HENRY L. WILSON, Employee/Appellant-Petitioner, v. SCANLAN INT=L, INC., and STATE FUND MUTUAL INS. CO., Employer-Insurer, and HEALTHPARTNERS, FAIRVIEW HEALTH SERVS., ALLINA HOSP. & CLINICS/UNITED HOSP., ST. PAUL RADIOLOGY, NEUROLOGICAL ASSOCS., and UNIVERSITY OF MINN. PHYSICIANS, Intervenors.

 

WORKERS= COMPENSATION COURT OF APPEALS

DECEMBER 9, 2005

 

No. WC05-198

 

 

HEADNOTES

 

EVIDENCE - RES JUDICATA.  Where the decision of the worker=s compensation judge involved a claim for temporary total disability benefits extending from April 20, 2002, through the date of hearing on October 31, 2003, and where the employee now claims entitlement to temporary total disability or permanent total disability benefits from November 1, 2003, the doctrine of res judicata is not applicable when considering the effect of the previous findings and order, and does not preclude the claims presented by the employee=s claim petition.

 

Reversed and remanded.

Petition to vacate findings and order dismissed without prejudice.

 

Determined by: Rykken, J., Stofferahn, J., and Wilson, J.

Compensation Judge: Cheryl LeClair-Sommer

 

Attorneys: William G. Moore, Law Office of William G. Moore, Fridley, MN, for the Appellant/Petitioner.  Kim D. Amundson, Lynn, Scharfenberg & Associates, Minneapolis, MN, for the Respondents.

 

 

OPINION

 

MIRIAM P. RYKKEN, Judge

 

The employee appeals from the compensation judge=s order of May 11, 2005, which granted the employer and insurer=s motion to dismiss the employee=s claim petition that he had filed on April 14, 2004.  The employee also petitions to vacate the compensation judge=s previous findings and order, served and filed January 12, 2004.  We reverse the dismissal of the employee=s claim petition, and remand the matter for further consideration to the Office of Administrative Hearings.  We also dismiss, without prejudice, the employee=s petition to vacate the findings and order.

 

BACKGROUND

 

In 2000, Mr. Henry L. Wilson, the employee, began working for Scanlan International, the employer, performing various assembly tasks.  On April 29, 2002, he sustained an admitted injury to his low back following which he was hospitalized and underwent extensive medical treatment.^[1]  On July 30, 2002, the employee filed a claim petition, seeking entitlement to temporary total disability benefits since July 15, 2002, as a result of his low back and claimed hernia injury, as well as payment for medical expenses incurred since his injury for treatment for his hernia and lumbar condition.  On October 31, 2003, that claim petition was addressed at a hearing before a compensation judge.  In her Findings and Order, served and filed on January 12, 2004, the compensation judge found that the employee sustained a temporary low back injury as a result of his April 29, 2002, injury, in the nature of a soft tissue/myofascial syndrome with no spinal pathology, and that he also had sustained an aggravation of his underlying pericolostomy hernia as a result of his work injury.  The judge awarded temporary total disability benefits from July 15, 2002, through July 3, 2003.

 

The compensation judge denied the employee=s claim that he developed an inguinal hernia as a result of his work injury or that he aggravated a pre-existing inguinal hernia as a result of the injury, and denied the employee=s claim for temporary total disability benefits from July 4, 2003, through the date of the hearing, based upon her conclusion that the aggravation of his pericolostomy hernia did not substantially contribute to the employee=s disability after July 3, 2003.  The employee appealed from the compensation judge=s findings and order.

 

On April 14, 2004, while that appeal was pending at the Workers= Compensation Court of Appeals, the employee filed a second claim petition, seeking temporary total disability or permanent total disability benefits continuing from November 1, 2003.^[2]  In their answer to the employee=s claim petition, the employer and insurer contended that the employee=s new claim for disability benefits from November 1, 2003, was barred by the doctrine of res judicata, based upon the compensation judge=s previous findings and order issued on January 12, 2004.  The employer and insurer contended that the compensation judge had already determined that the employee sustained a temporary injury to his low back and an aggravation of his pericolostomy hernia as a result of his 2002 work injury, but that by July 3, 2003, the employee=s disability resulting from the aggravation of the underlying hernia no longer represented a substantial contributing cause of his total disability from work.  On that basis, the employer and insurer argued that the employee=s current claims were foreclosed by the compensation judge=s earlier findings and order.

 

In the employee=s appeal to this court from the earlier findings and order, the following issues were addressed:  (1) the proper calculation of the employee=s weekly wage; (2) whether the employee=s low back injury had resolved by July 3, 2003, (3) whether there was a causal connection between the employee=s 2002 work injury and his inguinal hernia, and (4) whether the employee was entitled to temporary total disability benefits between April 20, 2002, and July 3, 2003, as a substantial result of his work injury.  In a decision served and filed September 10, 2004, this court affirmed, with modifications, the compensation judge=s findings and order.  Those modifications include a revision of the wage rate, and an extension of temporary total disability benefits payable through August 14, 2003.  By summary opinion served and filed on December 22, 2004, the Minnesota Supreme Court affirmed the decision of the Workers= Compensation Court of Appeals.  Wilson v. Scanlan Intl, 64 W.C.D. 548 (W.C.C.A. 2004), summarily aff=d (Minn. Dec. 22, 2004).

 

On January 26, 2005, the employer and insurer filed a motion to dismiss the employee=s April 14, 2004, claim petition, contending that the employee=s claim petition should be dismissed on the grounds of collateral estoppel.  They argued that there had been a final determination, on the merits of the employee=s claim, that after August 14, 2003, his disability was no longer substantially related to his work injury.  The employer and insurer argued that the employee had already been provided with a full and fair opportunity to be heard on the issue of entitlement to benefits due to his work injury of April 29, 2002, and that the earlier litigation foreclosed any further claim.

 

  On May 11, 2005, over the employee=s objection to that motion for dismissal, the compensation judge served and filed an order dismissing the claim petition.  In that order, the compensation judge referred to her original finding that the employee=s work injury did not substantially contribute to his physical work restrictions after July 3, 2003.  In her memorandum, the compensation judge concluded that the Workers= Compensation Court of Appeals had determined that the employee=s work injury was temporary in nature and no longer represented a substantial contributing factor to the employee=s disability.  The employee appeals from the order dismissing the claim petition.

 

In addition, the employee has petitioned to vacate the findings and order of January 12, 2004.  The employee argues that good cause exists to vacate the findings and order, based on a substantial change in the employee=s medical condition and newly discovered evidence.

 

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), summarily aff=d (Minn. June 3, 1993).

 

DECISION

 

Two claims are at issue on appeal - - the employee=s appeal from the dismissal of his claim petition, and the employee=s petition to vacate the findings and order served and filed on January 12, 2004.

 

Employer and Insurer=s Motion to Dismiss Claim Petition

 

The employer and insurer contend that employee=s claim petition should be dismissed on the grounds of res judicata and collateral estoppel.  They argue that there has been a final determination, on the merits of the employee=s claim, that after August 14, 2003, his disability was no longer substantially related to his work injury.  The employer and insurer argue that the employee has already been provided with a full and fair opportunity to be heard on the issue of entitlement to benefits due to his work injury of April 29, 2002, and that the decisions issued by the compensation judge and the Workers' Compensation Court of Appeals following earlier litigation have foreclosed any further claim.

 

Res judicata or claim preclusion is essentially a finality doctrine in which Aa final judgment on the merits bars a second suit for the same claim by parties or their privies.@  Kaiser v. Northern States Power Co., 353 N.W.2d 899, 902 (Minn. 1984).  It is well-settled that the principles of res judicata are applicable in workers= compensation proceedings.  Alexander v. Kenneth R. LaLonde Enters., 288 N.W.2d 18, 31 W.C.D. 407 (Minn. 1980); 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, 48 W.C.D. 368 (Minn. 1993); Westendorf v. Campbell Soup, 243 N.W.2d 157, 28 W.C.D. 460 (Minn. 1976).  Collateral estoppel, or issue preclusion, is a limited form of res judicata whereby a prior judgement 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) the issue is identical to one in a prior adjudication; (2) there was a final judgment on the merits; (3) the estopped party was a party or in privity with a party to the prior adjudication; and (4) 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. 2001).  The court has also held that Aneither collateral estoppel nor res judicata is rigidly applied,@ and the focus is on Awhether 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 argue that the compensation judge properly dismissed the employee=s claim petition of April 14, 2004, because the employee=s claim for further benefits was foreclosed by the January 12, 2004, findings and order, and the September 10, 2004, decision issued on appeal by the Workers' Compensation Court of Appeals.  At the initial hearing on this case, however, the employee=s claim was limited to benefits for a discrete period of time, between April 20, 2002, and the date of the hearing on October 31, 2003.  In his current claim, the employee seeks benefits after October 31, 2003.  In addition, although the compensation judge found that the employee sustained a temporary low back injury as a result of his April 29, 2002, work injury, she also found that the employee sustained an aggravation of his underlying pericolostomy hernia as a result of that injury and made no specific finding that the aggravation of his pericolostomy hernia was temporary.  The compensation judge awarded temporary total disability benefits from April 20, 2002, through July 3, 2003, and found that the employee=s work injury did not substantially contribute to the employee=s disability Afrom July 4, 2003 through the date of the hearing.@

 

Although the compensation judge concluded, in her memorandum accompanying her Order Dismissing Claim Petition, that this court had Adetermined the work injury, in essence, was temporary and no longer a substantial contributing factor to the disability,@ we did not make such a determination.   In its decision of September 10, 2004, this court did not  hold that the employee=s injury was temporary in nature but instead limited our conclusions to the time period placed in issue at the evidentiary hearing.  See Minn. Stat. ' 176.421, subd. 6; Bradford v. Bureau of Engraving, 459 N.W.2d 697, 698, 43 W.C.D. 279, 280 (Minn. 1990) (jurisdiction of the Workers' Compensation Court of Appeals is "limited to the issues raised by the parties in the notice of appeal or by a cross-appeal.").  We affirmed the compensation judge=s findings, with modification, extending the award of benefits through August 14, 2003.

 

In the current proceeding, the employee seeks temporary total disability or permanent total disability benefits from and after November 1, 2003, a claim that was not before the compensation judge at the previous hearing nor was it addressed by her findings and order served and filed on January 12, 2004.  The compensation judge erred in concluding that our decision effectively held that the employee=s work injury was temporary in nature.  Accordingly, the doctrine of res judicata is not applicable, and does not bar the claims sought by the employee in his claim petition filed on April 14, 2004.  See Webster v. Midnite Express, Inc., slip op. (W.C.C.A. Sept. 20, 2004).  We therefore reverse the compensation judge=s dismissal of the employee=s claim petition, and refer the matter to the Office of Administrative Hearings for placement of the claim petition on the trial calendar.

 

Employee=s Petition to Vacate Findings and Order

 

The employee petitions to vacate the compensation judge=s findings and order of January 12, 2004.  He asserts that cause exists to support vacation of the findings and order, basing his petition on a substantial change in his medical condition, related to his pericolostomy hernia, that developed after the findings and order were served and filed, and on newly discovered evidence that came into existence after the findings and order were served and filed.  In view of our holding that res judicata does not bar the employee=s claim petition for benefits after October 31, 2003, from going forward, and because, in our decision of September 10, 2004, we did not hold that the employee=s 2002 injury was temporary in nature, there is no practical reason to address the employee=s petition to vacate or the employer and insurer=s defenses to that petition.  Any substantial change in the employee=s medical condition that has occurred after the findings and order were issued on January 12, 2004, has no effect on what was addressed at the hearing.  We therefore dismiss, without prejudice, the employee=s petition to vacate the findings and order of January 12, 2004.