DANIEL L. SCHILLING, Employee/Petitioner, v. STRUCTURAL BLDGS., INC., and SFM MUT. INS. CO., Employer-Insurer.

 

WORKERS= COMPENSATION COURT OF APPEALS

AUGUST 18, 2008

 

No. WC08-153

 

HEADNOTES

 

VACATION OF AWARD.  The handwritten addition to a stipulation which was to the benefit of the employee and the insurer=s denial of specific medical expenses when the stipulation provided for future medical do not constitute cause to vacate the settlement under Minn. Stat. ' 176.461.

 

Petition to vacate award on stipulation denied.

 

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

 

Attorneys:  Daniel L. Schilling, Pro se Employee.  M. Chapin Hall, Lynn, Scharfenberg & Assocs., Minneapolis, MN, for the Respondents.

 

 

OPINION

 

DAVID A. STOFFERAHN, Judge

 

The employee has petitioned to vacate a settlement he entered into with Structural Buildings, Inc., and its insurer, SFM, in August 2007.  We conclude cause does not exist to vacate the settlement and the petition is denied.

 

BACKGROUND

 

The employee, Daniel L. Schilling, has sustained two work injuries to his thoracic spine.  The first was on January 27, 1986, when the employee was carrying a motor on a ladder.  He was working at the time as a mechanic for Carlson Craft, then insured by Hartford Insurance Company.  The second injury was on January 3, 2004, when the employee was in a motor vehicle accident while he was working for Structural Buildings, Inc.  The workers= compensation insurer for Structural Buildings was State Fund Mutual Insurance Company, now known as SFM Mutual Insurance Company.

 

In June 2007, the employee settled his claims against Carlson and Hartford.  In return for a full, final, and complete settlement of all claims arising out of the 1986 injury, the employee was paid $33,750.00.  The employee had received medical care through the U.S. Department of Veterans Affairs, and the VA=s intervention interest for medical bills was settled with Hartford agreeing to pay $2,500.00 to the VA.  Claims for future medical expenses were left open.

 

The employee settled his claims with Structural Buildings and SFM in August 2007.  The employee settled all claims arising out of his 2004 work injury in return for payment of $9,000.00.  The stipulation specifically closed out all claims by the employee for medical expenses arising out of the 2004 work injury.  The employee was paid $3,500.00 for a waiver of medical claims involving providers other than the VA.  The stipulation further provides that the VA, a party to the agreement, may have a direct claim against SFM for future medical care it provides to the employee as the result of his work injury.

 

DECISION

 

It is important at the outset for the parties to understand what this court may do and what it may not do in considering a petition to vacate a settlement.  This court has been given authority by Minnesota law, as enacted by the legislature, to vacate a settlement.  However, that authority is not unlimited.  In order to vacate a settlement, this court must find that Acause@ exists.

Cause is defined in Minn. Stat. ' 176.461.  According to that statute, cause is limited to:

 

1.         a mutual mistake of fact;

2.         newly discovered evidence;

3.         fraud; or

4.         a substantial and unanticipated change in the employee=s medical condition.

 

It would seem clear that the issues of newly discovered evidence or substantial change in medical condition do not exist in the present case.  The question for this court is whether the allegations set out of by the employee in the papers he has filed with this court meet one of the other two definitions of cause.  Fraud is generally considered to be a misrepresentation of facts by one party to the other party which results in damages to the other party.^[1]  A mutual mistake of fact is when both parties to the agreement fail to appreciate or are unaware of a central fact to the agreement.^[2]

 

The first allegation made by the employee has to do with a handwritten addition to the stipulation placed in the stipulation by counsel for the employer and insurer at the time the stipulation was presented to a compensation judge for approval.  The addition was made to paragraph VII.2, which deals with the employee=s obligation to indemnify or repay SFM for any workers= compensation claims that SFM is expected to pay in the future.  The added language provides that the employee=s obligation does not apply to claims brought by the VA against SFM.  In other words, if SFM pays a bill at the VA, the employee does not have to repay SFM that amount.

 

This addition to the stipulation is not a mutual mistake or fraud which would invalidate the settlement.  Making a handwritten addition to a settlement without the knowledge of the other party does not automatically invalidate a settlement as the employee argues.  The question is the effect of that addition on the rights of the parties.  In the present case, we might possibly reach a different result if the added language had changed the agreement in the employer=s favor but, as we have noted, the added language was to the benefit of the employee.  We conclude the handwritten addition to the stipulation is not cause which would allow the settlement to be vacated.

 

The other allegation of the employee has to do with his medical care at the VA.  As part of the settlement, the employee agreed to waive his right to make claims against SFM for medical treatment.  Instead, the VA was allowed to make claims directly against SFM for future medical treatment it provides to the employee as the result of the work injury.  The employee and SFM agree with this summary and we find no dispute between the parties on this issue.  The employee claims, however,  that SFM is refusing to pay the VA for medical care and that SFM is not honoring its agreement to make payment of work-related medical bills.

 

Disputes over the payment of medical bills are common in the workers= compensation system.  An injured employee needs to appreciate that an insurer=s agreement to cover future medical expenses is not a guarantee that every single bill will be paid without question.  In order for the workers= compensation insurer to be liable for a medical bill, it must be shown that the medical treatment is treatment for the work injury and not for an unrelated condition.  Secondly, it must be shown that the treatment is reasonable and necessary for the work injury.

 

Obviously, parties may disagree about whether medical treatment was related to the work injury or was reasonable.  If there is a dispute, the workers= compensation law sets out a procedure to resolve the dispute.  Because an insurer denies a particular bill does not mean that the insurer is failing to live up to an obligation set out in a settlement to cover future medical expenses.  We note that in the present case the VA has filed a claim for medical expenses for treatment it has provided to the employee and that medical request is presently pending.^[3]

 

We do not believe that the actions of SFM on the payment of expenses at the VA are evidence either of fraud or of a mutual mistake of the parties at the time the settlement was completed.

 

Because we do not find that the employee=s allegations constitute cause under the statute, the petition is denied.