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LILLIAN S. JENSEN, Employee/Appellant, v. DONNELLY CUSTOM MANUFACTURING CO. and TRIFAC WORKERS’ COMPENSATION FUND, ADMIN’D BY MEADOWBROOK INS. GROUP, Employer-Insurer/Respondents, DOUGLAS CNTY. HOSP., HEALTHPARTNERS, CENTRACARE ST. CLOUD HOSP., and ANESTHESIA ASSOC. OF ST. CLOUD, Intervenors.

WORKERS’ COMPENSATION COURT OF APPEALS 
SEPTEMBER 10, 2019

No. WC19-6266

EVIDENCE – RES JUDICATA.  Res judicata does not bar an employee from claiming benefits for a time period after a decision on an earlier claim.  Collateral estoppel does not bar a later claim when an employee’s condition has changed.  Because the issue of whether the employee’s condition has changed or whether new material facts have emerged, such that collateral estoppel would not apply, has not been addressed, the matter is remanded for further proceedings.

    Determined by:
  1. Gary M. Hall, Judge
  2. Deborah K. Sundquist, Judge
  3. Sean M. Quinn, Judge

Compensation Judge:  William J. Marshall

Attorneys:  Steven J. Drummond, Drummond Law Office, Alexandria, Minnesota, for the Appellant.  Autumn Capelle Hoag, Brown & Carlson, P.A., Minneapolis, Minnesota, for the Respondents.

Vacated in part and remanded.

OPINION

GARY M. HALL, Judge

The employee appeals the compensation judge’s denial of a claimed consequential complex regional pain syndrome (CRPS) condition and the denial of her claim for permanent total disability benefits.  We vacate in part and remand.

BACKGROUND

On February 9, 2014, Lillian Jensen, the employee, was injured as a result of a trip and fall while working as a laborer for Donnelly Custom Manufacturing Company, the employer, which was insured for workers’ compensation liability by TRIFAC Workers’ Compensation Fund.  The employer and insurer initially admitted primary liability for a right hand sprain and a forehead contusion, and paid various workers’ compensation benefits.  The employee worked in a light duty capacity until she was taken off work on October 8, 2014.

The employee treated with Dr. Thomas Dudley at Heartland Orthopedics for persistent right hand pain.  Dr. Dudley found no objective findings of CRPS but referred her to Dr. Andrew Staiger, a hand specialist at St. Cloud Orthopedics, for further evaluation.  On examination, Dr. Staiger noted no swelling, instability, or temperature changes.  He observed slight discoloration, suspected CRPS, and referred the employee to the Center for Pain Management. Dr. Staiger did not treat the employee again and did not provide a narrative report.  A nurse practitioner at the Center for Pain Management wrote a letter stating that the employee was diagnosed with CRPS related to the 2014 work injury.

On November 14, 2014, the employee filed a claim petition seeking benefits related to injuries to her head, both hands, wrists, and arms, as well as a consequential CRPS condition.  On December 4, 2014, the employee underwent an independent medical examination with Dr. Joel Gedan, who opined that the employee had no objective findings consistent with CRPS.  A hearing was held before Compensation Judge Bradley J. Behr on July 16, 2015.  One of the issues at the hearing was whether the employee developed CRPS of her right upper extremity as a substantial result of her February 9, 2014, injury.  In a Findings and Order dated October 6, 2015, Judge Behr found that the employee had sustained a minor forehead contusion and a right hand sprain/strain as a result of the work injury, and that she was subject to work restrictions related to her right hand injury.  The judge found she had not proven that she had sustained a left upper extremity injury or that she was had sustained CRPS as a substantial result of her work injury.  Neither party appealed this decision.

In December 2015, the employee sought treatment for her symptoms with Dr. Sena Kihtir at United Pain Center.  Dr. Kihtir treated the employee with stellate ganglion blocks, a spinal cord stimulator trial, and medications for chronic right arm pain from CRPS and right leg pain from failed surgical back syndrome.  She diagnosed the employee with CRPS and opined that this condition was directly related to the employee’s 2014 work injury.  Dr. Todd Hess from the same clinic rated the employee as having 44.25 percent permanent partial disability.

In 2016, the employee filed a claim petition for permanent total disability benefits, asserting that she had also sustained a low back injury at the time of the 2014 injury.  Medical expenses for intervenors were also at issue.  On January 25, 2017, Dr. Kihtir opined that the employee was permanently and totally disabled.  Dr. Gedan evaluated the employee again on April 6, 2017, and again concluded that the employee did not have CRPS.  A hearing was held on November 27, 2018.

At the hearing, the employee testified that her right hand sprain had resolved and that she had not treated for the sprain since 2015.  She also testified that she has had CRPS symptoms since 2014.  The employer and insurer argued that the employee’s claim for CRPS was barred by the principles of res judicata and collateral estoppel.  In Findings and Order dated February 1, 2019, Compensation Judge William J. Marshall denied the employee’s claims, finding that her right hand injury had resolved, that she had not sustained a low back injury, and that the issue of CRPS had been decided in the previous decision by Judge Behr.  The judge also found that the employee’s doctors had not indicated that the employee’s CRPS condition had developed after the earlier hearing and that the employee had testified that she had CRPS before the 2015 hearing.  Based on these findings and the principles of res judicata, the judge denied the employee’s CRPS claim.  The judge did not make any other findings related to the employee’s permanent total disability claim.  The employee appeals the compensation judge’s finding that her CRPS claim is barred and the denial of her claim for permanent total disability benefits.  The employee did not appeal the finding that the evidence fails to show that she suffered a low back injury as a result of her 2014 work injury.

STANDARD OF REVIEW

On appeal, the Workers’ Compensation Court of Appeals must determine whether “the findings of fact and order [are] clearly erroneous and unsupported by substantial evidence in view of the entire record as submitted.”  Minn. Stat. § 176.421, subd. 1(3).  Substantial evidence supports the findings if, in the context of the entire record, “they are supported by evidence that a reasonable mind might accept as adequate.”  Hengemuhle v. Long Prairie Jaycees, 358 N.W.2d 54, 59, 37 W.C.D. 235, 239 (Minn. 1984).  Where evidence conflicts or more than one inference may reasonably be drawn from the evidence, the findings are to be affirmed.  Id. at 60, 37 W.C.D. at 240.  Similarly, findings of fact should not be disturbed, even though the reviewing court might disagree with them, “unless they are clearly erroneous in the sense that they are manifestly contrary to the weight of evidence or not reasonably supported by the evidence as a whole.”  Northern States Power Co. v. Lyon Food Prods., Inc., 304 Minn. 196, 201, 229 N.W.2d 521, 524 (1975).

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), summarily aff’d (Minn. June 3, 1993).

DECISION

The employee claims that the compensation judge erred by finding res judicata barred her current CRPS claim based on Judge Behr’s 2015 finding that she “failed to prove by a preponderance of the evidence that she has developed CRPS or RSD as a substantial result of her 2/9/14 right hand injury.”

Res judicata applies in workers’ compensation cases only with respect to issues specifically litigated and decided in prior proceedings.  See Fischer v. Saga Corp., 498 N.W.2d 449, 450, 48 W.C.D. 368, 369 (Minn. 1993); Alexander v. Kenneth R. LaLonde Enters., 288 N.W.2d 18, 20, 31 W.C.D. 407, 410 (Minn. 1980).  The application of the principles of res judicata is reviewed de novo.  Care Inst., Inc.-Roseville v. Cty. of Ramsey, 612 N.W.2d 443, 446 (Minn. 2000).  The res judicata effect of a prior workers' compensation determination is limited to issues and facts determinative of benefit eligibility and events at issue and in existence as of the date of the prior hearing.  See Mach v. Wells Concrete Prods. Co., 866 N.W.2d 921, 75 W.C.D. 279 (Minn. 2015).

Whether the employee had sustained CRPS as a result of the 2014 work injury was litigated by the parties at the 2015 hearing and decided by Judge Behr in his Findings and Order.  Judge Behr considered the medical evidence presented at that hearing and found that the employee had not proven she had sustained CRPS as a substantial result of her 2014 right hand injury.  He also found that the employee continued to have restrictions related to her right hand sprain.  After that hearing, the employee continued to treat for CRPS and for her right hand.  At the 2018 hearing, the employee again asserted that she had developed CRPS as result of the 2014 injury and submitted new evidence regarding the causation of her CRPS condition and medical treatment.  The employer and insurer argued that the employee’s claim for CRPS was barred by the principles of res judicata and collateral estoppel.  The judge found there is no medical evidence that the employee developed CRPS after the 2015 hearing, which was not appealed, and that the employee’s claim related to her CRPS condition was barred.

The circumstances of this case are similar to those presented in Mach.  In that case, the employee had claimed a CRPS condition and related treatment.  A compensation judge found the employee had not proven that he suffered from CRPS and that the treatment was not reasonable and necessary.  A few years later, the employee again claimed he had CRPS and requested treatment related to that condition, which a compensation judge denied by application of res judicata and collateral estoppel.  The Minnesota Supreme Court agreed with this court that res judicata did not apply to bar the employee’s claim, but held that collateral estoppel could apply to bar the employee’s claim.  The supreme court vacated the decision and remanded to the compensation judge for determination of whether the employee’s condition had changed or new material facts had emerged in order to resolve whether collateral estoppel precluded the employee’s claim.  Id. at 928, 75 W.C.D. at 288-89.

Under Mach, res judicata does not bar the employee from claiming benefits for a time period after the 2015 decision by Judge Behr.  As the supreme court quoted in Mach, “[i]t is almost too obvious for comment that res judicata does not apply if the issue is the claimant’s physical condition or degree of disability at two entirely different times.”  Id. at 926, 75 W.C.D. at 285 (quoting 12 Arthur Larson et al., Larson’s Workers’ Compensation Law § 127.07[7] (Matthew Bender rev. ed. 2015)).  Moreover, in 2015, Judge Behr found that the employee had “failed to prove by a preponderance of the evidence” that she had developed CRPS as a substantial result of her work injury.  “A finding that the employee’s claims were denied for lack of proof does not equate to a finding that his work injuries were temporary or that he is foreclosed from claiming benefits thereafter.”  Vick v. N. Engraving Corp., 70 W.C.D. 348, 357 (W.C.C.A. 2010).

In his 2019 Findings and Order, the judge considered only the application of res judicata, and did not address whether collateral estoppel would bar the employee’s claim as was argued by the employer and insurer.  Collateral estoppel, or issue preclusion, may preclude relitigation of an identical issue necessarily determined in a previous judgement on a different cause of action.  Id. at 927, 75 W.C.D. at 286.  Collateral estoppel applies when: “(1) the issue was identical to one in a prior adjudication; (2) there was a final judgment on the merits; (3) the estopped party was a party or in privity with a party to the prior adjudication; and (4) the estopped party was given a full and fair opportunity to be heard on the adjudicated issue.”  Willems v. Comm’r of Pub. Safety, 333 N.W.2d 619, 621 (Minn. 1983).  As the party asserting collateral estoppel, the employer and insurer have the burden of proving the defense of collateral estoppel.  Lange v. City of Byron, 255 N.W.2d 226, 228 (Minn. 1977). Collateral estoppel, like res judicata, is not applied rigidly and should not work as an injustice against a party.  Id.  The application of collateral estoppel is reviewed de novo.  Care Inst., Inc.-Roseville, 612 N.W.2d at 446.

In Mach, the supreme court held that collateral estoppel does not bar a claim for medical expenses when an employee’s condition has changed.  The supreme court also noted that the compensation judge in that case had not determined whether the employee’s condition had changed, or whether new material facts had emerged, and therefore remanded the matter to the compensation judge for further proceedings.  Mach, 866 N.W.2d at 928, 79 W.C.D. at 288-89.  In this case, Judge Marshall considered only whether the employee had developed CRPS after the 2015 hearing.  He did not consider whether the employee’s condition had changed or worsened, or whether new material facts have emerged, since the 2015 hearing.  Under these circumstances, we cannot determine whether collateral estoppel would bar the employee’s CRPS claim.  We vacate the compensation judge’s denial of the employee’s claim for CRPS and remand the matter to the compensation judge for determination of whether the employee’s condition has changed or worsened, or whether new material facts have emerged.

To the extent that the remainder of the compensation judge’s findings are based on his denial of the employee’s CRPS claim, those appealed findings related to the employee’s CRPS condition, including findings that the employee has no restrictions related to the February 9, 2014, injury and that the employee is not permanently and totally disabled as a result of her 2014 work injury, are also vacated.