CLARENCE JOHNSON, Employee/Petitioner, v. UNIV. GOOD SAMARITAN and SENTRY INS. GRP., Employer-Insurer/Respondents.

The pro se employee petitions to vacate an October 18, 2004, award on stipulation based on grounds of fraud and a substantial change in medical condition.  We deny the petition.

Clarence Johnson, the employee and pro se petitioner, claimed injuries to his low back and left leg arising out of and in the course of his employment with University Good Samaritan, the employer, on June 14, 2003.  The matter was resolved by way of a Mediation Resolution/Award, which incorporated a stipulation for settlement, served and filed October 18, 2004, at the Department of Labor and Industry.  The stipulation shows that the employer and insurer denied primary liability for the claimed injuries, and contended that the injuries had resolved and that he was not entitled to any claimed benefits.  The parties agreed to a full, final, and complete settlement, including permanent partial disability to any extent.  At the time of the settlement, the employee was represented by counsel, as was the employer and insurer.

Since the award on stipulation was issued in 2004, the pro se employee has filed four petitions to vacate the award on stipulation.  The first was filed on October 12, 2007, claiming newly discovered evidence and mutual mistake of fact.  That petition was denied.  Johnson v. Univ. Good Samaritan, slip op., No. WC07-245 (W.C.C.A. Mar. 6, 2008).  The second petition to vacate was filed in October 2014 on the grounds of mutual mistake of fact, newly discovered evidence, and/or a substantial change in medical condition.  That petition was also denied.  Johnson v. Univ. Good Samaritan, 75 W.C.D. 427 (W.C.C.A. 2015), summarily aff’d (Minn. Nov. 17, 2015).  A third petition to vacate was filed in April 2018 alleging several grounds, including fraud, to support his petition, none of which supported any basis to set aside the award per Minn. Stat. § 176.461(b), and was denied.  Johnson v. Univ. Good Samaritan, 79 W.C.D. 143 (W.C.C.A. 2018), summarily aff’d (Minn. Feb. 6, 2019).

The employee has filed another petition to vacate the 2004 award on stipulation based on fraud and a substantial change in medical condition.^[1]  The employer and insurer filed an objection, arguing that the employee’s claims should be denied based this court’s previous decisions.  For the reasons discussed below, the petition is denied.

This court may set aside an award on stipulation for cause pursuant to Minn. Stat. § 176.461(a).  For awards issued on or after July 1, 1992, “cause” includes mutual mistake of fact, newly discovered evidence, fraud, or “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(b); see also Ryan v. Potlatch Corp., 882 N.W.2d 220, 224-25, 76 W.C.D. 491, 496 (Minn. 2016); Franke v. Fabcon, Inc., 509 N.W.2d 373, 49 W.C.D. 520 (Minn. 1993).

In this case, the employee has alleged that there is proof of fraud.  To support his argument, he asserts that the parties relied upon a zero percent permanent partial disability (PPD) rating and a determination of maximum medical improvement at the time of the settlement in 2004, ^[2] but that the employee was rated at seven percent PPD by his treating physician in 2007.^[3]  He also argues that his union refused to help him following his termination from the employer, ^[4] and that the Minnesota Department of Employment and Economic Development (DEED) allowed the employer 30 days to respond to his unemployment claim rather than the ten days to respond to a request for information.^[5]

To establish fraud, there must be: 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. (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)). 

The employee previously made allegations of fraud in his 2014 petition to vacate, citing the same evidence regarding the lack of union representation and the allowance of 30 days for the employer to respond to DEED as proof.  This court denied the employee’s petition based on those claims of fraud, noting that the court did not have jurisdiction to address issues regarding his unemployment compensation or his union representation.  This decision was affirmed by the Minnesota Supreme Court.  Johnson v. Univ. Good Samaritan, 75 W.C.D. 427 (W.C.C.A. 2015), summarily aff’d (Minn. Nov. 17, 2015).  These issues remain outside the jurisdiction of this court, therefore they will not be addressed further.

Regarding the allegation of fraud based on evidence of a seven percent PPD rating dated three years after the settlement, there is no evidence that a false representation was made by any party.  The employee claims that correspondence between the attorneys involved at the time of the settlement indicates that they agreed that he had a zero percent PPD at that time of the settlement, contrary to a 2007 rating from Dr. Morales, and that his award should be vacated based on fraud because the settlement did not contemplate this rating.  We disagree.  Regardless of the correspondence cited by the employee, permanency was clearly considered and settled in the 2004 stipulation as discussed in this court’s 2008 decision.  In his 2007 petition to vacate in this matter, the employee presented evidence of a PPD rating from Dr. Morales, which was apparently based on an MRI scan completed in June of 2003,^[6] prior to the settlement.  The 2007 petition was denied in part because the court determined that evidence of PPD, known to the parties, existed before the settlement and was not newly discovered evidence as claimed by the employee.  Johnson v. Univ. Good Samaritan, slip op., No. WC07-245 (W.C.C.A. Mar. 6, 2008).  No new or additional evidence on any of the allegations of fraud has been presented in this petition.  The parties specifically agreed to settle the employee’s entitlement to permanent partial disability to any extent in the 2004 stipulation and the evidence shows that PPD was considered as part of the settlement.

  Because the elements have not been met to show fraud under Minn. Stat. § 176.461(b), the employee’s petition to set aside the 2004 award on stipulation based on fraud is denied.

The employee’s prior petitions to vacate in 2007, 2008, and 2015 claimed a substantial change in medical condition.  His present petition alleges that there is a substantial change in condition based on an undated determination of disability for social security benefits.  That determination stated that prior to September 27, 2004, the employee could have done “less physically demanding” work, but based on his age, education, and past work history, in combination with his medical condition, he was disabled as of September 27, 2004.^[7]  The conditions listed in that document included the employee’s back, leg, and shoulder, along with psychiatric problems.

When evaluating whether a substantial change in medical condition has been shown, this court compares the employee’s condition at the time of the settlement with the condition at the time the petition was filed.  See Davis v. Scott Moeller Co., 524 N.W.2d 464, 467, 51 W.C.D. 472, 475 (Minn. 1994); Battle v. Gould, Inc., 42 W.C.D. 1085, 1086 (W.C.C.A. 1990), summarily aff’d (Minn. May 24, 1990); Virnig v. Carley Foundry, Inc., slip op. (W.C.C.A. Nov. 14, 2000).  In considering the employee’s petition to vacate, we will compare his condition at the time of the October 2004 settlement with his condition at the time the petition to vacate was filed in 2024.  “[T]he basic concern in determining whether sufficient cause exists to set aside an award is to assure a compensation proportionate to the degree and duration of disability.”  Krebsbach v. Lake Lillian Coop. Creamery Ass’n, 350 N.W.2d 349, 353-54, 36 W.C.D. 796, 801 (Minn. 1984) (citation omitted).

A substantial change in an employee’s medical condition may be demonstrated by several factors, including: a change in diagnosis, a change in the employee’s ability to work, additional PPD, the necessity of more costly and extensive medical care than initially anticipated, a causal relationship between the work injury covered by the settlement and the employee’s current worsened condition, and the contemplation of the parties at the time of the settlement.  Fodness v. Standard Café, 41 W.C.D. 1054, 1060-61 (W.C.C.A. 1989). 

In this case, the evidence presented by the employee of the social security disability determination does not show any change in the employee’s condition between the time of the settlement in 2004 and the time of the filing of the petition to vacate.  In fact, that document shows that the employee had been determined to be disabled prior to the settlement.  There is no evidence of additional restrictions or need for medical treatment.  In his petition, the employee mentions his prescription of Bextra as evidence of a substantial change in medical condition because it was a “bad drug that was recalled,” but there is no evidence or explanation of what condition that drug was prescribed for, what effects it had on the employee, or how that prescription changed his condition.

Also, although argued as evidence of fraud, the employee presented evidence of a seven percent PPD rating, which he claims did not exist at the time of the 2004 settlement.  Since Dr. Morales’s 2007 report was made after the settlement, the rating could arguably be construed as evidence of a substantial change in medical condition.   That permanency rating, however, was based on evidence that was known to the parties at the time of the settlement.  As noted above, this court had previously reviewed the evidence regarding permanency and held that medical evidence suggesting PPD, including the June 25, 2003, MRI scan showing a small- to moderate-sized disc herniation and full thickness supraspinatus tear, which was completed prior to the settlement and was the basis for Dr. Morales’ opinion, did not constitute newly discovered evidence.  Johnson v. Univ. Good Samaritan, slip op., No. WC07-245 (W.C.C.A. Mar. 6, 2008).  Similarly, evidence of permanency that existed at the time of a settlement does not support a substantial change in medical condition.

The employee has not shown good cause to set aside the 2004 award on stipulation, and his petition to vacate this award is denied.^[8]