DAVID HOLTSLANDER, Employee/Petitioner, v. GRANITE CITY ROOFING, INC. and SFM MUT. INS. CO. and CNA INS. CO., Employer-Insurers/Respondents, and ST. CLOUD HOSP., CONSULTING RADIOLOGISTS, LTD., CENTRACARE CLINIC, and CTR. FOR DIAGNOSTIC IMAGING, Intervenors.

The employee petitions this court to vacate an Award on Stipulation, served and filed on December 23, 2002, asserting that cause exists pursuant to Minn. Stat. § 176.461 on the basis of mutual mistake of fact and a substantial change in medical condition. Because good cause has been established to vacate the award, we grant the petition.

The employee, David Holtslander, was employed as a roofer for the employer, Granite City Roofing, when he suffered a number of work-related injuries. On August 11, 1997, while the employer was insured by National Fire Ins. Co. of Hartford (“National Fire”), the employee suffered an admitted injury primarily to his right shoulder and right knee as a result of a fall. On January 7, 1998, while the employer was still insured by National Fire, the employee suffered an admitted injury to his cervical spine, lumbar spine, and left shoulder, as well as burn injuries. The employee underwent surgery to his right shoulder in February of 1998. In May of 1998, he underwent a cervical fusion at C5-6. On October 9, October 12, and November 17 of 2000, the employee suffered admitted injuries to his right shoulder and low back. At that time, the employer was insured by SFM Mutual Ins. Co. (“SFM”). In March 2001, the employee underwent a two-level fusion at L4-S1.

Settlement was reached between the employee and the two insurers in 2002. Prior to settlement, the employee had been paid a variety of benefits by both insurers, including wage loss, medical, and rehabilitation benefits, as well as permanent partial disability benefits for the cervical and lumbar spine and for the right shoulder. Immediately prior to settlement, the employee had filed a claim petition seeking additional medical benefits and attorney fees. A petition for contribution had also been filed by the employer and insurer SFM.

By agreement between all of the parties, the employee’s claims were resolved on a full, final, and complete basis with the exception of medical expenses related to the cervical spine, lumbar spine, right elbow, right shoulder, and in exchange for payment of $135,000.00, less attorney fees. According to the terms of the agreement, $10,000.00 of that sum was intended to close out future rehabilitation and chiropractic care and treatment. It was also agreed that with respect to exposure for future medical treatment to the lumbar spine and right shoulder, the insurer SFM was liable for 60% and the insurer National Fire was liable for 40%.^[1] An Award on Stipulation was issued on December 23, 2002, by Compensation Judge James Cannon.

At the time of settlement, the employee was not working, but had been released to light duty work.^[2] The parties had agreed that the employee was not capable of returning to his pre-injury roofer position. The employee alleges in his petition that at the time of the 2002 settlement, he considered his medical condition to be stable and that he did not anticipate requiring any further medical treatment. He also alleges that he expected to require fewer work restrictions and that he would be able to obtain other employment.

Months following the settlement, on August 21, 2003, the employee underwent a lumbar fusion at L3-4, adjacent to the L4-S1 fusion that was performed in 2001. He then had hardware removed in 2004, and proceeded to have a fourth level fused at L2-3 on June 25, 2007. In 2012, a spinal cord stimulator was implanted, and replacement has since been recommended. On March 8, 2016, the employee underwent surgery to remove a bone spur from his cervical spine. In addition, the employee claims that, since the settlement, he has suffered from headaches related to his neck condition which have interfered with his ability to work. He further claims that the pain from his cervical and lumbar spine is so significant that he requires pain medication which also interferes with his ability to work.

The employee has not worked since the 2002 settlement and he began receiving social security disability benefits in 2006.

In 2011, the employee suffered a number of falls as a result of his right knee giving out, which his doctors attributed to his low back condition. The employee filed a claim petition, which was amended in 2014, seeking, among other things, payment of treatment rendered to his right knee. His claims were heard by a compensation judge in January of 2015. By Findings and Order dated March 19, 2015, the judge awarded the right knee treatment, concluding that the right knee condition was causally related to the January 7, 1998, and November 17, 2000, work injuries. The employer and two insurers appealed and this court affirmed.^[3]

On October 31, 2016, the employee filed with this court a Petition to Vacate the December 23, 2002, Award on Stipulation, citing mutual mistake of fact and a substantial change in medical condition.

The employee asserts the December 23, 2002, Award on Stipulation should be vacated on the basis of mutual mistake of fact and a substantial change in medical condition pursuant to Minn. Stat. § 176.461. Minn. Stat. § 176.461(b) permits this court to vacate an award “for cause,” which is limited to the following:

To serve as a basis to vacate an award on stipulation, a mutual mistake of fact must involve a shared mistaken belief as to a fact material to the settlement.^[5] A mistake of only one party is not sufficient.^[6] When analyzing whether a mutual mistake has occurred, “the inquiry focuses on what the situation was and what was known about it at the time of settlement.”^[7]

In his petition, the employee asserts that mutual mistakes of fact exist with respect to the parties’ understanding of the nature and severity of his injuries, and the impact those injuries would have on his vocational prospects. He argues that the settlement agreement does not contemplate a claim for permanent total disability, rather, the parties expected that the employee would return to work in a less demanding position than his date of injury employment, and that any period of disability would be temporary. Both insurers deny the existence of a mutual mistake of fact. They assert that at the time of settlement, they were aware of the employee’s unsuccessful attempts to obtain employment and the extent of his work restrictions, and that settlement of the employee’s claims was evaluated with consideration of the possibility that he would become permanently and totally disabled. On the evidence presented, it cannot be said that any mistake as to the severity of the employee’s injuries, or the extent to which he would vocationally limited, was mutual between the parties. Because a unilateral mistake is not sufficient under the statute, we decline to vacate the award on this basis.

The employee asserts a substantial change in his low back condition since the time of the award. Claims of substantial change in medical condition are generally analyzed according to the factors set forth in Fodness v. Standard Café.^[8] The Fodness factors are:

These factors are to be applied in a manner consistent with the requirements that the change was clearly not anticipated, and the change could not reasonably have been anticipated at the time of the award.^[10]

As a preliminary matter, we limit our consideration of a substantial change in medical condition to the employee’s low back condition. The employee’s petition argues a substantial change in medical condition based upon a number of medical conditions, including his low back, neck, right knee, and headaches. Because we conclude the evidence submitted is sufficient to establish a substantial change in medical condition for the low back alone, we decline to address the other conditions referenced in the petition, or arguments advanced by the employer and insurers regarding Ryan v. Potlatch Corp.^[11]

The employee argues that this factor weighs in favor of vacating the settlement because his low back condition has deteriorated since the time of settlement such that his diagnosis has changed. The employee has undergone four surgeries related to his low back subsequent to the settlement, including two fusion surgeries of expanded levels. The employer and insurers argue that, with regard to the employee’s lumbar spine, because his underlying diagnosis of transitional syndrome has not changed, he failed to satisfy this factor. We disagree.

Since the time of the award, the employee has undergone surgery at expanded levels of his lumbar spine, which this court has repeatedly held constitutes a change in diagnosis.^[12] While the employee’s underlying diagnosis may not have changed, as is argued by the employer and insurers, the medical evidence clearly demonstrates that the employee’s low back condition has deteriorated significantly since the time of settlement.^[13] The employee has met this factor for vacating the settlement.

The employee argues that at the time of settlement, it was expected that he would return to work subject to his restrictions. Since the time of settlement, he has undergone multiple surgeries and his condition has deteriorated such that he is no longer able to work and now receives social security disability benefits. The employer and insurers argue that there has been no change in the employee’s ability to work because he was not working and had been struggling to obtain employment at the time of settlement. The evidence submitted shows the employee was under rather significant physical restrictions at the time of settlement, though the exact restrictions are not clear. He had been receiving vocational rehabilitation and job placement assistance, which were suspended upon finalization of the settlement. The employee applied for and began receiving social security disability benefits in 2006, approximately four years after the settlement.

The stipulation reflects an understanding between the parties that the employee was not capable of returning to his pre-injury roofing position, though he may start a roofing business. The agreement also specifies that the employee was to be paid for two weeks of temporary total disability benefits following the settlement, and that $10,000.00 of his lump sum was intended to close out future vocational rehabilitation and chiropractic care. Nowhere in the agreement is there a mention of potential permanent total disability. The language in the agreement seems to contemplate some sort of return to work and an intended effort by the employee to do so in the future.^[14] Further, we note that the focus of this factor is a change in the employee’s ability to work, and not a change in whether the employee was or is currently working.^[15] We acknowledge that the evidence on this factor is limited, but sufficient to meet the employee’s burden.

The employee argues that he would likely be entitled to additional permanent partial disability benefits as a result of his additional fusion surgeries. The employer and insurers assert that without a medical opinion with respect to specific ratings, this factor does not weigh in favor of vacating the settlement. We disagree. Lack of direct evidence of additional permanent partial disability is not necessarily fatal to a petition to vacate.^[16] While it is not our role to determine the extent of the increase in the employee’s permanent partial disability, it is reasonable upon reviewing the medical evidence available to conclude that an increase in permanency is likely appropriate, given the deterioration of the employee’s low back condition and additional surgeries since the time of settlement.

The employee has undergone more costly and extensive medical care since the time of settlement and there is little dispute from the employer and insurers. The employer and insurers do argue that because medical expenses were left open under the 2002 settlement agreement, this factor should carry less weight than other factors.^[17] However, this court has continued to consider changes in the extent of treatment to be “useful evidence bearing on whether there has been a substantial change in the employee’s medical condition.”^[18] The treatment undergone by the employee since the time of settlement has been significant and this factor supports vacating the award.

The employer and insurers do not dispute whether the employee’s low back condition and its deterioration is causally related to the employee’s numerous work injuries. As such, the employee has met this factor.

The employee asserts that, at the time of settlement, the parties did not consider the possibility that he would become permanently and totally disabled as a result of his work injuries. He argues that it was his understanding at the time of settlement that while he would not return to work as a roofer, he would eventually go back to work subject to restrictions and that he would not require significant medical care beyond what he had received. The employer and insurer SFM argue that the possibility that the employee would not return to work given his limited restrictions, unsuccessful attempts to find employment, and his limited transferable skills, was known to the parties at the time and considered as part of the settlement. They point to a demand letter from the employee’s former counsel, in which she addresses exposure for a potential permanent total disability claim. The terms of the agreement between the parties ultimately closes out benefits for permanent total disability, among other benefits, and does not otherwise address the issue. Regardless of the demand letter, the fact remains that permanent total disability benefits were not being claimed by the employee, nor does the issue of a potential permanent total status appear in the parties’ claims and contentions. Even if the employer and insurers contemplated the employee’s permanent total status at the time of settlement, as they assert, there is no evidence that a deterioration of the employee’s low back condition, need for four additional surgeries to the low back, or designation as disabled for purposes of social security, was anticipated or reasonably should have been anticipated.

The employer and insurer SFM also argue that the settlement amount of $135,000.00 was significant and indicates that permanent total disability benefits were considered. While the lump sum paid to the employee under the agreement is not insignificant, it cannot be said that the amount necessarily accounts for the value of permanent total disability benefits for an employee who was 42-years-old at the time of settlement.^[19]

We conclude that while the employee has not demonstrated mutual mistake of fact upon which to vacate the 2002 Award on Stipulation, he has presented sufficient evidence of a substantial change in medical condition that was not anticipated, and could not reasonably have been anticipated, at the time of the award.