Mills v. Spink Elec. Co-op.

• Decision Date: 14 June 1989
• Docket Number: No. 16356,16356
• Citation: 442 N.W.2d 243
• Parties: Robert G. MILLS, Claimant and Appellee, v. SPINK ELECTRIC COOPERATIVE, Employer and Appellant, and Federated Rural Electric Insurance Corporation, Insurer and Appellant.
• Court: South Dakota Supreme Court

Page 243

442 N.W.2d 243

Robert G. MILLS, Claimant and Appellee, v. SPINK ELECTRIC COOPERATIVE, Employer and Appellant and Federated Rural Electric Insurance Corporation, Insurer and Appellant.

No. 16356.

Supreme Court of South Dakota.

Argued Feb. 16, 1989.

Decided June 14, 1989.

Robert B. Anderson of May, Adam, Gerdes & Thompson, Pierre, for claimant and appellee.

William Fuller of Woods, Fuller, Shultz & Smith, Sioux Falls, for employer, insurer and appellants.

MORGAN, Justice.

This is an administrative appeal by Spink County Electric Cooperative (Employer) and Federated Rural Electric Insurance Corporation (Insurer), collectively referred to herein as Companies, from a decision of the South Dakota Department of Labor (Department), reopening an approved worker's compensation settlement and awarding Robert Mills (Mills) additional medical benefits. We affirm.

On June 21, 1974, Mills accidently suffered a severe electrical shock while working within the scope of his employment. His electrical burns necessitated amputation of his right arm and a below-the-knee amputation of his left leg. In 1976, Mills signed a settlement agreement with Insurer that was later approved by Department. The agreement provided in pertinent part that Insurer would pay future medical expenses only until January 1, 1978. The agreement included a release covering unknown and unanticipated injuries, damages and disability resulting from the electrocution.

Mills testified that only one future surgery was discussed prior to the execution of the settlement agreement in 1976. Two medical reports, attached to the agreement, made no reference to the possibility that extensive future treatment would be necessary.

The record reflects that Mills' condition has deteriorated steadily since 1978 due to the continued shrinking and atrophy of his leg. This change in condition has necessitated numerous surgeries and refitting and replacement of prostheses. Mills obtained new fittings and new prosthetic devices for his leg approximately once each year from 1978 to 1986.

Certified Prosthetist Jack Daughters testified that the condition of Mills' leg had atrophied and changed so much and so rapidly over the period of ten to twelve years since he began treating him that new artificial legs were required more frequently than for the normal amputee. Further, he stated that it was abnormal for a mature amputation to continue to atrophy the way Mills' had. In this regard, he described Mills as a unique amputee.

In 1983, Mills filed a petition with Department requesting that Companies be liable for "unanticipated" medical expenses incurred and for all future medical expenses. After a hearing in 1986, Department concluded that Mills had demonstrated a "change of condition" which permitted the reopening and modification of the 1976 settlement agreement pursuant to SDCL 62-7-33. The trial court affirmed.

On appeal, Companies raise the following issues:

1) Whether Mills waived his statutory right to request review of medical payments;

2) Whether Department has jurisdiction to reopen the settlement agreement; and

3) Whether there existed a change in Mills' condition justifying an award of medical benefits.

Our standard of review in this case is governed by SDCL 1-26-36. This requires us to "give great weight to the findings made and inferences drawn by [Department] on questions of fact." Id.; Finck v. Northwest School Dist. No. 52-3, 417 N.W.2d 875 (S.D.1988). Further, we review the record in the same light as does the trial court and determine whether or not Department's decision was clearly erroneous in light of all the evidence. In re Northwestern Bell Tel. Co., 382 N.W.2d 413 (S.D.1986).

Companies first contend that Mills' voluntary signature on the settlement agreement is equivalent to a complete and irrevocable waiver of his private statutory right to reopen his claim pursuant to SDCL 62-7-33. Companies emphasize that Mills voluntarily and intelligently entered into the negotiated settlement after expressly considering that his medical condition was uncertain. They point to language in the agreement which reads: "It is acknowledged that future medical treatment is likely[.]" Therefore, they say, he has waived his right to any future medical benefits.

We are not persuaded. Ordinarily, releases and settlement agreements obtained without coercion, and with consideration, are valid and binding. However, under certain conditions, an exception to this rule exists when worker's compensation rights are involved. In Vodopich v. Trojan Mining Co., 43 S.D. 540, 180 N.W. 965 (1921), where a similar argument was raised, this court relied on what is now SDCL 62-3-18 ¹, to deny a similar claim of waiver. Reviewing that statute, in conjunction with what is now SDCL 62-7-33 ², we said:

We are of the opinion that it is the plain intent of the Workmen's Compensation law that, while fraud or misrepresentation in obtaining the release would be a ground for setting it aside, yet an injured employee is not required to establish the fact that an agreement for release of further liability was entered into by reason of the fraud or misrepresentation of the employer before he can have the cause reopened. Where such an agreement is signed and approved by the Industrial Commissioner under [SDCL 62-7-33], equitable grounds for setting aside the release must be established before the cause can be reopened. (Citation omitted.)

43 S.D. at 545, 180 N.W. at 966.

In Novak v. C.J. Grossenburg and Son, 89 S.D. 308, 232 N.W.2d 463 (1975), we reviewed the Vodopich decision and subsequent decisions that considerably restricted it. We overruled Chittenden v. Jarvis, 68 S.D. 5, 297 N.W. 787 (1941), wherein a final release, approved and filed with the Commissioner was held not to be subject to review because it was filed with the Commissioner, whereas the release in Vodopich was not. In Novak, we held:

We would hold that since there is no statutory mandate against setting aside a release where consequences of an injury were not discoverable until sometime in the future there can be a review by the Commissioner of the award in view of the newly discoverable disability.

89 S.D. at 316, 232 N.W.2d at 467.

The claimant in Novak had suffered an injury to his back, which had resulted in some disability. After he had signed a full receipt and release of the insurer and employer, he experienced more difficulty, resulting in surgery, when a laminectomy and diskectomy were done. We held the...