CLARENCE JOHNSON, Employee/Petitioner, v. SKIL-TECH, INC., and UNITED WIS. INS. CO., admin’d by UNITED HEARTLAND, Employer-Insurer/Respondents.

The pro se employee petitions to vacate Awards on Stipulation served and filed February 26, 2007, and March 25, 2015, alleging fraud or a substantial change in medical condition.  We refer the petition to the Office of Administrative Hearings for an evidentiary hearing.

Clarence Johnson, the employee and pro se petitioner, fell from a ladder and injured both knees while working for Skil-Tech, Inc., the employer, on April 24, 2006.  The employee, represented by counsel, filed a claim petition in June 2006 seeking workers’ compensation benefits and penalties for an asserted frivolous and non-specific denial of the employee’s claim, as well as interest and Irwin fees.  The employer and its insurer denied liability for the claimed injury.  At a deposition taken on September 13, 2006, the employee testified that he also cut his left thumb when he fell.  He described the cut as a small nick that did not cause him any problems.

On October 6, 2006, the employee was seen for an independent medical examination by Dr. David C. Fey at the request of the employer.  Dr. Fey issued a report dated October 16, 2006.  Based upon his review of the employee’s medical records and examination of the employee, Dr. Fey opined that on April 24, 2006, the employee sustained bilateral medial and lateral meniscus tears and a temporary aggravation of his pre-existing bilateral degenerative knee arthritis and rated the employee at four percent permanent partial disability (PPD) for each knee per Minn. R. 5223.0510, subp. 3.B(3) related to his work injury.  The report stated that the employee indicated he had a minor laceration to his left hand which had not given him any ongoing problems.  Dr. Fey assigned the employee permanent restrictions of no prolonged climbing on ladders or standing, which he opined were related to the employee’s pre-existing bilateral degenerative knee arthritis condition.  Finally, Dr. Fey opined that based upon that pre-existing condition, future knee replacement surgery may be required.

Dr. Douglas A. Becker prepared a health care provider report dated November 8, 2006, indicating the employee had fallen from a ladder and sustained bilateral meniscus tears.  Dr. Becker performed bilateral partial medial and lateral meniscectomies on August 24, 2006, and rated the employee with four percent PPD per Minn. R. 5223.0510, subp. 3.B(3).  The employee reached maximum medical improvement on December 1, 2006.  (Ex. E of Case document, Health Care Provider Report, Nov. 8, 2006.)

The parties, all represented by counsel, settled the dispute and a stipulation for settlement was signed by the employee on February 14, 2007.  The stipulation stated that the employee had been paid one week of temporary total disability benefits and permanent partial disability benefits based on a rating of four percent per knee.  The parties agreed that the bilateral knee injuries comprised all known injuries sustained as a result of his work activities for the employer.  There was no mention of a left hand or a left thumb injury in the stipulation.  The employee claimed entitlement to additional wage loss benefits, additional permanency, and medical expenses.  The terms of the stipulation provided that the employee was to be paid $30,000, less attorney fees, for a full, final, and complete settlement of all claims, except for future medical expenses which were left open subject to defenses, and closed out penalties, interest, Roraff fees, and .081 fees to-date.  The stipulation for settlement was reviewed by a compensation judge and an award on stipulation was served and filed on February 26, 2007, which also dismissed the employee’s claim petition.

On August 10, 2011, the employee filed a claim petition for medical expenses based on his bilateral knee injuries and a left thumb injury.

In a narrative report dated October 3, 2011, Dr. Becker indicated the employee had significant underlying hypertrophic changes in the knees and would likely need bilateral total knee arthroplasty surgery in the future.  Dr. Becker further opined that the work injury in 2006 led to progressive deterioration, degeneration, and increased symptoms in the employee’s knees.  (Ex. E of Case document, Narrative Report.)

Dr. Elizabeth A. Arendt saw the employee at the M Health Riverside Rehabilitation Center on July 22, 2014.  Dr. Arendt examined the employee, reviewed a letter written by the employee and the narrative report of Dr. Becker, and opined that the employee’s fall at work aggravated his pre-existing bilateral knee arthritis.  (Exs. E, G of Memorandum of Law, Letter from Elizabeth A. Arendt, M.D.)

The parties, all represented by counsel, entered into a second stipulation for settlement on March 24, 2015, to resolve a dispute over medical expenses.  In the stipulation, the employee was paid $12,500 as a medical pool, with an agreement that the employee was barred from presenting any further medical claims until after he had provided sufficient documentation that the full amount of the medical pool had been used for medical expenses related to his knee injuries.  The employee’s counsel was paid $5,000 as a to-date settlement of attorney fees.  A partial award on stipulation was served and filed on March 25, 2015.^[1]

Less than two months later, the employee underwent bilateral knee arthroplasties performed by Dr. Michael J. Nemanich on May 11, 2015.  The pre- and post-operative diagnosis was advanced bilateral knee degenerative arthritis.  The employee asserts that his personal insurance paid for the surgery.  Following the bilateral knee replacement surgery, the employee was seen on May 23, 2018, by Dr. Patrick Horst for complaints of pain.

The employee, appearing pro se, filed a petition to vacate with this court on April 13, 2018, asserting grounds of newly discovered evidence, fraud, and mutual mistake.  The employee asserted that he had claimed penalties but that the compensation judge approved the stipulation for settlement and dismissed his claim petition without ordering the payment of penalties.  The employee alleged this omission in 2007 constituted grounds to vacate the stipulations based on fraud, newly discovered evidence, or mistake.  The employee also asserted that the employer and insurer’s denial of his claim was frivolous, thereby justifying an award of penalties.

The employer and insurer opposed the employee’s 2018 petition, arguing that the employee had not submitted an affidavit or other evidence supporting the petition and that none of the claimed bases to vacate the petition were present.  They also asserted that the employee misunderstood the stipulation by failing to note that the claim for penalties was foreclosed as part of the overall agreement.  Specifically, they argued that the employee’s claim for penalties existed at the time of the 2007 stipulation and could not be considered newly discovered evidence; the assertion of fraud did not meet the elements of fraud used by this court in assessing a petition to vacate; and the closeout of the penalties claims was not a mutual mistake of fact because the express language in the stipulation closed out penalties to-date.

After the employer and insurer’s response was filed, the employee submitted several medical records to support a change in medical condition as a basis to vacate the awards.  In an order served and filed on June 29, 2018, this court denied the employee’s motion to amend the petition to vacate, noting that the employee was not prohibited by statute from filing a subsequent petition to vacate predicated on a substantial change in medical condition.

This court denied the employee’s 2018 petition, finding that the employee had not established cause to vacate the awards on the bases asserted.  Johnson v. Skil-Tech, Inc., 79 W.C.D. 137 (W.C.C.A. 2018), summarily aff’d (Minn. Feb. 6, 2019).  In February 2020, the employee filed a claim petition for additional medical expenses.  The employer and insurer admitted liability for causally related medical expenses but requested documentation of the medical expenses and an accounting of the funds from the $12,500 medical pool.  When the employee failed to comply with an order to compel documentation of the medical pool funds, the claim petition was dismissed in December 2021.

The pro se employee now petitions to vacate the February 2007 and March 2015 awards on stipulation based on fraud or a substantial change in medical condition.^[2]  The employer and insurer object.

This court has authority to vacate or set aside an award only for cause under Minn. Stat. § 176.461(a).  Cause is limited by statute to mutual mistake of fact, newly discovered evidence, fraud, or substantial and unanticipated change in medical condition.  Minn. Stat. § 176.461(b).  The employee asserts that the awards on stipulation should be vacated based on fraud or a substantial change in medical condition.

The employee claims fraud as a basis for vacating the awards.  The elements of fraud: 1) a false representation of fact; 2) the representation must deal with a past or present fact; 3) the fact must be susceptible of knowledge; 4) the representing party must know that the fact is false; 5) the representing party must intend that another be induced to act based on the false representation; 6) the other person must, in fact, act on the false representation; and 7) the misrepresentation must be the proximate cause of actual damages.  Bramscher v. City of Perham Police Dep’t, slip op. at 3-4 (W.C.C.A. Feb. 27, 1995) (citing Weise v. Red Owl Stores, Inc., 286 Minn. 199, 202, 175 N.W.2d 184, 187 (1970)).  We conclude the employee failed to make a showing of fraud that warrants vacating the awards on stipulation.

The employee alleges that the failure to include penalties in the stipulation constitutes fraud, which was the same argument previously rejected by this court in 2018.  We will not address this argument again.  The employee also asserts that the failure to address the injury to his left thumb in the prior stipulations and awards constitutes fraud.  Our review of the stipulations and awards indicate that the only claims involved in the settlement were for injuries to the employee’s knees. The employee has submitted a few medical records indicating expenses for an MRI of the left thumb in 2010 and for x-rays of an unspecified finger in 2011, but there is no evidence that these medical expenses are related to an injury to the employee’s left thumb in 2006.  Notably, while the employee points out that he mentioned his left thumb injury in his deposition on September 13, 2006, (Ex. 3 at 35) he also stated in the deposition that the left thumb cut was a small nick that did not cause any problems.  (Ex. 3 at 33-34.)  Further, the 2007 stipulation specifically states that the bilateral knee injuries comprised all known injuries sustained as a result of his work activities for the employer.  Based on our review of the evidence, the employee has not established fraud as a basis to vacate the awards.

The employee argues a new statutory premise in his current petition to vacate by claiming that he has sustained a substantial change in medical condition.^[3]  In evaluating a petition to vacate based upon a substantial change in medical condition, the following factors are used:

The employee has submitted evidence of additional medical care he has received since the 2007 and 2015 awards, including bilateral knee arthroplasties.  He has not submitted evidence as to any change in his ability to work nor a medical opinion rating any additional PPD from the April 24, 2006, work injury after those surgeries.  In addition, there is no evidence as to payment for the additional medical care the employee has had to his knees since the time of the 2007 award until 2015 or after the 2015 award.  The employee has submitted no documentation or evidence showing what, if any, of the $12,500 medical pool has been paid toward medical care for his knees.  There is also little evidence of what future medical care, if any, the parties anticipated at the time of either the 2007 or 2015 settlements.

The parties dispute whether the employee’s present condition regarding his bilateral knees is causally related to the 2006 work injury.  Dr. Becker, prior to the 2015 award, opined that the employee’s pre-existing bilateral degenerative knee condition was aggravated or accelerated by the 2006 work injury.  On the other hand, Dr. Fey has opined that the employee’s bilateral degenerative knee arthritis had no causal relationship to the 2006 work injury.  There is a significant factual issue as to causation of the employee’s ongoing bilateral knee condition and need for additional medical care.  Beyond the causation issue, there are factual issues regarding the correct PPD rating following the employee’s bilateral knee arthroplasties, the employee’s ability to work with or without restrictions, and payment for the employee’s medical care after the 2015 settlement established the $12,500 medical pool.

Minn. Stat. § 176.521, subd. 3, provides that this court may, before determining whether to set aside an award, refer the matter to the chief administrative law judge for assignment to a compensation judge for factual findings to better inform this court in its decision.  Referral may be appropriate when there is conflicting evidence, including disputes between medical experts, or where the evidence submitted raises issues of fact, including credibility determinations.  Jacobson v. Hennepin Faculty Assocs., No. WC04-210 (W.C.C.A. Nov. 24, 2004); Fealy v. Am. Lutheran Church, slip op. (W.C.C.A. June 27, 2000); Martinson v. USX Corp., slip op. (W.C.C.A. July 22, 1999).

For these reasons, this court refers this matter to the chief administrative law judge for assignment to a compensation judge to make findings regarding: 1) medical causation of the need for bilateral knee arthroplasties and any resulting permanency or disability, 2) PPD ratings post-bilateral knee arthroplasties, 3) the employee’s work restrictions both now and at the time of the 2007 settlement, and 4) whether the employer and insurer have paid for medical care related to the employee’s knees since the 2007 settlement and whether any medical payments have been made by the employee from the $12,500 medical pool.  After these findings are returned, this court will consider the employee’s petition to vacate the 2007 and 2015 awards on stipulation.