W.C. No. 3-063-709Industrial Claim Appeals Office.
August 29, 1996
ORDER OF REMAND
The claimant seeks review of an order of Administrative Law Judge Martinez (ALJ) which denied his Petition to Reopen the claim based upon a mutual mistake of material fact. We set aside the order and remand for entry of a new order.
The claimant suffered a compensable back injury and subsequently underwent multiple fusion surgeries of the lumbar spine. Based upon the opinion of Dr. Roth, the respondents filed a Final Admission of Liability which admitted liability for maximum permanent partial disability benefits, and listed the date of maximum medical improvement (MMI) as November 17, 1993.
On June 10, 1994, the parties entered into a “Stipulation for Full and Final Settlement and Release of All Claims” (Settlement). The Settlement provided that, in exchange for a lump sum payment, the claimant waived his right to further benefits except medical benefits for one year. The claimant also waived the right to reopen the claim except on grounds of fraud or mutual mistake of material fact.
In June 1995 the claimant filed a Petition to Reopen the Settlement alleging a mutual mistake of fact concerning whether he attained MMI. Relying upon the opinion of Dr. Odom, the claimant contends that the prior fusion surgeries did not successfully fuse the vertebrae at the L5-S1 level. The claimant further contends that, in the absence of a solid union of the vertebrae at the L5-S1 level, he has not reached MMI.
The ALJ concluded that the respondents would have settled the claim regardless of whether the claimant was at MMI. The ALJ’s determination was based, in part, upon the provision of the Settlement which reflects the parties’ mutual agreement that:
“[T]he diagnoses or prognoses made by the physicians in this matter may be incorrect or subject to change . . . None of the parties are relying upon any promises, guarantees, or predictions made by anyone as to the Claimant’s physical or mental condition or as to any other aspect of this claim.”
The ALJ also noted that the Settlement was made at least five months after the filing of the respondents’ Final Admission of Liability. Consequently, the ALJ determined that the claimant failed to prove that the MMI determination was “material” to the respondents’ willingness to enter into the Settlement, and denied the Petition to Reopen.
On review the claimant contends that the ALJ erred in failing to reopen the claim. Because the ALJ’s findings of fact are insufficient to permit appellate review, we remand the matter to the ALJ for additional findings of fact, and the entry of a new order.
Notwithstanding the claimant’s contrary contention, it was the claimant’s burden to prove the existence of a mutual mistake of a material fact concerning the terms of the Settlement. For a fact to be “material” the claimant must establish that: 1) the fact relates to a “basic assumption” on which the contract is made; 2) the party seeking release from the settlement must show that the fact had a material effect on the agreed exchange of performances; 3) the fact must not be one as to which the party seeking relief bears the risk. See Masias v. Colorado Compensation Insurance Authority (Colo.App. No. 94CA0989, July 20, 1995) (not selected for publication) citing Restatement of Contracts (Second) § 152 (1981), an Hailpern v. Dryden, 154 Colo. 231, 389 P.2d 590 (1964).
In Masias, as here, the claimant entered into a full and final settlement of a workers’ compensation claim. In exchange for a lump sum payment and two years of medical care the claimant waived her right to reopen the claim except on grounds of fraud or mutual mistake. The settlement specifically designated a physician to treat the claimant and provided that no change of physician was allowed without written consent from the insurer. However, the designated physician was not available to treat the claimant and he referred the claimant to another provider. After the insurer refused to pay for medical treatment from the new provider the claimant petitioned to reopen the claim based upon a mutual mistake of fact concerning the availability of the designated physician.
Relying on the “plain language” of the settlement agreement, the Masias court concluded that the contract was based upon a “basic assumption” that the claimant would receive extended medical treatment at the insurer’s expense. Further, the court concluded that the assumption had a material impact on the agreed exchange of performances in the contract because the claimant did not receive the bargained for medical treatment and the insurer had not been required to pay for the treatment bargained for by the claimant. Lastly, the court held that the availability of the designated provider was not a risk assumed by the claimant, because the claimant was not required to assume the risk that the insurer would unreasonably withhold consent for a change of provider. Therefore, the court held as a matter of law that the availability of the designated provider was a material fact.
Here, the Settlement expressly refers to the fact that the permanent physical impairment from the claimant’s compensable injuries of the back, hips and right lower extremity was rated as 32 percent. Stipulation for Full and Final Settlement and Release of All Claims, paragraph 4. Permanent medical impairment is not ascertainable until the claimant reaches MMI Golden Animal Hospital v. Horton, 897 P.2d 833 (Colo. 1995); Donald B. Murphy Contractors, Inc., v. Industrial Claim Appeals Office, 916 P.2d 611 (Colo.App. 1995) cert. denied April 29, 1996. Consequently, the plain language of the Settlement demonstrates that MMI related to a basic assumption in the settlement, namely that the claimant’s condition had stabilized and the extent of impairment was determinable.
Further, MMI is defined as the point in time when the claimant’s condition is “stable” and “no further treatment is reasonably expected to improve the condition.” Section 8-40-201(11.5), C.R.S. (1995 Cum. Supp.). Thus, a determination of MMI terminates the claimant’s right to medical care designed to improve the condition and restricts further medical benefits to treatment required to maintain or prevent a deterioration of the claimant’s condition. Grover v. Industrial Commission, 759 P.2d 705 (Colo. 1988); Stollmeyer v. Industrial Claim Appeals Office, 916 P.2d 609 (Colo.App. 1995), cert. denied April 29, 1996. MMI also triggers the right to medical impairment benefits because the claimant’s condition is stable and ratable. Section 8-42-107(8)(c), C.R.S. (1995 Cum. Supp.).
Under such circumstances, the existence of MMI was certainly material to the parties’ agreed on exchange of performances. It is doubtful the claimant would have surrendered his right to medical benefits after one year or surrendered the right to additional permanent partial or permanent total disability benefits had he believed his condition was not stable. Consequently, the stability of the claimant’s condition must have been a factor influencing the respondents’ evaluation of the case and propriety of the settlement.
Concerning the issue of “risk” the Settlement reveals that the claimant waived his right to reopen the claim “if his condition becomes worse or changes.” However, this waiver is separate and distinct from the question of whether the claimant achieved MMI prior to any change or worsening.
The Settlement also suggests that the claimant assumed the risk that further treatment would be required for “unknown injuries, conditions, disabilities, or diseases” resulting from the industrial accident. However, the parties stipulated that claimant’s disability from the injuries to his back, hip and right lower extremity was stable and resulted in a combined permanent impairment rating of 32 percent. Therefore, as to these injuries, neither party agreed to assume the risk that the claimant had not reached MMI.
Similarly, the claimant agreed that he was not “relying upon any promises, guarantees, or predictions made by anyone” as to his “physical or mental condition.” However, the risk assumed by the claimant concerning the future course of his known condition, is distinct from the parties’ understanding of the claimant’s condition at the time of the Settlement. The parties’ assumption that the claimant’s condition had stabilized and that no further medical treatment would reasonably improve his condition, arguably concerns a present or past fact concerning the “extent, severity and likely duration” of the known injuries, and was not a risk assumed by the claimant. See Gleason v. Guzman, 623 P.2d 378 (Colo. 1981) (general release for unknown injuries does not preclude rescission where plaintiff is not aware of the basic character of the injury).
Therefore, we conclude as a matter of law that the existence of MMI was a fact which was “material fact” to the Settlement. Consequently, the ALJ erred in denying the Petition on grounds that the claimant failed to prove a mistake concerning a “material” fact.
However, the claimant was also required to prove that there was a “mistake” concerning MMI, and that the mistake was shared by the respondents. Whether the claimant sustained his burden of proof is a factual question for resolution by the ALJ Maryland Casualty Co. v. Buckeye Gas Products Co., 797 P.2d 11 (Colo. 1990).
Because the ALJ erroneously determined that MMI was not a “material” fact, the ALJ failed to enter specific findings of fact concerning whether the claimant sustained his burden to prove a mutual mistake of fact concerning MMI. Consequently, we must remand the matter to the ALJ for additional findings of fact and a new order which resolves the pertinent issues.
IT IS THEREFORE ORDERED that the ALJ’s order dated March 1, 1996, is set aside, and the matter is remanded to the ALJ for entry of a new order consistent with the views expressed herein.
INDUSTRIAL CLAIM APPEALS PANEL ____________________________________ David Cain ____________________________________ Kathy E. Dean
Copies of this decision were mailed August 29, 1996 to the following parties:
Sean D. Davis, P.O. Box 1603, Arboles, CO 81121
Critter’s Meat Factory, 1111 Camino del Rio, Durango, CO 81301-5172
Colorado Compensation Insurance Authority, Attn: Laurie A. Schoder, Esq. (Interagency Mail)
Scot Houska, Esq., 744 Horizon Ct., Ste. 360, Grand Junction, CO 81506 (For the Respondents)
Daniel Spitzer, Esq., 1911 Main Ave., Ste. 103, Durango, CO 81301 (For the Claimant)
Office of the Attorney General, Civil Litigation Section, Subsequent Injury Fund Unit, 1525 Sherman St., 5th Flr., Denver, CO 80203-1760
BY: _______________________