Deborah K. Leadens v. Diversified Distrib., et. al.

Deborah K. Leadens v. Diversified Distrib., et. al. No. WC22-6475 (WCCA November 14, 2022)

The employee, Deborah Leadens, sustained a work injury on October 1, 1979.  The employer and insurer admitted liability and paid benefits for wage loss, medical care, rehabilitation services and permanent partial disability.  The employee, who was not represented by an attorney at the time, settled all workers’ compensation claims related to the October 1, 1979, injury on a full, final, and complete basis in exchange for $105,000, leaving open only future medical expenses.  The settlement was approved by a compensation judge, “having examined [the stipulation] and all the files, records and proceedings herein and finding said stipulation to be in substantial accord with the workers’ compensation law.” An Award on Stipulation was issued on September 21, 1998.

In October 2020, the employee, with the assistance of a lawyer, filed with this court a petition to vacate the 1998 Award.  The employee alleged in her petition that there had been a substantial change in her medical condition that was clearly not anticipated and could not reasonably have been anticipated at the time of the award.  In her petition and supporting brief, the employee also argued that a settlement in which an employee is not represented by a lawyer is per se unreasonable and voidable on the basis of fairness and public policy. This Petition was rejected as the Court said the employee failed to establish the changes to her low back and left knee could not reasonably have been anticipated.

The employee then filed another petition with this court, alleging that the 1998 award is voidable and requesting referral to the Office of Administrative Hearings.

In her prior petition, one basis upon which the employee sought vacation of the 1998 Award on Stipulation was for mutual mistake of fact, arguing that the award was per se voidable under public policy and fairness principles because she was not represented at the time of settlement.  This court did not accept this argument and denied the petition.  Now, in her current petition, the employee asks that this court find the award voidable and refer the stipulation to a compensation judge to determine whether the settlement was fair, reasonable, and in conformity with Minn. Stat. Ch. 176.

A judgment is voidable only if it is erroneous or founded on some irregularity.  Lange v. Johnson, 204 N.W.2d 205, 208 (Minn. 1973).  The employee asserts that the award is voidable but identifies no error or irregularity.  Her prior petition asserted that because she was not represented, the award should be considered voidable per se. The court again rejected this argument.

Rather than identify an error or irregularity such that the award would be voidable, the employee asserts that a compensation judge should have reviewed the agreement with the employee.  Specifically, she states that the compensation judge should have reviewed with her the law regarding supplementary benefits and simultaneous injury factor benefits, and should have explained to her the impact of closing out certain benefits.  She states that “no one conducted an exposure analysis” or told her what the future value of her claim would be, and that had she known, she would not have entered into the agreement. The court noted that this would be far beyond the appropriate role of the Judge to engage in this kind of activity.

She also cited Rossbach v. Rossbach as a basis for relief, however the Court noted that in Rossbach an error was made in the Award insofar as the Judge stated that both parties in the agreement were represented when neither were. The court therefore distinguished Rossbach from this case. 77 W.C.D. 911 (W.C.C.A. 2017)

Takeaway: There must be an error or irregularity in order for the court to determine an Award is voidable and refer the claim back to the Office of Administrative Hearings.