Minnesota employees, and to a lesser extent employers/insurers, currently have several options for vacating a workers’ compensation Award on Stipulation for Settlement. I was recently asked whether a misdiagnosis might pave the way for filing such a petition. The answer, like many in the legal realm, depends on the circumstances. However, based on the Minnesota Supreme Court’s ruling in Monson v. White Bear Mitsubishi, 663 N.W.2d 534 (Minn. 2003) and Minnesota Statute § 176.461, it is more likely than not that a significant misdiagnosed condition would provide a sound basis for vacating an unwanted settlement agreement.
Minnesota Statute § 176.461 allows the Workers’ Compensation Court of Appeals (“WCCA”) to, upon application of either party, and if “cause” is shown, set aside an award (which includes an Award on Stipulation for Settlement) and grant a new hearing. Section (b) of § 176.461 limits “cause” to the following: (1) a mutual mistake of fact; (2) newly discovered evidence; (3) fraud; or (4) 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.”
The Monson Court held that a “mistake in diagnosis or extent of disability may … serve as grounds for reopening a case.” Monson, at 540. See also Stewart v. Rhar Malting Co., 435 N.W.2d 538, 540 (Minn. 1989). In reaching its determination, the Supreme Court quoted extensively from Larson’s Workers’ Compensation Law § 131.05(2)(b):
In view of the practical protective function of workers’ compensation, the desirability of preserving a right to reopen for genuine mistake seems too self-evident for argument. In the nature of things, there are bound to be many occasions when even the most thorough and skillful diagnosis misses some hidden compensable condition. Should the claimant then be penalized because of an erroneous disposition, either by award or settlement, when the only fault lies in the imperfections of medical science?
In reviewing a request for vacation, the WCCA has shown that it will examine in depth whether “the imperfection of medical science” was material/relevant to the Compensation Judge’s decision. Battle v. Federal Express Corp, No. WC06-299 (W.C.C.A. Aug. 1, 2007). It will also look at whether the employee, at the time of settlement, had a grasp on what his future would entail regardless of the new diagnosis, i.e., was the misdiagnosis enough to change the employee’s permanent restrictions going forward. In Daeda v. System-Bilt Structures, 52 W.C.D. 318, (W.C.C.A. November 28, 1994), the employee argued that because of a mistaken diagnosis he entered into a settlement agreement without a full understanding of his prognosis or the severity of his condition. The WCCA, however, was not persuaded by the employee as the settlement agreement was reached a full 32 months after his injury; which was enough time that he should have had a pretty good idea of what his future workability and treatment would demand.
The principle that permanent restrictions, and an understanding of one’s future treatment, might preclude a later request for vacation was confirmed by Fitch v. Luigino’s, Inc., 1997 WL 218590 (W.C.C.A. April 14, 1997). In Fitch, the Court looked at whether the employee required more costly and extensive medical care than was anticipated at the time of settlement. They held that if the newly discovered evidence did not change the anticipated future treatment, the vacation should be denied.
Finally, the WCCA has shown that it will look to whether the evidence forming the basis of the vacation could have been discovered through the exercise of reasonable and due diligence. In Needles v. Suburban West Auto, 1996 WL 31854 (W.C.C.A. Jan. 10, 1996), the WCCA held that the evidence at the heart of the petition for vacation must have been in existence at the time of the award and must not have been discoverable through the exercise of reasonable and due diligence.
In conclusion, a misdiagnosis with the right underlying evidence should be enough to support a vacation. As the WCCA has indicated, the probability of success for an employee is greatly increased if the new diagnosis presents a substantial change in the circumstances relating to the injury and future treatment. An employer/insurer opposing a petition to vacate based on a misdiagnosis will want to provide the WCCA with medical records, and perhaps the testimony of a vocational expert, showing that the misdiagnosis did not alter the restrictions or treatment already assigned to the employee.
If you have any questions about the latest workers’ compensation developments, filing or defending a petition to vacate or any other workers’ compensation matter, please feel free to call or e-mail any one of our many experienced attorneys – www.hansendordell.com / 651-482-8900.
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