JAMES W. STEVENS, Employee/Respondent, v. S.T. SERVS. and CNA INS. COS., Employer-Insurer/Petitioners.

WORKERS’ COMPENSATION COURT OF APPEALS
MARCH 8, 2016

No. WC15-5839

VACATION OF AWARD - MUTUAL MISTAKE.  Where the employer and insurer failed to present evidence of a mutual mistake of fact at the time of settlement, the petition to vacate must be denied.

VACATION OF AWARD - SUBSTANTIAL CHANGE IN CONDITION.  Where the employer and insurer failed to present evidence of a substantial change in medical condition as of the time of the petition to vacate, the petition must be denied.

Determined by:
            David A. Stofferahn, Judge
            Gary M Hall, Judge
            Deborah K. Sundquist, Judge

Attorneys:  Gerald S. Weinrich, Weinrich Law Office, Rochester, Minnesota, for the Respondent.  James R. Waldhauser, Thomas F. Coleman, and Michael R. Johnson, Cousineau McGuire Chartered, Minneapolis, Minnesota, for the Petitioners.

Petition to vacate award on stipulation denied.

OPINION

DAVID A. STOFFERAHN, Judge

The employer and insurer petition to vacate an Award on Stipulation served and filed on November 23, 1994, on the grounds of mutual mistake of fact and a substantial change in medical condition.  We find the employer and insurer have not established cause under the statute and deny the employer and insurer’s petition.

BACKGROUND

James W. Stevens, the employee, who is presently 75 years old, sustained work related injuries to his shoulders in 1984 and 1985 while employed by S.T. Services.  In 1994, the parties entered into a stipulation for settlement in which the employer and insurer agreed to pay the employee ongoing permanent total disability benefits.  An Award on Stipulation was filed on November 23, 1994.

In 2006 or 2007, the employee moved to Alaska and got an Alaska plumber’s license.  Although he did not look for work, he gave his friends plumbing advice and regularly accompanied them to Home Depot.  A Home Depot employee approached Stevens about working there, and although Stevens said he could not use his arms or do any lifting, Home Depot hired him as a plumbing specialist in February 2008.  Steven’s main job was advising customers, and apart from cleaning and organizing his work areas, Stevens did no manual labor.  The employee had substantial earnings at Home Depot and continued to work there on a nearly full-time basis between 2008 and 2010.  During this period, the employee met annually with a representative of the insurer and disclosed his employment.  Mr. Stevens discontinued his employment with Home Depot in December 2010 due to a personal health condition and returned to Minnesota.

In June 2011, 17 years after Mr. Stevens was adjudicated permanently and totally disabled, the employer and insurer filed a petition with this court to discontinue benefits, alleging that the employee had returned to employment with substantial income and as a result was no longer permanently and totally disabled.  The employer and insurer’s petition was held in abeyance for some time due to settlement negotiations between the parties.  In October 2012, this court issued its decision on the employer and insurer’s petition, referring the matter to the Office of Administrative Hearings to determine if the employee was permanently and totally disabled and to determine if the employer and insurer were entitled to a credit for permanent total disability benefits.[1]  The compensation judge found that the employee was no longer permanently and totally disabled.  The employee appealed to this court and we affirmed.[2]

The employee appealed the decision to the Minnesota Supreme Court, arguing that the employer and insurer were precluded by statute from discontinuing permanent total disability benefits by a petition to discontinue benefits.  The Minnesota Supreme Court agreed, reversed the decision of this court, and remanded the case to this court with instructions to dismiss the petition to discontinue.  In its decision, the supreme court stated that the employer and insurer would need to seek vacation of the award pursuant to Minn. Stat. § 176.461.[3]

On July 20, 2015, the employer and insurer petitioned this court to vacate the November 23, 1994, award on stipulation.  The employee objected.

DECISION

This court may set aside an award for cause.  Minn. Stat. § 176.461.  The statute further provides that:

As used in this section, the phrase “for cause” is limited to the following:

  1.   a mutual mistake of fact;
  2.   newly discovered evidence;
  3.   fraud; or
  4.   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. 

Minn. Stat. § 176.461.

The employer and insurer have argued here that there was a mutual mistake of fact and that there has also been a substantial change in the employee’s medical condition that justifies vacation of the award on settlement.

In considering whether there has been a mutual mistake by the parties “the inquiry focuses on what the situation was and what was known about it at the time of the settlement.”  Franke v. Fabcon, Inc., 509 N.W.2d 373, 377, 49 W.C.D. 520, 525 (Minn. 1993).  This court has held previously that a mutual mistake occurs when the opposing parties both misapprehend some material fact at the time of settlement.  Shelton v. Schwan’s Sales Enters., 53 W.C.D. 110, 113 (W.C.C.A. 1995), summarily aff’d (Minn. Sept. 5, 1995).

The employer and insurer claim that the parties understood the employee was unable to work at the time of the settlement when in fact he was employable.  However, there is no evidence presented by the employer and insurer that the employee was in fact employable in Minnesota in 1994 when this settlement was completed.  The fact that the employee found employment in a different labor market more than one thousand miles away and 14 years after the settlement does not relate back to the circumstances at the time of the 1994 settlement.  We conclude the employer has not established cause on the basis of a mutual mistake.

The employer and insurer then claim that there has been a substantial change in the employee’s medical condition which supports vacation of the award.  The employer has presented no evidence to support this assertion.  The most recent medical information presented to this court is from 1990, 4 years before the settlement and 26 years before this present decision.  We find no way in which the information presented by the employer and insurer can be determined to meet the requirement of showing that at the time of the petition to vacate there has been a substantial change in medical condition.

The employer and insurer argue, however, that a change in medical condition is evidenced by the employee’s return to work.  It is true that we have identified a change in ability to work as one of the factors to be considered in determining whether there has been a change in medical condition.  Fodness v. Standard Café, 41 W.C.D. 1054, 1060 (W.C.C.A. 1989).  A change in employability alone does not necessarily reflect a substantial change in medical condition (here the limited nature of his work duties weighs against such an inference) and, in the absence of any medical records, this claim must be denied as well.

It may seem incongruous that an employee may continue to receive permanent total disability benefits despite having returned to work, but a return to employment is not one of the definitions of cause set forth in the statute.  Before the 1992 amendments to the statute, cause was determined by the application of case law.  Krebsbach v. Lake Lillian Coop. Creamery Ass’n, 350 N.W.2d 349, 36 W.C.D. 796 (Minn. 1984).  In the amendment to Minn. Stat. § 176.461, the legislature provided that cause is limited to the statutory definitions. “[W]orkers’ compensation is solely a creature of statute.” Miels v. Northwestern Bell Tel. Co., 355 N.W.2d 710, 713, 37 W.C.D. 164, 167 (Minn. 1984).  This court is limited to the definitions of cause in the statute and the petition of the employer and insurer simply does not meet any of the statutory definitions of cause.  Based upon the information presented to this court, the petition to vacate must be denied.



[1] Stevens v. S.T. Servs., 72 W.C.D. 569 (W.C.C.A. 2012).

[2] Stevens v. S.T. Servs., 74 W.C.D. 419 (W.C.C.A. 2013), rev’d 851 N.W.2d 52, 74 W.C.D. 433 (Minn. 2014).

[3] Stevens at 60, 74 W.C.D. at 446 (Minn. 2014).