VACATION OF AWARD – SUBSTANTIAL CHANGE IN CONDITION. Where the medical evidence submitted does not establish that the employee’s admitted low back and left knee injuries underwent a substantial worsening that were or could reasonably have been anticipated, and where the medical evidence submitted does not support a consequential injury, the employee has not established good cause under Minn. Stat. § 176.461 to vacate the award on stipulation.
Attorneys: Joshua E. Borken, St. Paul, Minnesota, for the Petitioner. Mark A. Kleinschmidt, Cousineau, Waldhauser & Kieselbach, P.A., Mendota Heights, Minnesota, for the Respondent.
Denied.
DAVID A. STOFFERAHN, Judge
The employee petitions this court to vacate a September 21, 1998, Award on Stipulation pursuant to Minn. Stat. § 176.461. The employee has not established good cause to vacate the award and we deny the petition.
The employee, Deborah Leadens, sustained an admitted injury to her left knee as a result of a slip and fall while working for the employer, Diversified Distributors, on October 1, 1979. [1] The employer and insurer paid various benefits, including wage loss benefits, supplemental benefits, medical benefits, rehabilitation benefits, and permanent partial disability benefits.
Contemporaneous medical records were not made available for this court’s review, however, according to the history and medical record review completed by Dr. Paul Wicklund in 2019, the employee underwent arthroscopic surgery shortly after the date of injury and was, thereafter, back to full activity without pain. According to Dr. Wicklund’s report, the employee underwent a second arthroscopic procedure in 1982 to repair her meniscus following a fall on stairs. A third arthroscopic procedure to the left knee was performed in 1984 after ongoing complaints of a twisting incident in 1983, and she underwent a fourth procedure in 1987. In 1988, the employee underwent a fifth surgery, and a 1989 MRI showed evidence of an anterior cruciate ligament (ACL) injury and meniscal degeneration. In 1992, a meniscectomy and an ACL reconstruction were performed.
The employee developed pain in her low back, which her treating chiropractor related to the issues the employee was experiencing with her left knee. A 1990 CT scan showed mild disc herniations at L3-4, L4-5 and L5-S1 with some mild impingement of the nerve root. In 1993, the employee underwent an MRI of the lumbar spine which showed disc dehydration from L2-3 through L5-S1, and a lateral disc herniation at L2-3 with impingement. Following facet joint injections and diagnostic discograms, the employee ultimately underwent a fusion from the L3 level to the sacrum in 1995. She continued to have SI joint pain and underwent hardware removal surgery in 1996.
In January 1998, a lumbar spine MRI showed further degeneration at the L2-3 level. Her pain persisted as she continued to work as a paraprofessional for a school district. She would undergo SI joint injections in late 1998.
In September 1998, the employee executed a Stipulation for Settlement, settling her claims against her employer on a full, final, and complete basis with the exception of future medical expenses, in exchange for a sum of $105,000.00. The Stipulation for Settlement was reviewed and approved by a compensation judge, who issued an Award on Stipulation on September 21, 1998. The employee was not represented by counsel at the time she entered into the settlement agreement. In her affidavit submitted in support of her petition to this court, the employee testified that she did not discuss the terms of the settlement with the compensation judge.
Following the 1998 settlement, the employee continued to treat for both low back and left knee pain. The employee was seen for left knee pain in 2000 and later had the hardware from her 1992 ACL reconstruction surgery removed. She regularly presented with left knee pain complaints in 2002, 2003, and 2004. An October 2004 MRI revealed a degenerative meniscus tear, which was repaired the following month. Her complaints of pain and discomfort continued into 2005 and 2006, and she was advised that because her condition was degenerative, it was likely to continue to worsen over time. In March 2007, the employee underwent an MRI of the left knee, which showed degenerative changes and an ACL tear. Injections and conservative treatment were provided. The employee was seen again in 2009 with similar complaints and her treating physician, Dr. Patrick Kraft, noted that the left knee was well on its way to needing replacement. She received injections again in 2011, and ultimately underwent total replacement of the left knee in July 2013 under the care of Dr. Kraft.
In July 2003, five years following the settlement agreement, the employee presented with complaints of chronic low back pain. A September 2003 MRI of the lumbar spine was ordered, which showed mild to moderate central stenosis at L2-3. Her treating physician, Dr. David Kraker, opined that the employee did not require further treatment or a change in work restrictions. The following spring, upon continued complaints of pain and spasms, Dr. Kraker issued an opinion that the employee was permanently disabled due to her low back condition and noted that she may need an extension of her fusion to include the L2-3 level. Thereafter, the employee began receiving social security disability benefits.
The employee underwent an MRI in October 2007, which showed foraminal narrowing on the left at L2-3. A CT scan then showed bilateral foraminal stenosis at L2-3. Under the care of Dr. Kraker, the employee underwent a bilateral laminectomy and fusion at the L2-3 level in February 2008, adjacent to her L3-S1 fusion performed in 1995.
In addition to ongoing care for her low back and left knee, the employee frequently treated for complaints of right knee pain. In April 2004, the employee was seen by Dr. Kraft with complaints of bilateral knee pain. In May 2007, Dr. Kraft drafted a letter to the employee in follow up to a right knee injection appointment. Therein, he stated that the employee had patellofemoral disease of the right knee, which he believed was, to some degree, from favoring the right knee because of the problems she had had with her left knee. (Ex. I.) The employee treated for right knee pain in 2009 and again in 2011. An MRI of the right knee revealed a meniscus tear for which the employee underwent surgery in April 2011. Her pain continued and she received more injections into 2016. She began treating with Dr. Brian O’Neill following the retirement of Dr. Kraft. Under the care of Dr. O’Neill, the employee underwent total right knee replacement in August 2017.
In 2019, Dr. O’Neill provided a permanency rating of an additional 20% for each knee. In his letter report, Dr. O’Neill stated, “My understanding is that these [knee conditions] are both related to her injury of 10/1/1979.” (Ex. F.)
The employee was examined at her counsel’s request by Dr. Paul Wicklund, who issued a report dated October 6, 2019. After reviewing medical records and performing an examination of the employee, Dr. Wicklund opined that her low back condition had changed since the 1998 settlement with the 2008 fusion of the additional level at L2-3. Dr. Wicklund stated that the employee’s low back condition was related to her 1979 work injury and left knee issues. It was his opinion, however, that the employee’s right knee condition was not causally related to the work injury. Dr. Wicklund believed that the employee has been permanently disabled for “some time” and that she would require activity restrictions should she seek employment. (Ex. E.)
By petition dated October 30, 2020, the employee seeks to have the September 21, 1998, Award on Stipulation vacated.[2] The employer objects.
This court may set aside an award on stipulation “for cause” pursuant to Minn. Stat. § 176.461. “For cause” under the statute is limited to:
Minn. Stat. § 176.461(b).
The employee petitions this court to vacate the September 21, 1998, Award on Stipulation, alleging both a mutual mistake of fact and a substantial change in medical condition since the time of the award. She asserts that cause is established for both bases because she could not have anticipated at the time of settlement that she would need two knee replacements and another back surgery.[3]
The employee argues that because of her worsened left knee condition and 2013 total replacement, the 2008 fusion of an additional level in her low back, and the development of a right knee condition and need for total replacement in 2017, she meets all factors set forth in Fodness v. Standard Café.[4] She maintains that she is no longer able to work, and since the time of the settlement, she has been awarded social security disability benefits relative to her low back condition. Because she has undergone treatment and surgeries subsequent to the 1998 settlement, she claims higher permanency ratings for her low back and bilateral knee conditions and establishes having needed more costly medical care. The employer, meanwhile, argues that none of the Fodness factors support the employee’s petition to vacate the settlement. They assert that the treatment and surgeries for the employee’s left knee and low back constitute a progression of known conditions that were already increasing in severity at the time of settlement, and in particular, that the L2-3 level that was fused in 2008 was symptomatic prior to the settlement. They argue that the employee had not been working in the months leading up to the settlement, and while she did work part time for a number of years following the settlement, the 2019 opinion of Dr. Wicklund provides that she could work within restrictions. The employer argues that the employee’s permanency ratings have not increased when the current ratings are converted and compared to the benefits already paid.
The Minnesota Supreme Court has stated that in order to set aside an award based upon a substantially changed medical condition, the following must be proven: (1) a substantial change in medical condition; (2) the change was clearly not anticipated; and (3) the change could not reasonably have been anticipated. Hudson v. Trilliam Staffing, 896 N.W.2d 536, 540 (Minn. 2017) (citing Ryan v. Potlatch Corp., 882 N.W.2d 220, 224-25 (Minn. 2016)). Under this criteria, the evidence submitted does not support vacating the 1998 Award on Stipulation with respect to the employee’s left knee and low back conditions. In the decades between the 1979 date of injury and the 1998 settlement, the employee had ongoing issues with both body parts and had undergone surgeries with marginal relief of symptoms. Around the time of the 1998 settlement, the employee was experiencing ongoing issues with both her left knee and low back and there is no indication in the medical records or otherwise that either condition had resolved or that further medical care would not be needed. In her affidavit in support of her petition, the employee alleges that she could not have anticipated her conditions worsening, however, this statement is not substantiated by other evidence. As such, the employee has not met her burden to show 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 under Minn. Stat. § 176.461 for her left knee or low back condition.
The employee also seeks to have the award vacated based upon the unanticipated development of an injury to her right knee that she argues is consequential to her 1979 work injury. The employee was not experiencing right knee symptoms at the time of the settlement. As she continued to have issues with her left knee, the employee began treating for pain and discomfort in her right knee. The medical records of Dr. Kraft state that he believed her right knee symptoms were the result of her “favoring” the right knee over the more symptomatic left knee. The employee underwent injections, a meniscus repair surgery, and a total replacement in 2017. In 2019, Dr. O’Neill provided a permanency rating for the employee’s right knee condition. His opinion that the right knee condition was related to the 1979 work injury was equivocal, stating that it was his “understanding” that both knee conditions were related. (Ex. F.) Meanwhile, the employee submitted in support of her petition the opinion of Dr. Wicklund, who in his 2019 report opined that the employee’s right knee condition was not related to her work injury. The medical evidence as submitted does not support a substantial change in medical condition with respect to the employee’s right knee.
The employee has failed to establish good cause to vacate the Award on Stipulation under Minn. Stat. § 176.461, and her petition is denied.
SEAN M. QUINN, Judge
I concur with the majority opinion that the employee’s petition fails to establish good cause under Minn. Stat. § 176.461 and that this court does not have the statutory authority to vacate the September 21, 1998, Award on Stipulation. That said, the employee’s petition raises important questions about the extent of this court’s authority to vacate awards on stipulation under the statute and under prior caselaw.
First, I agree with the majority’s rejection of the employee’s argument that settlement agreements in which an employee is not represented by counsel should be per se voidable. In this case, the employee settled her claims for workers’ compensation benefits without the assistance of an attorney. She testified by affidavit that she did not discuss the settlement with either an attorney or with the compensation judge before signing.
Pursuant to Minn. Stat. § 176.521, subd. 1, a settlement with an unrepresented party must be approved by the commissioner or by a compensation judge. Only those settlements that conform to chapter 176 will be approved, and the parties bear the burden to prove that the settlement terms are fair, reasonable, and in conformity. Id., subd. 2. The statute provides that a settlement is presumptively fair, reasonable, and in conformity so long as the parties are represented by an attorney, and so long as the agreement does not close out the employee’s right to medical compensation. Id.
A fair reading of this provision is that if the parties are not represented by an attorney, the settlement cannot be considered presumptively fair, reasonable, or in conformity with chapter 176. There is nothing in the record, including the employee’s testimony and the award on stipulation itself, which indicates that the settlement entered into by the unrepresented employee was reviewed for fairness, reasonableness, or conformity with chapter 176, but rather, likely was summarily approved. In her petition to this court, the employee attempts to couch this situation as a mistake of fact, one of the four bases for vacating an award under Minn. Stat. § 176.461. The majority was correct to reject her argument. The employee also argues that the Award on Stipulation should be voided. This court has, in the past, considered the voidability of settlements. See Rossbach v. Rossbach Constr., Inc., No. WC17-6070 (W.C.C.A. Nov. 2, 2017) (where statutory requirements are not followed, an award on stipulation is not void, but is voidable); see also Sondrol v. Del Hayes & Sons, 47 W.C.D. 659 (W.C.C.A. 1992) (consideration of four factors to determine whether a voidable award on stipulation is void). The Workers’ Compensation Act does not give this court the authority to void awards on stipulation. Absent a legislative change, we must deny the employee’s request to void the September 21, 1998, Award on Stipulation.[5]
Second, while I agree with the majority opinion that the medical evidence in the record does not support a consequential injury to the employee’s right knee, I question whether this court could vacate the Award on Stipulation due to any post-settlement consequential injury given the Minnesota Supreme Court’s holding in Ryan v. Potlach Corp., 882 N.W.2d 220 (Minn. 2016).
In Ryan, the employee settled her workers’ compensation claim arising from a back injury on a full, final, and complete basis. Years later, she developed depression and filed a claim petition seeking benefits related to that condition under the long-standing concept, somewhat unique to workers’ compensation law, that even full, final, and complete settlements do not foreclose later claims for benefits that arise from medical conditions that are not part of the settlement agreement. See Sweep v. Hanson Silo Co., 391 N.W.2d 871, 39 W.C.D. 51 (Minn. 1986). The Ryan court, as an initial holding, reaffirmed the Sweep doctrine. Ryan, 882 N.W.2d at 225. As to whether settlement agreements also close out consequential injuries arising from the specifically settled injury condition, the court concluded that consequential injuries not within the contemplation of the parties, or reasonably capable of being within the contemplation of the parties, at the time of the settlement are not foreclosed by the settlement. Id. In doing so, the Ryan court relied upon the statutory language for petitions to vacate, even though Ms. Ryan had filed a claim petition and not a petition to vacate.
Considering this language, the court concluded that Ms. Ryan’s consequential depression, though it developed after the settlement, was capable of being anticipated at the time of her settlement simply because it was consequential and was, therefore, foreclosed by the settlement. The court further suggested that the employee must affirmatively prove what then-unknown post-settlement conditions were not contemplated by the parties at the time of the settlement. Under this framework, two concepts emerge which place an unreasonable and essentially impossible burden on employees petitioning to vacate settlements under these circumstances. One, any post-settlement consequential injury, because it is causally related to the original injury subject to the agreement, was necessarily contemplated by the parties at the time of settlement. Two, no post-settlement consequential injury is compensable unless an employee can prove that this injury was affirmatively not anticipated.
In this case, we are presented with a petition to vacate brought under Minn. Stat. § 176.461, and not a claim petition as had been filed by Ms. Ryan. However, the Ryan court relied upon the same contemplation language of Minn. Stat. § 176.461 and concluded that an injury that is consequential is capable of being contemplated at the time of settlement. Application of Ryan is, I believe, required in cases such as this, though it leads to an impossible burden and a harsh result for employees such as Ms. Leadens should they be able to prove causation between the original work injury and an injury sustained after the settlement of their claim.
[1] On the date of injury, the employer was insured against workers’ compensation liability by Home Insurance Company, which is now insolvent, and its claims are being administered by the Minnesota Insurance Guaranty Association (MIGA).
[2] The employee entered into a second settlement agreement with the employer. On April 24, 2008, an Award on Stipulation was issued approving an agreement resolving the employee’s claim for expenses related to a home bathroom remodel. The employee was represented by counsel.
[3] In her petition, the employee argues that stipulations for settlement in which a party is not represented are “per se unreasonable and [are] voidable” on the basis of public policy and fairness principles. (Mem. in Support of Pet. at p. 11.) While we agree that settlements involving unrepresented parties should be closely reviewed in terms of best practices, and acknowledge that lack of representation can be considered as to the reasonableness of the agreement, we cannot agree with the employee that a per se rule is appropriate or that a mutual mistake of fact exists in this case such that this court has authority to vacate the 1998 Award on Stipulation under Minn. Stat. § 176.461. This court’s authority to set aside an award for a mutual mistake of fact is limited to mutual mistakes where opposing parties have both misapprehended some fact that is material to the claim or claims. See Shelton v. Schwan’s Sales Enters., 53 W.C.D. 110 (W.C.C.A. 1995), summarily aff’d (Minn. Sept. 5, 1995).
[4] 41 W.C.D. 1054 (W.C.C.A. 1989). In Fodness, this court articulated the following factors that may be used in evaluating claims of a substantial change of medical condition:
[5] The employee had an admitted 1979 work injury and was entitled to significant future benefits under the statute at that time. She negotiated settlement of her claim without the assistance of counsel against a represented employer and insurer and the Special Compensation Fund. Employees such as Ms. Leadens require the safeguard outlined in Minn. Stat. § 176.521, and in cases where that safeguard is not provided, the statute should, in my opinion, provide a remedy. This is not to say there should be an absolute right to a vacation of an award on stipulation in such situations, but at least a chance to present evidence and let the court system decide based on the merits.