EMA MCKINLEY, Employee/Respondent, v. TARGET CORP., SELF_INSURED/SEDGWICK CLAIMS MGMT. SERVS, INC., Employer/Petitioner.

The self-insured employer petitions to vacate an Award on Stipulation, served and filed September 9, 2010, and an Award on Addendum to the Stipulation, served and filed February 1, 2011, on three  bases:  (a) an unanticipated substantial change in a medical condition, (b) mutual mistake of fact, or (c) fraud.  We grant the petition.

On April 10, 1993, Ema McKinley, the employee, was injured when she fell while working in a storage area at a store run by Target Corporation, the self-insured employer.  The employee reported that she struck her head and lost consciousness for over two hours while her left arm was pinned underneath her and her left foot was twisted and lodged among boxes.  The employee was immediately taken off work and initially treated for a left ankle injury.  She later developed a spastic left ankle.  The employee began a course of medical treatment that was extensive and complex.  She treated at the Mayo Clinic and developed symptoms of reflex sympathetic dystrophy^[1] in her left lower extremity.  The constellation of symptoms included reddening of the skin, change in sweat patterns, and a positive bone scan in May 1993.  The employee was diagnosed with somatoform pain disorder superimposed on RSD.   The employee was able to return to work in summer 1993 on a gradual basis.  She still had pain in her left toes, but the other pain and edema improved until the employee returned to work.  Upon returning to her job, the pain in her left ankle returned, spreading to her left leg.  In October 1994, the employee was again diagnosed with RSD.  The employee stopped working in January 1995 and her symptoms got worse.

The employee started walking with the assistance of crutches in January 1995, and by November 1995 she was using a wheelchair.  During this time, the employee also developed left shoulder, arm, and hand pain.  A November 22, 1995, Mayo Clinic medical record states that the employee displayed edema, skin temperature changes, decreased perspiration, reduced grip strength, and restricted range of motion during a left hand examination.  The employee was diagnosed with left hand RSD.  In February 1996, the employee’s left hand closed into a claw shape.  While sitting in her wheelchair, the employee tilted to the left with her left ear almost touching her shoulder and her left foot turned inward.

In September 1996, the parties litigated the cause and extent of the employee’s conditions.  The employer admitted that the employee was permanently and totally disabled, but argued that her work injury was not a substantial contributing factor.  A compensation judge determined that the employee’s symptoms and conditions during the period in dispute were work related.  The judge found that the employee had RSD of the left leg and arm, that she had over 52 percent permanent partial disability, that she was permanently and totally disabled, and that the work injury was a substantial contributing cause of her disability.^[2]  On appeal from this decision, the WCCA affirmed these findings.^[3]  In November 1997, the parties settled the permanent partial disability claim, and closed out permanent partial disability to 52 percent.  The parties also agreed that the employee was permanently and totally disabled.

In January 2001, the parties settled all claims for permanent partial disability up to 100 percent, permanent total disability compensation, and supplementary benefits with payment of $60,000.00 to the employee plus $35,000.00 withheld pending a petition for attorney fees, and the purchase of an annuity which would pay the employee $1,953.00 per month for ten years until January 1, 2011.  The employee also agreed that this payment would settle her claims for installation of an elevator and modification and/or payment for a handicapped accessible van.  An award on stipulation was filed on January 26, 2001.

In May 2001, the parties litigated several medical expenses and services before a compensation judge at the Office of Administrative Hearings.  In Findings and Order dated May 9, 2001, the judge found that the employee was confined to a wheelchair 24 hours per day with her posture bending to the left so that the tip of her shoulder touched the left arm rest of the chair and her head was in a horizontal position, and that attempts to change the employee’s position caused extreme pain.  The judge also found that the employee’s gastrointestinal problems and breathing difficulties were related to her unusual physical positioning, which resulted from her work-related RSD.  The judge awarded medical expenses related to these conditions as consequential injuries from her work-related injury.  The judge also found that personal care attendant services were necessary as a result of the consequential injuries and awarded the cost of those services.^[4]

The employee continued to receive extensive medical treatment at the Mayo Clinic.  In May 2002, the employee began participating in a trial of Thalidomide medication as pain relief treatment for RSD.  The employee reported increased pain after she stopped taking the medication.  In December 2002, the employee was again prescribed Thalidomide.  In May of 2003, the employee reported relief with insomnia and with her pain levels.  Through the Mayo Clinic, the employee continued to be prescribed Thalidomide for many years.

In December 2003, the parties litigated various medical expenses for medical treatment of flare-ups of the employee’s heart condition, urinary tract infections, throat problems, dental disease, insomnia, cyst removal, and skin conditions, which were awarded by a fact finder as consequences of treatment for her work injuries.  The employee’s request for appointment of a QRC was denied.^[5]  Dietary supplements were later approved as reasonable and necessary to maintain the employee’s health.

On March 12, 2009, the employer filed a medical request seeking to discontinue payment for the cost of Thalidomide as not reasonable, necessary, or causally related to the work injury.  The request was accompanied by an October 6, 2008, report from Dr. Ronald Vessey who criticized the use of Thalidomide as being very expensive with no identifiable objective response.  He listed the cost of the drug as over $12,000.00 per month in April 2007, resulting in an annual cost of just under $150,000.00 per year.  Dr. Vessey recommended that the employee be taken off Thalidomide and be treated in an intensive psychiatric program for somatoform conversion disorder.

In August 2010, the parties reached a settlement on the employee’s need for personal care services and her use of Thalidomide.  Under the stipulation, the employer agreed to provide reasonable and necessary home health care “on a disability as warranted basis.”  At the time of the settlement, the employee was receiving 70 hours of personal care per week.  The employer maintained the right to periodically have an independent home assessment conducted to determine the reasonableness and necessity of the services.  The employee was to directly employ the personal care attendants.  The employer would purchase an annuity effective for 15 years which would pay $3,000.00 per month with cost-of-living adjustments to the employee, effective February 11, 2011.  The parties stipulated that the structured settlement was not a replacement benefit for permanent total, temporary total, or any other indemnity benefit.  The employee’s use of Thalidomide was also addressed in this settlement.  The structured settlement terms were contingent on the employee ending all use of Thalidomide and not using its generic equivalents or any other immunomodulator derivatives of Thalidomide.  Other medical expenses remained open.  An award on stipulation was served and filed on September 9, 2010.

The employee’s Thalidomide prescription was last filled on September 3, 2010, and as of October 4, the employee stopped taking it.  On October 11, 2010, the employee reported worsened pain.  There was a discussion of extending the weaning period under the agreement, which allowed a six-month weaning period, but different pain medication was recommended instead.

On February 1, 2011, an award on stipulation was filed as an addendum to the 2010 award on stipulation, which allowed the employer to make voluntary payments until the Medicare set-aside approval was obtained and to purchase the annuity after receiving the approval.

On January 4, 2012, the employee was treated by Dr. David G. Bell, one of the employee’s treating physicians from the Mayo Clinic, who was astonished that the employee was standing independently as he entered the room.  He noted that she had been wheelchair bound since he met her in 2004.  The employee reported that on December 24, 2011, she experienced a spontaneous remission after falling out of her wheelchair and lying on the floor for eight hours.  She described the event as a miracle where her hand, foot, and spine straightened and she was able to walk.  At the clinic, she was able to walk a few steps with standby assistance but fatigued easily.  She reported that she still had significant pain and Dr. Bell continued her medication and recommended physical therapy.

On January 18, 2012, the employee was evaluated by Dr. Kathryn Stolp for a physical rehabilitation consultation.  Dr. Stolp noted that this was an extraordinary case and that the employee was much more mobile than she had been in years, but that she was profoundly deconditioned and had joint contractures.  Dr. Stolp recommended physical therapy, occupational therapy, and possibly pool therapy if her skin condition allowed it.  The employee treated with Dr. Keith Bengtson on January 31, 2012, for follow-up care and medication review.

On January 31, 2013, the employee underwent an independent medical examination with Dr. Teresa L. Gurin.  Dr. Gurin reviewed the employee’s medical history and medical records back to 1970, which included multiple episodes of what was labeled severe hysteria with pseudo-seizures, fainting, and loss of consciousness.  A history taken during an emergency room evaluation on August 20, 1974, included a number of syncopal episodes.  A psychiatric consultant opined that the syncopal episodes resulted from conversion hysteria.  Dr. Gurin also noted that a discharge summary after the 1993 work injury stated that there was “no history of syncope, loss of consciousness, or seizures” and that this statement was inconsistent with the earlier medical records and demonstrated a lack of knowledge regarding the employee’s pre-existing history.  Dr. Gurin opined that the employee’s work injury had completely resolved and that she did not need any prescription medication, home care assistance, or a liquid diet.

On April 11, 2013, the employer filed a medical request seeking to discontinue all further medical expenses, claiming that the employee’s work injury had resolved and no further treatment was needed.  The employee objected, claiming that despite the improvement in her condition she still had symptoms and was need of the disputed treatment.  By example, the employee argued that she had received treatment for skin lesions on her upper trunk and arms which Dr. Bengtson indicated was reasonable to believe was associated with her CRPS.  The employer also requested that payroll service stop paying personal care expenses on grounds that the expenses were fraudulently billed.  On September 11, 2013, the employee filed a medical request for approval of a functional capacities evaluation.  The medical requests were consolidated for hearing at the Office of Administrative Hearings.

A hearing was held on November 19 and December 27, 2013.  The employee testified that she continued to need personal care services for 39 hours instead of 70 hours per week.  In the compensation judge’s findings and order served and filed April 18, 2014, the judge included the following findings: (a) the employee was not credible regarding her complaints, current condition, or disability; (b) that the employee had exaggerated and misrepresented her abilities and disabilities; (c) that the employee’s story about a volunteer assistant no one else had met was not believable; and (d) that the employee was actually doing her own personal care and was not as disabled as she claimed.^[6]  The judge concluded that personal care attendant services were no longer warranted, and denied the employee’s expenses for nutritional supplements after 2012, as well as the disputed prescription medication, dermatology treatment, hearing loss treatment, physical therapy, psychological counseling, personal trainer sessions, and the functional capacities evaluation.  The judge allowed an office visit charge for Dr. Bell on January 4, 2012.

On September 23, 2015, the employer filed a petition to vacate the September 2010 award on stipulation and the February 2011 award on addendum to the stipulation.

The Workers’ Compensation Court of Appeals has the authority to vacate an award on stipulation “for cause.”^[7]  A party must show good cause in order for this court to vacate an award.^[8]  Cause to set aside an award exists if (1) the award was based on a mutual mistake of fact, (2) there is newly discovered evidence, (3) the award was based on fraud, or (4) there is 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.^[9]  When analyzing a petition to vacate, this court compares the employee’s condition at the time of the settlement award to the condition at the time the petition was filed.^[10]

The employer claims the September 9, 2010, award on stipulation as well as the February 1, 2011, award on addendum to stipulation should be vacated based on an unanticipated substantial change in medical condition, mutual mistake of fact, or fraud.  First, the employer claims that the employee deliberately and intentionally deceived the employer regarding the nature and extent of her work injury, symptoms, functional capacities, and restrictions, and her need for medical treatment, home health care, and ongoing workers’ compensation benefits by fraudulently exaggerating and misrepresenting her disabilities.  Next, the employer claims that there was a mutual mistake of fact in that both parties assumed that the employee would not recover to the extent that she could care for herself without personal care assistance, be able to walk, or to not need to use Thalidomide.  Finally, the employer argues that the employee has undergone a substantial change in medical condition since the time of the award.

A substantial changein the employee’s medical condition requires that the change in the condition occurred after the time of the award, was clearly unanticipated at the time of the award, and could not reasonably have been anticipated at the time of the award.^[11]  Substantial change may be demonstrated by a number of factors such as a change in diagnosis, the causal relationship between the work injury and the medical condition, and the contemplation of the parties at the time of the settlement.^[12]

At the time of the settlement, the parties had just completed a long-term settlement of ten years.  In the 2010 settlement, the parties agreed to a 15 year settlement.  The employee argues that under the terms of the settlement, the $3,000.00 monthly annuity was given in exchange for stopping her use of Thalidomide at a cost of $12,000.00 per month, which had saved the employer hundreds of thousands of dollars since 2010.  The employee asserts that the employer should not be able to discontinue paying the annuity after obtaining the benefit of the bargain from the settlement.  We understand the parties entered into extensive negotiations over this complicated claim.  However, the employee’s assertions do not address the part of the settlement regarding payment of personal care attendants with the annuity payments “on a disability as warranted basis.”

The employer claims there was no expectation from either party at the time of the settlement that there would be a recovery from the employee’s injury to a degree which would allow her to care for herself, ambulate, live independently from home health care assistance, and be independent of prescription medications.  The employee asserted at the time of the settlement that she had major limitations in her capacity to function in her activities of daily living without direction or personal assistance from personal care services.  The employee now concedes that her RSD/CPRS condition has gone into remission after the settlement as a result of subsequent events and circumstances, but argues that her diagnosis of RSD/CPRS has not changed since that condition, by definition, waxes and wanes, and therefore that remission was anticipated by the parties.

The employee has experienced a profound change in her ability to function since the time of the settlement.  The employee is no longer bound to a wheelchair.  The employee is capable of taking care of herself including bathing, dressing, cleaning her home, walking from place to place, and using public transportation without the need of supervision, direction, or personal assistance.  The degree of change in the supervision, direction, or personal assistance needed to perform the employee’s activities of daily living are appropriate factors to consider when defining a substantial change in medical condition.  There has been a changein the employee’s medical condition, after the two awards at issue were served and filed, that was clearly unanticipated and could not reasonably have been anticipated at the time of the awards.

Considering the above factors, the employer has met the definition of a substantial change in medical condition since the time of the settlement.  The employer has established good cause to vacate the awards on stipulation.  We, therefore, grant the employer’s petition to vacate the awards on stipulation.  Because we are granting the employer’s petition to vacate the awards on the basis of an unanticipated substantial change in medical condition, we need not address the arguments that the awards on stipulation at issue were based upon mutual mistake of fact or fraud.