In the fall of 1988, Galen Block suffered an injury to his low back while working for Exterior Remodeling, Inc. Mr. Block underwent a laminectomy and filed a workers compensation claim. The parties entered into a partial settlement, resolving the employee’s claims for wage loss and permanent partial disability benefits. A few years later, the employee underwent a second laminectomy. This resulted in his having permanent work restrictions, but still being able to return to his former line of work.
The employee subsequently claimed further wage loss and entitlement to permanent partial disability benefits. In 1992, he agreed to resolve those claims on a full, final, and complete basis, with future medical treatment left open, in exchange for a lump sum payment of $40,000.00, less attorney fees. The settlement between the parties was approved by a compensation judge.
In 2009, he experienced an onset of low back, left leg, and foot drop symptoms. He treated conservatively, and in 2010, underwent decompression surgeries and a fusion at L3-S1. In 2016, the employee petitioned this court to vacate the 1992 settlement. It was vacated on the basis of a showing of a substantial unanticipated change in the employee’s medical condition.
The employee then filed a claim petition seeking various benefits. The employer and insurer conceded entitlement to benefits, but the parties disputed the extent to which the employer and insurer were entitled to a credit for the $40,000.00 paid under the 1992 settlement.
The compensation judge found that the employer and insurer were entitled to 100 percent credit for the $40,000.00 payment, and ordered an offset of 100 percent of the credit against benefits stipulated by the parties to be due to the employee. The employee appealed.
The employee first argued that any claim for credit made by the employer and insurer is exclusively governed by Minn. Stat. § 176.179. The court disagreed with this interpretation, as the payment, was not made under a mistake of fact or law by the employer and insurer. In 1992, the parties entered into a good faith agreement that was deemed fair, reasonable, and in conformity with the Workers’ Compensation Act. Terms of the agreement were negotiated, a sum of money proportionate to the degree and duration of the employee’s injury was offered and accepted, the agreement was executed by all parties, and an award was issued.
The employee then argued that if Minn. Stat. § 176.179 does not apply, there is no other statutory mechanism to order any credit for the settlement amount paid. The court also rejected this argument, finding that when the court vacates a settlement, that fact does not imply that an employee’s claims are compensable or that an employee is entitled to compensation, only that the employee has established that the statutory grounds exist to vacate the award on stipulation pursuant to Minn. Stat. § 176.461. When this court vacated the 1992 settlement, both parties were placed in the same position they were in prior to the settlement. Thus, an order for offset and credit was appropriate.