Perez v. MPLSP Hotel Corp., et. al.

Perez v. MPLSP Hotel Corp., et. al., No. WC16-5918 (WCCA Sept. 20, 2016)

The employer and insurer in this matter appeal from the compensation judge’s Order Disapproving Stipulation and the OAH supervising judge’s Order Denying Motion to Disqualify. The employee worked as a housekeeper for Comfort Suites. She twisted her left knee while cleaning a room. After receiving a hinged knee brace and undergoing physical therapy, an MRI revealed a medial meniscus tear. Dr. Todd Johnson performed partial medial and lateral meniscectomies of the left knee on December 30, 2013. The employee returned to work with no restrictions on February 14, 2014.

The employee returned to Dr. T. Johnson on September 12, 2014, and received an additional MRI. The results indicated progression of chondromalacia in the trochlear groove of the patella. The employee sought a second opinion by Dr. Aimee Klapach on January 14, 2015. Dr. Klapach diagnosed the employee with left knee pain post partial medial and lateral meniscectomies with osteoarthritis. She opined that the employee’s ongoing arthritis was the cause of the pain, and the employee may need a knee replacement someday.

On January 16, 2015, Dr. T. Johnson indicated the employee’s left knee pain was due to her medial and patellofemoral chondromalacia and performed a viscosupplementation injection. Dr. T. Johnson opined the employee reached MMI on February 27, 2015.

The employee sought care from Dr. Gary Johnson on March 20, 2015. He referred her to physical therapy and for an FCE. Dr. G. Johnson diagnosed medical and lateral mensisci tears of the left knee treated with arthroscopic surgery and ongoing left knee pain secondary to chondromalacia of the knee and patellofemoral joints. He assigned a 0% PPD rating.

The employee filed a Claim Petition seeking TPD and PPD benefits, medical expenses, and rehabilitation services on March 23, 2015. The parties submitted a request for mediation to DOLI on July 2, 2015. Before the mediation, the parties reached an agreement for a full, final, and complete settlement of the employee’s claims, including closing out all future medical expenses. The employee would receive $35,000, less $7,000 in attorney fees. The Stipulation for Settlement was submitted on December 1, 2015.

On December 4, 2015, Compensation Judge Mesna issued an order disapproving the stipulation. After a conference call with the parties on December 14, 2015, the judge issued an Order Striking and Rescinding the Order Disapproving Stipulation to allow submission of additional documentation.

After an additional records review by Dr. Michael D’Amato on December 23, 2015, he opined the employee sustained a permanent injury, with a 2% PPD rating. He also stated the employee had a non-work-related pre-existing lateral meniscal deficiency and chondromalacia of the patellofemoral joint. He indicated the employee would not require additional medical treatment for the work-related injury and she reached MMI. However, due to continuing knee pain the employee may need a total knee replacement in the future, but this could not be predicted within a reasonable degree of medical certainty.

The parties resubmitted a Stipulation for Settlement on December 31, 2015, and the compensation judge issued another Order Disapproving Stipulation citing the possible need for a total knee replacement in the future.
The employer and insurer filed a Motion to Disqualify Judge on January 20, 2016, stating the judge demonstrated an “inability to provide a fair, objection, and impartial hearing in this case.” This motion was denied by the OAH supervising judge on January 25, 2016.

The WCCA dismissed the employer and insurer’s appeal of the OAH supervising judge’s Order Denying Motion to Disqualify since it is an interlocutory order and the court lacked jurisdiction.

The employer and insurer also appealed the Order Disapproving Stipulation, stating the parties’ stipulation was fair, reasonable, and in accordance with the Minnesota Workers’ Compensation Act, and the judge abused his discretion in his refusal to approve the stip. Generally, parties to the settlement agreement bear the burden of proof that it is reasonable, fair, and conforms to the Act. However, when both parties are represented by attorneys, the agreement is conclusively presumed to be fair, unless the settlement purports to be a full, final, and complete settlement of an employee’s right to medical compensation. Settlements are favored because they avoid delay and litigation costs, and grant expedited relief.

The WCCA determined the compensation judge did not abuse his discretion in disapproving the stipulation. The stipulation agreement purported to be a full, final, and complete settlement of the employee’s right to medical compensation. A settlement agreement is not in conformity with the Act if it is “more likely than not to be opposed to the best interests of the employee.” Heinz v. Vickerman Constr., 306 N.W.2d 888, 890 (Minn. 1981). The possible need for a future knee replacement that may or may not be causally related to the work injury allowed the compensation judge to reasonably conclude that the proposed settlement was not in the best interests of the employee.