NANCY A. WATSON, Employee/Appellant, v. MINNESOTA SERVS., a/k/a SIGNATURE DINING, and ST. PAUL MERCURY INS. CO./ST. PAUL TRAVELERS, Employer-Insurer.

 

WORKERS= COMPENSATION COURT OF APPEALS

OCTOBER 9, 2006

 

No. WC06-155

 

HEADNOTES

 

EVIDENCE - RES JUDICATA.  Under the circumstances of this case, the compensation judge erred as a matter of law in concluding that a previous decision denying specific medical expenses, on causation grounds, was res judicata on the issue of whether the employee had any permanent partial disability, loss of earning capacity, or need for rehabilitation assistance as a result of her admitted work injury.

 

Reversed and remanded.

 

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

Compensation Judge: Cheryl LeClair-Sommer

 

Attorneys: James A. Batchelor, Batchelor Law Firm, Minneapolis, MN, for the Appellant.  Lisa Pearson Wheeler, John G. Ness & Associates, St. Paul, MN, for the Respondents.

 

 

OPINION

 

DEBRA A. WILSON, Judge

 

The employee appeals from the compensation judge=s dismissal of her claims on grounds of res judicata.  We reverse and remand for further proceedings.

 

BACKGROUND

 

The employee sustained a work-related injury to her low back on November 28, 2001.  Signature Dining [the employer] and its insurer admitted liability for the injury and paid various benefits.

 

In August of 2004, the employee filed a medical request, seeking authorization for an MRI scan and referral to a physiatrist.  At the same time, the employee filed a claim petition, alleging entitlement to wage loss benefits, permanent partial disability benefits, and rehabilitation assistance.  In a letter to the Department of Labor & Industry, counsel for the employee asked that the medical request Abe maintained on a separate fast track hearing schedule@ and not consolidated with the claim petition.

 

The employee=s medical request came on for hearing on February 15, 2005,^[1] and the compensation judge issued her decision in the matter on March 18, 2005.  In that decision, the judge designated the issues as A[w]hether the proposed MRI and referral to Dr. Agre is reasonable and necessary@ and whether Athe November 28, 2001 work injury [is] a substantial contributing factor to the recommended treatment.@  The relevant findings read, in their entirety, as follows:

 

1.         The evidence fails to establish that the November 28, 2001 work injury is a substantial contributing factor to the MRI and follow-up visit with Dr. Agre, a Physiatrist.  Dr. Mikhail=s opinion that the injury Ais the cause of her current problems@ was accorded little weight since it lacked important information on the nature and extent of the prior ongoing low back symptoms, prior claim of permanent and ongoing work-related low back injuries, and prior medical treatment.

 

2.         The MRI is necessary to ascertain the full extent of the underlying condition given the chronic low back symptoms and perceived numbness in the left leg.  The referral to Dr. Agre is necessary as recommended by Dr. Walid Mikhail in order to consult on potential conservative treatment.

 

3.         The Treatment Parameters do not apply since the employer/insurer have denied liability for the ongoing symptoms to the low back.

 

In her memorandum, the compensation judge explained her reasoning in more detail, noting again that physicians supporting the employee=s claim were apparently not aware of the employee=s long history of low back injuries and prior treatment.  The judge also rejected the employee=s testimony about the nature of her previous injuries.

 

A hearing on the employee=s claim petition was held, before the same compensation judge, on February 7, 2006.  At that time, the employer and insurer contended, in part, that the employee=s claim for wage loss benefits, permanent partial disability benefits, and rehabilitation benefits was barred by res judicata and/or collateral estoppel.  Other issues included whether the November 28, 2001, work injury was merely temporary; whether the employee had become medically unable to work; whether the employee had a loss of earning capacity due to the November 28, 2001, work injury; whether the employee was entitled to a rehabilitation consultation; and the extent of permanent partial disability, if any, attributable to the November 28, 2001, work injury.  The employer and insurer again admitted that the employee had sustained a work-related injury on November 28, 2001, but maintained that the injury was temporary and had resolved.

 

In a decision issued on March 23, 2006, the compensation judge found, in relevant part, as follows:

 

1.         The current issue, whether the work injury is a substantial contributing factor to the ongoing condition, is identical to the issue at the prior hearing.  The prior Findings and Order represents a final judgment on the merits for identical parties to the current litigation.  The employee was given a full and fair opportunity to be heard on the adjudicated issue at the prior hearing after requesting an expedited hearing.

 

2.         The employee is precluded from relitigating the nature of the November 28, 2001 work injury, which was resolved by the Findings and Order served and filed March 18, 2005.

 

In her memorandum, the compensation judge quoted Finding 1 from her earlier decision and then wrote as follows:

 

Inherent in the [earlier decision] is a determination that the employee has failed to prove that the ongoing condition was a result of the work injury of November 28, 2001.  This conclusion was reached based upon the employee=s selective memory and lack of convincing medical opinions.  Although the undersigned determined the medical treatment was reasonable and necessary, the employer and insurer were not required to pay for the treatment since the work injury was not proven to be the cause of the ongoing condition.  The nature of the injury was an issue at the prior hearing; the nature of the November 28, 2001 work injury is at issue in the instant case.  The employer and insurer presented the same defense in the prior hearing as in the present hearing - - that the ongoing medical condition was unrelated to the work injury.  Causation between ongoing symptoms and the work injury was not found, based upon the evidence at the initial hearing.

 

(Emphasis in original).  The judge made no findings, on the merits, concerning the employee=s entitlement to wage loss, permanency, or rehabilitation benefits.  The employee appeals.

 

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).

 

DECISION

 

Principles of res judicata are applicable in workers= compensation proceedings.  See, e.g., Alexander v. Kenneth R. LaLonde Enters., 288 N.W.2d 18, 31 W.C.D. 407 (Minn. 1980).  However, res judicata applies in workers= compensation cases only with respect to issues actually litigated and decided.  See, e.g., 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) (Ares judicata does not apply if the issue at stake was not specifically decided in the prior proceedings@).  See also Westendorf v. Campbell Soup Co., 243 N.W.2d 157, 158, 28 W.C.D. 460, 460 (Minn. 1976).  Collateral estoppel is a form of res judicata, whereby an initial judgment is conclusive in a subsequent suit, between the same parties, as to issues finally decided in the initial action.  Travelers Ins. Co. v. Thompson, 163 N.W.2d 289 (Minn. 1969).

 

In the present case, the compensation judge concluded that the nature of the employee=s November 28, 2001, injury had been finally determined in the prior proceeding resolving the employee=s medical request, and she read her prior decision as involving a determination that the employee=s Aongoing condition@ was not causally related to that work injury.  Finding the underlying issue in the most recent litigation to be identical, the judge concluded that the employee=s current claim was barred.  The judge=s decision to this effect is clearly erroneous.

 

In her initial decision, the judge denied the requested medical expenses on grounds that the employee did not prove that her need for the treatment was causally related to the work injury.  In so doing, the judge implied that the treatment might well have been necessitated by prior work injuries or preexisting conditions.  However, it is one thing to find that the need for recommended treatment may be related to a preexisting condition, quite another to find that the employee no longer suffers from the effects of an admitted injury.  While she may have intended to do so, the judge made no finding that the admitted November 28, 2001, work injury was merely temporary, she made no finding that the injury had resolved, and she made no finding that the employee=s Aongoing condition@ was unrelated to the injury.  And, importantly, no such finding was necessary to or inherent in the judge=s denial of the employee=s medical expense claim.  Under the circumstances of this case, the judge=s denial of certain medical care has no necessary bearing on whether the employee has any permanent partial disability, loss of earning capacity, or need for rehabilitation as a result of her work injury.  Also contrary to the compensation judge=s reasoning, the present case is distinguishable from Publicover v. Voltelcom, 64 W.C.D. 231 (W.C.C.A. 2004), in which this court affirmed an application of res judicata where, in the initial litigation, a compensation judge expressly determined that the employee=s work injury had Afully resolved.@  Id. at 232.  No comparable finding has been made in the matter now before us.

 

Because the compensation judge clearly erred by denying the employee=s claim on grounds of res judicata, we reverse her decision and remand the matter for reconsideration and findings on the merits.