Hunt v. Pick's Pack-Hauler

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Decisions of the Nebraska Court of A ppeals
23 Nebraska A ppellate R eports
HUNT v. PICK’S PACK-HAULER
Cite as 23 Neb. Ct. App. 278
Joseph Hunt, appellant, v.
Pick’s Pack-H auler, Inc.,
and Great West Casualty
Company, Inc., appellees.
___ N.W.2d ___
Filed September 15, 2015. No. A-14-937.
1. Summary Judgment: Appeal and Error. An appellate court will affirm
a lower court’s grant of summary judgment if the pleadings and admis-
sible evidence offered at the hearing show that there is no genuine issue
as to any material facts or as to the ultimate inferences that may be
drawn from those facts and that the moving party is entitled to judgment
as a matter of law.
2. Workers’ Compensation. Lump-sum settlements, in the context of
workers’ compensation, are governed by Neb. Rev. Stat. §§ 48-139,
48-140, and 48-141 (Reissue 2010).
3. ____. Every lump-sum settlement approved by order of the Workers’
Compensation Court shall be final and conclusive unless procured
by fraud.
4. ____. Upon paying the lump-sum settlement amount approved by the
Workers’ Compensation Court, the employer shall be discharged from
further liability on account of the injury and shall be entitled to a duly
executed release.
5. Workers’ Compensation: Releases. Upon filing the duly executed
release, the liability of the employer under any agreement, award, find-
ing, or decree shall be discharged of record.
6. Workers’ Compensation. Any lump-sum settlement by agreement of
the parties pursuant to Neb. Rev. Stat. § 48-139 (Reissue 2010) shall be
final and not subject to readjustment if the settlement is in conformity
with the Nebraska Workers’ Compensation Act, unless the settlement is
procured by fraud.
7. ____. All amounts paid by an employer or by an insurance company
carrying such risk, as the case may be, and received by the employee
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HUNT v. PICK’S PACK-HAULER
Cite as 23 Neb. Ct. App. 278
or his or her dependents by lump-sum payments pursuant to Neb.
Rev. Stat. § 48-139 (Reissue 2010) shall be final and not subject to
readjustment if the lump-sum settlement is in conformity with the
Nebraska Workers’ Compensation Act, unless the settlement is pro-
cured by fraud.
8. ____. Neb. Rev. Stat. §§ 48-139, 48-140, and 48-141 (Reissue 2010)
indicate that in the area of workers’ compensation, lump-sum settle-
ments are final and not subject to readjustment unless the settlement is
procured by fraud.
9. ____. Neb. Rev. Stat. §§ 48-139, 48-140, and 48-141 (Reissue 2010)
emphasize the finality of a lump-sum settlement and only contemplate
readjustment if the settlement itself is procured by fraud, and the stat-
utes do not speak to readjusting underlying awards allegedly procured
by fraud.
10. Workers’ Compensation: Judgments: Time: Appeal and Error. The
Workers’ Compensation Court may modify or change its findings, order,
award, or judgment at any time before appeal and within 14 days after
the date of such findings, order, award, or judgment.
11. Workers’ Compensation: Jurisdiction: Statutes. As a statutorily cre-
ated court, the Workers’ Compensation Court is a tribunal of limited and
special jurisdiction and has only such authority as has been conferred on
it by statute.
12. Workers’ Compensation. A party’s allegations of fraud to readjust a
lump-sum settlement must pertain to the procurement of the lump-sum
settlement itself.
Appeal from the Workers’ Compensation Court: Laureen K.
Van Norman, Judge. Affirmed.
Rolf Edward Shasteen, of Shasteen & Morris, P.C., L.L.O.,
for appellant.
Jason A. Kidd, of Engles, Ketcham, Olson & Keith, P.C., for
appellees.
Moore, Chief Judge, and Pirtle and Bishop, Judges.
Bishop, Judge.
In August 2000, Joseph Hunt injured his right arm in the
course and scope of his employment as a truckdriver with
Pick’s Pack-Hauler, Inc. The parties entered into a lump-sum
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Decisions of the Nebraska Court of A ppeals
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HUNT v. PICK’S PACK-HAULER
Cite as 23 Neb. Ct. App. 278
settlement agreement in accordance with an award of benefits
entered by the Nebraska Workers’ Compensation Court fol-
lowing trial; the compensation court approved the settlement
in 2003. Pick’s Pack-Hauler paid Hunt pursuant to the settle-
ment, and Hunt filed a satisfaction and release of Pick’s Pack-
Hauler’s liability in June 2003.
In 2013, Hunt filed a petition in the compensation court
seeking to set aside the lump-sum settlement on the basis of
constructive fraud, alleging that his treating physician had
incorrectly determined that he had reached maximum medical
improvement (MMI) at the time of the 2003 settlement. The
compensation court granted the motion for summary judgment
of Pick’s Pack-Hauler and its insurer, Great West Casualty
Company, Inc. (Great West), and dismissed Hunt’s petition.
Hunt now appeals; we affirm.
BACKGROUND
On August 30, 2000, Hunt (age 34 at the time) injured
his right arm while securing a trailerload during his employ-
ment with Pick’s Pack-Hauler. He first sought treatment from
his family doctor on September 5 and was prescribed anti-­
inflammatory medication and shown exercises to relieve pain
“‘in his right biceps area.’” Hunt did not seek medical treat-
ment again until April 6, 2001, when he returned to his family
doctor with complaints of pain in his right shoulder. Hunt was
referred to Dr. Gary Chingren, an orthopedic doctor. In a letter
dated April 21, 2001, Dr. Chingren noted that Hunt’s injury
would be a “long term problem” and stated that it could take
“6 to 9 months for things to get well.”
In September 2001, due to Hunt’s continued pain, an MRI
was taken of his right shoulder. Dr. Chingren noted the MRI
reflected a “full thickness rotator cuff tear.” Hunt filed a peti-
tion in the Workers’ Compensation Court on September 24.
After undergoing additional conservative care, Dr. Chingren
performed right shoulder surgery on Hunt on October 10,
2001. Hunt continued to see Dr. Chingren for postoperative
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HUNT v. PICK’S PACK-HAULER
Cite as 23 Neb. Ct. App. 278
checkups through February 2002. At this February appoint-
ment, Dr. Chingren noted that Hunt reported that his arm ached
and hurt, but that medication helped. Dr. Chingren noted that
Hunt may have ruptured his right biceps tendon “at some point
in time.”
In a letter dated November 1, 2002, Dr. Chingren stated that
at Hunt’s 1-year postoperative visit in October, his examina-
tion was “essentially the same as it was in July,” and that Hunt
had made “very satisfactory progress.” Dr. Chingren deter-
mined Hunt had a 14-percent impairment rating for his right
upper extremity.
Trial on Hunt’s petition was held on January 14, 2003. The
court entered an award on March 14. The court found that
Hunt sustained a right arm injury as the result of an accident
arising out of and in the course of his employment with Pick’s
Pack-Hauler. The court found that as a result of Hunt’s work
accident and injury, he was temporarily and totally disabled
from October 9, 2001, to January 9, 2002, which was when
Dr. Chingren released Hunt to work light duty. Thereafter,
the court found that Hunt sustained a 14-percent permanent
partial impairment to his right arm, in accordance with Dr.
Chingren’s impairment rating. The court determined Hunt’s
average weekly wage was $775.02, entitling him to temporary
total disability benefits of $487 per week for 132⁄ 7 weeks, and
$487 per week for 30.1 weeks for his 14-percent permanent
partial disability to his right arm. The award also ordered
Pick’s Pack-Hauler to pay for certain medical bills incurred
by Hunt and to reimburse Hunt’s insurance company and
Medicare. The court did not award Hunt future medical treat-
ment, concluding that Hunt had not submitted evidence sug-
gesting it would be required.
On April 23, 2003, the parties filed an “Application for
Approval of Final Lump Sum Settlement” in the Workers’
Compensation Court. The settlement application stated that
the settlement was
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HUNT v. PICK’S PACK-HAULER
Cite as 23 Neb. Ct. App. 278
intended to cover all injuries, ailments, and diseases, both
physical and mental, and the aggravation of pre-existing
conditions, of whatsoever kind or character arising out
of or in any way connected with the [August 20, 2000,]
accident alleged herein and resultant injuries, includ-
ing future developments thereof, whether now known or
hereafter to become known.
The settlement application provided that the parties had
reached a final lump-sum settlement agreement wherein
Pick’s Pack-Hauler agreed to pay the lump-sum amount of
$22,128.84, which constituted all the indemnity and medi-
cal benefits awarded to Hunt in the court’s March 14, 2003,
award, plus $1,000 in additional consideration in full satis-
faction of all of Hunt’s claims resulting from his August 30,
2000, accident. The settlement application stated that Hunt
had considered the “possibility of future developments of said
accident and injuries, the extent and nature of which, how-
ever, at the present time are unknown to [Hunt] and which
cannot be ascertained.”
On June 18, 2003, the compensation court entered an order
approving the parties’ settlement application. On June 23,
Hunt filed a satisfaction of lump-sum settlement and released
Pick’s Pack-Hauler from further liability.
More than 10 years later, on November 7, 2013, Hunt filed
a petition to set aside the lump-sum settlement on the basis
of fraud pursuant to Neb. Rev. Stat. § 48-139(2)(c) (Reissue
2010). Hunt alleged that the settlement “failed, through no
intent of the parties, to completely disclose all of the salient
medical facts and circumstances necessary for the court to
develop a fully informed opinion as to the advisability of
approval.” Specifically, Hunt alleged that the “true medical
condition of [his] right shoulder at the time of settlement was
actually and, in fact, unknown.”
Pick’s Pack-Hauler and Great West filed a motion to dismiss
Hunt’s petition on December 6, 2013. The court entered an
order on January 9, 2014, overruling Pick’s Pack-Hauler and
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HUNT v. PICK’S PACK-HAULER
Cite as 23 Neb. Ct. App. 278
Great West’s motion, concluding that Hunt was entitled to a
hearing to determine if the allegations of fraud in his petition
entitled him to relief.
Pick’s Pack-Hauler and Great West filed a motion for sum-
mary judgment on June 3, 2014, alleging that Hunt failed to
establish that the lump-sum settlement constituted a construc-
tive fraud upon the court. A hearing on the motion was held on
June 25.
According to evidence submitted at the summary judg-
ment hearing, in November 2011, Hunt sustained a subse-
quent injury to his right shoulder while employed by Rosen’s
Diversified, also known as Gibbon Packing (Gibbon Packing).
Medical evidence from Hunt’s workers’ compensation claim
against Gibbon Packing reflected that he was treated by Scott
Franssen, D.O., subsequent to his November accident. In
January 2012, Dr. Franssen stated his medical opinion that
Hunt’s “right shoulder current symptomatology is an aggrava-
tion of a pre-existing condition.” Dr. Franssen stated Hunt had
“advanced posttraumatic osteoarthritic [changes and] a full
thickness tear of his rotator cuff” that “has severe retraction,”
noting that an “outside orthopod [Dr. Chingren]” had previ-
ously repaired it in 2000-2001. Dr. Franssen recommended
conservative care, but thought Hunt “probably” would need a
total shoulder arthroplasty “down the road.”
Dr. Brent Adamson performed an independent medical
evaluation (IME) on August 23, 2012. Dr. Adamson concluded
that Hunt’s diagnosis was “chronic retracted rotator cuff tear
of right shoulder, degenerative arthritis of right shoulder.”
Dr. Adamson opined that the etiology of Hunt’s symptoms
at the time of the IME were related to his August 30, 2000,
injury and concluded that Hunt had temporarily aggravated a
preexisting condition as a result of his November 2011 acci-
dent. Dr. Adamson concluded that Hunt did not suffer from
any permanent partial disability of his right shoulder over and
above the 14 percent that was rated in 2001, and Dr. Adamson
said he would not recommend surgery.
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HUNT v. PICK’S PACK-HAULER
Cite as 23 Neb. Ct. App. 278
According to Hunt, he entered into a release of liability
with Gibbon Packing, which release was filed in the Workers’
Compensation Court in January 2013. Such release did not
provide for future medical care of his right shoulder. No other
terms of Hunt’s settlement with Gibbon Packing appear in
our record.
Through Hunt’s interrogatories entered into evidence at
the summary judgment hearing in the instant case, he clari-
fied that his claim for constructive fraud was based on his
reliance on Dr. Chingren’s opinion in 2002 that Hunt was at
MMI. Hunt believed that the opinions of Drs. Franssen and
Adamson given in 2012 indicate Hunt’s right shoulder condi-
tion had gotten worse and that therefore Dr. Chingren falsely,
though unintentionally, represented that Hunt had reached
MMI in 2002.
The compensation court in the instant case entered an order
on September 29, 2014, sustaining Pick’s Pack-Hauler and
Great West’s motion for summary judgment. The court stated
that Hunt was represented by counsel, participated in trial, and
obtained an award based in part on the opinion of his own
treating physician, and that the subsequent settlement was
based upon a fully litigated award. The court concluded that
“[t]o argue nearly 10 years later that a doctor’s opinion which
may or may not have been incorrect at the time it was offered
is not constructive fraud” for purposes of setting aside the
lump-sum settlement. The court therefore granted Pick’s Pack-
Hauler and Great West’s motion for summary judgment and
dismissed Hunt’s petition.
Hunt timely appeals.
ASSIGNMENT OF ERROR
Hunt assigns two errors on appeal, which we summarize
and consolidate as one: The Workers’ Compensation Court
erred in granting summary judgment based on its conclusion
that Dr. Chingren’s opinion that Hunt had reached MMI did
not constitute constructive fraud.
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Decisions of the Nebraska Court of A ppeals
23 Nebraska A ppellate R eports
HUNT v. PICK’S PACK-HAULER
Cite as 23 Neb. Ct. App. 278
STANDARD OF REVIEW
[1] An appellate court will affirm a lower court’s grant of
summary judgment if the pleadings and admissible evidence
offered at the hearing show that there is no genuine issue as to
any material facts or as to the ultimate inferences that may be
drawn from those facts and that the moving party is entitled
to judgment as a matter of law. Marcuzzo v. Bank of the West,
290 Neb. 809, 862 N.W.2d 281 (2015).
ANALYSIS
[2-8] Hunt sought to set aside the parties’ lump-sum settle-
ment approved by the compensation court in 2003 on the
basis of constructive fraud. Hunt’s petition in the instant case
claimed that the application for lump-sum settlement submit-
ted to the court in 2003 was inaccurate and perpetrated a con-
structive fraud on the court within the meaning of § 48-139.
Hunt filed this action to set aside the lump-sum settlement
itself, so we begin by examining the relevant statutes. Lump-
sum settlements, in the context of workers’ compensation,
are governed by § 48-139 and Neb. Rev. Stat. §§ 48-140 and
48-141 (Reissue 2010). Section 48-139(2)(c) provides in rel-
evant part:
Every such lump-sum settlement approved by order of the
compensation court shall be final and conclusive unless
procured by fraud. Upon paying the amount approved
by the compensation court, the employer (i) shall be dis-
charged from further liability on account of the injury . . .
and (ii) shall be entitled to a duly executed release. Upon
filing the release, the liability of the employer under any
agreement, award, finding, or decree shall be discharged
of record.
(Emphasis supplied.) Section 48-140 provides in part: “Any
lump-sum settlement by agreement of the parties pursuant
to section 48-139 shall be final and not subject to readjust-
ment if the settlement is in conformity with the Nebraska
Workers’ Compensation Act, unless the settlement is procured
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by fraud.” (Emphasis supplied.) Finally, § 48-141 provides in
relevant part:
All amounts paid by an employer or by an insurance
company carrying such risk, as the case may be, and
received by the employee or his or her dependents by
lump-sum payments pursuant to section 48-139 shall be
final and not subject to readjustment if the lump-sum
settlement is in conformity with the Nebraska Workers’
Compensation Act, unless the settlement is procured by
fraud . . . .
(Emphasis supplied.) The language used in §§ 48-139, 48-140,
and 48-141 indicate that in the area of workers’ compensation,
lump-sum settlements are final and not subject to readjustment
“unless the settlement is procured by fraud.” In Hunt’s peti-
tion, he claimed that the “contents of the Application for Lump
Sum Settlement developed by the parties and submitted to the
court was inaccurate and operated in such a manner as to per-
petrate a constructive fraud upon the court within the meaning
of . . . § 48-139.” Hunt further claimed that
the Lump Sum Settlement Application failed, through
no intent of the parties, to completely disclose all of
the salient medical facts and circumstances necessary
for the court to develop a fully informed opinion as to
the advisability of approval. Specifically, the parties so
failed because the true medical condition of [Hunt’s] right
shoulder at the time of settlement was actually and, in
fact, unknown.
. . . Without true and correct information about the con-
dition of [Hunt’s] right shoulder, the Court was deprived
of the opportunity to fairly and accurately evaluate the
representations contained in the Application for Lump
Sum Settlement, and, accordingly, it approved [the] same
on medical representations which were inaccurate, but
not known to be so, at the time they were made.
While Hunt argues that the “Court was deprived of the oppor-
tunity to fairly and accurately evaluate the representations”
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made in the lump-sum settlement application and that the
“medical representations . . . were inaccurate,” it is signifi-
cant to remember that the “representations” contained in the
lump-sum settlement in this case were derived from actual
trial court findings set forth in the March 14, 2003, award.
The terms of the lump-sum settlement were not the result
of any party misrepresenting Hunt’s medical information to
induce a settlement through pretrial negotiations; rather, the
terms flowed directly from the compensation court’s award
following trial. There is no dispute that the parties relied
upon the compensation court’s March 14 award when entering
into the lump-sum settlement. The total amount paid to Hunt,
$22,128.84, constituted all the indemnity and medical benefits
awarded to Hunt in the court’s March 14 award, plus $1,000
in additional consideration.
[9-12] Hunt makes no allegation that any party engaged in
fraudulent action to procure the lump-sum settlement itself;
rather, his allegations of “fraud” pertain solely to allegedly
erroneous medical evidence offered and accepted by the
compensation court at trial in 2003. Hunt is apparently asking
us to conclude that there is a genuine issue of material fact
sufficient to overcome summary judgment with regard to his
argument that (1) certain trial evidence was constructively
“fraudulent” in this case, and therefore, (2) such “fraudulent”
information was then relied upon in the lump-sum agreement,
and therefore, (3) the lump-sum agreement was “procured by
fraud” as contemplated by the lump-sum settlement statutes
set forth previously. We do not read the lump-sum settlement
statutes to provide a mechanism for challenging the evidence
upon which an award is based; rather, we read the statutes
as being limited to challenging lump-sum settlements which
may have been procured by fraud. Sections 48-139, 48-140,
and 48-141 emphasize the finality of a lump-sum settlement
and only contemplate “readjustment” if the “settlement” itself
is procured by fraud; the statutes do not speak to readjusting
underlying “awards” allegedly procured by fraud. And, while
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Cite as 23 Neb. Ct. App. 278
the compensation court may modify or change its findings,
order, award, or judgment at any time before appeal and
within 14 days after the date of such findings, order, award,
or judgment, see Neb. Rev. Stat. § 48-180 (Cum. Supp.
2014), and may modify as set forth in § 48-141, Hunt’s posi-
tion does not fall within either of those statutes. Nor does
Hunt point us to any authority that would allow the com-
pensation court to set aside or modify a fully litigated award
more than 10 years after its entry on the basis of alleged
constructive fraud occurring during trial. As a statutorily cre-
ated court, the Workers’ Compensation Court is a tribunal of
limited and special jurisdiction and has only such authority
as has been conferred on it by statute. Cruz-Morales v. Swift
Beef Co., 275 Neb. 407, 746 N.W.2d 698 (2008). Because
Hunt’s allegations of fraud do not pertain to the procurement
of the lump-sum settlement as contemplated by §§ 48-139 to
48-141, but instead pertain only to trial evidence upon which
the court’s March 14, 2003, award was made, the compensa-
tion court properly dismissed Hunt’s petition to set aside the
lump-sum settlement.
For the sake of completeness in addressing the arguments
advanced by Hunt, even if we were to accept his position
that constructive fraud occurring at the trial level could carry
over to the lump-sum settlement made in accordance with
the trial court’s award, Hunt’s argument still fails. Our courts
have never determined whether constructive fraud, if properly
proved, would be sufficient to reopen or readjust a lump-sum
settlement under §§ 48-139 to 48-141. However, we need not
determine that issue at this time, because we conclude the
record in the instant case affirmatively demonstrates that the
lump-sum settlement itself was not procured by fraud, con-
structive or otherwise.
Hunt refers to Professor Larson’s treatise to support his
argument that a physician’s mistake constitutes “‘construc-
tive fraud’” sufficient to reopen a lump-sum settlement. Brief
for appellant at 9. According to Professor Larson, courts have
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found constructive fraud sufficient to justify reopening a settle-
ment where an innocent misrepresentation has been made
by a physician chosen by the employer or its insurer, and
those representations have been relied on by the claimant.
Professor Larson continues, “If, however, claimant has relied
on the representations of her own physician, there has been
no fraud.” 13 Arthur Larson & Lex K. Larson, Larson’s
Workers’ Compensation Law § 131.05[1][b] at 131-48 (2015).
Therefore, even if we did adopt Professor Larson’s position,
as Hunt urges us to do, it would not support the reopening of
the parties’ lump-sum settlement in this case. Hunt alleges the
basis of the constructive fraud was that Dr. Chingren incor-
rectly placed him at MMI in 2002. Dr. Chingren was Hunt’s
own physician, not a physician chosen by Pick’s Pack-Hauler
and Great West. According to Professor Larson, if a claimant
relied on representations of his own physician, there has been
no fraud. Therefore, according to Hunt’s own cited authority,
he would not be entitled to reopen the lump-sum settlement on
the basis of constructive fraud.
Furthermore, the record before us affirmatively refutes
Hunt’s factual allegations of constructive fraud. Hunt argues
that summary judgment was inappropriate because “there is a
question of fact as to whether Dr. Chingren’s representation
that . . . Hunt’s condition became permanent and therefore
that he reached MMI in November 1, 2002[,] constituted
constructive fraud.” Brief for appellant at 10. Hunt goes on
to assert:
[I]f the statement of Dr. Chingren, although made with-
out an evil intent, was false, it had a tendency to deceive
. . . Hunt, his attorney, and the court, both during the
trial and when the court approved the lump sum settle-
ment. Had the truth about the seriousness of . . . Hunt’s
condition been known at the time, . . . Hunt would not
have filed his application for lump sum settlement, and
the court would not have approved it. Therefore, there
is a genuine issue of material fact as to whether this
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statement constitutes constructive fraud and provides a
basis for the lump sum settlement to be set aside.
Id. at 10-11.
In support of his argument, Hunt relies on the medical
evidence from his November 2011 work injury with Gibbon
Packing to suggest that Dr. Chingren’s opinion was false
when it was made. Hunt cites to Dr. Adamson’s IME con-
ducted in August 2012 (nearly 10 years after Dr. Chingren
placed Hunt at MMI), in which Dr. Adamson opined that
“[a]ll of [Hunt’s] current disability is related to his original
injury of 2000.” In looking at the entirety of Dr. Adamson’s
IME report, however, he clearly states that Hunt temporar-
ily aggravated a preexisting condition as a result of his
November 2011 work accident; such aggravation lasted 2
months; and after that 2-month period, Hunt again reached
MMI. Dr. Adamson concluded that once Hunt reached MMI
after the temporary aggravation, he did not suffer from any
permanent partial disability of his right shoulder over and
above the 14 percent that Dr. Chingren had previously rated
him. Hunt had reported to Dr. Adamson that “his shoulder is
no worse than it was three or four years ago” and “he can do
everything now that he could do prior to the injury he sus-
tained at Gibbon Packing.” Dr. Adamson’s report, therefore,
actually supports Dr. Chingren’s permanency rating provided
to Hunt in 2002. Dr. Franssen likewise was of the opinion that
Hunt’s “right shoulder current symptomatology is an aggrava-
tion of a pre-existing condition”; Dr. Franssen did not opine
or suggest that Hunt was not at MMI until his November
2011 work accident.
The evidence in our record reflects that subsequent to Dr.
Chingren’s permanency rating in 2002, Hunt continued to
work for various employers in a variety of capacities for the
next nearly 10 years. There is no evidence in our record that
Hunt sought medical treatment for his right shoulder until the
November 2011 work accident with Gibbon Packing, wherein
he aggravated his preexisting shoulder condition. The facts in
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this case simply do not support a claim of constructive fraud
for purposes of reopening or readjusting a lump-sum settle-
ment, even assuming such a claim could be made based upon
the alleged erroneous opinion of a claimant’s own physician
more than 10 years after the matter was fully litigated.
CONCLUSION
For the foregoing reasons, we affirm the Workers’
Compensation Court’s order granting summary judgment in
favor of Pick’s Pack-Hauler and Great West and dismissing
Hunt’s petition.
A ffirmed.