EK HEALTH

by Steve Kline, Esq.
EK Health Services' Legal Counsel

Decided in late May 2011, State Compensation Insurance Fund v. WCAB (Romero) demonstrated the power of stipulations and the possibility of challenging them with newly discovered facts.  

Mr. Romero was a bus driver who suffered a stroke and sustained injuries to his internal system.  The principal area of dispute centered on the cause of the stroke.  The treating doctor indicated that it was caused by an infection of the tissue inside Mr. Romero's heart and valves.  However, the doctor was unable to medically confirm the source of the infection. He indicated that the most common cause of that type of infection was through dental procedures.  However Mr. Romero indicated that he had not had any dental procedures prior to the stroke.  Evidence was presented that Mr. Romero had used a hammer on the job and punctured his finger that then became infected.  The doctor declined to render any determinative opinion as to how the infection was caused.

All parties agreed that Mr. Romero as a result of the stroke was totally permanently disabled.  However, in order to resolve the matter, the parties stipulated to the injury and the workers' compensation judge approved an award setting the permanent disability level at 35%.

Within five years from the date of the injury, Mr. Romero filed a petition to reopen for new and further disability.  An Agreed Medical Evaluator (AME) was named.  The AME reviewed all of the medical records and evaluated Mr. Romero's condition.  

The AME concluded that while Mr. Romero was totally permanently disabled (100%), the causation for his infection was as a result of a dental procedure two or three weeks prior to his stroke.  With this report, the insurance carrier filed a petition to terminate benefits.  However this petition was filed well over five years from the date of the injury.

At trial, the judge indicated that the petition for termination of benefits was untimely and consequently was denied.  The statute of limitations for such a petition is within five years from the date of the injury or within 30 days from a petition to reopen. The carrier had exceeded both limits.  The judge awarded Mr. Romero’s attorney $10,000.00 for successfully defeating a petition to terminate benefits.

The judge also found that since the AME and all the medical reports agreed that Mr. Romero was totally permanently disabled, the Award should be changed from 35 percent to 100 percent.

The WCAB Commissioners denied reconsideration. The insurance carrier accordingly filed a writ with the Court of Appeal challenging the WCAB decision.  

The Second District Court of Appeal reviewed the entire matter.  First they ruled that the carrier's petition to terminate benefits was untimely. Any allegations about the source of infection were rejected because that information was readily available in the medical records at time of the stipulation.  They reaffirmed the $10,000 attorney fees award.

With respect to increasing the applicant's permanent disability level from 35 percent to 100 percent, the Court of Appeal reversed the trial judge. The Court pointed out that at the time of the stipulation and award, all the medical opinions were in agreement that Mr. Romero’s medical condition was total permanent disability. The Court indicated that there was no new and further disability as it was in fact the same as that which had occurred at the time of the stipulation.  Thus, the Court rejected the upward adjustment of permanent disability to 100%.

Since both parties had stipulated to facts in order to resolve the matter, they were held to those decisions.  Stipulations become truths, whether they are such in reality. The court indicated that when a stipulation is made, the issues are resolved and accordingly will not be set aside by the discovery of new facts unless fraud is shown.  Both sides are bound by their stipulations.

When an insurance carrier or for that matter an applicant agrees to a stipulation, the parties should clearly understand that these are the facts of the matter regardless of the state of the evidence.  Compromise creates a new reality.  Be very careful what you agree to … is it really what you want?  

Thanks for your attention.