Hudson v. Trillium Staffing, Supreme Court Case No. A16-2017 (June 7, 2017)
The Supreme Court reviewed a WCCA Order to Vacate a Stipulation for Settlement based upon a substantial change in condition. The Petition to Vacate was filed by the employee pro se. The Supreme Court determined the WCCA abused its discretion as the WCCA decision was based on an expert medical opinion that lacked foundation.
Originally, the employee brought a claim for both an orthopedic low back and neck injury as well as psychological injuries. He later amended it to include a concussion injury. The employer and insurer paid a lump sum of $125,000 to settle all claims of neck, low-back, brain, psychological or other injuries with the sole exception of future reasonable medical expenses for low back and neck injuries.
Following the settlement the employee started seeing a psychiatrist who diagnosed him with severe major depression, generalized anxiety disorder and posttraumatic stress disorder and gave him a 75% PPD rating and said he was unable to work due to his injuries. It was based on the new psychiatrist, Dr. Ghelfi’s report that the WCCA vacated the settlement.
The first portion of the Supreme Court’s analysis addressed the standard to be applied when a party is seeking to set aside an award based upon a substantial change in medical condition. Though Ryan v. Potlatch Corp. (Minn. 2016) did not directly deal with a Petition to Vacate, the Supreme Court applied the standard contained therein to this Petition. It described the Ryan requirements as follows:
To set aside an Award based on a substantially changed medical condition, a petitioner must prove: (1) a substantial change in medical condition; (2) that the change was clearly not anticipated; and (3) that the change could not reasonably have been anticipated.
This is a more concise statement of the rule from Ryan, and a three part test where all elements must be met for an Award to be vacated.
The Supreme Court determined the WCCA erred in determining the employee had met the first element. They say that the WCCA failed to sufficiently scrutinize the factual foundation of Dr. Ghelfi’s opinion. Their reasoning was that the doctor’s opinion was descriptively flawed because and never indicated what facts form the basis of her opinion that the traumatic burying injury warranted a 75% rating noted it explain how she calculated such a high PPD rating.
They go on to say that the factual support the PPD rating is lacking in the record. It went over Minnesota rule 5223.0360, subpart seven D (four) which states that for a 75% rating they must have constant “moderate to severe emotional disturbances… and require sheltering with some supervision of all activities.” They went on to say that nothing in the record indicates the employee needed sheltering or some supervision of all activities. The Supreme Court went on to state “to the contrary, the record shows that Hudson exercises considerable independence in his daily activities. Among other things he rents a room and was on his own; he cares for his 11-year-old son, who splits time between Hudson and the child’s mother; he manages his medications, finances and personal affairs; he takes walks by himself in the morning and occasionally meets with friends; and he volunteers at his Senate’s school twice a week”. They then went on to point out that this evidence demonstrates that the employee is capable of taking care of himself without sheltering and supervision of any activities, “let alone all activities”. They go on to state “in short, Dr. Ghelfi assigns the PPD rating that is manifestly contrary to the facts in the record”.
For those reasons the Supreme Court reversed the WCCA.
This case appears quite important because, up until now Petitions to Vacate were analyzed under the Fodness v. Standard Café (W.C.C.A. 1989) factors when there is a claim of substantial change in condition. The Supreme Court never get into an explicit discussion of the Fodness factors. They do discuss some of those factors when discussing if the employee met the first element of the Ryan test, but don’t actually mention them.
We now have a conjunctive three element test where the Supreme Court is saying all three elements must be met to vacate. Further they are explicitly including an element that relates to the subjective intents of the parties (element 2) and the objective analysis of what could be anticipated by the parties (element 3). Fodness appears to still be good case law, but now is likely to be considered the analysis to determine the first of the three Ryan elements that must be met. If that is the case, it should be more difficult for employees to succeed when filing a Petition to Vacate based upon a substantial change in medical condition.