NO. 83-532
IN THE SUPREME COURT OF THE STATE OF MONTANA
1984
WAYNE R. SOLLIE,
Claimant and Appellant,
-vs-
PGAVEY COMPANY, Employer,
and
TRAVELERS INDEINITY COMPANY,
Defendant and Respondent.
APPEAL FROM: The IJorkers' compensation Court of the Statec.of
Montana, The Honorable Timothy Reardon, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
Hennessey Law Office; Joseph P. Hennessey, Billings,
Montana
For Respondent :
Crowley, Haughey, Hanson, Toole & Dietrich; Randy
Bishop, Billings, Montana
Submitted on Briefs: June 6, 1984
Decided: August 3 0 , 1984
Filed: 3,lJl-j . +j,234
2:
( '
-
Clerk
Mr. Justice Fred J. Weber delivered the Opinion of the Court.
Wayne E. Sollie (Sollie) petitioned the Workers'
Compensation Court to set aside, on the grounds of mutual
mistake, a previous full and final compromise' settlement
entered into by Sollie and his employer's insurance company.
After submission upon an agreed written record, the Workers'
Compensation Court refused to set aside the compromise
settlement. Sollie appea-1s this refusal. We affirm.
The issue is whether the Workers' Compensation Court
erred in refusing to set aside the compromise settlement on
the grounds of mutual mistake.
Sollie is a 66 year old married male residing in
California. On August 11, 1976 Sollie was injured in an
industrial accident while an employee of Peavey Company
(Peavey), an employer whose carrier was Travelers Indemnity
Company (Travelers). Sollie was injured while attempting to
raise an overhead door at a grain elevator. As he raised the
door, it suddenly reversed direction and dropped back upon
him as a result of a broken cable. Sollie immediately felt
pain in his lower back and was unable to straighten up. He
was taken to the hospital emergency room and was hospitalized
for approximately 2 weeks. In the latter part of September,
Sollie returned to work but reinjured himself and was forced
to stop working. He has not been employed since that time.
Sollie was treated by a physician in Glendive and was
later referred to an orthopedic surgeon in Billings. By
report dated June 1, 1977 that orthopedic surgeon determined
that Sollie had a degenerative lumbar disc disease affecting
various levels of the lumbar spine and a spondylolysis at the
L-5 level. The orthopedic surgeon assigned Sollie a
permanent partial impairment rating of 20% of the whole man.
Sollie continued to suffer pain and in October 1978 was
examined by a Billings surgeon who suggested surgery to fuse
the lumbar vertebrae. After seeking a second opinion, Sollie
concluded that there was a chance the surgery would be
unsuccessful and he elected not to undergo surgery.
Sollie was represented by an attorney different than his
counsel on appeal. The trial attorney negotiated with
Travelers over a period of time. Ultimately a compromise
settlement was reached on April 18, 1979. Up to that date
Sollie had received. $13,198.39 in compensation benefits and
$2,859.90 in medical benefits. Sollie executed a petition
for full and final compromise settlement which listed the
benefits received, stated that a controversy existed between
Sollie and Travelers regarding the amount and duration of
compensation, and agreed that a lump sum of $8,100 would be
acceptable as a full and final compromise settlement,
representing compensation for 100 weeks. Further medical and
hospital benefits were expressly reserved by Sollie. Sollie
petitioned the Division of Workers' Compensation, with the
concurrence of Travelers, for approval of the petition. The
petition was approved by the Division Administrator on June
4, 1979 and on June 12, 1979, the Workers' Compensation Court
entered its order concurring in the full and final compromise
settlement. The court found that this was a reasonable and
fair settlement under the circumstances.
Dr. Nelson, a diplomat of the American Board of
Neurology and Psychiatry, examined Sollie on March 9, 1983,
nearly four years after the compromise settlement. In the
proceedings on setting aside the compromise settlement, the
medical reports of the original examining physicians were
admitted in evidence and compared to the testimony of Dr.
Nelson. In addition, the deposition of the trial attorney
who had represented Sollie was taken. After consideration of
this evidence, the Workers' Compensation judge entered
extensive findings of fact, conclusions of law and judgment.
The court refused to set aside the compromise settlement and
determined that Sollie was not entitled to further
compensation benefits, costs or attorneys fees.
Did the Workers1 Compensation Court err i n refusing to
.
set aside the compromise settlement on the grounds of mutual
mistake? Sollie contends there was a mutual mistake by both
Sollie and Travelers as to the nature and extent of his
injury. He argues that this mistake affords a basis for
setting aside the compromise settlement on the authority of
Kienas v. Peterson (Mont. 1980), 624 P.2d 1, 37 St.Rep. 1747.
Kienas involved a 32 year old man who suffered an injury to
his lower back. He was examined by various doctors,
including an orthopedic surgeon who found some problems with
the lower lumbar region and ultimately found that Kienas had
progressed as far as he could in healing. At that point the
orthopedic surgeon estimated Kienas' impairment rating as 5%.
In making that rating the orthopedic surgeon did not take
into account Kienasl preexisting neurological condition,
cerebral palsy. After negotiations in which Icienas was not
represented by an attorney, a full and final compromise
settlement for $4,040.54 was agreed upon. Kienas later asked
to set aside the compromise settlement on the basis of later
neurological examinations, which found that Kienas was
totally disabled and that the accident could have aggravated
his cerebral palsy and muscular condition. This Court noted
that a totally disabled person would have been entitled to
receive in excess of $115,000 in benefits. Kienas, 624 P.2d
The Court then stated:
"The full and final compromise settlement entered
into by the parties is a contract. The law of
contracts applies in construing and determining the
validity and enforceability of the settlement
agreement. The pertinent statutes provide:
"Section 28-2-409, MCA:
"Mistake - - fact is a mistake - caused 9 -
of - - not the
neglect - - legal duty - - part - - person
of a on the of the
making the mistake - consisting -
and in:
" (1) an unconscious ignorance or forgetfulness of
- factTpast or present, material - - contrac5
a- to the
or
(2) belief - - present existence - - thing
in the of a
material - - contract which -- exist.
to the does not . ."
624 P.2d at 2-3, 37 St.Rep. at 1749-50 (Court's
emphasis).
This Court then made the following comments regarding the
element of mistake on the part of both parties:
"We find both parties were mistaken, and. there is
evidence of an unconscious ignorance of a fact that
is material to the contract. Neither party at the
time of entering the full and final compromise
settlement knew of the exact nature or extent of
the injury suffered by claimant. Neither party was
aware of any possible disability caused by injury
on the preexisting cerebral palsy condition . . ..
It was not until the hearing to reopen the
agreement that testimony from a neurologist
indicated that the injury could have aggravated or
accelerated the prior cerebral palsy." 624 P.2d at
3, 37 St.Rep. at 1750.
This Court then concluded that the settlement should be
set aside and stated:
"The facts in this case are unique. The parties
were laboring under a material mistake as to the
nature of and the extent of claimant's injuries.
The need to fairly compensate the injured worker is
the intent and the purpose of the workers'
compensation law. The full and final compromise
settlement, therefore, must be set aside for a
mutual mistake of a material fact as to the nature
and the extent of the injury caused by claimant's
accident. Claimant knew of the cerebral palsy;
however, claimant, as well as respondent, did not
know of the extent of the injury caused by the
accident. There is ample evidence on the record
for this Court to conclude that the injury
sustained by claimant could have accelerated the
cerebral palsy." 624 P.2d at 3, 3 7 St.Rep. at
1750-51.
Sollie contends that Kienas is directly applicable here.
Sollie suffered a compensable injury to the L-5 level of his
spine. He argues that in diagnosing that condition, the
treating orthopedic surgeon noted there was an underlying
condition of intervertebral disease, but did not mention that
the injury could have aggravated or compounded the underlying
condition. He argues that based upon the medical evidence
then available, all parties believed that Sollie's accident
caused a "mechanical" injury which would soon heal and cause
no further problem. Sollie contends that this mutual mistake
misled the parties into the completion of the compromise
settlement.
The Workers' Compensation Court disagrees with Sollie's
analysis of the evidence. The court analyzed the medical
evidence and quoted from the June 1, 1977 medical report of
Dr. Frankel, which in part stated:
"The patient has gotten along reasonably well since
he was last seen. He has some days of recurring
low back discomfort and other days he gets along
very well. He is having some pain in his right
knee and has some occasional discomfort in his left
shoulder which I think are unrelated to his current
back problem.
". . . I repeated his x-rays and - patient
the
continues - -
to show fairly wide spread degenerative
intervertebral disc disease involving at least the
lower three levels. In addition, he probably has a
spondylolysis of the pars at L-5 visible
particularly in the right oblique.
"DISPOSITION: The patient was advised that the
situation - permanent, although his symptom level
is
ma.y vary. He has mentioned the possibility of job
training through Voc Rehab. I think this is highly
desirable, simply because his current problem is
that of degenerative lumbar disc disease and the
nature of this condition is a permanent one.
"With regard to impairment, the patient has
multiple level degenerative intervertebral disc
disease, with a spondylolysis at the L-5 level.
This is compatible with a 20% permanent impairment
of the whole man." (court's emphasis)
The Workers' Compensation Court noted that Dr. Nelson's
findings in 1982 were consistent with Sollie's medical
reports existing at the time of the compromise settlement.
The court also noted that Dr. Nelson made a qualified
estimate based on his examination in 1982 that Sollie had
"about 20% whole body" impairment. The court found this to
be consistent with the Frankel report of June 1, 1977.
The Workers' Compensation Court pointed out that at the
time of the compromise settlement Sollie did not believe he
was capable of working. The court quoted from Sollie's 1982
deposition testimony:
"Q . (BY MR. SPEAR) Mr. Sollie, is your back
giving you as much trouble now as it w a s in April
of 79?
"A. There isn't much difference in it really.
"Q. It's been pretty much the same all along?
"A. Pretty much the same."
The court concluded that the claimant had testified that his
back was in much the same condition in 1982 as it had been on
the date of the compromise settlement. Accordingly, the
court concluded that Sollie and Travelers were not laboring
under a mutual mistake of fact material to their settlement
contract when they entered into a full and final compromise
settlement.
Comparing this case to Kienas, the court pointed out
that Kienas and his insurer did not know when they entered
their settlement agreement that the industrial accident
possibly aggravated the preexisting cerebral palsy. The
court reasoned that this constituted the mistake of fact
which was the crucial element in the Kienas decision. The
court applied this analysis to the present case and stated:
"The medical testimony and medical reports which
are part of the record establish that the findings
upon physical examination of the claimant are the
same now as they were at the time when Sollie
agreed to fully and finally compromise his workers'
compensation claim. Wayne Sollie was advised prior
to his full and final compromise settlement that
his medical condition was permanent, but that his
symptom level might vary. The medical reports,
which were in the possession of Wayne Sollie,
clearly revealed the presence of multi-level
intervertebral degenerative disc disease.
"Further, at the time the claimant agreed to
compromise his claim, he had been unemployed for
more than two years and in fact had applied
unsuccessfully upon two occasions for social
security benefits alleging total disability . . ..
"The testimony of claimant's attorney reveals that
they were aware of their right to claim permanent
total disability, but elected to compromise this
workers' compensation claim because of the medical
information available to them revealing partial
impairment. . ..
"In the present case, claimant has failed to show
anything but that the parties were fully aware of
the physical problems of which the claimant
complained, their cause, and claimant's prospects
for finding employment in the normal labor market
throughout the settlement negotiations. Therefore,
the parties freely consented to the terms of this
settlement agreement."
We have reviewed the depositions, transcript and other
evidence submitted to the Workers' Compensation Court and
conclude that there is substantial evidence to support the
court's findings of fact and conclusions of law.
We hold that in the present case the parties were not
laboring under a material mistake as to the nature of and the
extent of Sollie's injuries and that there is no factual
basis for Sollie's contention that there was a mutual mistake
of fact at the time of the compromise settlement.
It is also important to consider section 39-71-204, MCA,
which limits the power of the Workers' Compensation Court to
amend a compromise settlement:
"Except as provided in 39-71-2908, the division or
the workers' compensation judge shall not have the
power to rescind, alter, or amend any order
approving a full and final compromise settlement of
compensation."
Section 39-71-2908, MCA allows the Workers' Compensation
judge to disapprove an order allowing full and final
compromise settlement within 10 days of the judge's receipt
of an order. This Court has held in several cases that these
statutes preclude reopening of Workers' Compensation
settlements. See State ex rel. Montana Phosphate Products
Co. v. Industrial Accident Board (1971), 156 Mont. 466, 481
P.2d 684; Elich v. Industrial Accident Board (1944), 116
Mont. 144, 154 P.2d 793; Williams v. Industrial Accident
Board (1939), 109 Mont. 235, 97 P.2d 1115.
We affirm the Workers' Compensation Court.
We concur:
a~-&.$.,'d/Mweeq
Chief Justice