I N THE STJPREME COURT OF THE STATP O F MONTANA
1989
W I L L I A M WHITCHER,
C l a i m a n t and A p p e l l a n t ,
-vs-
WINTER HARDWARE COMPANY,
Employer,
and
P A C I F I C EMPLOYERS INSURANCE C O . ,
D e f e n d a n t and R e s p o n d e n t .
A P P E A L FROM: T h e Workers' C o m p e n s a t i o n C o u r t , T h e H o n o r a b l e ~ i m o t h y
R e a r d o n , Judge p r e s i d i n g .
COUNSEL O F RECORD:
For A p p e l l a n t :
L l o y d E. H a r t f o r d , B i l l i n g s , Montana
For R e s p o n d e n t :
Michael P. Heringer, B i l l i n g s , Montana
S u b m i t t e d on B r i e f s : Jan. 5, 1 9 8 9
Betided: February 2 3 , 1 9 8 9
Filed:
Mr. Justice Fred J. Weber delivered the Opinion of the Court.
The claimant, Mr. Whitcher, filed a petition with the
Workers' Compensation Court to reopen his Full and Final
Compromise Settlement, to have medical benefits paid, and to
receive vocational rehabilitation. The court denied the
request to reopen the settlement agreement, but ordered that
claimant is entitled to medical benefits, a 20% penalty on
those medical benefits, rehabilitation, and costs and attor-
ney' fees on the prevailing issues. Mr. Whitcher appeals that
portion of the court's decision denying him the opportunity
to reopen his full and final compromise settlement. We
affirm.
The issue is whether the Workers' Compensation Court
erred in refusing to allow the claimant to reopen his full.
and final compromise settlement based on the grounds of
mutual mistake.
On December 18, 1978, William Whitcher suffered an
industrial accident arising out of and in the course of his
employment with Winter Hardware in Billings, Montana. Mr.
Whitcher was employed as a laborer for the hardware wholesal-
er, and hurt his back while attempting to move some angle
iron. Although injured, he continued to work for the employ-
er until January 12, 1979 before seeking medical treatment.
Mr. Whitcher filed a timely claim for compensation and
Pacific Employers Insurance, who insured Winter Hardware,
duly accepted liability and paid biweekly benefits and medi-
cal expenses as incurred. Mr. Whitcher's temporary total
weekly benefits were $95.53 and his permanent partial dis-
ability rate was $94.00 per week. He received the following
lump sum advances during 1979, which were to be credited
against his right to future permanent partial disability
payments :
1. October 1, 1979 - $750.00
2. November 5, 1979 - $500.00
3. November 21, 1979 - $1000.00
At his employer's insistence, Mr. Whitcher sought medi-
cal treatment on January 9 , 1979, due to pain in his lower
back which radiated into his lower extremities. On March 15,
1979, he underwent back surgery in an attempt to alleviate
the pain.
Seven months after surgery, the orthopedic surgeon who
performed the surgery gave Mr. Whitcher an estimated impair-
ment rating of 20% whole body permanent physical impairment
and loss of function. That 20% impairment rating was con-
firmed by the doctor again on March 13, 1980, one year after
surgery. On March 20, 1980, Mr. Whitcher signed a Petition
for Full and Final Compromise Settlement in the amount o-F
$8,000.00. Initial-ly, the proposed settlement offer of
$8,000.00 was rejected by Levi Loss of the Compliance Bureau.
However, Mr. Loss suggested to the claims adjuster that the
the Bureau would approve the settlement if an additional.
payment of 26 weeks of benefits at the claimant's temporarv
total rate, or $2,483.78, was added to the original $8,000.OC
settlement figure. The Workers Compensation Court found that
Mr. Loss was aware of Mr. InJhitcherls 20% impairment rating
which would have entitled him to 7-00 weeks of benefits at +he
rate of $94.00 or some $9,400.00.
Eventually, the claims adjuster agreed to amend the
petition to include the additional payments. The settlement
was processed and approved by the appropriate authorities in
April 1980. Mr. Whitcher continued to receive benefits
through September 11, 1980. Thereafter, he was notified by
letter dated September ? ? , 1980 that he would no longer
receive benefit-c pursuant to the compromise settlement
agreement.
On January 27, 1987, Mr. Whitcher filed a petition with
the Workers' Compensation Court to reopen the 1.980 settle-
ment. The court denied Mr. Whitcher's request based on hj.s
failure to comply with the applicable statute of limitations.
On appeal, Mr. Whitcher argues that he is entitled to reopen
his settlement based on the mutual mistake of the parties in
settling his claim, and does not address the applicability of
the statute of limitations. For purposes of our review, we
will first discuss the court's findings as they relate to Mr.
Whitcher's claim of mutual mistake and then we will review
the court's decision on the applicability of the statute of
limitations.
This Court has allowed the recission of a full and final
settlement agreement based on a mutual mistake of fact in
Kienas v. Peterson (Mont. 1980), 624 P.2d 1, 37 St.Rep. 1747.
A mistake of fact is defined by statute as follows:
Mistake of fact is a mistake not caused by the
neglect of a legal duty on the part of the person
making the mistake and consisting in:
(1) an unconscious ignorance or forgetfulness of a
fact, past or present, material to the contract, or
(2) belief in the present existence of a thing
material to the contract which does not exist or in
the past experience of such a thing which has not
existed.
Section 28-2-409, MCA.
Mr. Whitcher contends that there are three separate
bases for a finding of mutual mistake which justify a settinq
aside of the settlement agreement and that therefore, it was
error for the Workers' Compensation Court to deny a reopening
of the case. These accounts of mutual mistake relate to (I.)
the parties' understanding of the settlement agreement; (2)
the condition of the claimant's back at. the time of the
settlement; and (3) the claimant's psvchol.ogica1 condition at.
the time of the settlement.
The Settlement Agreement
First, Mr. Whitcher argues that because he was unable to
understand the agreement, there was no meeti.ng of the minds
as to what was being settled and that this constitutes mutual
mistake. He contends that he thought the lump sum amount OF
$8,000.00 was anal-ogous to his previous lump sum distribn-
tions in t.hat he would continue to receive benefits. Whi1.e
it is not clear how the insurer was in "unconscious igno-
rance" as to the meaning of the contract terms, we assume
that Mr. Whitcher is charging the insurer with knowledqe of
his own ignorance regarding the meaning and effect of t.he
full and final settlement.
A clinical psychologist testified by deposition regard-
ing the claimant's ability to read. and understand the settle-
ment agreement. The psychologist had. performed various tests
on the claimant in 1980 at the request of Vocational Rehabil-
itative Services to determine Mr. Whitcher's vocational
skills and interests. Those tests revealed. that in 1980, Mr.
Whitcher had an IQ which was just below average intelligence
and that his reading ability was at the 8th grade level.
When asked whether the claimant would be able to comprehend
the Petition for Fu13. and Final Settl-ement,the psychologist
responded:
A: I think that he would be able to comprehend jt
with perhaps some concepts explained to him.
Rut basically most of the wording is at a
level which he could comprehend.
Q: What would you feel would need to be explained
to him?
A: Oh, such words I think as duration, he might
not he able to understand the meaning of that
term without some---iust be able to pronounce
it and understand jt. Tberp's just a matter
of some single words and so forth. Concur-
rence. These are some more difficult words to
read. And they're not in a typical type of
vocabulary of people at Mr. Whitcher's level.
However, I think that if there was some
discussion along with this, he can understand
the figures and terms of the amount of money
involved. The fact that this is a lump sum
payment, and that he's due some additional
benefits, I think that would be fairly under-
standable to him.
Levi Loss, the assistant bureau chief with the Workers'
Compensation Division at the time of the settlement, stated
that he would not approve a settlement if he thought a claim-
ant did not understand it. Although Mr. Loss initially
rejected the $8,000.00 settlement offer, he later approved it
upon the addition of 26 weeks of benefits. When testifying
about Mr. Whitcher's understanding of the finality of the
settlement agreement, Mr. Loss stated:
I believe at the time that he understood it.
I think that he must have been in a position to
where that was ---
Somehow or another, it didn't seem to be that
important to him. He just wanted his money, and it
was more important to get it, although he was aware
that it could have some gravity; and if they ask
for it and insist on it, it gets to the point where
if the adjuster and them, if that's what they work
out, I can't tell too many people just how far to
go, if they insist.
The adjustor who handled the claim testified that he had
no reason to doubt Mr. Whitcher's ability to understand that
$8,000.00 was the maximum he was going to get. The evidence
indicates that the adjustor had explained both verbally and
in writing that after receiving the $8,000.00, the cl-aimant
would he c l o s i n ~his right to compensation forever.
The Workers1 Compensation Court found that Mr. Whitcher
was capable of understanding the terms of the settlement
agreement. We holcl that the above testimony substantially
supports that finding so that the claim of mutual mistake as
to what was being settled is without merit.
In connection with that argument, Mr. Whitcher contends
that the modification of the settlement agreement to include
26 weeks of additional payments without his knowledge or
consent constitutes mutual mistake since there was no meeting
of the minds as to those provisions. No relevant findings
were made by the Florkers' Compensation Court, and we are
reluctant to serve as factfinders as to this issue. However,
we fail to see why Mr. Whitcher would not have agreed to the
additional terms of the settlement. since they were in his
economic interest.
Next, Mr. Whitcher contends that the parties were mutu-
ally mistaken in their understanding of the nature and extent
of his back condition and how the injury mav have aggravated
the claimant's pre-existing psychological impairments. The
Workers' Compensation Court made no specific findings relat-
ing to the issue of mutual mistake and the claimant's mental
or physical condition, and as a reviewing court, we will not
make our own findings of fact in this regard. However, given
our concern for this claimant whose impairment is serious and
who was not represented by legal counsel at the time he
entered into the settlement agreement, we will briefly exam-
ine the record to determine if there is any evidence which
might justify further inquiry into these contentions.
The Rack Injury
This Court has been reluctant to reopen a Petition for
Full and Final Settlement based on mutual mistake surrounding
the injury except in a small number of situations. In Kimes
v. Charlie's Family Dining & Donut Shop (Mont. 19881, 759
P.2d 986, 45 St.Rep. 1402, this Court allowed an injured
worker to reopen his petition where a new and different
medical problem was discovered after the settlement. In
Weldele v. Medley Development (Mont. 1987), 738 P.2d 1281, 44
St.Rep. 1062, we allowed a reopening of the petition where
the claimant's initial condition deteriorated substantially
and the treating physician's initial assessment was a misdi-
agnosis of the actual extent of the injury.
There is no evidence in the record indicating that Mr.
Whitcher's back condition was originally misdiagnosed and
that it subsequently worsened beyond the scope of the initial
diagnosis. Nor is there evidence indicating that any new or
different medical problem was diagnosed after the settlement.
While we are sympathetic to the claimant's purported in-
creased levels of pain, we find nothing in the record to
indicate that the present state of his injury is anv differ-
ent than at the time of settlement. The orthopedic surgeon
who gave the claimant a 20% whole body impairment rating in
1980 testified again in 1987 that, in his opinion, the im-
pairment rating had not changed during that time. Also, in
April of 1982 a myelogram was administered which revealed "an
area where there was pressure which did not look significant-
ly different from the time of the myelogram at the time of
his first surgery (in 1980)."
The claimant's testimony indicates that he has suffered
extreme and often debilitating pain ever since the injur;r,
which appears to have gotten worse over the years. We note
that during this time, Mr. Whitcher has been employed in jobs
requiring heavy lifting, bending, and long periods of stand-
ing, which was discouraged by his phvsician. Toget-her with
the lack of medical testimony justifying a reopening of the
case, we conclude that while Mr. Whitcher mav indeed he
experiencing an increased level of pain, there is nothing to
indicate the parties were mutually mistaken about the condi-
tion of his hack at the time of the settlement.
The Psychological Condition
Mr. Whitcher also contends that the parties were mutual--
ly mistaken about certain diagnosed personality disorders,
which he claims did not become "active" until after the
injury and the settlement. This Court has found mutual
mistake where a claimant's lower back injury was later deter-
mined to have aggravated a pre-existing condition of cerebral
palsy which the parties did not. take into account at the time
of the impairment ratj-ng and settlement agreement. Kienas v.
Peterson, 624 P.2d at 3. However, there is no evidence here
which would support a similar conclusion. While it is clear
that Mr. Whitcher suffered a number of psychological impair-
ments, there is no evidence to connect those impairments to
the back injury. The psychologist's report indicates that
Mr. Whitcher suffered a chronic personality d sorder, which
i
he descrihed as:
". . . (a) generally inadequate adjustment over a
number of years, probably first appearing as a
teenager, or maybe even a little earlier than that,
inadequately adjusting to school, dropping out, not
finding any consistent satisfactory type of work,
having some family, marital problems."
The evidence indicates that this described "condition" per-
sisted following the claimant's injury. However, there is no
evidence that it was the claimant's personality disorder
which was the source of his frustration so much as it was
just an unfortunate series of events which occurred following
the injury.
Mr. Whitcher was examined again in 1982 by a different
clinical psychologist who also identified several personality
disorders, one of which he characterized as a "schizoid"
tendency. When asked about the relationship between the
claimant's schizoid behavior and his back condition, the
psychologist testified:
" . . . I think that in this instance, that he is
apt to show rather inconsistent behavior with
regard to his back problem. It is going to bother
him maybe sometimes a bit more; sometimes he is
going to ignore it. He is going to take a very
obtuse attitude, he might, I don't know; like
nothing is wrong with me. I am going to go ahead
and work. I am not going to lie, I am not going to
tell anybody; it will be some irratic behavior
about the way he treats his back. I don't think
the back injury is going to make the schizoid
personality disorder worse, it is not going to make
it worse, it is just going from this way to this
way. "
Our examination of the record leads us to conclude that
even if the parties did not take into account the existence
of the claimant's personality disorder at the time of the
settlement, there is no basis upon which to find a mutual
mj-stake of fact. The evidence does not indicate that the
personality disorder was aggravated by the injury or that
there was anv connection between the injury and the disorder.
Even if we had found some basis upon which to consider
this case on the merits, the Workers' Compensation Court
concluded that Mr. Whitcher's claim is barred hy the statute
of limitations so that his request to reopen the petition
should be denied. In declining to reopen Mr. Whitcher's
settlement agreement based on the grounds of mutual mistake,
the Workers' Compensation Court applied t h e following statute
of Limitations:
The period prescribed for the commencement of
an action for relief on the ground of fraud or
mistake is within 2 years, the cause of action in
such case not to be deemed to have accrued until
the discovery by the aggrieved party of the facts
constituting the fraud or mistake.
Section 27-2-203, MCA.
Since the settlement was completed and approved by the
proper authorities in April of 1980, the court concluded that
under the statute, Mr. Whitcher had until April of 1982 to
file his claim. Since it did not appear that he was seekins
medical care during that time until he returned to see his
doctor in April, 1982, the court noted that the statute ma17
not have begun to run until that time. Rased on medical
facts and Mr. Whitcher's debilitating condition in 1982, the
court concluded that the limitation period would have expired
by at least the fall of 1984. Thus, the claim filed in 1987
was barred by the two year statute of limitations in either
case.
Finally, the court noted that the only possibility of
not being precluded by the statute of limitations from bring-
ing this claim would be if Mr. Whitcher's mental capacity was
such as to make him unable to knowingly be charged with the
statute. Since this possibility was neither raised or pur-
sued by the claimant, the court did not consider it as an
issue and stated, "Unfortunately, the harsh reality of his
claim under the circumstances gives the Court no alternative
but to deny his request."
We conclude that the determination by the Workers'
Compensation Court that Mr. Whitcher's claim is barred by the
statute of limitations is a correct application of the law in
light of the facts of this case. There is no evidence that
the statute should be tolled either by latent discovery or by
the claimant's mental condition. We affirm the court's
denial of the claimant's request to open the Petition for
Full and Final Compromise Settlement.
We note the Workers' Compensation Court's concern for
Mr. Whitcher's mental, physical, and emotional condition, and
the benefits to which the court deemed him entitled. These
benefits include medical coverage, a 20% penalty against the
insurer, rehabilitation, and costs and attorney fees for the
medical benefits issue upon which he prevailed.
Affirmed.
We Concur: /
Mr. Justice William E. Hunt, Sr., and Mr. Justice R. C. McDonough
did not participate in this cause.
Mr. Justice John C. Sheeh~r,dissenting:
This worker's right to compensation payments should he
reinstated on the law and on the facts.
When Mr. Wood, representing Pacific Employer Insurance,
offered an $8,000 settlement, on March 20, 1980, Whitcher had
a whole body permanent physical impairment of 20 percent
recognized by his doctor. The petition which Wood prepared
and had Whitcher sign for $8,000 represented the payments
that Whitcher would receive at $94 a week for 1.64 vears.
The people then handling claims for the Workers' Compensat.ion
Division recognized the proposal as unconscionable. Without
contacting Whitcher, the Workers' Compensation Division
negotiated with Wood for an additional 26 weeks of
compensation. Whitcher never was consulted by either Wood or
the Division as to whether OJhitcher would consent to the
increase. The necessity for the increase would have
impressed upon Whitcher, perhaps, that his dealings with Wood
were not on all fours with propriety. Thus, we have a full
and final settlement to which Whitcher never consented. As
the opinion notes, the Workers' Compensation Court made no
relevant findings as to this point. Nonetheless, the
majority airily dismisses the lack of Whitcher's consent
saying, "We fail to see why Mr. VJhitcher would not have
agreed to the additional terms of the settlement since they
were in his economic interest." Thus does the majority
supply the missing element of consent to the agreement in
this case. The majority does not attempt to explain how an
agreement so detrimental to the interests of Whitcher are in
his "economic interest."
In Kienas v. Peterson (1980), 624 P.2d 1, 37 St.Rep.
1747 (Harrison, J.) this Court set aside a full and final
compromise agreement before the Workers' Compensation Court
on the ground of mutual mistake. Section 28-2-1611, MCA,
permits a contract to be revised by the court when through
fraud or mutual mistake a written contract does not truly
express the intention of the parties. It was on that hasi-s
that Kienas was decided. However, S 28-16-1611, MCA, also
permits the revision of a contract when there is a mistake of
one party which the other party at the time knew or
suspected. The evidence here shows that Whitcher's consent
to the $8,000 settlement was a mistake. If Pacific did not
know it was a mistake at the time, it soon found out when the
proposal was submitted to the Workers' Compensation Division.
The subsequent amendment of the proposal for settlement
executed between Wood and the Division without the knowledge
or consent of Whitcher constituted no contract as far as
Whitcher is concerned and there should be no problem about
reopening his case before the Workers' Compensation Court
under S 28-16-1611, MCA.
Section 27-2-203, MCA, provides that the two year
statute of limitations for reopening a contract on the ground
of fraud or mistake is not to be deemed to have accrued until
the discovery by the aggrieved party of the facts
constituting the fraud or mistake. The question of fact to
he determined in this case should be when did Whitcher
determine or discover that he had made a mistake in signing
the faulty agreement. There is no doubt that Pacific knew or
suspected that he had made a mistake.
Whitcher has been completely disabled since his injury
and is completely disabled now. The use of legal dodges to
deny him his monetary relief where his medical need is
verified, shows the absurdity of courts in this Workers'
Compensation system. The consent of Whitcher to the final
settlement here cannot be implied under our statutes because
he was never offered a proposal which became the final
settlement. Section 28-2-503, MCA. The purported contract
could be altered here only by another contract here in
writing which does not exist, or by an executed oral
agreement which also does not exist. Section 28-2-1602, MCA.
There being no contract, Whitcher has no problem with respect
to his right to additional compensation, no contract, no bar
throuqh the statute of limitations.
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