DARRELL GILLETTE, Applicant

MILWAUKEE COUNTY, Employer

FORT ATKINSON MEMORIAL HEALTH SERVICE, Employer

MILWAUKEE COUNTY, Insurer

UNITED WISCONSIN, Insurer

The applicant submitted a petition for commission review of a Department Order issued on August 22, 2002, in which the administrative law judge dismissed the applicant's petition to the department to reopen the compromise agreement reached between the parties on March 23, 2000. Respondents submitted answers to the petition, and briefs were submitted by the parties. At issue is whether or not the compromise should be reopened.

The commission has carefully reviewed the entire record in this matter, and hereby reverses the department order. The commission makes the following:

The applicant, whose birth date is May 5, 1951, sustained a conceded low back injury while working for Milwaukee County on December 22, 1990. He underwent a fusion with instrumentation in 1991, a re-fusion with insertion of new instrumentation in 1993, and surgical removal of instrumentation in 1995. The applicant claimed that a new work injury occurred while he was working for Fort Atkinson Memorial Health Services on January 15, 1998. However, in a department order dated September 16, 1999, an administrative law judge found that there had been no new work injury. She found that a fourth surgery performed in 1998 was attributable to the 1990 work injury, and ordered additional temporary disability, permanent functional disability, and medical expenses. The applicant also claimed loss of earning capacity including permanent total disability, but the administrative law judge left the order interlocutory with respect to loss of earning capacity, because the applicant indicated he would be seeking assistance from the Department of Vocational Rehabilitation.

On February 28, 2000, the applicant and his attorney signed a compromise agreement with respondents whereby he accepted as his settlement the present value amount of $210,000. Of this amount, $42,821.81 went to the applicant's attorney for fees and costs, $48,178.19 was paid to the applicant as a lump sum so that he could pay outstanding medical expenses, and a balance was left of $119,000. That amount was used to purchase an annuity with a monthly benefit of approximately $829 payable to the applicant, and guaranteed for 15 years.

As of the date of hearing, the applicant's monthly income was $1,170 from social security disability payments and $829.39 from the compromise annuity, for a total of $1,999.39. His current monthly medical expenses are approximately equivalent to this monthly income.

In a letter completed on January 17, 2000, the applicant's primary treating physician for pain control, Dr. M. Heydarpour, answered questions for the applicant's attorney regarding foreseeable medical expenses. He indicated that the applicant would need surgical replacement of his spinal medication pump every five to seven years, and that this would cost approximately $31,000 for each replacement. He also indicated that the applicant would need $4,000 to $6,000 per year for physician services, $10,000 to $12,000 per year for medications for the spinal pump, and $2,000 to $3,000 per year for other medications. Using the lowest end of each of these estimates, the foreseeable medical expenses would amount to $20,400 per year. Using the highest end of the estimates, the figure is $25,400 per year. Currently, the applicant is actually paying approximately $20,000 per year in medical expense.

The commission has consistently held that a compromise will not be reopened unless it is shown that it involved gross inequity, fraud, duress, mutual mistake, or that important newly-discovered evidence has arisen. Gilles Beaudoin v. Rebar Placers, WC Claim No. 93045798 (LIRC Jan. 15, 1998); Yench v. UW Oshkosh, WC Claim No. 90029552 (LIRC July 31, 1995); Blenke v. American Can Company, WC Claim No. 87037750 (LIRC September 9, 1992).

In the applicant's case, the dispute before the ALJ in 1999 was over which of two employers was liable for the applicant's disability and treatment beginning on January 15, 1998 (Milwaukee County or Fort Atkinson Memorial Health Service and its insurer). There was no medical opinion attributing the ongoing disability and treatment expense to a nonindustrial cause. The ALJ found Milwaukee County liable based on the medical opinions relating such disability and treatment to the conceded work injury of December 22, 1990. Milwaukee County had petitioned that decision to the commission at the time of the compromise, and had asserted that Fort Atkinson Memorial Health Service and its insurer should be liable based on an alleged injury of January 15, 1998.

In addition, the evidence demonstrates that prior to the compromise the parties were aware of Dr. Heydarpour's letter detailing the applicant's known future medical expenses. They were also aware of the fact that after paying outstanding expenses and attorney fees, the applicant would be left with an annuity paying him approximately $829 per month. By simple arithmetic, this annuity amount could be seen to cover less than half of the known future medical expenses. The commission therefore finds that based on the circumstances of the applicant's case, the compromise approved by the department on March 23, 2002, was grossly inequitable. It provided for less than half of the known future medical expenses, and left nothing for the applicant's loss of earning capacity claim.

Respondents argue that since the compromise specifically contemplated the fact that the applicant "may incur additional medical expenses in the future," and went on to state that such expenses would not be their responsibility, the compromise should not be reopened. The argument continues that even though the applicant may have made a "bad deal" he was aware of the risk inherent in any compromise, and therefore must be held to have assumed that risk. They cite prior commission decisions which they assert support their argument. In fact, any realistic appraisal of the applicant's claim at the time the compromise was reached would have revealed that the liability dispute was between which of two employers (one of which had a separate insurer) should pay, not whether the applicant's ongoing disability and medical treatment expense were compensable under Chaper 102. The risk was to the employers and the insurer named as respondents, not to the applicant. Under these circumstances, a compromise which in effect left over half of the known future medical expenses unpaid, and made no provision for a loss of earning capacity claim, was not just a "bad deal." It was grossly inequitable. The prior commission decisions which respondents cite involved different facts and circumstances which are not analogous to the applicant's case.

The commission therefore sets aside the compromise approved by the department on March 23, 2000. This has the effect of reinstating the ALJ's decision issued on September 16, 1999, effective with the date of the commission's decision as stamped below. Milwaukee County shall have the statutory appeal period (21 days) to reinstate its petition to the department order of September 16, 1999. Of course, in any future order, all unreturned payments made in compliance with the compromise order of March 23, 2000, shall be taken into account and credited to Milwaukee County. The $1500 payment which Fort Atkinson Memorial Health Service and its insurer paid to Milwaukee County shall also be taken into account and credited. Pending final resolution of this claim, Milwaukee County is authorized to suspend any further payments under the compromise agreement, and to be reimbursed for payments made to date.

NOW, THEREFORE, this

The Findings and Order of the administrative law judge are reversed. The compromise approved by the department in this matter on March 23, 2000, is set aside. The department decision issued by Administrative Law Judge Nancy L. Schneiders on September 19, 1999, is reinstated.

Dated and mailed April 23, 2003
gilleda . wrr : 185 : 3 ND § 10.5

/s/ David B. Falstad, Chairman

/s/ James A. Rutkowski, Commissioner

/s/ James T. Flynn, Commissioner

cc: 
Attorney Richard J. Steinberg
Attorney Mark A. Grady
Attorney Linda D. Kiemele

[ Search Decisions ] - [ WC Legal Resources ] - [ LIRC Home Page ]

uploaded 2003/05/02