Sopko v. C & R Transfer Co., Inc.

• Decision Date: 28 January 1998
• Docket Number: No. 20012,20012
• Citation: 1998 SD 8,575 N.W.2d 225
• Parties: Jeffrey SOPKO, Employee and Appellee, v. C & R TRANSFER COMPANY, INC. Employer and Appellant, and Home Insurance Company, Insurer and Appellant.
• Court: South Dakota Supreme Court

Page 225

575 N.W.2d 225

1998 SD 8

Jeffrey SOPKO, Employee and Appellee, v. C & R TRANSFER COMPANY, INC. Employer and Appellant and Home Insurance Company, Insurer and Appellant.

No. 20012.

Supreme Court of South Dakota.

Argued Sept. 10, 1997.

Decided Jan. 28, 1998.

N. Dean Nasser, Jr., James R. Even of Nasser Law Offices, Sioux Falls, for employee and appellee.

Timothy M. Gebhart of Davenport, Evans, Hurwitz & Smith, Sioux Falls, for appellants.

KONENKAMP, Justice.

¶1 Following his 1974 injury, claimant suffered intermittent seizures, but his doctor was unsure of their origin. Consequently, he settled his workers' compensation case with an agreement approved by the Department of Labor, specifically conceding he sustained no permanent disabling injury. In 1994, he petitioned to reopen his case after surgery revealed his seizures resulted from the original injury. Is he entitled to reopen despite having waived all future claims arising from his accident? Because our workers' compensation laws are designed to ensure injured workers receive their statutory benefits, we conclude settlement agreements cannot foreclose reopening in the event of a change in condition resulting from an undiscovered injury or an unforeseen consequence of a known injury. We affirm the decision to reopen.

Facts

¶2 On August 25, 1974, while employed by C & R Transfer Company, Inc., Jeffrey Sopko was struck on the head by a bursting split-rim from a truck tire. The explosion perforated both his tympanic membranes and caused severe cranial injuries, requiring restorative treatment. He also experienced seizures. To control them, his doctors prescribed Dilantin, which he was to take "indefinitely." The insurer paid Sopko's medical expenses and temporary total disability benefits for six months while he was unemployed. The final medical bills for the original injury were paid on December 2, 1976.

¶3 Although he was unable to return to C & R because his position had been filled, Sopko worked for other employers for the next few years. In April 1979, he was diagnosed with bacterial spinal meningitis, resulting from cerebrospinal fluid leakage caused by the cranial fractures he incurred in the 1974 injury. In the next few months, he underwent a series of medical procedures to repair the leak. Throughout this time he continued to work, missing only a few days. Sopko's seizures persisted intermittently through 1980. His treating physician, Dr. Harlan Payne, concluded "it is unclear whether the seizures resulted from that accident or actually antedated it ... I could not really say what the exact etiology of his seizures may have been." By April 1981, however, his seizures had ended.

¶4 Sopko petitioned the Department of Labor for additional workers' compensation benefits, including $13,600 in medical bills he incurred from the meningitis episode. The insurer initially denied the claim on the ground the statute of limitations had expired. After hearings commenced, but before a final decision, the parties signed an agreement dated August 18, 1981, compromising all claims. The Stipulation for Settlement, which is the focal point of this appeal, stated in part:

According to all of the medical documentation submitted in connection with claimant's petition, none of plaintiff's physicians could assign a percentage of permanent disability to claimant's skull or to claimant's entire person as a result of the injury. Therefore, it is hereby stipulated and agreed that claimant, for purposes of this settlement, did not sustain a permanent disabling injury as the result of the accident which occurred on employer's premises in August, 1974. The Worker's Compensation Commission should not be entitled to enter a finding of permanent disability or to reserve the question pending future problems claimant may sustain. Claimant hereby waives any right he may have to a stay of further proceedings pending the need for possible future treatment. Claimant hereby waives and releases all claim [sic] he may have against defendants for any additional medical assistance or any additional compensation.

* * * * * *

Claimant hereby releases defendants and waives any claim for payment for any permanent disabling injury, permanent physical disability, or payment for any medical payments that may be incurred in the future due to the skull and ear injuries sustained by claimant in said industrial accident. This waiver is given based on the fact heretofore outlined in this petition together with the fact that a significant question about the timeliness of claimant's claim exists. Specifically, claimant understands that defendants have a valid defense based on the statute of limitation, but defendants have waived that claim to the extent that they have agreed to compromise this claim.

* * * * * *

Upon approval of this compromise agreement by the South Dakota Worker's Compensation Commission, or by its hearing examiner, and payment in accordance with the provisions hereof, said claimant releases and forever discharges his employer and insurance carrier from all claims and causes of action, whether now known or ascertained, or which may hereafter arise or develop as a result of said injury, including any and all liability of said employer and said insurance carrier, and each of them, to the defendants, heirs, executors, administrators, or assigns of said claimant.

The Department formally approved the settlement on August 19, 1981.

¶5 In 1984, his seizures began to steadily recur. To relieve the problem, in 1992, Dr. John R. Gates of Minneapolis, Minnesota, performed a right temporal lobectomy. He found an accumulation of scar tissue originating from earlier surgery necessitated by the 1974 injury. In Dr. Gates' opinion, the seizures beginning in 1984 were directly attributable to this scar tissue. He also concluded the seizures constituted a change in Sopko's condition requiring further medical treatment. On March 2, 1994, Sopko again petitioned the Department for compensation. The parties agreed to bifurcate the case so that C & R's statute of limitations and release defenses could be considered first. After a hearing, the Department concluded the 1981 agreement should be set aside and the case reopened because Sopko demonstrated a substantial, and unforeseen, post-release, physical change of condition. In his findings, Director Marsh wrote, "the underlying claim from 1974 has always been compensable and the Department retains continuing jurisdiction over compensable claims pursuant to SDCL 62-7-33 when there has been a substantial, material worsening of the physical condition of the employee." To the extent the employer urged the settlement agreement foreclosed any reopening, Marsh declared it "invalid as a matter of law." On appeal, pursuant to SDCL 62-7-19, the circuit court affirmed, concluding that although there were facts to the contrary, "substantial evidence" supported the Department's findings. ¹ In this appeal, C & R offers essentially one question: Is Sopko's current petition barred by the 1981 settlement agreement?

Standard of Review

¶6 Our standard of review, delineated in SDCL 1-26-36, requires us to give great weight to the findings and inferences made by the Department on factual questions. Helms v. Lynn's, Inc., 1996 SD 8, pp 9-10, 542 N.W.2d 764, 766; Finck v. Northwest Sch. Dist. No. 52-3, 417 N.W.2d 875, 878 (S.D.1988). We examine agency findings in the same manner as the circuit court to decide whether they were clearly erroneous in light of all the evidence. In Matter of Northwestern Bell Tel. Co., 382 N.W.2d 413, 415 (S.D.1986). If after careful review of the entire record we are definitely and firmly convinced a mistake has been committed, only then will we reverse. Spitzack v. Berg Corp., 532 N.W.2d 72, 75 (S.D.1995)(citing Day v. John Morrell & Co., 490 N.W.2d 720, 723 (S.D.1992)); see also United States v. U.S. Gypsum Co., 333 U.S. 364, 395, 68 S.Ct. 525, 541, 92 L.Ed. 746 (1948)(origin of definition). Questions of law, of course, are fully reviewable. Caldwell v. John Morrell & Co., 489 N.W.2d 353, 357 (S.D.1992); Egemo v. Flores, 470 N.W.2d 817, 820 (S.D.1991).

¶7 Relying on our precedent, the circuit court partially applied a substantial evidence analysis to review the Department's findings. To allay future confusion over the proper standard of review in administrative appeals, we will no longer employ "substantial evidence" terminology. In the past, we have regularly combined clearly erroneous and substantial evidence principles, but the latter is not the proper test. SDCL 1-26-36 was amended effective July 1, 1978, changing the standard of review for sufficiency of the evidence from "unsupported by substantial evidence on the whole record" to "clearly erroneous." (For reasons unknown the definition remains unrepealed. SDCL 1-26-1(9)). The difference between the two standards should not be obscured: It is simply inaccurate to conclude, findings supported by substantial evidence are not clearly erroneous. ² 1 S. Childress & M. Davis, Federal Standards of Review § 2.07 at 2-44 (2d ed. 1992)(citing cases from every federal circuit). Even when substantial evidence supports a finding, reviewing courts must consider the evidence as a whole and set it aside if they are definitely and firmly convinced a mistake has been made. See W.R.B. Corp. v. Geer, 313 F.2d 750, 753, (5th Cir.1963), cert. denied 379 U.S. 841, 85 S.Ct. 78, 13 L.Ed.2d 47 (1964). Furthermore, "[u]se of substantial evidence language, even in a technically correct comparison, is troublesome not only as a vestige of the rejected jury test, but also as a potential infringement on separate standards of review in other areas, such as administrative appeals." Childress & Davis, supra, § 2.07, at 2-47. Nonetheless, no remand is required here as we review the Department's fact findings the same as the circuit court.

Analysis and Decision

¶8 We begin with our accustomed...