No. 91-034
IN THE SUPREME COURT OF THE STATE OF MONTANA
1991
ROBERT L. RATH,
Claimant and Appellant,
-vs-
ST. LABRE INDIAN SCHOOL,
Employer,
and
STATE COMPENSATION MUTUAL INSURA:
NCE F .
1
Defendant and Respondent.
APPEAL FROM: Workers Compensation Court,
The Honorable Timothy Reardon, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
John S. Yoder; Yoder Law Office, Billings, Montana
For Respondent:
Michael P. Heringer; Anderson, Brown, Gerbase,
Cebull, Fulton, Harman & Ross, Billings, Montana.
Submitted on briefs: June 13, 1991
Decided: August 13, 1991
Filed:
Justice Karla M. Gray delivered the Opinion of the Court.
The claimant, Robert L. Rath, appeals the judgment of the
Workersf compensation Court refusing to set aside the Full and
Final Compromise Settlement that he entered into on January 17,
1986. Following a trial on the matter, the Workers4 Compensation
Court ruled that there was no mutual mistake of fact as to the
claimant Is medical condition at the time of the settlement and that
his petition to reopen the settlement was barred by the statute of
limitations pursuant to 5 27-2-203, MCA. We affirm.
The dispositive issue on appeal is whether the Workers'
Compensation Court erred in concluding that the claimant's petition
to reopen the settlement was barred by the statute of limitations
pursuant to 5 27-2-203, MCA.
Over the years, the claimant has suffered three separate
on-the-job injuries to his back. In July 1969, the claimant was
working as a supervisor at a sawmill in Ashland, Montana when a
tree struck him on his back. He suffered a compression fracture
of a thoracic vertebra. The claimant was treated by Dr. Peter V.
Teal, an orthopedic surgeon in Billings. In January 1971, the
claimant was released by Dr. Teal to pursue lighter work and was
given a twenty percent impairment rating as a result of this
injury. The claimant received workers' compensation benefits,
settling his claim on a full and final compromise basis.
Shortly after settlement, the claimant returned to work as a
heavy equipment operator for Powder River County in Broadus,
Montana. On June 18, 1971, the claimant strained his lower back
2
while changing a tire on a road grader. As with his previous
injury, the claimant was treated by Dr. Teal. A myelogram was
performed which showed a bulging d i s c at L4-5. Based upon t h e
claimant's complaints of pain, Dr. Teal completed a fusion from L4
to S1 in February 1972.
Dr. Teal released the claimant to work i n October 1 9 7 4 . He
also assessed a twenty percent impairment rating for this injury.
The claimant received workers1 compensation benefits as a result
of his 1971 injury, again settling his claim on a full and f inal
compromise basis.
After this settlement, the claimant went to work as the food
supervisor fox the St. Labre Indian School. His back condition was
subject to intermittent flare-ups associated with increased
activity level. The claimant saw Dr. Perry M. Berg, an associate
of Dr. Teal, in 1982 or 1983 for upper back pain. In 1983, he also
saw Dr. L. A. Campodonico, his family physician in Miles City, for
low back pain.
On March 5, 1985, the claimant slipped and fell while carrying
a box of meat and injured his back a third time. He was initially
treated by Dr. C. T. Smith, an orthopedic surgeon in Sheridan,
Wyoming. Dr. Smith diagnosed the claimant's condition as an "acute
lumbosacral strain of S1 joint superimposed on degenerative
arthritis and an old fusion."
On April 9, 1985, the claimant was examined by Dr. Teal. Dr.
Teal noted that the claimant had been having steadily increasing
pain prior to re-injuring his back in the fall at work. The
claimant also complained of tenderness at L2-3 and L3-4. Dr. Teal
diagnosed the claimant as having degenerative disc disease, along
with chronic lumbar sprain. Dr, Teal believed the claimant was
unable to return to his former position and advised him to seek
lighter work, The claimant did not return to Dr. Teal until
September 1986, after his full and final compromise settlement had
been approved by the Workersi compensation Court.
The claimant was examined by Dr. Gary Ray, however, on
October 17, 1985. Dr. Ray noted the degenerative changes above the
claimant's fusion. Dr. Ray believed the claimant had reached
maximum healing and released him to work with significant
restrictions. The claimant never returned to Dr. Ray.
~pproximately three months prior to the full and final
compramise settlement, the claimant retained Thomas Lynaugh to
represent him in regard to his workersf compensation claim. The
claimant and Mr. Lynaugh also entered into an attorney agreement
for Mr. Lynaugh to represent him in regard to his claim for social
security disability benefits.
On November 20, 1985, the claimant requested a partial lump
sum advance of $65,000 from the respondent, State Compensation
Mutual Insurance Fund, which he asserted could be credited against
his projected permanent total disability benefits. The only type
of employment activity that the claimant felt he could physically
perform was light bookkeeping duties at a family-owned diner in
Ashland. The clairnantlscondition had not improved since the March
1985 injury.
The respondent denied the claimantls request for a lump sum
advance. The claimant's counsel, however, negotiated a settlement
in the amount of $71,500 to be paid in a lump sum, which
represented 500 weeks at the claimant's maximum permanent partial
disability rate.
In support of the Petition for Full and Final Compromise
Settlement, the claimant executed an affidavit which indicated that
he was aware of the extreme limitations placed on him by Dr. Ray.
He also recognized that his only vocational opportunity was in a
limited capacity at the family-owned diner in Ashland. In his
affidavit, the claimant also stated that he was aware that with
the full and final compromise settlement, he could never reopen his
claim.
The Petition for Full and Final Compromise Settlement was
subsequently submitted to the Division of Workers1 Compensation.
The Division approved the settlement on January 17, 2986. The
Workers1 Compensation Court approved the settlement on January 21,
1986.
The claimant s back problems have bothered him consistently
since the March 5, 1985 injury. He was admitted to the hospital
by Dr. Teal in late September 1986 because of his continuing low
back pain. On September 29, 1986, a CT scan showed constriction
of the claimant's spinal canal. On Octobes 3, 1986, a myelogram
was performed which showed spinal stenosis at t h e L3-4 level. The
stenosis was due to the bulging of the disc and/or bone spurs that
projected into the spinal canal.
Dr. Teal explained in his deposition that the claimant's
joints are wearing out, which produces constriction of the spinal
canal so that the nerves have less room. As the condition
progresses, the spinal canal becomes narrower and the vertebrae
become more unstable and loose as time passes. Dr. Teal suspected
spinal stenosis in April 1985 because of the claimant Is significant
degenerative disc disease. However, his suspicions were not
confirmed until the October 3, 1986, myelogram.
Dr. Teal testified that based upon the findings of the CT scan
and the myelogram, he discussed with the claimant the possibility
of future surgery to relieve the constriction in his spinal canal.
He advised the claimant to consider surgery and to return in
November 1986 to discuss it further.
The claimant pursued his claim for social security disability
benefits during this period of time. As part of that claim
process, the claimant's counsel submitted a letter with exhibits
to the administrative law judge on October 23, 1986, asserting that
the findings of the CT scan and the myelogram supported Rathls
claim for disability benefits. The letter makes it clear that Dr.
Teal had discussed with the claimant the possibility of surgery as
a course of treatment for his condition. The claimant argued that,
given his condition, he was not capable of performing any
competitive employment, and therefore, was totally disabled.
Although Dr. Teal requested that the claimant return in
November 1986 to discuss surgery for his back problems, the
claimant did not return until July 1987, at which time he continued
to complain of low back pain. In May 1988, the claimant told Dr.
Teal that his pain was as severe as in March 1985. X-rays did not
reveal any significant change in the claimant's condition.
The claimant returned to Dr. Teal on May 9, 1989, complaining
of pain in his back. A CT scan showed stenosis of the spinal canal
at L3-4. When compared with the CT scan of September 1986, this
CT scan showed basically no change in the claimant's condition
except for a little more stenosis at the L3-4 level.
An MRI completed on July 19, 1989 reconfirmed Dr. Teal's
belief that claimant suffered from spinal stenosis. Dr. Teal
recommended surgery. Surgery was performed on November 3, 1989,
to decompress and remove bone spurs at L3-4 and to extend the
fusion to the third lumbar vertebra. At the time of his deposition
on September 6, 1990, Dr. Teal did not believe the claimant had
reached a point of maximum healing and had not released the
claimant to work. The claimant has not worked since his March 5,
1985 injury.
On July 9, 1990, the claimant filed a petition with the
Workers' Compensation Court to set aside the Full and Final
Compromise Settlement he had entered into on January 17, 1986, on
the grounds of mutual mistake of the fact that he would be required
to have additional back surgery after the settlement of his claim.
A trial on the matter was held on September 24, 1990. The claimant
testified briefly at the trial. Further testimony of the claimant,
as well as testimony of his treating physician, Dr. Teal, his
counsel at the time of settlement, Thomas Lynaugh, three of the
respondent's claims personnel and the claimant's vocational
rehabilitation expert, was submitted by depositions filed with the
Workers' Compensation Court.
On December 13, 1990, the Workers' Compensation Court entered
its findings of fact, conclusions of law, and judgment refusing to
set aside the settlement. The Workers' Compensation Court ruled
that there was no mutual mistake of fact as to the claimant's
medical condition at the time of the settlement, and that his
petition to reopen the settlement was barred by the statute of
limitations pursuant to 5 27-2-203, MCA. This appeal followed.
The claimant contends on appeal that the Workers' Compensation
Court erred in concluding that there was no mutual mistake of fact
regarding the condition of his back at the time of the January 17,
1986, Full and Final Compromise Settlement. In addition, the
claimant contends that the Workers' Compensation Court erred in
concluding that his petition to reopen the settlement was barred
by the statute of limitations.
The claimant maintains that he never had knowledge that his
condition might require further surgery until he received a letter
from Dr. Teal dated July 29, 1989. He asserts that the court
ignored the testimony of Dr. Teal that in an office visit on
July 7, 1987, after the October 3, 1986, myelogram, there was no
discussion of surgery. He argues that Dr. Teal's office note of
this visit reflected that Dr. Teal had not yet determined a
definite diagnosis of spinal stenosis and that Dr. Teal's primary
diagnosis was depression. He further asserts that in his next
visit to Dr. Teal on May 31, 1988, he again was treated
conservatively with no discussion of surgery. The claimant argues
that this evidence is consistent with his own testimony that he
believed Dr. Teal thought his subjective complaints of pain had a
psychological, rather than a physiological, basis. He further
argues that the two-year statute of limitations contained in
5 27-2-203, MCA, did not begin to accrue until he actually
discovered his mistake regarding the condition of his back in July
1989.
This Court will not overturn findings of fact of the Workers1
Compensation Court if there is substantial evidence in the record
to support them. Kraft v. Flathead Valley Labor & Contr. (1990),
243 Mont. 363, 365, 792 P.2d 1094, 1095. Conclusions of law,
"whether the conclusions are made by an agency, workers1
compensation court, or trial court," will be upheld if the
tribunal's interpretation of the law is correct. Steer, I n c . v.
Dept. of Revenue (Mont. 1990), 803 P.2d 601, 603, 47 St.Rep. 2199,
2200. We will also uphold the result reached below if correct,
regardless of the reasons given for the conclusion. Jerome v.
Pardis (19891, 240 Mont. 187, 192, 783 P.2d 919, 922.
The Full and Final Compromise Settlement entered into by the
parties is a contract. In Kienas v . Peterson (1980), 191 Mont.
325, 624 P.2d 1, this court established that under general
principles of contract law a full and final compromise settlement
could be set aside in limited situations if the parties to the
agreement were operating under a mutual mistake of fact. Section
28-2-409, MCA, describes what constitutes a mistake of fact:
What constitutes mistake of fact. 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 existence of such a thing which has not existed.
Section 27-2-203, MCA, sets forth the applicable statute of
limitations for an action to reopen a full and final compromise
settlement on grounds of mutual mistake.
Actions for relief on ground of fraud or mistake. 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.
Actual knowledge of the mutual mistake is not required to start the
running of the statute of limitations. DrAgostino v. Swanson
(lggO), 240 Mont. 435, 443, 784 P.2d 919, 924. Rather, the statute
of limitations begins to run when the facts are such that the party
bringing the action would have discovered the mistake had he or she
exercised ordinary diligence. D' Aqostino, 240 Mont . at 443, 784
Here, the Workers' Compensation Court concluded that, based
upon the medical evidence presented, it could find nothing to
indicate that the parties were mutually mistaken about the
condition of the claimant's back at the time of the settlement.
In addition, the court ruled that the claimant's petition was
barred by the two-year statute of limitations, apparently reasoning
that because there was no mutual mistake of fact at the time the
settlement was entered into in January 1986, the two-year period
for bringing the action expired in January 1988,
Our review of the record shows that even if the parties were
mutually mistaken as to the condition of the claimant's back at the
time they entered into the settlement, as the claimant asserts, the
claimant's petition was barred by the statute of limitations.
Contrary to the claimant's assertions, the record clearly indicates
that the claimant discovered no later than October 1986 that
additional back surgery was a possibility. Dr. Teal testified
that, based upon the findings of the September 1986 CT scan and the
October 1986 myelogram, he discussed with the claimant the
possibility of further surgery, advised him to consider it and
requested him to return in November to discuss it further. The
claimant did not return to Dr. Teal until July 1987. In his
deposition, Dr. Teal explained that he did not discuss surgery with
the claimant at that time because he was "impressed . . . with the
severity of [the claimant's] emotional depression and felt that we
shouldn't be--we should be treating that and shouldn't be putting
him through an operation."
Furthermore, in October 1986, the claimant's attorney notified
the administrative law judge in the claimant's social security
claim of Dr. Teal's conclusion that surgery was a possible course
of treatment. Moreover, when the administrative law judge ruled
in the claimant's favor, the decision awarding social security
disability benefits was based in part on the medical findings that
surgery was possible for the claimant in the future.
Given this evidence, the two-year period in which to bring a
claim based on mutual mistake pursuant to 5 27-2-203, MCA, expired,
at the latest, in October 1988. Because the claimant did not file
his petition to reopen the settlement until July 1990, his claim
was barred by the statute of limitations. Accordingly, the result
reached by the Workers' Compensation Court is correct.
Affirmed.
* !# -
y Chief Justice
August 13, 1991
CERTIFICATE OF SERVICE
I hereby certify that the following order was sent by United States mail, prepaid, to the
following named:
John S. Yoder
YODER LAW OFFICE
P.O. Box 3333
Billings, MT 59103-3333
Michael P. Heringer
ANDERSON, BROWN, GERBASE, CEBULL,
FULTON, HARMON & ROSS
P.O. Drawer 849
Billings, MT 59103-0849
ED SMITH
CLERK OF THE SUPREME COURT
STAT%% MONTANA