NO. 94-181
IN THE SUPREME COURT OF THE STATE OF MONTANA
1994
JONATHAN S. SANFORD,
Petitioner and Appellant,
-v-
BRANDON OWENS, INC.
Employer
and
STATE COMPENSATION MUTUAL
INSURANCE FUND,
Defendant and Respondent.
APPEAL FROM: Workers' Compensation Court
The Honorable Mike McCarter, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
Erik Rocksund, Columia Falls, Montana
For Respondent:
Todd Hammer, Warden, Christensen, Johnson & Berg,
Kalispell, Montana
Submitted on Briefs: September 15, 1994
Decided: November 22, 1994
Filed:
Justice Fred J. Weber delivered the Opinion of the Court.
Claimant Jonathan S. Sanford appeals the decision of the
Workers' Compensation Court which disallowed his petition to set
aside a full and final compromise settlement with respect to a knee
injury he suffered in 1989. The Workers' Compensation Court
determined there had not been a mutual mistake of fact concerning
the nature and seriousness of his condition. We affirm.
The sole issue for appellate review is whether the findings
and conclusions of the Workers 1 Compensation Court are supported by
substantial credible evidence.
Jonathan S. Sanford (Sanford) sustained a knee injury in
December of 1989 while working as a skidder operator for Brandon
Owens, Inc. in Lincoln County, Montana. He slipped and fell
backwards off a tractor he was operating, seriously injuring his
right knee. At the time of the injury, his employer was insured by
State Compensation Mutual Insurance Fund (State Fund). At age 17,
Sanford had undergone a meniscectomy to the same knee. A
meniscectomy is a removal of the meniscus covering the knee.
Sanford initially saw his family doctor, Dr. Raine, who
referred him to Dr. Lawrence Iwersen, an orthopedic surgeon. On
January 22, 1990, Dr. Iwersen diagnosed chondromalacia patella and
prescribed physical therapy. When the knee did not respond to the
physical therapy, Dr. Iwersen performed a diagnostic arthroscopy on
March 13, 1990. The arthroscopy did not identify any significant
abnormality other than that resulting from the prior meniscectomy.
During the arthroscopy, Dr. Iwersen visually observed and manually
2
probed Sanford's posterior cruciate ligament (PCL), noting that it
was "intact."
Sanford continued to experience severe knee pain and in May
1990, Dr. Iwersen prescribed a magnetic resonance image @RI). The
MRI also showed the PCL to be intact. Also in May of 1990, Sanford
was seen in consultation by Dr. John Hilleboe, an associate of Dr.
Iwersen, who found no laxity associated with the cruciate or
lateral ligament testing as observed from the videotape of the
arthroscopy, the MRI and his examination.
Sanford then went to Dr. Raine again and was referred to Dr.
Michael Sousa, a Missoula orthopedic surgeon. Dr. Sousa wrote in
a letter to Dr. Iwersen dated July 3, 1990:
[T]his patient has some instability secondary to cruciate
ligamentous laxity and patellar symptoms, possibly
secondary to a painful bipartite patella o r
chondromalacia patella.
Dr. Sousa advised that Sanford follow-up with Dr. Iwersen and
suggested that he might require a "cruciate ligament reconstruction
and/or a partial patellectomy to relieve his symptoms." He noted
that the results of this surgery were by no means 100% guaranteed.
Because Sanford's condition did not substantially improve, Dr.
Iwersen did a second arthroscopy on September 11, 1990; at the same
time he performed a partial patellectomy (partial removal of the
kneecap) to try to lessen Sanford's pain. During this surgery, Dr.
Iwersen physically probed and visually observed the PCL, noting
again that it was intact. Like the first arthroscopy, this was
also recorded on videotape and is part of the record in this case.
Dr. Iwersen's post-operative diagnosis is described in an
3
office note dated December 20, 1990, in which he wrote:
The [patient] was in today, long discussion and another
exam. I think that basically, he has lateral and
posterolateral instabilitv. He has a difficult problem
with this and we may be able to help him with a lateral
reconstruction but I wouldn't mind getting an opinion
from one of the knee surgeons in Salt Lake or Seattle as
this is quite an unusual problem. He, on the other hand,
would like to be rated and end all this. He has been
helped with the brace and is tired with surgery, though
I think we could help him with a reconstruction of his
lateral collateral ligment [sic]. He does not wish this
at this time, so I will rate him and see him on a PRN
basis. (Emphasis supplied.)
Dr. Iwersen testified that he told Sanford in discussions occurring
prior to his April 1991 settlement that he had posterolateral
instability, that the problem was a difficult one, and that
additional surgery was likely. He told him his knee was unstable
because of damaged ligaments and recommended that Sanford seek help
from a knee specialist in Salt Lake City or Seattle. Dr. Sousa
agreed that a reconstruction of Sanford's knee ligament would be in
his best interest.
Pursuant to the April 1991 settlement agreement with the State
Fund, Sanford received a $29,000.00 lump sum payment and $10,325.73
in biweekly payments. He reserved medical and hospital benefits.
He acknowledged at trial that he was aware prior to the settlement
that his knee could require further surgery and that Dr. Iwersen
had suggested getting another opinion from a specialist in Salt
Lake City or Seattle. He further acknowledged that he had not
wanted to submit to the surgery suggested by Dr. Iwersen and that
he wanted to end it all and bring his claim to closure. Dr.
Iwersen performed reconstructive surgery in November 1991.
4
Sanford testified that his knee condition caused his knee to
"pop out" on hundreds of occasions and on a daily basis following
the March 1990 arthroscopy performed by Dr. Iwersen. He testified
that in January 1992, the worst instance of the knee popping out
occurred as he was going down a flight of stairs in his home.
Following that occasion, he told his physical therapist that he had
fallen on his knee. During the trial, he minimized the degree of
seriousness of the fall when he testified that he remembered it
because his daughter was with him and she was hurt. At trial, he
testified that he did not fall on his knee but rather had fallen
with his shoulder against the paneled wall and that he was sore all
over for a few days.
Sanford had further surgeries on the right knee performed by
Dr. Lonnie Paulos in Salt Lake City, Utah. Dr. Paulos performed an
arthroscopy on September 29, 1992, and a posterolateral knee
reconstruction on January 28, 1993.
Dr. Paulos testified by deposition as to his belief that a
tear in the PCL had been present but healed at the time Dr. Iwersen
saw an intact PCL. Dr. Paulos did not have the benefit of viewing
Dr. Iwersen's videotapes from the two arthroscopies done prior to
Sanford's settlement, nor had he reviewed the depositions of
Sanford and his wife, the physical therapy records, or Dr. Sousa's
medical records and he did not know that Sanford had fallen down
the stairs in January of 1992. Without this very pertinent
information, Dr. Paulos concluded that Dr. Iwersen did not
'*appreciate the instability" of Sanford's knee. Dr. Iwersen
5
testified in his deposition that he did not appreciate the
instability of Sanford's knee early on in his care of Sanford but
did so by the fall of 1990. This was after the second arthroscopic
surgery and prior to Sanford's settlement with the State Fund.
Sanford was not represented by counsel in negotiating the
April 1991 settlement agreement. In this action, he has attempted
to reopen that settlement agreement based on mutual mistake of
material fact. He contends that he and the State Fund were unaware
that he had sustained a tear of his PCL ligament. He further
contends that there was a mistake in the nature and extent of the
injury and in the belief that he could return to work.
Sanford's request in this case is for a review of evidence
presented mostly by medical doctors. Upon review of the entire
record, this Court will uphold the Workers' Compensation Court's
factual findings and conclusions if they are supported by
substantial credible evidence. Simons v. State Compensation Mut.
Ins. Fund (1993), 262 Mont. 438, 445, 865 P.2d 1118, 1122; Pepion
v. Blackfeet Tribal Indus. (1993), 257 Mont. 485, 489, 850 P.2d
299, 302; Rose v. Burdick's Locksmith (Mont. 1994), 875 P.2d 337,
338, 51 St.Rep. 447, 448. In cases where all medical testimony is
not offered by deposition, the Court will not reweigh the medical
deposition testimony. Simons, 865 P.2d at 1122. In this case,
most but not all of the significant medical testimony was presented
by deposition and, thus, our review of the factual findings and
conclusions is limited to whether the findings are supported by
substantial credible evidence.
6
Are the findings and conclusions of the Workers' Compensation
Court supported by substantial credible evidence?
The factual findings and conclusions which are being
challenged in this appeal relate to the significance of the PCL
injury, the effect of the pre-settlement diagnosis of lateral and
posterolateral rotary instability, and whether Sanford may return
to work. For the reasons discussed below, we conclude that the
Workers' Compensation Court's decision refusing to set aside the
settlement agreement is supported by substantial credible evidence.
THE PCL INJURY
The evidence was undisputed that Sanford's PCL in the right
knee was found to have been partially torn and healed over by
scarring on September 29, 1992, the date of Dr. Paulos' first
surgery. This was eight months after the fall on the stairs at
home, nearly eighteen months after the settlement and close to
three years after the compensable injury. The testimony conflicts
as to when the tearing of the PCL may have occurred.
There is no question that Sanford sustained a very serious
work-related injury when he fell from the tractor in December of
1989. Dr. Paulos opined that this must have been the time when the
PCL tear occurred. Sanford relies on Dr. Paulos' opinion for his
claim of mutual mistake of fact. He contends that the PCL injury
resulted from the December 1989 accident although the damage was
not recognized or identified until after the settlement. He
further contends that the Workers' Compensation Court's findings
and conclusions supporting the ultimate conclusion that the PCL
damage occurred as a result of the 1992 fall were based on the
7
testimony of State Fund's expert witnesses, Drs. Sechrest an
Friedrick, and are contrary to the opinions and records of
Sanford's treating physicians, Drs. Iwersen and Paulos.
The Workers' Compensation Court Finding of Fact No. 27 states
in pertinent part:
e) It is more likely than not that the PCL tear
identified by Dr. Paulos was caused by Sanford's January
1992 fall down the stairs at home. Both Dr. Sechrest and
Dr. Friedrick reviewed videotapes of Dr. Iwersen's first
two surgeries as well as a physical therapy report
following Sanford's January 1992 fall. Based on their
review of those items, as well as other records and
depositions, they testified that it was more probable
than not that the PCL damage occurred as a result of the
January 1992 fall down the stairs. Prior to the fall
down the stairs, claimant's knee popped out "hundreds of
times." . . . The fall down the stairs, however, was
different in degree. Claimant described his fall as
follows:
A: That's the worst time because the knee -- the
knee popped quite a ways out. It wasn't just a
little. It wasn't just a slide. It was an out.
Q: And that one really put you down?
A: Yes.
Dr. Friedrick observed videotapes of the 1990
arthroscopies and opined that Dr. Iwersen's probings of
the PCL were inconsistent with the existence of a PCL
tear at that time. . . . Dr. Iwersen did not express an
opinion but pointed out that falling down the stairs did
not cause Sanford's instability, which already existed,
and that the fall could have caused a PCL tear or further
tear. (Citations omitted.)
Dr. Iwersen's videotapes of the first two arthroscopies both
show that Dr. Iwersen probed the PCL and concluded that it was
intact. The testimony presented establishes that a finding that
the PCL is "intact" does not mean it is in perfect condition and
that an injured PCL is only one of a number of problems which can
8
cause a knee to be unstable. It further established that although
the PCL may have been stretched and may have contributed to the
laxity of the knee as a whole, that sort of condition is not as
apparent soon after an injury as it is after a period of time.
This is apparently because the muscles which help to support the
knee, including the four quadriceps in the thigh, weaken and become
atrophied from disuse. In the beginning post-injury stages, it is
more difficult to detect exactly what is injured because the
patient may involuntarily guard the knee by motor control due to
good muscle tone, thereby shielding the exact nature of the injury
from detection.
At trial, Dr. Sechrest testified in person. Dr. Sechrest had
thoroughly reviewed all the medical records of all the physicians
who treated Sanford; he had reviewed the depositions of Dr.
Iwersen, Dr. Paulos, Dr. Friedrick, Sanford and Sanford's wife; he
had reviewed the physical therapy reports; and he had seen Dr.
Iwersen's videotapes.
Dr. Sechrest testified that if you have continued giving way
of the knee, you may have significant instances of reinjury. He
further testified that the instability may increase over a period
of time and ligaments of the knee may be damaged or further damaged
more easily with incidents of trauma. He testified that the PCL
may not be functioning the way it should and yet still appear
intact, show up on an MRI scan intact, and only over time become
stretched out and unable to function properly. He testified that
there was a definite possibility that the PCL was further damaged
9
when Sanford fell on the stairs and that, based on the information
he reviewed in the chart, it was more likely than not that further
injury occurred to the PCL at that time. Dr. Sechrest further
testified that after his review of the objective data provided to
him, including the report of the MRI scan, the videotapes, and the
results of the examinations by three orthopedic surgeons--Drs.
Sousa, Hilleboe and Iwersen--his opinion was that the PCL was
intact prior to the time Sanford saw Dr. Paulos. He testified that
the weakening and resultant atrophy of muscles and other connective
tissues from disuse can cause a "set-up for further injury . . .
[lowering] the threshold at which any connective tissue is going to
be damaged" and that where the muscles are weak and atrophied, it
can take an incident of less trauma to further affect the
structures in the knee.
The State Fund also provided the deposition testimony of Dr.
Friedrick, another orthopedic surgeon. Dr. Friedrick testified to
his opinion, based on a review of all the records, that it was
medically more probable than not that the PCL was torn or partially
torn at some time subsequent to the settlement in April of 1991.
He testified that if the PCL had been significantly disrupted, Dr.
Iwersen's probing as demonstrated by the videotapes would have
either lengthened or completely separated the fibers of the PCL,
depending on the degree of the injury.
Sanford argues that Dr. Iwersen never diagnosed the PCL damage
prior to the April 1991 settlement. Dr. Iwersen's records do not
specify a problem with the PCL prior to the April 1991 settlement.
10
However, Dr. Iwersen testified that his diagnosis included the
possibility of PCL damage even though it was not specifically
identified. Dr. Iwersen stated that an identification of the PCL
injury was not crucial to his overall diagnosis of posterolateral
rotary instability. Dr. Sechrest also testified that he did not
consider the identification of a particular injury to the PCL to be
a determining factor. In fact, all of the medical testimony
indicates that a diagnosis of PCL damage is not critical and that
a functional diagnosis of lateral and posterolateral rotary
instability implicitly carries with it the possibility of PCL
damage.
Dr. Sechrest testified that such a functional diagnosis
describes a pattern of instability in the knee based on a physical
examination of the mechanics of the knee. Prom the physical
reaction to certain physical maneuvers, a physician can imply
injury to certain groups of ligaments. Dr. Iwersen made this
functional diagnosis after his second arthroscopic surgery
performed in September of 1990. All doctors agreed that the
posterolateralrotary instability
in this case--was the critical determining factor in determining
how next to proceed. The diagnosis included the possibility of
some damage to the PCL but damage in the nature of laxity rather
than an outright tear which would have been observable by means of
the arthroscopies.
Sanford attempted to deny that his at-home injury was serious
enough to tear his PCL. His testimony at trial contradicted that
11
of his deposition. In his deposition testimony, he testified that
the incident on the stairs was the worst incidence of the knee
popping out; at the trial, he claimed that he remembered the
incident because his daughter was hurt. He told his physical
therapist that he had landed on his right knee; at trial, he denied
falling on his knee and stated that he had hit his shoulder lightly
on the paneled wall and that his entire right side was sore.
Sanford's contention that the Workers' Compensation Court
disregarded the testimony of his treating physicians is not
persuasive. Dr. Paulos did not have a complete foundation from
which to make a conclusion. Moreover, Dr. Paulos did acknowledge
that the PCL could have torn at the time of the fall on the stairs.
Dr. Iwersen also testified it was possible that the PCL could have
been torn in the fall on the stairs but stated that he had no
opinion on that issue. In contrast, both Dr. Sechrest and Dr.
Friedrick had reviewed all of the medical records and depositions
in this case. Furthermore, Dr. Sechrest testified in person and
the Workers' Compensation Court found him to be a very credible and
knowledgeable witness. Clearly, there was substantial credible
evidence to support a finding that the PCL was torn when Sanford
fell on the stairs in his home. We will not reweigh that evidence.
We conclude the Workers' Compensation Court's discounting the
weight attributable to Dr. Paulos' testimony is supported by
substantial credible evidence.
THE PRE-SETTLEMENT DIAGNOSIS
Sanford contends that the Workers 1 Compensation Court erred by
12
finding and concluding that the basic nature and extent of his
condition was recognized even though his treating physicians may
not have identified the specific ligaments involved. He contends
that Dr. Iwersen admitted there was no specific reference to the
PCL being damaged prior to the 1991 settlement and that the pre-
settlement diagnosis did not include PCL damage.
The State Fund contends that these arguments and assertions
assume that damage to the PCL was present after the original injury
and prior to the settlement and did not result from Sanford's
falling down the stairs in January of 1992. It further contends
that this Court need not address this issue any further because it
assumes that the PCL was damaged prior to the settlement.
Although we have addressed the issue of damage to the PCL at
length above, this issue is not as simple as respondent would make
it. The medical testimony in this case is clearly in agreement
that other ligaments as well as the PCL are likely involved in an
unstable knee. In fact, the evidence is emphatic that rarely is
there only one ligament involved. Dr. Iwersen's diagnosis of
lateral and posterolateral instability is a complex of injuries to
various soft tissues in the knee and may or may not involve damage
to the PCL. Moreover, it was explained at trial and in depositions
that as the supporting structures become weakened and atrophy from
disuse, it becomes easier to make an accurate diagnosis of the
particular structures contributing to the instability.
Dr. Sechrest testified in detail during the trial concerning
the concept of functional diagnosis. He explained that a diagnosis
13
of lateral and posterolateral rotary instability is a functional
diagnosis which is generally the result of a combination of
injuries. He further explained that while a specific
identification of a tear in a ligament may be important in
determining the plan for a specific surgical procedure, it is not
significant in determining the nature and extent of the injury.
Dr. Sechrest also stated that tearing or further tearing of
ligaments may occur where this sort of functional diagnosis is
made, particularly when the leg musculature subsequently becomes
weakened and atrophied.
The deposition testimony of Dr. Friedrick and Dr. Iwersen
agreed with the testimony of Dr. Sechrest concerning the nature of
the diagnosis. Their testimony indicated that the PCL may have
sustained some damage as a result of the 1989 injury which remained
undetected initially and which contributed to the overall
instability of the knee. Both Dr. Sechrest and Dr. Iwersen
explained that specific reference to the PCL was unnecessary for
reaching a correct assessment or diagnosis of Sanford's condition.
Dr. Iwersen explained the nature of the diagnosis of
posterolateral rotary instability:
[Wlhether you have a complete tear of your posterior
cruciate ligament to me doesn't -- That's not crucial.
What is crucial is that he has this instability problem
that is going to be disabling. It's a difficult,
difficult problem to deal with. And the posterior
cruciate to me just -- It doesn't mean anything. What
has happened is Doctor Paulos elected to reinforce that
posterior cruciate ligament in order to take care of this
posterolateral instability.
Dr. Iwersen also testified that even when the PCL is intact, it may
14
be necessary to tighten or reconstruct the ligament. Prior to the
settlement, he assessed Sanford's injury as a difficult one to
address and encouraged a referral to an expert in Salt Lake City or
Seattle. Dr. Iwersen stressed to Sanford that he would likely need
additional surgery in the future and that he could possibly need a
total knee replacement.
There are numerous other indications in the record to support
the fact that the seriousness of the injury was recognized by Dr.
Iwersen prior to the settlement in April of 1991. In an office
note dated July 30, 1990, he states that "really I am unsure what's
going on here." He testified that initially, he did not appreciate
the nature of the injury, but certainly did so prior to the
settlement. The record supports this statement. Dr. Iwersen had
the written report of Dr. Sousa's evaluation in which Dr. Sousa
stated that it was possible Sanford would require a cruciate
ligament reconstruction and/or partial patellectomy. Indeed, Dr.
Iwersen had wanted to perform another surgery and particularly
advised Sanford that he had a difficult problem not easily
identified. Dr. Iwersen eventually did perform a third surgery but
not until several months after the settlement. Clearly the problem
was identified, however, that the condition would require future
surgery to take care of laxity which would occur as a natural
progression. Dr. Iwersen also told Sanford that he may require a
total knee replacement at some later date. Dr. Paulos also opined
that a total replacement may be necessary in the future. It is
hard to imagine what further extent of the effect of the injury
15
could be contemplated beyond a total knee replacement.
Dr. Sechrest testified that Dr. Iwersen had not misdiagnosed
Sanford's condition and that the diagnosis made by Dr. Iwersen
after the second arthroscopy was a functional diagnosis which is
usually the result of a combination of injuries. Dr. Sechrest
further explained that although a specific identification of a tear
may be important in determining when to perform a specific surgical
procedure, it was not significant in determining the nature and
significance of the injury here. Dr. Paulos also agreed with the
functional diagnosis of posterolateral rotary instability and did
not agree with Sanford that Dr. Iwersen had misdiagnosed his
condition.
Setting aside a settlement based on mutual mistake of fact
requires a change in diagnosis. The diagnosis here included the
possibility that Sanford could further injure the knee as a result
of its condition. A diagnosis of instability involves the
possibility of future damage because the condition is unstable.
That possibility of future damage became reality here when Sanford
further injured the knee due in wart to the instability wreviouslv
diaanosed bv Dr. Iwersen which caused his knee to be more
susceptible to injury. Simply put, the diagnosis remained the same
irrespective of a PCL injury. Further, all doctors were in
agreement that it was the 1989 injury and not the fall on the
stairs that caused the instability.
The alleged material mistake of fact concerning the nature and
extent of the injury here is not analogous to the sort of mistake
16
which can result in a setting aside of a workers' compensation
settlement such as in Kimes v. Charlie's Family Dining & Donut Shop
(1988), 233 Mont. 175, 759 P.2d 986, where it was discovered after
settlement that the claimant had suffered a torn meniscus which
created the conditions for probable degenerative changes in the
knee joint. See also Wolfe v. Webb (1992), 251Mont. 217, 824 P.2d
240 (claimant suffered injury to clavicle and after settlement, his
physicians discovered previously undiagnosed damage to his right
shoulder); Kienas v. Peterson (1980), 191 Mont. 325, 624 P.2d 1
(medical assessment of a back injury did not take into account its
effect of aggravating the preexisting cerebral palsy); and Weldele
v. Medley Dev. (1987), 227 Mont. 257, 738 P.2d 1281 (treating
physician's initial assessment was a misdiagnosis of the actual
extent of the injury).
We conclude there was no misdiagnosis of the nature and extent
of the injury here which constitutes a mutual mistake of fact. The
nature of the injury here was a general instability of the knee
with the possible extent being a total knee replacement in the
future. The diagnosis did not rule out the possibility of future
surgeries to repair laxity or other problems caused by the
instability of the knee falling short of a total replacement.
RETURN TO WORK
Although Sanford claims he has not been able to obtain
employment, we conclude the Workers * Compensation Court did not err
in determining that Sanford's employment prognosis has not changed.
Prior to settlement in April of 1991, Dr. Iwersen determined that
17
Sanford could return to sedentary employment and, most recently,
Dr. Paulos has also testified that he is able to return to
sedentary employment.
We hold the findings and conclusions of the Workers'
Compensation Court are supported by substantial credible evidence.
Affirmed .
We Concur: