TONY C. VICK, Employee, v. NORTHERN ENGRAVING CORP. and SENTRY INS. GROUP, Employer-Insurer/Appellants, and GUNDERSEN LUTHERAN MED. CTR., Intervenor.
WORKERS’ COMPENSATION COURT OF APPEALS
JUNE 30, 2010
EVIDENCE - RES JUDICATA; CAUSATION - MEDICAL TREATMENT. Where the judge’s 2006 and 2008 denials of the employee’s previous medical claims did not mean that his work injuries were temporary or that he was foreclosed from claiming payment for future medical treatment, where there was nothing in the prior decisions to suggest a break in the chain of causation, but where the exact nature of the employee’s current medical claims was not clear from the record, the compensation judge’s conclusion that her earlier decisions did not bar, by res judicata or collateral estoppel, the employee’s claim for payment of medical expenses after September 2005 was affirmed with modification to permit litigation of only those expenses not at issue in the judge’s 2006 and 2008 denials.
Affirmed as modified and remanded.
Determined by: Pederson, J., Wilson, J., and Rykken, J.
Compensation Judge: Janice M. Culnane
Attorneys: Charles A. Bird, Bird, Jacobsen & Stevens, Rochester, MN, for the Respondent. Brian J. Holly, Aafedt, Forde, Gray, Monson & Hager, Minneapolis, MN, for the Appellants.
WILLIAM R. PEDERSON, Judge
The employer and insurer appeal from the compensation judge’s determination that principles of collateral estoppel and res judicata do not bar the employee’s claim for medical treatment expenses. We affirm as modified.
Tony C. Vick [the employee] began working for Northern Engraving Corporation [the employer] in 1980. On June 9, 1992, the employee was lifting a conveyor at work when he injured his low back. The employer and its workers’ compensation insurer accepted liability for the injury, and the employee was off work for about ten weeks.
Following his injury, the employee was treated conservatively at the Gundersen Clinic in LaCrosse, Wisconsin. An MRI scan of the lumbar spine performed in late June 1992 revealed a herniated disc on the left side at L4-5. On August 18, 1992, the employee’s treating physician, Dr. James Williams, noted that the employee’s radiculopathy had resolved with conservative treatment. The employee was found to be asymptomatic, and he was released to return to his usual job at full capacity.
On November 12, 1992, the employee returned to see Dr. Williams for a final evaluation. He reported on that date “some occasional back and left lower extremity discomfort which is not in any way limiting.” Dr. Williams reiterated that the radiculopathy related to the employee’s herniated L4-5 disc was essentially resolved, and he rated the employee’s permanent partial disability at 9% under Minnesota Rules 5223.0070, subpart 1.B.(1)(a).
In late 1994, the employee and the employer and insurer entered into a full, final, and complete settlement of all claims for workers’ compensation arising out of the June 9, 1992, injury, except for reasonable, necessary, and causally related medical expenses.
The employee continued working for the employer, and on September 8, 2003, he reinjured his low back. The employer and insurer admitted liability for the injury, and the employee was off work for sixteen weeks. The employee sought treatment initially at the Gundersen Clinic, where he was seen by Dr. Glenn McCarty on September 12, 2003, complaining of pain in his left lumbar region that radiated into his left hip and buttocks and down the leg into his calf. Dr. McCarty restricted the employee from working and prescribed narcotic analgesics and muscle relaxants.
On October 10, 2003, the employee was seen in consultation by neurosurgeon Dr. Walter Faillace, whose assessment was “disabling sciatica that has not responded to conservative therapy secondary to a midline and lateral disc herniation at L4-5.” On November 13, 2003, the employee underwent a left L4 hemilaminectomy and left L4-5 discectomy and exploration of the L3-4 interspace, which Dr. Faillace reported was indicated based on the employee’s disabling left leg sciatic pain.
On January 2, 2004, the employee was seen again by Dr. McCarty, who noted that the employee was no longer on medication and was doing well, and he therefore released the employee to return to work without restrictions. Medical expenses associated with care and treatment of the employee were paid through the date of his return to work. On January 26, 2004, Dr. McCarty completed a Health Care Provider Report, indicating that the employee had reached maximum medical improvement [MMI] with regard to his September 8, 2003, injury, having sustained no permanent partial disability.
On Friday, February 20, 2004, the employee was performing maintenance on a molding press that required him to crawl inside the press. He subsequently reported to the employer that he experienced pain in his left lower back and hip as a result of this activity, and the employer completed an internal accident investigation report form. The employee evidently did not seek medical treatment but instead took a couple of days off to rest and then returned to his usual job.
The employee was examined by physiatrist Dr. Brenda Dierschke on September 14, 2004. On that date, the employee complained of discomfort or stiffness in his lower back, stiffness in his left knee, and numbness in both feet. He attributed the onset of these symptoms to his 2003 work-related injury. The employee reported to Dr. Dierschke that he had sustained a low back injury in 1992 but that that injury had resolved in about two months and he had then returned to work fulltime and had not had any symptoms in the affected area until his injury in 2003. With regard to causation for the employee’s current complaints, Dr. Dierschke stated, “With a reasonable degree of medical certainty and with the information available to me, it is difficult to say that the [employee’s] current symptoms are related to the August [sic] 8, 2003, injury.”
The employee continued working for the employer and was next seen for medical treatment by Dr. McCarty’s physician’s assistant, Angela House, on June 13, 2005. The employee reported to Ms. House that he had back pain in the location of his surgical scar. He denied any recent injury. He reported that he had been on vacation the previous week, but he was unable to pinpoint what may have exacerbated the pain. Ms. House assessed back pain, took the employee off work, and prescribed medication until he could be seen by Dr. McCarty again in two days.
When he saw Dr. McCarty on June 15, 2005, the employee advised the doctor that he had reinjured his back at work but was having difficulty getting workers’ compensation coverage, implying to the doctor that he must have been discharged too early after his surgery. Dr. McCarty acknowledged that he had discharged the employee for the condition that had necessitated his surgery in 2003, but he explained to the employee that it was his impression that the employee’s current symptoms were related to a new injury that should be reported to his employer and covered separately by workers’ compensation. In a telephone note on that date, Dr. McCarty reiterated that a question had arisen as to whether or not the employee’s back pain was associated with the previous episode of back pain requiring surgery. Dr. McCarty’s opinion remained that it was not and that “[t]he back pain he is suffering from today was mostly spasm from strain of the paravertebral musculature. The previous back pain involved degenerative disc disease and herniated disc.”
The employee’s low back pain continued, and on June 27, 2005, he was seen by physical medicine and rehabilitation specialist Dr. Joseph Binegar. Dr. Binegar obtained a history of the employee’s 2003 injury and surgery, as well as of his episode of back pain following his work activities in February 2004. Dr. Binegar diagnosed low back and left lower extremity pain status post-surgery for a left L4-5 herniated disc. He recommended an MRI scan of the lumbar spine to be followed by two epidural steroid injections, and he released the employee to work at light duty with restrictions.
The employee returned to see Dr. Binegar in follow-up on August 2, 2005. The employee reported improvement following the injections, and, with regard to the employee’s MRI scan, the doctor noted that the employee had a congenitally small spinal canal with disc bulging at the L3-4 and L4-5 levels, resulting in some generally mild to moderate central canal stenosis bilaterally. Dr. Binegar diagnosed low back pain into the lower extremity, secondary to the 2004 work injury, stating further that it was not clear to him that the injury was “in any way related to [the employee’s] injury of September 2003.” Dr. Binegar recommended a work hardening program and released the employee to light-medium duty work with restrictions.
The employee returned to see Dr. Binegar about six weeks later, on September 15, 2005. The doctor noted at that time that, since his last visit, the employee had been involved in a work hardening program. The work hardening therapist had reported that the employee had worked very hard in the program and had plateaued with his physical activities. Dr. Binegar again diagnosed low back pain, which he related to an injury in January or February of 2004, not to the employee’s injury of September 2003. About a week later, on September 21, 2005, the employee saw Dr. Binegar regarding a flare-up of his low back pain, with some radiation into both lower extremities. Dr. Binegar recommended a third epidural steroid injection and a course of physical therapy. The employee opted to defer the physical therapy. When he saw Dr. Binegar again about a month later, on October 24, 2005, the employee reported that the epidural injection had helped only temporarily. He continued to have pain primarily in the low back, with some radiation of that pain into both lower extremities, more severe on the left than on the right. The employee also advised the doctor that he had recently been laid off from his job. In view of the employee’s continued complaints despite conservative treatment, Dr. Binegar recommended a consultation with a neurosurgeon.
On November 28, 2005, the employee was examined by Dr. Keith Bengston at the Mayo Clinic Spine Center. Dr. Bengston obtained a history, performed an examination, and reviewed the employee’s July 1, 2005, lumbar MRI scan. Dr. Bengston diagnosed mechanical low back pain with elements of L4-5 central stenosis, as well as facet degenerative joint disease. He discussed treatment options with the employee, and they decided on a course of physical therapy directed toward lumbar flexion. After attending four physical therapy sessions, the employee was discharged from therapy on December 21, 2005, and was advised to continue gentle range of motion exercises as tolerated. On February 13, 2006, Dr. Bengston concluded that the employee had reached MMI with a whole body impairment rating of 13% under Minnesota Rules 5223.0390, subpart 4.C.(4), based on the employee’s previous two-level discectomy, radicular symptoms, and objective findings of muscle spasms.
In March 2006, the employee filed a claim petition, seeking payment of temporary total disability benefits continuing from October 21, 2005, compensation for a 10% permanent partial disability, and payment of related medical expenses, all as a result of the September 8, 2003, work injury. In April 2006, the employee also filed a medical request, seeking payment of medical bills incurred subsequent to July 2004 as a result of his personal injury of September 8, 2003. Medical benefits claimed included payment of bills for treatment at the Gundersen Clinic, the Gundersen Lutheran Medical Center, Caledonia Care and Rehabilitation, the Mayo Clinic, and EMPI, as well as reimbursement of out-of-pocket payments by the employee. The employer and insurer denied liability for the employee’s claims. An administrative conference relative to the employee’s medical request was held on June 2, 2006. The record was held open for sixty days to allow notification to providers of their right to intervene.
On August 9, 2006, a mediator/arbitrator at the Department of Labor and Industry issued a Decision and Order determining that “it has not been established that the need for the disputed treatment is causally related to the admitted 9/8/2003 work injury.” On August 15, 2006, the employee filed a Request for Formal Hearing.
The employee’s claim for payment of his outstanding medical expenses came on for hearing before Compensation Judge Janice M. Culnane on September 27, 2006. In a Findings and Order issued October 27, 2006, the judge concluded that the employee had failed to sustain his burden of proving that his work-related injury of September 8, 2003, was a substantial contributing factor in his need for the medical treatment at issue. The judge’s findings and order were affirmed by this court on April 30, 2007.
On February 7, 2008, the employee’s claims for wage loss and permanent partial disability benefits, originally asserted in a claim petition filed on March 8, 2006, came on for hearing before Judge Culnane. At the hearing, the employee also claimed the same medical expenses that he had claimed at the previous hearing before the judge. The employee now claimed that the medical expenses were causally related to the admitted work-related injury of June 9, 1992, or to the claimed injuries of February 20, 2004, or June 17, 2005. In a Findings and Order issued April 7, 2008, the judge found that the employee failed to prove that he had sustained work-related injuries on February 20, 2004, and June 17, 2005, and that he had failed to sustain his burden of proving that his work-related injury of June 9, 1992, was a substantial contributing factor in his need for the claimed medical treatment. She determined also that the employee had not been temporarily totally or temporarily partially disabled as claimed. The parties stipulated that the employee was entitled to compensation for a 2% permanent partial disability related to the September 8, 2003, injury.
On March 11, 2009, the employee again filed a medical request for payment of medical bills and for reimbursement for prescriptions and mileage allegedly related to the employee’s admitted work injuries of June 9, 1992, and September 8, 2003. In this request, the employee’s claims were purportedly for bills incurred after September 23, 2005, implying that bills incurred after that date had not been a subject of earlier litigation. On March 20, 2009, the employer and insurer filed a medical response denying that the employee’s expenses were reasonable and necessary and causally related to the admitted injuries. The employer and insurer also asserted that the employee’s claims for medical benefits had previously been judicially determined and that his current claims were barred by collateral estoppel.
On April 3, 2009, an administrative conference was held under Minnesota Statutes section 176.106. In a decision and order issued April 27, 2009, a mediator/arbitrator determined that “the work injury has not been demonstrated [to] be a substantial contributing factor [in] the need for the disputed treatment.” The employee filed a request for formal hearing, and the matter was again submitted to Judge Culnane. The parties agreed to bifurcate the decision process in this matter and proceeded solely on the issue of whether the employee’s claims for medical benefits were legally precluded by collateral estoppel or res judicata. No hearing was held and the matter was submitted to the judge on written argument.
In a findings and order issued February 11, 2010, the compensation judge determined that the findings and orders issued October 27, 2006, and April 7, 2008, addressed only the medical treatment expenses claimed by the employee through September 26, 2005. She determined also that there had not been a hearing on or a final determination regarding medical benefits provided to the employee after September 27, 2005. She therefore concluded that her earlier determinations on medical bills did not bar, by res judicata or collateral estoppel, the employee’s claim for medical expenses after September 27, 2005, and she ordered that the matter be set for a de novo evidentiary hearing. The employer and insurer appeal.
STANDARD OF REVIEW
“[A] decision which rests upon the application of a statute or rule to essentially undisputed facts generally involves a question of law which [the Workers’ Compensation Court of Appeals] may consider de novo.” Krovchuk v. Koch Oil Refinery, 48 W.C.D. 607, 608 (W.C.C.A. 1993).
The principles of res judicata are applicable in workers’ compensation proceedings. Abrahams v. University of Minn., Duluth, 61 W.C.D. 103 (W.C.C.A. 2001). The doctrine precludes litigation of issues and claims that were in fact decided in an earlier decision. Fischer v. Saga Corp., 498 N.W.2d 449, 450, 48 W.C.D. 368, 369 (Minn. 1993); citing 3 Larson, The Law of Workman’s Compensation § 79.72 (f) (1992) (“res judicata does not apply if the issue at stake was not specifically decided in the prior proceeding”). Collateral estoppel is a limited form of res judicata whereby a prior judgment is conclusive in a later suit between the same parties as to determinative issues finally decided in the former suit. Travelers Ins. Co. v. Thompson, 163 N.W.2d 289 (Minn. 1969). The Minnesota Supreme Court has held that the principles of collateral estoppel are appropriately applied in the following circumstances: (1) where the issue is identical to one in a prior adjudication; (2) where there was a final judgment on the merits; (3) where the estopped party was a party or in privity with a party to the prior adjudication; and (4) where the estopped party was given a full and fair opportunity to be heard on the adjudicated issue. Nelson v. American Family Ins. Group. 651 N.W.2d 499, 511 (Minn. 2002). The court has also held that “neither collateral estoppel nor res judicata is rigidly applied,” and the focus is on “whether its application would work an injustice on the party against whom estoppel is urged.” Johnson v. Consolidated Freightways, 420 N.W. 2d 608, 613-14 (Minn. 1988).
The employer and insurer contend that the compensation judge committed an error of law in failing to apply the principles of res judicata/collateral estoppel where the issues presented were previously argued, determined, and adjudicated in the prior hearings in 2006 and 2008. They assert that the judge’s prior findings and orders effectively broke the chain of causation relative to subsequent and future medical treatment. Furthermore, they contend, until the employee can demonstrate that his medical condition has changed from the condition covered by the previous litigation, res judicata and collateral estoppel bar him from bringing the same claim over and over again. We are not persuaded.
Following the hearings in 2006 and 2008, the compensation judge found that the employee failed to sustain his burden of proving that the medical treatment expenses at issue were causally related to his work-related injuries. A finding that the employee’s claims were denied for lack of proof does not equate to a finding that his work injuries were temporary or that he is foreclosed from claiming benefits thereafter. The parties have stipulated that the employee sustained work-related injuries to his low back on June 9, 1992, and September 8, 2003. We find nothing in the prior findings and orders to suggest a break in the chain of causation or that the compensation judge has made any decision on medical causation that would be dispositive on claims for future medical treatment related to the employee’s admitted injuries. The issue before Judge Culnane was whether the medical treatment received by the employee after September 27, 2005, was causally related to the 1992 and 2003 admitted work injuries. That issue was not before Judge Culnane at the hearings in 2006 and 2008. Nor has there been a final determination on the merits of the employee’s claims.
There is no record from which we can determine the exact nature of the employee’s current claims. In reviewing the earlier findings and orders, however, it appears that certain medical treatment expenses beyond September 27, 2005, have already been determined. We therefore modify the judge’s findings and order to provide that medical treatment expenses incurred after September 27, 2005, that were not a subject of the findings and order issued April 7, 2008, or the findings and order issued October 27, 2006, as affirmed by the Workers’ Compensation Court of Appeals on April 30, 2007, are not barred by res judicata and collateral estoppel.
 Portions of this background have been drawn from this court’s decision in Vick v. Northern Engraving Corp., No. WC06-271 (W.C.C.A. Apr. 30, 2007).
 For example, treatment expenses at the Mayo Clinic and Caledonia Care and Rehabilitation, which were at issue at the earlier hearings, did not commence until November and December 2005.