laminectomy and excision of a herniated disc at L5-S1 on the right. In a post-operative exam on November 20, 1995, Dr. Crowe noted that the employee’s symptomatology had improved and that he expected a good result. On December 4, 1995, however, the doctor noted that the employee’s right leg pain remained significant and that it was “looking like a very poor surgical result.” About three weeks later, on December 26, 1995, the employee filed a claim petition alleging a second low back injury, on July 8, 1995, this against both the employer and Metro Home Health Care. On March 5, 1996, Dr. Crowe wrote, in a letter replying to the employee’s attorney, that he believed both the March 1991 injury with the employer and the alleged July 1995 injury with Metro Home Health Care to be substantial contributing factors in the employee’s current condition and need for medical care, 40% related to the 1991 injury and 60% related to the 1995 injury. On April 2, 1996, Dr. Crowe concluded that the employee’s November 9, 1995, surgery “can now be considered a failure.”
On April 24, 1996, the employee was examined for Metro Home Health Care by Dr. Gary Wyard. It was Dr. Wyard’s opinion that there was no significant injury on July 8, 1995, that there was “nothing of an objective nature to support that claim,” that any aggravation of the employee’s pre-existing condition on that date was only a temporary one, and that “the March 22, 1991 injury at [the employer] is a substantial contributing factor to the [employee’s] medical expenses from and after July 8, 1995 including the surgery of November 9[, 1995,] and the resulting time loss.”
About a year later, in May of 1997, after flare-ups of the employee’s low back pain the previous November and April, the employee, the employer, and Metro Home Health Care entered into a settlement of the employee’s December 26, 1995, claim. The employee agreed to withdraw her claim against Metro Home Health Care and its insurer, agreeing specifically that she did not sustain a compensable injury with that employer on the date alleged, and both the employee and the employer herein agreed that there would be no further claims against Metro Home Health Care and its insurer.
Over the course of the next several years, the employee evidently held light duty LPN jobs with several other employers. She eventually came under the care of Dr. James Lee, who on June 6, 2001, diagnosed chronic low back and lower extremity radicular pain. She saw Dr. Lee about twice annually for about two years thereafter concerning intermittent flare-ups over that period of time. Beginning about July of 2003, her low back symptoms began to worsen, and on September 24, 2003, she was seen on an emergency basis for severe pain radiating into her left buttock, for which she was treated with two injections of morphine and a prescription of Percocet. On October 1, 2003, Dr. Lee referred her for a lumbar MRI scan and prescribed physical therapy five times a week for two weeks. The scan was conducted on November 5, 2003, and was read in part to reveal severe multilevel spondylosis, with a broad-based L5-S1 disc protrusion affecting the traversing right S1 nerve root. On December 10, 2003, the employee underwent an epidural steroid injection in an effort to relieve her pain.
The employee’s low back and radicular pain continued severe over the course of the next several years. On January 15, 2004, she received a Demerol/Vistaril injection, and on February 2, 2004, she underwent an epithelial steroid injection. On April 1, 2004, she was given a Demerol/Vistaril injection and a Triamcinolone/Xylocaine injection, and five months later, on September 14, 2004, Dr. Lee ordered a repeat epidural steroid injection, which was administered on October 7, 2004. On December 6, 2004, Dr. Lee noted that the employee had not benefitted much from the October 7 injection and that her low back pain continued severe and radicular into her thighs and legs. Dr. Lee renewed the employee’s Percocet prescription, added a prescription for amitriptyline, and issued permanent restrictions against lifting over ten pounds, against doing any heavy push-pull activities, and against more than occasional bending, stooping, and squatting.
In July of 2005, the employee experienced a marked flare-up in her low back pain of undetermined etiology, with radicular symptoms extending down into her thighs and legs. She was treated with medication for about two months, and on August 30, 2005, she was treated with Demerol/Vistaril and Triamcinolone injections. Her symptoms continued in the months that followed, and became severe in May of 2006. On May 17, 2006, Dr. Lee administered a Demerol/Vistaril injection, prescribed physical therapy, ordered a repeat MRI scan, and anticipated a repeat epidural steroid injection. The scan, conducted on that same day, was read to reveal multilevel degenerative disc disease from T12 to S1, moderate to severe stenosis at L4-5, a small disc herniation at that level impinging on the L5 nerve root, and moderate stenosis at L3-4--all findings concluded to be unchanged from the 2003 study. The employee’s symptoms seemed to improve over the course of the following month, but by December of 2006 they had flared up again and grown very severe, and in that month the employee left the last of her LPN jobs due to her pain, and she has not returned to work since that time.
On January 8, 2007, upon referral from Dr. Lee, the employee was examined by spine surgeon Dr. Garry Banks, who recommended low back surgery in the form of decompression with discectomy at L4-S1. The following day, January 9, 2007, the employee saw Dr. Lee again, who recommended that she remain off work. On February 19, 2007, Dr. Banks concluded that the employee had “progressive radiculopathy,” with the majority of her pain related to nerve impingement most marked at L4-5 but also to some extent at L5-S1, and he indicated on a disability slip that she was restricted from working. On March 17, 2007, Dr. Banks performed on the employee’s spine bilateral partial laminectomies with right discectomies from L4 to S1, but the employee’s healing was complicated and required further surgeries on March 22 and March 26, 2007. These additional surgeries included various procedures, including irrigation and debridement of hematoma, laminectomy correction, foraminotomy, discectomy correction, dural tear repair, wound drainage with debridement and irrigation, epidural hematoma evacuation, laminectomy extension, and bio-glue removal. On April 30, 2007, at the request of Dr. Banks, the employee underwent another lumbar MRI scan, which was read to reveal, in addition to a laminectomy at L4-5, multiple levels of stenosis. By May 3, 2007, the employee was experiencing increased pain in her low back and bilaterally in her buttocks and the backs of her thighs, for which Dr. Banks prescribed medication and restricted the employee from working, and on May 7 and July 19, 2007, he performed epidural injections at L3-4 of the employee’s spine.
On July 25, 2007, Dr. Lee diagnosed chronic lumbar spondylosis, and by August 13, 2007, the employee was “beside herself” with severe low back and right lower extremity pain and numbness, for which Dr. Lee administered a Demerol/Vistaril injection. On August 14, 2007, the employee underwent a myelogram, and, on October 31, 2007, with her pain increasing and following a discogram on September 19, 2007, Dr. Banks performed several additional surgical procedures on the employee’s low back. These procedures included revision decompressions with partial laminectomies, revision discectomies and foraminotomies, neurolysis, and a posterior and posterolateral fusion from L3 to S1, with installation of instrumentation, iliac bone graft, and iliac crest reconstruction.
The employee’s pain subsided somewhat following her October 2007 surgery, but it spiked again in the summer of 2008 and remained chronic, despite epidural steroid injection and other modes of treatment. On October 15, 2008, on referral from Dr. Banks, the employee underwent yet another lumbar MRI scan, which was read to reveal no evidence of worsening changes. On October 20, 2008, however, the employee complained of worsening right mid-lumbar pain, and on November 7, 2008, Dr. Banks’s Physician’s Assistant, Jessica Staples, wrote an unaddressed note headed “Dear Workman’s Compensation,” in which she opined that the employee’s “current back pain is still related to her prior work[ers’] compensation injury” and requested reconsideration of coverage for treatment with facet nerve injections.
On January 9, 2009, the employee was examined for the employer and insurer by physiatrist Dr. Mark Agre. It was Dr. Agre’s conclusion that the employee had peripheral neuropathic symptoms in her lower extremities that had “nothing to do with her original work injury” and had probably “clouded the issue over her congenital spinal stenosis.” Dr. Agre agreed with Dr. Hames’s original conclusion in 1992, that surgery was not warranted in treatment of the employee’s work injury, noting that the employee’s hemilaminectomy by Dr. Crowe and her further multilevel decompressions and fusions “have not altered the course of her leg pain, construed as radicular complaints.” It was Dr. Agre’s further opinion that, given her chronic pain syndrome, the employee’s back would probably continue to hurt no matter what her course of treatment.
On March 16, 2009, Dr. Banks recommended additional epidural injections, following which the employee would be, in Dr. Banks’s opinion, at maximum medical improvement [MMI]. These injections were performed on April 18, 2009. On March 23, 2009, Physician’s Assistant Staples rated the employee’s permanent partial disability at 27.5 percent of the whole body, pursuant to Minnesota Rules 5223.0070, subpart 1.D., for a spinal fusion at three vertebral levels.
On April 27, 2009, the employee petitioned this court to vacate her award on stipulation filed July 15, 1993, on grounds that there has been a substantial change in her condition since the date of her award. In the affidavit accompanying her petition, the employee indicates that, ever since her January 8, 2007, examination by Dr. Banks, she has been of the understanding that Dr. Banks has restricted her from working. She states also in that affidavit that, subsequent to her 1993 settlement, she has continued to experience ongoing low back pain and intermittent lower extremity pain with periodic flare ups, for which she has periodically sought medical treatment. She indicates also that it has been her understanding that the insurer has accepted liability for the cost of her five low back surgeries--on November 9, 1995, March 17, 2007, March 22, 2007, March 26, 2007, and October 31, 2007. She indicates also that she continues to experience severe low back and lower extremity pain that renders her unable to work. She indicates finally that, at the time of her July 1993 settlement, she had no idea that her condition would ever require surgery, let alone a three-level fusion. Among documents submitted in support of the employer and insurer’s objection to the employee’s motion to vacate is a record of Dr. Banks’s treatment of the employee on May 4, 2009, subsequent to the employee’s filing of her petition to vacate. In that record, Dr. Banks notes that the employee’s recent, first set of epidurals had relieved about 40% of her back pain, that she would be receiving another set on that same date, that a third set was being considered a “good option,” that the employee was “looking forward to trying to return to some part-time light work in the near future,” and that he, the doctor, had released her to return to part-time light-duty work.
This court’s authority to vacate a compensation judge’s award is found in Minnesota Statutes § 176.461 and, with regard specifically to settlements, § 176.521, subd. 3. An award may be set aside if the petitioning party makes a showing of good cause to do so. Good cause has long been held to exist if “(a) the award was based on fraud; (b) the award was based on mistake; (c) there is newly discovered evidence; or (d) there is a substantial change in the employee’s condition.” Stewart v. Rahr Malting Co., 435 N.W.2d 538, 539, 41 W.C.D. 648, 649 (Minn. 1989). These bases were codified in slightly different language in a 1992 amendment of Minnesota Statutes § 176.461. In that amendment, applicable to all awards post-dating the July 1, 1992, effective date of the amendment, the substantial change basis was further defined as “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.” Minn. Stat, § 176.461 (underscoring added).
In Fodness v. Standard Cafe, this court identified the following factors for consideration in determining whether to vacate an award based on a substantial change in condition: (1) changes in the employee’s diagnosis; (2) changes in the employee’s ability to work; (3) the development of any additional permanent partial disability; (4) the necessity of more costly and extensive medical or nursing care than was anticipated; (5) the causal relationship between the work injury and the worsening of the condition; and (6) the contemplation of the parties at the time of the award. Fodness v. Standard Cafe, 41 W.C.D. 1054, 1060-61 (W.C.C.A. 1989). In the present case, while arguing initially that there is a legitimate question as to whether there has even been a substantial change in the employee’s condition, the employer and insurer argued primarily that any change that may have occurred in the employee’s condition since her 1993 award was reasonably anticipated at the time of that award and so, under both the amended statute and the Fodness factors, cannot serve as a basis for vacation of the award. Alternatively, they argue also that any substantial change that may have occurred in the employee’s condition is not causally related to the 1991 work injury.
1. Diagnosis, Ability to Work, Additional Permanent Partial Disability, Necessity of More Extensive Medical Care
In support of her petition, the employee has initially presented evidence that her diagnosis, her ability to work, her degree of permanent partial disability, and her need for medical care have all changed substantially since her 1993 award on stipulation. She argues that her diagnosis at the time of settlement was a surgically untreated herniated disc at L4-5 with multilevel degenerative disc disease, whereas now it is a status post three-level fusion with unrelenting chronic pain. She argues that she was working at the time of settlement, whereas now she is totally unable to work due to the severity of her pain. She argues that her permanency rating at the time of settlement was 10.5 percent according to the employer’s own rating, whereas now it is 27.5 percent, in light of her three-level fusion. She argues that her medical treatment since the award has been obviously very extensive and that her need for that treatment has far exceeded what was anticipated by anyone at the time of settlement.
In response, the employer and insurer acknowledge that the employee’s diagnosis has changed due to her extensive surgeries, but they argue that those surgeries were unrelated to the employee’s 1991 work injury and that the employee’s underlying diagnoses of chronic lumbar pain, chronic pain syndrome, and profound disuse atrophy, as identified by Dr. Agre, have remained unchanged since the 1993 award on stipulation. The employee’s lower extremity symptoms, they argue, are also unrelated to the employee’s work injury, being due instead, according to Dr. Agre, to a peripheral neuropathy. With regard to the employee’s ability to work, the employer and insurer argue that the employee “has been in and out of a number of jobs since the July 1993 settlement,” noting in conclusion Dr. Banks’s final, May 4, 2009, treatment notes, in which Dr. Banks indicates that he has released the employee to return to work and that the employee is looking forward once again to that return. The employer and insurer acknowledge the change from a 14% rating to a 27.5% rating in the employee’s whole-body permanent partial disability, but they argue that “any additional permanent partial disability would simply be attributable to the employee’s multiple surgeries and, does not truly represent a significant decrease in her level of functionality.” Finally, with regard to the need for more extensive medical care than was originally anticipated, the employer and insurer argue primarily, citing Burke v. F & M Asphalt, 54 W.C.D. 363 (W.C.C.A. 1996), that this court normally puts less emphasis on this factor, where medical expenses are not closed out by the award that the petitioner is seeking to vacate. They argue further that, according to Dr. Agre, the only treatment still required by the employee is a core strengthening program with pool therapy to alleviate her chronic pain syndrome.
We conclude that the evidence and arguments submitted by the employee in this case constitute evidence of a substantial change in her medical condition with regard to her diagnosis, her ability to work, her permanent partial disability, and the extent of her medical care. On medical issues, the employer and insurer rely almost entirely on the opinions of Dr. Agre, whereas there are, we find, copious records of several other physicians, both treating and nontreating, that support the employee’s petition. That the employee’s ultimate ability to work, subsequent to her fusion may be little different from what it was at the time of her settlement is not, we conclude, a determining factor, given the clear extra burdens that accompany that complicated invasive surgery. Nor is it relevant regarding the permanency factor that her level of functionality has not decreased as her permanency ratings have nearly doubled.
2. Reasonable Foreseeability of the Change
We have concluded that the employee’s current diagnosis, ability to work, degree of permanency, and need for extensive medical care, when compared with those same factors at the time of her award on stipulation, demonstrate a substantial change in the employee’s condition with regard to those factors. The employer and insurer contend that, whether they do so or not, such a change was clearly contemplated by the parties and acknowledged specifically by the employee at the time of the stipulation for settlement and so cannot be a basis for vacation of the employee’s award on stipulation. They emphasize that the employee initialed a series of questions, in not just one but two different stipulations for settlement, indicating that she understood those settlements to be final even if her condition should substantially change in the future, the latter stipulation even post-dating her first surgery. Citing Crowson v. Frenzel Mill, slip op. (W.C.C.A. June 19, 1991), the employer and insurer argue,
Whether or not the employee failed to consider whether she would, in fact, require surgery in the future when she signed off on the 1993 and 1997 stipulations, clearly, the employer and insurer have a right to rely on the employee’s express representations that she understood the finality of the settlement agreements. Otherwise those representations are meaningless.
We are not persuaded.
The boilerplate language and initialing to which the employer and insurer refer may but does not necessarily represent the reasonably foreseeable consequences of the injury or the true expectations and contemplation of the parties at the time of the award. At the time of the award, over two years after the work injury, the employee had been examined by Dr. Kraft, Dr. Hames, and Dr. Pilling with consideration for her possible candidacy for surgery, and all three of those physicians had concluded that she was not a candidate. Indeed, Dr. Kraft had certified her as being at maximum medical improvement, having rated her permanent partial disability under a category for nonsurgically-treated lesions, Yet much of the most evident change in the employee’s medical condition since the award is related to multiple surgeries that were medically recommended for her after all, subsequent to her award--in particular her three-level fusion. Being still without any apparent surgical option for treatment of her low back and bilateral leg pain over two years after her work injury, by agreement of her three main doctors, the employee had no reasonable basis for any longer anticipating a surgical option - - certainly not a three-level fusion.
3. Causal Relationship to the Work Injury
In addition to other evidence essentially implying a presumption by her doctors and even the employer that her ongoing condition continues to be related to her work injury of March 22, 1991, the employee has submitted express causation opinions of Dr. Crowe, Dr. Wyard, and Physician’s Assistant Staples in support of her petition. Based on the contrary expert opinion of Dr. Agre, the employer and insurer contend that the extensive surgical treatment that the employee has undergone since her award is unrelated to her work injury, which Dr. Agre concluded “consisted of a lumbar strain . . . that was misconstrued as a symptomatic spinal stenosis” and surgically treated aggressively as such, unsuccessfully and without warrant. Subsequent lower extremity symptoms have been, they argue, the result of a peripheral neuropathy that is unrelated to the 1991 work injury, and the employee’s only continuing injury-related diagnosis is chronic pain syndrome, a diagnosis present already at the time of her settlement.
Having concluded that the employee has sufficiently made her case for vacation on all Fodness factors other than the causation factor, and finding the issue of causation clearly arguable, we conclude that the employee’s petition is ripe for our decision upon a compensation judge’s hearing and finding on the sole issue of causation. We therefore refer the matter to the Office of Administrative Hearings for a full evidentiary hearing on solely that issue and a finding consistent with all factual and other aspects of this decision. Should either party object to the judge’s finding after full hearing of the matter, the judge’s conclusion is appealable to this court, for our consideration and decision prior to our issuance of any final order on the employee’s petition to vacate her July 15, 1993, award on stipulation.
 See Franke v. Fabcon, Inc., 509 N.W.2d 373, 377, 49 W.C.D. 520, 525 (Minn. 1993).