The employee claimed he sustained a work related low back injury while working for University Good Samaritan in June 2003. The employee was represented by an attorney, and after mediation entered into a Stipulation for Settlement with the employer and insurer. An Award on Stipulation was issued on October 18, 2004.
The employee agreed to a full, final and complete settlement closing out all workers’ compensation claims, including future medical expenses in exchange for a lump sum of $3,000.
Three years later, the employee (who was no longer represented by an attorney) filed a petition to vacate the settlement and Award. Following oral argument, the compensation judge determined that the employee had failed to establish legal cause to vacate the settlement and Award, and denied his petition. The employee appealed to the W.C.C.A. for “cause.”
The W.C.C.A. may set aside an Award for “cause,” which is defined as (1) mutual mistake of fact; (2) newly discovered evidence; (3) fraud; or (4) a substantial change in medical condition under Minn. Stat. §176.461.
The employee argued that the settlement should be set aside because there was a mutual mistake of fact based on newly discovered evidence and/or a substantial change in his medical condition. The W.C.C.A. reviewed that information and determined that the employee had failed to establish any of those grounds. The W.C.C.A. declined to set aside the Award.
The employee again appealed to the W.C.C.A., this time claiming that a new reason—fraud—should be the basis for vacating the Award. 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 to 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. Weise v. Red Owl Stores, Inc., 175 N.W.2d. 184, 187 (Minn. 1970).
The employee argued there was fraud based on the employer and insurer’s reliance on the medical opinions of their independent medical examiner. The employee also argued that there was a conflict of interest on the part of the mediator and a failure on the part of the Department of Labor and Industry to investigate the denial of liability by the employer and insurer for the claimed low back injury. Further, the employee argued his denial of unemployment benefits were causally connected to the alleged fraud in the workers’ compensation matter.
The W.C.C.A. found there was no fraud and that none of the instances cited by the employee alleging fraud were contrary to the provisions of the workers’ compensation statute. The W.C.C.A. noted that the employee failed to provide sufficient factual support for the claimed misrepresentations that led to the settlement. Because the employee did not meet the standard to show fraud, the Petition to Vacate the Stipulation for Settlement was denied.