Kruzich v. Old Republic Insurance

June 10 2008

DA 06-0436

IN THE SUPREME COURT OF THE STATE OF MONTANA

2008 MT 205

HENRY KRUZICH,

Petitioner and Appellee,

v.

OLD REPUBLIC INSURANCE COMPANY,

Respondent/Insurer and Appellant.

APPEAL FROM: Montana Workers’ Compensation Court, WCC No. 2005-1247
Honorable James Jeremiah Shea, Presiding Judge

COUNSEL OF RECORD:

For Appellant:

Joe C. Maynard, Steven W. Jennings, Crowley, Haughey, Hanson, Toole
& Dietrich, P.L.L.P., Billings, Montana

For Appellee:

William P. Joyce, Joyce, Johnston & MacDonald, PLLP, Butte, Montana

Submitted on Briefs: January 24, 2007

Decided: June 10, 2008

Filed:

__________________________________________
Clerk
Justice James C. Nelson delivered the Opinion of the Court.

¶1 Old Republic Insurance Company (Old Republic) appeals a judgment of the

Workers’ Compensation Court (WCC) setting aside the 1994 settlement agreement

between Old Republic and Henry Kruzich, and reopening Henry’s claim. We reverse.

¶2 We address the following issue on appeal: Did the WCC err in rescinding the

settlement agreement based upon mutual mistake of fact?

Factual and Procedural Background

¶3 In August 1988, Henry suffered a serious head injury while employed with Blue

Range Mining of Butte, when an ore bucket struck Henry on the side of the face. At the

time of Henry’s injury, Blue Range Mining was enrolled under Compensation Plan No. 2

of the Workers’ Compensation Act (WCA), and was insured by Old Republic.

¶4 The blow to Henry’s head caused a cave-in to the right orbital rim with the orbital

floor and left lateral orbit being pushed up into the frontal lobe of his brain. He

underwent surgery to repair and reconstruct his fractured skull. Henry was 37 years old

at the time of the accident. He and his wife Kathy had been married for five years and

had two small children.

¶5 Shortly after the accident, Old Republic accepted liability for Henry’s injury and

began paying temporary total disability and medical benefits. Old Republic retained the

services of Industrial Injury Claims Services (Industrial) to adjust the claim. While the

extent of Henry’s disability was initially unclear, the parties ultimately agreed that Henry

was permanently totally disabled.

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¶6 In March 1990, Henry traveled to the Virginia Mason Clinic in Seattle for

additional testing to determine the extent of his brain injury. These tests revealed that

Henry had reductions in speed and flexibility of thinking, and in fine motor speed and

grip strength in his right hand; significant problems with visual spatial memory and with

complex tactual spatial problem solving; and a tendency to lose complex visual spatial

information. The clinic also noted that Henry suffered from constant headaches.

¶7 In February 1991 and over the next two years, Henry’s doctors suggested that

Henry needed a minimum of eight to ten hours of domiciliary care daily and that, in all

likelihood, he required 24-hours-a-day domiciliary care. The doctors opined that without

such care, Henry was at a significant risk for additional injuries, continued depression,

and possible suicide. While Henry could bathe and dress himself, Kathy explained that

Henry engaged in unsafe behaviors when he was unsupervised, such as forgetting to turn

off stove burners or leaving the door to the wood stove open.

¶8 Since the accident, Kathy had operated a small day care out of her home which

also provided her the opportunity to supervise Henry. In October 1991, Kathy closed her

day care to take employment outside the home in order to obtain health insurance

coverage for her family. Neighbors and family members checked in on Henry during the

day, but he struggled to function on his own. Henry’s doctors believed that Henry

required more structure, hence Kathy quit her job to stay home and care for Henry.

¶9 Kathy was appointed as Henry’s conservator on June 9, 1992. After months of

negotiations, the parties reached an agreement that required Old Republic to pay Kathy

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$5.30 per hour, 70 hours per week, for her to stay home and care for Henry. Old

Republic began paying for this domiciliary care in January 1993 at the agreed upon rate.

¶10 In June 1994, Henry and Old Republic entered into a Compromise and Settlement

Agreement, which was approved by the Department of Labor and Industry on July 26,

1994. Under the terms of this agreement, Henry’s claims for permanent total disability

benefits and domiciliary care benefits were settled for $132,701.28 (of which

$125,000.00 represented new money and $7,701.28 represented the waiver of an

overpayment). In conformance with the parties’ agreement, an exhibit was attached to

the settlement agreement which expressly closed “fully and forever . . . any and all

present and future domiciliary care” benefits while specifically reserving medical and

hospital benefits. To that end the exhibit provided:

Such benefits shall include all costs and charges associated with any type of
supervised care that claimant may need or desires as a result of his
industrial injury including, but not limited to, domiciliary (attendant) care
as presently provided by claimant’s wife and paid for by the Insurer, rest
home care, rehabilitation center or attended care (and its equivalent), and
paid supervision of daily activities in or outside of the home. In closing out
all domiciliary care medical benefits, the parties agree that all other medical
care benefits for medical conditions caused by the industrial injury shall
remain in force.

¶11 In December 1995, Henry no longer required domiciliary care, hence Kathy was

able to return to work outside the home. As before, their neighbors checked on Henry

from time to time.

¶12 In 2004, Henry began to exhibit symptoms of a movement disorder. His doctors

variously described his condition as Parkinsonism, Parkinson’s disease, and Parkinson’s-

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plus. It was determined that the Parkinson’s disease was most likely the result of the

traumatic brain injury sixteen years earlier.

¶13 On February 17, 2005, Henry filed a petition with the WCC seeking to rescind the

settlement agreement. Henry argued that the parties’ failure to anticipate that he would

ultimately contract Parkinson’s disease as a result of his injury was a mutual mistake of

fact justifying rescission of the settlement agreement.

¶14 A hearing was held in the matter on January 23, 2006. On June 1, 2006, the WCC

entered its Findings of Fact, Conclusions of Law and Judgment wherein it determined

that because a mutual mistake of fact regarding the nature of Henry’s injuries had

occurred, the settlement agreement must be set aside and Henry’s claim reopened.

¶15 Old Republic appeals.

Standard of Review

¶16 We conduct de novo review of the WCC’s conclusions of law to determine

whether the court’s conclusions are correct. Harrison v. Liberty Northwest Ins. Corp.,

2008 MT 102, ¶ 11, 342 Mont. 326, ¶ 11, 181 P.3d 590, ¶ 11 (citing Flynn v. Uninsured

Employers’ Fund, 2005 MT 269, ¶ 11, 329 Mont. 122, ¶ 11, 122 P.3d 1216, ¶ 11).

¶17 Our review of the WCC’s findings of fact, on the other hand, is both deferential

and limited in scope. We simply review the WCC’s factual findings to determine

whether they are supported by substantial credible evidence. Harrison, ¶ 11 (citing In re

Abfalder, 2003 MT 180, ¶ 10, 316 Mont. 415, ¶ 10, 75 P.3d 1246, ¶ 10). Substantial

credible evidence is that which a reasonable mind could accept as adequate to support a

conclusion. Harrison, ¶ 11 (citing Simms v. State Compensation Ins. Fund, 2005 MT

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175, ¶ 11, 327 Mont. 511, ¶ 11, 116 P.3d 773, ¶ 11). Because of the high level of

deference we accord to the WCC’s factual findings, we will consider evidence to be

substantial even if it is contradicted by other evidence, it is somewhat less than a

preponderance and it is inherently weak. However, i t must be more than a mere

“scintilla” of evidence and i t must rise above the level of “trifling or frivolous.”

Harrison, ¶ 11 (citing EBI/Orion Group v. State Compensation Mut. Ins. Fund, 249

Mont. 449, 453, 816 P.2d 1070, 1073 (1991)).

¶18 As for the scope of our review, we confine our review to determining whether

substantial credible evidence supports the findings actually made by the WCC. We do

not resolve conflicts in the evidence, and we do not consider whether evidence supports

findings that are different from those made by the WCC. Harrison, ¶ 11 (citing Kloepfer

v. Lumbermen’s Mut. Cas. Co., 276 Mont. 495, 498-99, 916 P.2d 1310, 1312 (1996);

Montana State Fund v. Murray, 2005 MT 97, ¶ 19, 326 Mont. 516, ¶ 19, 111 P.3d 210,

¶ 19).

Discussion

¶19 Did the WCC err in rescinding the settlement agreement based upon mutual
mistake of fact?

¶20 Old Republic argues that the WCC erred in concluding that the parties’ made a

material and mutual mistake when they failed to predict that Henry would contract

Parkinson’s disease several years after the settlement. Old Republic provides the

following four reasons for its contention. First, Old Republic asserts that the mutual

mistake-of-fact doctrine rejects the notion that a mistake of fact can consist of a failure to

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predict future events. Second, Old Republic asserts that even accepting the WCC’s

conclusion that a failure to anticipate future events can be a mistake, such failure in this

case is not a mutual mistake because, at the time of settlement, Old Republic was aware

that Henry’s condition would worsen over time. Third, Old Republic asserts that even

assuming that the parties’ failure to predict Parkinson’s disease was a mutual mistake, the

WCC erred by concluding that the mistake was material. Finally, Old Republic asserts

that in concluding that the parties’ failure to predict the future was a mutual mistake of

fact, the WCC erred by setting forth a rule that jeopardizes the enforceability of

settlement agreements, thereby disregarding the public policy of encouraging settlements.

¶21 Henry argues, on the other hand, that at the time of the settlement, his condition

was stable and he had no problems with motor function. Thus, neither Henry, his wife,

nor Old Republic’s adjuster knew that Henry would develop a movement disorder. On

that basis, Henry argues that the WCC correctly relied on the long standing rule that a

mistake about the nature and extent of the claimant’s physical condition is a “material”

mistake of fact justifying the rescission of the settlement agreement.

¶22 Henry fails to recognize, however, that it is precisely because his condition was

stable and he had no problems with motor function at the time he entered into the

settlement agreement that a mutual mistake did not occur. It is on this basis that we

reverse the WCC. While substantial credible evidence does support the WCC’s finding

that Henry’s Parkinson’s disease was caused by his 1988 injury, it is undisputed that the

Parkinson’s disease did not exist when the parties entered into their settlement agreement.

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¶23 This Court has adopted the widely accepted rule that a failure to predict the future

is not a mistake of fact as contemplated by the mutual mistake-of-fact doctrine. See

Gamble v. Sears, 2007 MT 131, ¶ 46, 337 Mont. 354, ¶ 46, 160 P.3d 537, ¶ 46 (“it is

undisputed that if Gamble’s odontoid fracture existed at the time of settlement, the parties

were mutually mistaken regarding a material fact, and the settlement agreement must

therefore be rescinded.” (emphasis added)). Thus, the parties’ failure to predict Henry’s

Parkinson’s disease was not a mutual mistake of fact.

¶24 Because a settlement agreement is a contract, we apply contract law to determine

whether the agreement is valid and enforceable. Gamble, ¶ 24 (citing Wolfe v. Webb, 251

Mont. 217, 223, 824 P.2d 240, 244 (1992)). The parties must give their consent to enter

into a contract and that consent must be given freely. However, consent cannot be given

freely when it is based on a mistake. Gamble, ¶ 25.

¶25 “Either a mistake of fact or a mistake of law will preclude freely given consent.”

Gamble, ¶ 25. Section 28-2-409, MCA, defines what constitutes a 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. [Emphasis added.]

Thus, as Old Republic points out, parties to a contract make a mutual mistake of fact only

if they are unconsciously ignorant or forgetful of a fact that existed prior to or at the time

of settlement. Ignorance of a future event does not amount to a mistake of fact.

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¶26 Henry notes in his brief on appeal, that while the parties agree that the movement

disorder was caused by Henry’s 1988 injury, “[t]he parties also agree that prior to and at

the time of settlement neither knew that there was any connection between head injuries

and Parkinson’s and neither expected [Henry] would develop such a condition. (emphasis

added).” That is precisely the point.

¶27 “[T]he erroneous belief must relate to the facts as they exist at the time of the

making of the contract. A party’s prediction or judgment as to events to occur in the

future, even if erroneous, is not a ‘mistake’ as that word is defined here.” Restatement

(Second) of Contracts § 151 cmt. a (1981) (emphasis added). “[I]n order to relieve a

party from liability on the contract, the mistake must relate to a material fact, past or

present, and not to a future contingency.” 17A C.J.S. Contracts § 149a (1999) (emphasis

added).

Mutual mistake results when both parties to a contract share a common
assumption about a vital existing fact upon which they based their bargain
and that assumption is false, and because of the mistake, a quite different
exchange of values occurs from the exchange of values the parties
contemplated. . . . [A] mutual mistake of fact cannot lie against a future
event. Mutual mistakes must concern past or present facts, not unexpected
facts that occur after the document is executed.”

17A Am. Jur. 2d Contracts § 202 (2004) (emphasis added).

¶28 In United States v. Southwestern Elec. Co-op., Inc., 869 F.2d 310, 314 (7th Cir.

1989), the United States Court of Appeals for the Seventh Circuit stated that the doctrine

of mutual mistake does not cover an erroneous “prediction or judgment as to events to

occur in the future . . . it must be a mistake of a present or a past fact.” The Court of

Appeals further stated that “the rules governing rescission for either mutual or singular

9
mistake are inapplicable where . . . a party’s erroneous prediction or judgment as to future

events is involved.” Southwestern, 869 F.2d at 315 (citing Restatement (Second) of

Contracts § 151 cmt. a).

¶29 Similarly, the United States Court of Appeals for the Third Circuit cited with

approval two prior Pennsylvania cases that held that “a party who underestimates the

future severity of her injuries will not be permitted to avoid the consequences of a

settlement agreement based on mutual mistake.” Consolidated Rail Corp. v. Portlight,

Inc., 188 F.3d 93, 97 (3rd Cir. 1999) (citing Emery v. Mackiewicz, 240 A.2d 68 (Pa.

1968); Leyda v. Norelli, 564 A.2d 244 (Pa. Super. 1989)). The Court of Appeals

determined that this rule was

entirely consistent with the more general principle of mutual mistake
doctrine that erroneous predictions of future events do not qualify as a
mistake. . . . Were there not such a rule, the effectiveness of settlement
agreements would be greatly diminished.

Consolidated, 188 F.3d at 97.

¶30 Numerous other jurisdictions have held the same. For example, the Supreme

Court of West Virginia held that

a contract may not be reformed or rescinded based upon a mutual mistake
of fact if the mistake relates to a mistaken belief, judgment, or expectation
as to future, rather than past or present, facts, occurrences or events. If a
party to a contract could reform or rescind a contract on the ground that an
expectation as to future results or occurrences was mistaken, the stability
and binding force of many contracts would be destroyed.

Ryan v. Ryan, 640 S.E.2d 64, 69 (W. Va. 2006). The court in Ryan quoted with favor the

following excerpt from a decision of the United States Court of Appeals for the Fourth

Circuit:

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 In determining whether there has been a mutual mistake of fact, we must
examine the facts as they existed at the time of the agreement . . . . A
mutual mistake in prophecy or opinion may not be taken as a ground for
rescission where such mistake becomes evident through the passage of
time. What is today only a conjecture, an opinion, or a guess, might by
tomorrow, through the exercise of hindsight, be regarded then as an
absolute fact.

Ryan, 640 S.E.2d at 69 (emphasis added) (quoting United States v. Garland, 122 F.2d

118, 122 (4th Cir. 1941), cert denied, 314 U.S. 685, 62 S. Ct. 189 (1941)).1

1
In addition to the Seventh Circuit Court of Appeals’ decision in Southwestern, the Ryan
court also cited to the following cases in support of its position that the facts forming the
alleged mutual mistake must have existed at the time of the agreement:
Baker v. Penn Mut. Life Ins. Co., 788 F.2d 650, 661 (10th Cir. 1986) (“at
the time the parties entered into the 1975 Contract, the result of plaintiff's
future performance under the contract could only have been mere
conjecture, not an existing fact. No claim of mutual mistake can be stated
on such a basis.”) (footnote omitted); Shear v. National Rifle Ass'n of
America, 606 F.2d 1251, 1260 (D.C. Cir. 1979) (“The mistake does not
apply to predictions or promises of future conduct.”); Hartford Fire Ins. v.
Federated Dept. Stores, 723 F.Supp. 976, 994 (S.D.N.Y. 1989) (noting
that erroneous predictions are not mistakes that allow rescission.); Haas v.
Pittsburgh Nat. Bank, 495 F.Supp. 815, 818-19 (W.D. Pa. 1980) (“The
court is confronted here, at best, with a risk that resulted from the inability
of the parties to predict future events. As the Restatement and other
authorities make clear, such risks are distinct from bona fide mutual
mistakes of fact and provide no basis for reformation of a contract.”);
Boles v. Blackstock, 484 So. 2d 1077, 1082 (Ala. 1986) (“as a matter of
law, reliance on a prediction as to future events, will not support a claim
for rescission or release based on a claim of mutual mistake of fact”); In
re Marriage of Hall, 681 P.2d 543, 545 (Colo. App. 1984) (“A party's
prediction or judgment as to events to occur in the future, even if
erroneous, is not a ‘mistake’ for the purpose of making a contract
voidable.”); Beals v. Tri-B Associates, 644 P.2d 78, 80 (Colo. App. 1982)
(“the parties in this case did not make the type of mistake which would
justify rescission . . . If the parties harbor only mistaken expectations as
to the course of future events . . . rescission is not proper.”) (internal
citations omitted); Highway and Transp. Dept. v. Garley, 111 N.M. 383,
806 P.2d 32, 36 (1991) (finding an erroneous prediction of the future is
not a mistake under the doctrine of mutual mistake); Opsahl v. Pinehurst,

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¶31 In the case sub judice, Henry cites to several Montana cases which he contends

illustrate that his development of Parkinson’s disease sixteen years after his accident was

a mutual mistake of fact requiring rescission of the settlement agreement. However, the

cases Henry cites, Kienas v. Peterson, 191 Mont. 325, 624 P.2d 1 (1980); Weldele v.

Medley Development, 227 Mont. 257, 738 P.2d 1281 (1987); Kimes v. Charlies Fam.

Din. & Donut Shop, 233 Mont. 175, 759 P.2d 986 (1988); Wolfe v. Webb, 251 Mont. 217,

824 P.2d 240 (1992); and South v. Transportation Ins. Co., 275 Mont. 397, 913 P.2d 233

(1996), are fatal to Henry’s argument because they clearly establish that a failure to

predict a future condition is not a mistake regarding the nature and extent of a claimant’s

injury.

¶32 In Kienas, the claimant sustained a back injury in an industrial accident for which

he received compensation benefits from the State Fund. After nine months of receiving

benefits, the claimant signed a settlement agreement with the State Fund. Eighteen

months later, however, the claimant filed a petition in the WCC for a hearing to reopen

his file and to set aside the settlement agreement. At the time of the accident, the

claimant was suffering from cerebral palsy. He argued that the accident aggravated this

Inc., 81 N.C.App. 56, 344 S.E.2d 68, 72 (1986) (The court reasoned that,
to justify rescission of the contract for mutual mistake, the mistake must
have concerned facts as they existed when the contract was made.);
Jackson County v. Jackson Educ. Serv. D., 90 Or. App. 299, 752 P.2d
1224, 1228 (1988), review denied 306 Or. 155, 758 P.2d 346 (1988)
(“Each side might have fervently hoped that the legislation would or
would not result, but that hope is not a fact upon which a contract may be
found to be invalid.”).
Ryan, 640 S.E.2d at 68-69.

12
pre-existing condition and that the settlement did not take this factor into account. The

WCC denied claimant’s petition. Kienas, 191 Mont. at 326-28, 624 P.2d at 1-2. This

Court reversed on the basis of a mutual mistake of material fact. However, contrary to

Henry’s assertions in the instant case, the mutual mistake of fact found by this Court in

Kienas was the parties’ ignorance of the fact that the claimant’s workplace accident could

have aggravated his pre-existing cerebral palsy—a condition that existed and of which

the parties were aware at the time they entered into the settlement agreement. Kienas,

191 Mont. at 329-30, 624 P.2d at 3.

¶33 Similarly, in Weldele, the claimant was initially diagnosed with carpal tunnel

syndrome and rotator cuff syndrome. While thoracic outlet syndrome2 was suspected by

the two treating physicians, both failed to verify that condition and dismissed it as a

diagnosis. After settlement, the claimant’s shoulder and neck pain continued and he was

ultimately diagnosed with thoracic outlet syndrome requiring further surgery. Weldele,

227 Mont. at 257-60, 738 P.2d at 1281-83. On appeal, this Court affirmed the WCC’s

decision to rescind the agreement based upon mutual mistake of fact. This Court found

that the claimant had thoracic outlet syndrome at the time of the settlement. Weldele, 227

Mont. at 260-61, 738 P.2d at 1283.

¶34 In Kimes, the claimant injured his knee when he fell down some steps at work. He

underwent surgery to repair a ruptured cruciate ligament in his knee. Following surgery,

2
Unlike carpal tunnel syndrome, which is a compression of a nerve in the wrist, or
rotator cuff syndrome, which is an inflammation of the shoulder tendons, thoracic outlet
syndrome is a compression of, or pressure on, certain nerves or arteries in the chest
around the collarbone, which can have serious effects on the shoulders, arms and hands
of the afflicted.

13
the parties entered into a settlement agreement. The claimant continued to have knee

problems and further diagnostics revealed that, in addition to rupturing his cruciate

ligament, the claimant had torn a cartilage in his knee during his fall which the original

treating physician had failed to detect. Kimes, 233 Mont. at 176-77, 759 P.2d at 987.

This Court agreed with the WCC’s decision to set aside the settlement agreement on the

basis that both parties were ignorant of an injury that actually existed at the time of

settlement. Kimes, 233 Mont. at 178, 759 P.2d at 988.

¶35 In Wolfe, the claimant was injured when the ditch in which he was installing pipe

caved in and buried him up to his neck. As a result of this accident, he sustained crushing

injuries across his upper body, including a fracture of his left clavicle and dislocation of

his right clavicle where it formed a joint with the sternum. He also reported pain in his

shoulders. Claimant underwent two surgeries to his clavicle, but because the pain in his

shoulder was not his primary complaint, no treatment for his shoulder was rendered at

that time. Wolfe, 251 Mont. at 220, 824 P.2d at 241-42.

¶36 Three years after his injury, the claimant in Wolfe entered into a settlement

agreement with the State Fund. However, he continued to experience problems with his

shoulder. He returned to his treating physician who discovered a defect in the shoulder

joint. Thereafter, the claimant underwent two surgeries on his shoulder. He petitioned

the WCC to reopen his case and the WCC agreed concluding that there had been a mutual

mistake of material fact sufficient to justify setting aside the settlement agreement.

Wolfe, 251 Mont. at 221-22, 824 P.2d at 242-43. On appeal, we stated that “[o]ur review

then is necessarily limited to whether the testimony of one qualified and credible witness

14
established that claimant’s [shoulder] was injured at the time of his settlement agreement

with appellant.” Wolfe, 251 Mont at 230, 824 P.2d at 248 (emphasis added).

¶37 And, in South, the claimant sustained an on-the-job injury to her back. Following

two separate back surgeries, she settled her claim. The settlement agreement listed

several jobs which had been approved by the claimant’s doctor and which the parties

believed the claimant could perform. In accordance with the terms of the agreement, the

claimant elected to begin training as a massage therapist, one of the approved jobs listed

in the agreement. While in training, she began to experience worsening back pain hence

she was forced to quit the training program and undergo additional surgery. The WCC

denied the claimant’s request to rescind the settlement agreement on the grounds that the

claimant’s post-settlement back problems provided no proof that the parties were

mistaken as to the nature and extent of the claimant’s condition at the time of settlement.

South, 275 Mont. at 399-400, 913 P.2d at 234-35.

¶38 On appeal, we found no error in the WCC’s conclusion in South that the parties

were not mistaken regarding the nature and extent of claimant’s injury at the time the

contract was formed. We did not end our inquiry there, however, as we did find error in

the WCC’s failure to consider the claimant’s contention of mutual mistake regarding the

propriety of the job approved for her to do. South, 275 Mont. at 403, 913 P.2d at 236.

Thus, we did not rescind the settlement agreement in South based on a mutual mistake as

to the claimant’s injury, but on the mistaken belief that massage therapist was an

appropriate job for the claimant to pursue.

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¶39 Therefore, contrary to Henry’s assertions, these cases establish that, in order to

constitute a mistake of fact justifying rescission, a mistake regarding the nature and

extent of a claimant’s condition must be with respect to a claimant’s condition as it exists

at the time of settlement and not with respect to a condition that develops at some point in

the future.

¶40 In the instant case, it is undisputed that Henry did not have Parkinson’s disease

until approximately ten years after he signed the settlement agreement. And, at the time

the parties entered into the settlement agreement, no one could have foreseen that Henry

would develop Parkinson’s disease.

¶41 Judith Hosford, who had been employed by Industrial in 1988 to handle the

adjusting of Henry’s claim, testified by deposition and at trial that prior to 2004, Henry’s

main complaints dealt with cognitive problems and pain issues. Hosford, who was a

former Certified Nurse Assistant with a background in dealing with brain-injured

patients, testified that she was aware of deterioration in people who suffered brain

injuries, but that she did not expect Parkinson’s. Hence, she testified that in her

experience, head injuries always get worse, they never get better. Moreover, Hosford

asserted that in 1994, when the parties entered into the settlement agreement, not only

was she unaware of any connection between head injuries and Parkinson’s disease,

Henry’s medical records indicated that he was stable. Hosford further testified that it was

the Kruziches and their attorney who wanted to close domiciliary care as part of

settlement because they “wanted Work Comp basically out of their life.”

16
¶42 Kathy testified that at the time the parties’ were attempting to settle Henry’s claim,

she also believed that Henry’s condition had stabilized. She had done some research and

reading concerning brain injuries, but she did not learn anything about long-term

deterioration following a brain injury. Nether did she discuss long-term deterioration

with any of Henry’s doctors.

¶43 Kathy also testified that in November 1990, Community Medical Center in

Missoula provided Kathy with some articles on brain injuries, but those articles made no

mention of long-term deterioration. She also testified that she and Henry belonged to a

head injury support group for about a year. While this group occasionally had doctors as

guest speakers, Kathy did not recall receiving any information from the group or from

any of its guest speakers indicating that Henry’s condition might worsen.

¶44 Furthermore, Henry was examined by a neurologist in January 1993 who noted

that Henry had “normal strength, tone and cerebellar function.” And, in August and

September 2003, Henry saw a physiatrist who noted that Henry had normal upper and

lower extremity strength, normal coordination, and normal gait and balance. In addition,

one of Henry’s treating physicians indicated that Henry’s condition had stabilized.

¶45 Thus, because Henry’s Parkinson’s disease did not exist at the time of settlement,

the parties’ failure to anticipate that future condition was not a mistake as to the nature

and extent of Henry’s condition at the time of settlement. In order to justify rescission,

the mistake must have occurred at the time of settlement, and must thus relate to the

claimant’s condition as it existed at that time.

¶46 In rescinding the settlement agreement, the WCC stated that

17
 there is a clear distinction between the deterioration or worsening of a
condition and the development of an entirely distinct disorder. While a
deterioration or worsening of [Henry’s] cognitive abilities would perhaps
have been foreseeable, that is not the case before this Court. Rather,
[Henry] developed a distinct physical ailment as a direct result of his
industrial accident, the possibility of which neither party was aware at the
time the claim was settled. [Emphasis added.]

Although the court recognized that at the time the parties executed the settlement

agreement, neither party could have foreseen that Henry would develop Parkinson’s

disease, the court then went on to erroneously conclude that this constituted a mutual

mistake of fact. As we have already determined, the doctrine of mutual mistake applies

only to known facts that existed at the time the settlement agreement was executed.

¶47 The public policy of this State is to encourage settlement and avoid unnecessary

litigation. Augustine v. Simonson, 283 Mont 259, 266, 940 P.2d 116, 120 (1997) (citing

Holmberg v. Strong, 272 Mont. 101, 106, 899 P.2d 1097, 1100 (1995)). Thus, we have

stated that to encourage settlement and preserve the sanctity of workers’ compensation

settlement agreements, we will reopen such agreements only “rarely and reluctantly.”

South, 275 Mont. at 406, 913 P.2d at 238 (Erdman, J., dissenting) (citing Whitcher v.

Winter Hardware Co., 236 Mont. 289, 769 P.2d 1215 (1989)). If we were to uphold the

WCC and fashion a new rule that unanticipated future medical conditions could

retroactively create mutual mistakes at the time of settlement, then settlement agreements

would not be worth the paper they are written on because any unanticipated medical

condition would justify rescission.

¶48 Accordingly, we hold that the WCC erred in rescinding the settlement agreement

based upon mutual mistake of fact.

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¶49 That said, the Dissent has raised several contentions that deserve a response. First,

the Dissent complains that we have parted ways “with three decades of mutual mistake of

fact analysis in the context of workers’ compensation law,” Dissent, ¶ 59, as though a

separate doctrine applies to WC cases than applies to other types of cases. Contrary to

this assertion, the mutual mistake of fact doctrine is the same no matter what type of case

is involved—WC cases are not governed by a separate body of law.

¶50 Second, the Dissent faults this Court for “disregard[ing] the limited scope of our

review of findings made by the WCC.” Dissent, ¶ 59. Based on our decision in Gamble

v. Sears, 2007 MT 131, 337 Mont. 354, 160 P.3d 537, the Dissent argues that because

substantial credible evidence supports the WCC’s finding that “Henry’s injury was

present at the time of the 1994 settlement agreement,” Dissent, ¶ 60, we may not consider

contrary findings. However, the WCC made no such finding. Rather, the WCC found:

In January 1993, [Henry] was examined by a neurologist, Dr. Scott
D. Callaghan, at the request of [Old Republic]. Dr. Callaghan noted,
among other findings, “In regards to this patient motorically, this seems to
be normal function in that he has normal strength, tone and cerebellar
function.”
[Henry] saw physiatrist Dr. Allen M. Weinert, Jr. on August 29,
2003, and again on September 22, 2003. On both visits, Dr. Weinert noted
normal upper and lower extremity strength, normal coordination, and
normal gait and balance.

Thus, unlike Gamble where the WCC’s findings were based on medical evidence

establishing that Gamble’s injury existed at the time of the settlement agreement, the

medical evidence in the instant case established that Henry’s Parkinson’s disease did not

exist at the time of the settlement agreement. To that end the WCC concluded that

19
 there is a clear distinction between the deterioration or worsening of a
condition and the development of an entirely distinct disorder. While a
deterioration or worsening of [Henry’s] cognitive abilities would perhaps
have been foreseeable, that is not the case before this Court. Rather,
[Henry] developed a distinct physical ailment as a direct result of his
industrial accident, the possibility of which neither party was aware at the
time the claim was settled. [Emphasis added.]

¶51 Third, the Dissent states that the “source of the Court’s reasoning . . . remains far

from clear.” Dissent, ¶ 66. What could be clearer than Montana’s mistake-of-fact

doctrine, quoted in ¶ 25 of this Opinion, which specifically states that a mistake of fact is

“an unconscious ignorance or forgetfulness of a fact, past or present, material to the

contract” or a “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

28-2-409, MCA (emphasis added). Indeed, the Court’s reasoning is mandated by the

black-letter law of this State which the Dissent does not so much as mention.

¶52 Fourth, the Dissent contends that we have failed to distinguish Henry’s claim from

the factual scenarios in Kienas, Weldele, Kimes, Wolfe and South. Nothing could be

further from the truth. As we have stated, the injury complained of in each of these cases

existed at the time of the settlement agreement. In the instant case, it is undisputed that

Henry’s Parkinson’s disease did not exist at the time of the settlement agreement and no

one—not his doctors, not the insurance adjustor, not Henry, and not his wife—foresaw

that Henry would develop Parkinson’s disease sixteen years after h i s accident.

Additionally, while the Dissent contends that “we address an undetected injury that had

20
occurred in 1988,” Dissent, ¶ 82 (emphasis added), Henry’s Parkinson’s disease was not

“undetected” in 1988. It did not exist in 1988—there was nothing there to detect.3

¶53 Furthermore, there is absolutely no evidence in the record before this Court that, at

the time the settlement agreement was executed, Henry suffered an “injury” of

Parkinson’s disease or even that Henry would develop that disease sixteen years later.

The WCC reached that very conclusion. In attempting to craft a theory to undo the

settlement agreement and to compensate Henry, the Dissent refuses to acknowledge that

the legal issue before this Court is whether the settlement agreement was entered into

under a mutual mistake of past or existing fact. Section 28-2-409, MCA. Quite simply,

the parties could not be mutually mistaken about a fact that did not exist then and exists

now only because Henry developed Parkinson’s disease a decade and a half after his

industrial accident. If, as the Dissent posits, the mutual mistake-of-fact doctrine could be

undone at a later date because of 20/20 hindsight, then the doctrine would cease to have

any legal utility at all.

¶54 Fifth, the Dissent complains that we incorrectly lump cases involving injured

workers together with cases involving electric co-ops, railroads, and ex-spouses. Dissent,

¶ 85. The Dissent continues to harbor the mistaken belief that a separate doctrine

regarding mutual mistake of fact applies to WC cases than applies to all other types of

cases. The cases cited in the Opinion that the Dissent takes issue with—Southwestern,

Consolidated and Ryan—are all cases involving the doctrine of mutual mistake of fact

3
To “detect” means “to discover the existence or presence of.” The Collins English
Dictionary 421 (Patrick Hanks ed, 2d ed., Collins 1986) (emphasis added).

21
and are cited and examined to shed further light on this doctrine and to illustrate how it

has been applied in other jurisdictions.

¶55 Finally, the Dissent points out that the intent and purpose of workers’

compensation law involves the “need to fairly compensate the injured worker.” Dissent,

¶ 59. We agree. However, one’s subjective perception of “fairness” cannot be achieved

by simply ignoring governing statutory law and our dispositive jurisprudence—at least in

the absence of some other legal challenge not at issue here. We sympathize with the

plight of the Kruziches. And, if repeating the horrific circumstances of Henry’s industrial

accident in mantra-like fashion could change the law, then the outcome of this appeal

might well be different. The legal issue before us, however, is not complex. It involves

the doctrine of mutual mistake of fact, the law of which is well-established. Old

Republic, like any other litigant appearing before this Court, is entitled to our impartial

application of the law—an approach that can hardly ever be fairly characterized as a

“windfall,” Dissent, ¶ 85, to the prevailing party, regardless of the result.

¶56 On the undisputed facts of this case, we hold that the WCC erred in its application

of the law of mutual mistake of fact. Accordingly, we must reverse the court’s legal

determination in that regard.

¶57 Reversed.

/S/ JAMES C. NELSON

We Concur:

/S/ JOHN WARNER

22
/S/ JIM RICE
/S/ PATRICIA COTTER

Justice Brian Morris dissents.

¶58 The WCC concluded that neither party contemplated at the time of the settlement

that Henry would develop a movement disorder directly attributable to being hit in the

face with an ore bucket in 1988. The Court determines that the WCC unjustifiably

reached this conclusion in light of the fact that a mutual mistake that would justify

rescinding a settlement agreement “must be with respect to a claimant’s condition as it

exists at the time of settlement and not with respect to a condition that develops at some

point in the future.” ¶ 39 (emphasis in original). I disagree with the Court's analysis of

mutual mistake of fact as applied here. I dissent.

¶59 The Court’s analysis parts ways with three decades of mutual mistake of fact

analysis in the context of workers’ compensation law. The Court’s analysis also defeats

the very intent and purpose of the workers’ compensation law--the “need to fairly

compensate the injured worker . . . .” Weldele, 227 Mont. at 261, 738 P.2d at 1283.

Finally, the Court’s analysis disregards the limited scope of our review of findings made

by the WCC. Gamble, ¶ 20.

23
¶60 As noted by the Court in Gamble, we must determine only whether substantial

credible evidence supports the WCC’s finding that Henry’s movement disorder was

caused by the 1988 accident and that Henry’s injury was present at the time of the 1994

settlement agreement. Gamble, ¶ 28. The claimant in Gamble alleged that she had

suffered symptoms since the time of her accident, but she conceded that she had never

reported the symptoms to her treating physician. Gamble, ¶ 29. The defendant argued

that the claimant’s failure to report her symptoms demonstrated that the injury had not

existed at the time of the settlement. Gamble, ¶ 29. The Court’s limited standard of

review precluded it, however, from rendering its own judgment regarding this alleged

inconsistency. Gamble, ¶ 30. We face no similar inconsistency here. The WCC found,

and Old Republic concedes, that Henry’s 1988 industrial accident caused his movement

disorder. We also know that Henry’s movement disorder was present at the time of the

1994 settlement, as the 1988 accident caused the movement disorder. ¶ 22. Henry

suffered no head trauma before or after his accident in 1988, thereby eliminating other

possible causes. Gamble, ¶ 44.

¶61 The Court concedes that substantial credible evidence supported this finding and

numerous other findings made by the WCC. ¶¶ 22, 40-44. The ore bucket crushed

Henry’s skull. Doctors had to remove bone fragments from Henry’s brain. The Virginia

Mason Clinic in Seattle, Washington, conducted a battery of tests on Henry in March

1990. The Clinic’s testing revealed that Henry had sustained a number of cognitive

impairments as a result of having his skull crushed by the ore bucket. The Clinic

specifically determined that Henry “had reductions in speed of thinking, reductions in the

24
flexibility of thinking, significant problems with visual spatial memory, reductions in fine

motor speed, reductions in grip strength in the right hand, problems with complex tactual

spatial problem-solving, and a tendency to lose complex visual spatial information.” The

Clinic did not diagnose any movement disorder in Henry at that time.

¶62 Henry’s medical records reveal that before 1994 he suffered from problems “such

as headaches and facial pain, depression, irritability, and difficulties with concentration

and memory.” Although Henry’s medical records documented these symptoms, Kathy

believed that Henry’s cognitive condition had stabilized by February 1994. Old Republic

agreed that Henry’s medical records indicated that he had stabilized by 1994. Dr. Scott

D. Callaghan, a neurologist, had examined Henry in January 1993 at Old Republic’s

request. Dr. Callaghan noted, among other findings, “[i]n regards to this patient

motorically, this seems to be normal function in that he has normal strength, tone, and

cerebellar function.” Dr. Stone also had noted that “[t]hings appear to be very stable.”

The mistaken belief that Henry’s condition had stabilized led the parties to enter a

settlement in June 1994.

¶63 By 2004, however, Henry began to exhibit symptoms of a movement disorder.

Dr. Allen M. Weinert, Jr., a physiatrist, or rehabilitation physician, examined Henry on

June 30, 2004. Dr. Weinert’s physical examination revealed a pill rolling tremor in

Henry’s left hand. Dr. Weinert also diagnosed left-sided Parkinsonism, “most likely as a

late sequela of traumatic brain injury.” Further examinations by Dr. Weinert revealed a

worsening of Henry’s Parkinsonism symptoms.

25
¶64 Old Republic’s representative, Judith Hosford, testified that she was aware of

“deterioration” in people who have suffered a brain injury. Hosfort added, however, that

she “didn’t expect Parkinson’s.” Hosford further conceded that in 1994 she was unaware

of any connection between head injuries and Parkinson’s or Parkinson’s plus. Hosford

did not contest Dr. Weinert’s determination that having his skull crushed by the ore

bucket had caused Henry’s movement disorder. The WCC specifically found that

Henry’s movement disorder, diagnosed in 2004, “is related to and caused by [Henry’s]

industrial injury.”

¶65 The Court takes issue with none of these findings. In fact, the Court concedes that

“substantial credible evidence does support the WCC’s finding that Henry’s Parkinson’s

disease was caused by his 1988 injury . . . .” ¶ 22. The Court nevertheless rejects

Henry’s claim. The Court characterizes its decision as an adherence to the widely

accepted rule that a failure to predict the future does not constitute a mistake of fact as

contemplated by the mutual mistake doctrine. ¶ 23. The Court notes that Henry did not

suffer from Parkinson’s symptoms at the time of the settlement in 1994. ¶ 22. As a

result, the Court concludes that “the parties’ failure to predict Henry’s Parkinson’s

disease was not a mutual mistake of fact.” ¶ 23.

¶66 The Court’s conclusion rests upon the notion that the mistake must have occurred

at the time of the 1994 settlement, and the mistake must relate to Henry’s condition as it

existed at that time. ¶ 45. The source of the Court’s reasoning, however, remains far

from clear. The Court discusses at length other workers’ compensation cases, but fails to

26
distinguish Henry’s claim from the factual scenarios upon which the Court rescinded the

settlement agreements. ¶¶ 31-38.

¶67 For example, the Court reasons that the parties in Kienas were ignorant of the fact

that the claimant’s workplace accident could have aggravated his pre-existing cerebral

palsy. ¶ 32. In fact, the Kienas Court noted that neither party at the time of entering the

settlement “knew of the exact nature or extent of the injury suffered by claimant.”

Kienas, 191 Mont. at 329, 624 P.2d at 3. In other words, the treating medical providers

had failed to diagnose fully the extent of the claimant’s injuries. ¶ 32. The Court in

Kienas accepted as a mutual mistake the parties’ ignorance of the possible aggravation, or

the extent, of a known injury.

¶68 Here, however, we do not face a question concerning the aggravation of a known

injury. Henry’s case presents the issue of an injury unknown to the parties at the time of

the settlement. Dr. Weinert determined that having his skull crushed in by the ore bucket

in 1988 had caused Henry’s movement disorder that had remained latent until 2004. The

WCC and this Court adopted this determination without objection from Old Republic.

Dr. Weinert’s 2004 examination demonstrates, at the very least, that the parties did not

know in 1994 the “exact nature or extent of the injury” suffered by Henry. Kienas, 191

Mont. at 329, 624 P.2d at 3.

¶69 Similarly, the Court characterizes the mutual mistake in Weldele as arising from

the fact that the treating medical providers had failed to diagnose that the claimant

suffered from thoracic outlet syndrome as a result of his industrial accident. ¶ 33. The

Court in Weldele relied upon the fact that doctors who had treated the claimant for

27
thoracic outlet syndrome “believed the syndrome was caused by his 1978 accident.”

Weldele, 227 Mont. at 261, 738 P.2d at 1283. The WCC in this case, of course,

specifically found that getting hit in the face with an ore bucket in 1988 had caused

Henry’s movement disorder.

¶70 The Court distinguishes Kimes on the basis that medical providers had failed to

diagnose an injury that existed at the time of the settlement. ¶ 34. The Court in Kimes

relied on the fact that Kimes had a tear in his medial meniscus, and that this injury

remained unknown to the parties at the time of the settlement. Kimes, 233 Mont. at 177,

759 P.2d at 987. The Court in Kimes determined that a mutual mistake existed despite

the fact that Kimes knew at the time of the settlement that potentially permanent

problems existed with the injured knee.

¶71 The Court in Kimes found support in the fact that Kimes’s disability rating had

increased as a result of the post-settlement surgery to remove a torn meniscus and that

Kimes’s prognosis now includes probable degenerative changes in the knee joint. The

Court also cited the fact that Kimes now required pain medication and had been advised

after the settlement not to return to his former line of work as a cook. Kimes, 233 Mont.

at 178, 759 P.2d at 988. Here, as found by the WCC, everyone knew that Henry suffered

from cognitive disorders as a result of getting hit in the face with an ore bucket. Nobody,

neither Henry’s wife, nor Old Republic, nor any of the medical providers who had

examined Henry, knew that Henry also suffered from a movement disorder as a result of

getting hit in the face with an ore bucket. Furthermore, no party disputes that Henry’s

28
medical reports revealed a much worse condition today than at the time of the settlement

agreement in 1994.

¶72 The Court confines its analysis of Wolfe based on the fact that our review was

limited to the question of whether the claimant’s shoulder “was injured at the time of his

settlement agreement . . . .” ¶ 36 (emphasis in original). The Court in Wolfe determined

that substantial evidence demonstrated that the “claimant’s injury to his right shoulder

was caused by his industrial accident . . . .” Wolfe, 251 Mont. at 231, 824 P.2d at 248.

This Court omits the fact that the Court in Wolfe reached its determination based upon the

claimant’s clear and unequivocal testimony that he “sustained no trauma to his right

shoulder either before or after his industrial injury.” Wolfe, 251 Mont. at 231, 824 P.2d at

248.

¶73 Henry, too, sustained no trauma to his head either before or after his industrial

accident in 1988. This elimination of other potential causes of Henry’s movement

disorder represents an important element in determining whether sufficient evidence

supports the WCC’s decision to rescind the settlement agreement. Gamble, ¶ 44. The

WCC found, and this Court concedes, as it must, that getting hit in the face with an ore

bucket in 1988 caused Henry’s movement disorder. ¶ 22. Like the claimant in Wolfe,

Henry had sustained this injury at the time of the settlement.

¶74 The Court struggles to distinguish South from the situation presented here. The

distinction that the Court attempts to draw between Henry’s claim and the cited mutual

mistakes regarding a claimant’s condition at the time of the settlement--(“ignorance of

the fact that claimant’s workplace accident could have aggravated his pre-existing

29
cerebral palsy,” ¶ 32), (“claimant had thoracic outlet syndrome at the time of the

settlement,” ¶ 33), (“both parties were ignorant of an injury that actually existed at the

time of settlement,” ¶ 34); and (“claimant’s shoulder was injured at the time of his

settlement,” ¶ 36)--founders in the face of South. In South, the parties “were not

mistaken regarding the nature and extent of claimant’s injury at the time the contract was

formed.” ¶ 38.

¶75 The claimant in South aggravated her existing lower back injury while training to

work as a massage therapist. South, 275 Mont. at 403, 913 P.2d at 236. Neither party in

South suffered any illusions regarding the fact that the claimant had suffered a lower back

injury. A doctor had advised the parties, however, that the claimant could work as a

massage therapist despite her injury, and the parties settled the claim. The Court

rescinded the settlement based upon the fact that the parties believed at the time of the

settlement, erroneously as it turned out, that the claimant could work as a massage

therapist. South, 275 Mont. at 404-05, 913 P.2d at 237. Similarly, a number of Henry’s

doctors also had advised the parties at the time of the settlement in 1994, erroneously as it

also turned out, that Henry’s condition had stabilized.

¶76 The medical providers did not know “of the exact nature or extent of the injury

suffered by [Henry],” as a result of getting hit in the face with an ore bucket. Kienas, 191

Mont. at 329, 624 P.2d at 3. Henry’s previously undiagnosed movement disorder cannot

be dismissed reasonably as a mere “variance in the symptom level.” Kimes, 233 Mont. at

178, 759 P.2d at 988. Various medical providers may have warned Kathy that the

symptoms of Henry’s cognitive disorders could vary over time. Nothing in the record

30
indicates, however, that any medical providers, or Old Republic, for that matter, ever

warned Kathy that an undiagnosed movement disorder could arise directly from Henry

having gotten hit in the face with an ore bucket.

¶77 The Court compounds its crabbed interpretation of Montana’s mutual mistake

cases by injecting into its analysis a series of mutual mistake cases outside the context of

the workers’ compensation system. The Court cites United States v. Southwestern Elec.

Co-op, Inc., 869 F.2d 310, 314 (7th Cir. 1989), for the proposition that a failure to predict

the future cannot constitute a mutual mistake. ¶ 28. The Court in Southwestern Electric

examined an unexpected increase in the cost of building power plants that bore no

relation to the wholesale power contract entered by the parties. This Court equates the

unexpected increase in the cost of building power plants with Henry’s unexpected

development of a movement disorder. The unexpected increase in cost in Southwestern

Electric had no relation to the parties’ contract, whereas Dr. Weinert and the WCC

determined that Henry’s movement disorder arose as a direct result of the industrial

accident that formed the basis for the parties’ settlement.

¶78 The Court also cites Consolidated Rail Corp. v. Portlight, Inc., 188 F.3d 93, 97

(3rd Cir. 1999), for its reliance on two Pennsylvania cases where the courts held that “a

party who underestimates the future severity of her injuries will not be permitted to avoid

the consequences of a settlement agreement based on mutual mistake.” ¶ 29. The court

in Consolidated Rail Corp. considered Conrail’s attempt to rescind a settlement

agreement with Portlight regarding a dispute over lost freight. Conrail argued that neither

party had any knowledge at the time of the settlement agreement of a controlling

31
limitation on Conrail’s liability for lost goods. Consolidated Rail Corp., 188 F.3d at 95.

Conrail filed an action to rescind the settlement agreement with Portlight based upon this

claimed mutual mistake of fact. The district court dismissed the action on the pleadings.

Consolidated Rail Corp., 188 F.3d at 95. The court of appeals reversed, holding that the

district court mistakenly had determined that Conrail’s mutual mistake claim was not

viable as a matter of law. Consolidated Rail Corp., 188 F.3d at 97.

¶79 The Court finally relies upon the West Virginia supreme court’s resolution of an

alimony dispute in Ryan v. Ryan, 640 S.E.2d 64 (W. Va. 2006). ¶ 30. The wife in Ryan

contended that both parties mistakenly had assumed that certain investments would

generate enough income to avoid the need of the husband to pay alimony. The

investments failed to generate sufficient income and the wife sought to rescind the

property settlement agreement under the mutual mistake doctrine. Ryan, 640 S.E.2d at

68. Not surprisingly, the court held that the parties’ mistaken expectation regarding the

amount of income that the investments would generate did not warrant rescinding the

property settlement agreement. Ryan, 640 S.E.2d at 69.

¶80 Ryan simply stands for the reasonable proposition that the parties’ expectation of

future events cannot support a mutual mistake claim. The parties may have held

unrealistic expectations at the time of the settlement regarding the amount of income that

the investments would generate. The investment fund managers may have made

mistakes after the parties’ settlement and entirely unrelated to the parties’ settlement that

depressed the investments’ returns. Here the parties knew at the time of the settlement

that Henry suffered from cognitive impairments and pain as a result of getting hit in the

32
face with an ore bucket. In contrast to the parties in Ryan, however, the parties did not

know that Henry also would suffer from a movement disorder as a direct result of having

his skull crushed by the ore bucket. Henry “sustained no trauma” to his head “either

before or after his industrial injury” that would cause him to develop a movement

disorder. Wolfe, 251 Mont. at 231, 824 P.2d at 248. The die had been cast in 1988 when

the ore bucket struck Henry in the face.

¶81 Henry sustained injuries in 1988. The symptoms of some of Henry’s injuries

appeared immediately. Henry’s medical providers identified additional injuries in the

period following the accident through testing and from the appearance of new symptoms.

Henry’s medical providers failed to identify, however, the injury to Henry’s brain that

constituted the direct cause of his movement disorder until 2004, ten years after the

parties had settled Henry’s claim. The movement disorder constituted a “late sequela of

[a] traumatic brain injury” that had occurred in 1988. Henry sustained no new injuries to

his brain after the 1988 accident. Gamble, ¶ 44.

¶82 For Henry, any cognitive deterioration or increase in pain could constitute a

variance in the symptom level or an inaccurate expectation regarding a condition known

at the time of the settlement. Both circumstances could fall outside the mutual mistake

doctrine. In this case, on the other hand, we address an undetected injury that had

occurred in 1988. The undetected injury remained unknown to the parties, however, at

the time of the settlement in 1994. The Court rejects the notion that Henry’s injury

remained undetected at the time of the settlement. It argues that Henry’s injury “did not

exist” at that time and thus “there was nothing there to detect.” ¶ 52. The Court’s

33
reasoning misapprehends the concept of injury as contemplated by Montana Worker’s

Compensation Act.

¶83 According to the Act, an “injury” means, among other matters, an “internal or

external physical harm to the body that is established by objective medical findings.”

Section 39-71-119(1)(a), MCA. Dr. Weinert diagnosed Henry’s movement disorder as

having been caused by Henry’s industrial accident in 1988. Old Republic does not refute

this objective medical finding. The WCC specifically found that Henry’s movement

disorder “is related to and caused by [Henry’s] industrial injury.” The Court concedes

that substantial credible evidence supports this finding. ¶ 22. As in Gamble, our limited

standard of review precludes us from reaching any other conclusion. Gamble, ¶ 30.

¶84 The Act further provides that an “injury” is caused by an accident. Four separate

components comprise an “accident” for purposes of the Act. Henry’s claim satisfies all

four. First, an accident is an unexpected traumatic incident. Section 39-71-119(2)(a),

MCA. Henry certainly did not expect to suffer the trauma of getting hit in the face with

an ore bucket. An accident must be identifiable by time and place of occurrence. Section

39-71-119(2)(b), MCA. Henry’s accident occurred at his place of work for Blue Range

Mining Co. on August 16, 1988. An accident must be identified by “member or part of

the body affected.” Section 39-71-119(2)(c), MCA. Besides crushing Henry’s skull, his

accident injured his brain in a manner that caused immediate cognitive impairments and

pain and later manifested itself in the form of a movement disorder. Finally, an accident

must be caused by a specific event on a single day or during a single work shift. Section

39-71-119(2)(d), MCA. Dr. Weinert determined that getting hit in the face with an ore

34
bucket on August 16, 1988, caused Henry’s movement disorder. The WCC agreed and

the Court concedes that substantial evidence supports the WCC’s finding. ¶ 22.

¶85 The consequences of Henry’s tragic accident reverberate to this day. The

consequences include the fact that Henry suffers from a severe movement disorder that

no one contemplated at the time of the settlement in 1994. Now the Court forces Kathy

and Henry to suffer the burden of the parties’ ignorance regarding Henry’s actual

condition at the time of the settlement in 1994. Old Republic will reap the windfall of the

parties’ ignorance. The Court’s mutual mistake analysis lumps injured workers with

incomplete diagnoses with electric coops who underestimate the cost of building new

power plants, Southwestern Electric, with railroads who fail to investigate liability

agreements before settling claims, Consolidated Rail Corp., and with ex-spouses

disappointed by bear markets, Ryan. Henry deserves the same treatment as the fragile

massage therapist in South, as the retail stocker in Gamble, and as the other injured

workers properly covered by the worker’s compensation system for the full extent of

their injuries. I dissent.

/S/ BRIAN MORRIS

35