No. 91-034 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1991 

ROBERT L. RATH, 

Claimant and Appellant, 

-vsST. LABRE INDIAN SCHOOL, 

Employer, 

and 

STATE COMPENSATION MUTUAL INSURA: NCE F1. 

Defendant and Respondent. 

APPEAL FROM: Workers Compensation Court, 

The Honorable Timothy Reardon, Judge presiding. 

COUNSEL OF RECORD: 

For Appellant: 

John S. Yoder; Yoder Law Office, Billings, Montana 

For Respondent: 

Michael P. Heringer; Anderson, Brown, Gerbase, 

Cebull, Fulton, Harman & Ross, Billings, Montana. 

Filed: 

Submitted on briefs: June 13, 1991 

Decided: August 13, 1991 
Justice Karla M. Gray delivered the Opinion of the Court. 

The claimant, Robert L. Rath, appeals the judgment of the 

Workersf compensation Court refusing to set aside the Full and 

Final Compromise Settlement that he entered into on January 17, 

1986. Following a trial on the matter, the Workers4 Compensation 

Court ruled that there was no mutual mistake of fact as to the 

claimant Is medical condition at the time of the settlement and that 

his petition to reopen the settlement was barred by the statute of 

limitations pursuant to 5 27-2-203, MCA. We affirm. 

The dispositive issue on appeal is whether the Workers' 

Compensation Court erred in concluding that the claimant's petition 

to reopen the settlement was barred by the statute of limitations 

pursuant to 5 27-2-203, MCA. 

Over the years, the claimant has suffered three separate 

on-the-job injuries to his back. In July 1969, the claimant was 

working as a supervisor at a sawmill in Ashland, Montana when a 

tree struck him on his back. He suffered a compression fracture 

of a thoracic vertebra. The claimant was treated by Dr. Peter V. 

Teal, an orthopedic surgeon in Billings. In January 1971, the 

claimant was released by Dr. Teal to pursue lighter work and was 

given a twenty percent impairment rating as a result of this 

injury. The claimant received workers' compensation benefits, 

settling his claim on a full and final compromise basis. 

Shortly after settlement, the claimant returned to work as a 

heavy equipment operator for Powder River County in Broadus, 

Montana. On June 18, 1971, the claimant strained his lower back 

2 
while changing a tire on a road grader. As with his previous 

injury, the claimant was treated by Dr. Teal. A myelogram was 

performed which showed a bulging disc at L4-5. Based upon the 

claimant's complaints of pain, Dr. Teal completed a fusion from L4 

to S1 in February 1972. 

Dr. Teal released the claimant to work in October 1974. He 

also assessed a twenty percent impairment rating for this injury. 

The claimant received workers1 compensation benefits as a result 

of his 1971 injury, again settling his claim on a full and f inal 

compromise basis. 

After this settlement, the claimant went to work as the food 

supervisor fox the St. Labre Indian School. His back condition was 

subject to intermittent flare-ups associated with increased 

activity level. The claimant saw Dr. Perry M. Berg, an associate 

of Dr. Teal, in 1982 or 1983 for upper back pain. In 1983, he also 

saw Dr. L. A. Campodonico, his family physician in Miles City, for 

low back pain. 

On March 5, 1985, the claimant slipped and fell while carrying 

a box of meat and injured his back a third time. He was initially 

treated by Dr. C. T. Smith, an orthopedic surgeon in Sheridan, 

Wyoming. Dr. Smith diagnosed the claimant's condition as an "acute 

lumbosacral strain of S1 joint superimposed on degenerative 

arthritis and an old fusion." 

On April 9, 1985, the claimant was examined by Dr. Teal. Dr. 

Teal noted that the claimant had been having steadily increasing 

pain prior to re-injuring his back in the fall at work. The 
claimant also complained of tenderness at L2-3 and L3-4. Dr. Teal 

diagnosed the claimant as having degenerative disc disease, along 

with chronic lumbar sprain. Dr, Teal believed the claimant was 

unable to return to his former position and advised him to seek 

lighter work, The claimant did not return to Dr. Teal until 

September 1986, after his full and final compromise settlement had 

been approved by the Workersi compensation Court. 

The claimant was examined by Dr. Gary Ray, however, on 

October 17, 1985. Dr. Ray noted the degenerative changes above the 

claimant's fusion. Dr. Ray believed the claimant had reached 

maximum healing and released him to work with significant 

restrictions. The claimant never returned to Dr. Ray. 

~pproximately three months prior to the full and final 

compramise settlement, the claimant retained Thomas Lynaugh to 

represent him in regard to his workersf compensation claim. The 

claimant and Mr. Lynaugh also entered into an attorney agreement 

for Mr. Lynaugh to represent him in regard to his claim for social 

security disability benefits. 

On November 20, 1985, the claimant requested a partial lump 

sum advance of $65,000 from the respondent, State Compensation 

Mutual Insurance Fund, which he asserted could be credited against 

his projected permanent total disability benefits. The only type 

of employment activity that the claimant felt he could physically 

perform was light bookkeeping duties at a family-owned diner in 

Ashland. The clairnantls condition had not improved since the March 

1985 injury. 
The respondent denied the claimantls request for a lump sum 

advance. The claimant's counsel, however, negotiated a settlement 

in the amount of $71,500 to be paid in a lump sum, which 

represented 500 weeks at the claimant's maximum permanent partial 

disability rate. 

In support of the Petition for Full and Final Compromise 

Settlement, the claimant executed an affidavit which indicated that 

he was aware of the extreme limitations placed on him by Dr. Ray. 

He also recognized that his only vocational opportunity was in a 

limited capacity at the family-owned diner in Ashland. In his 

affidavit, the claimant also stated that he was aware that with 

the full and final compromise settlement, he could never reopen his 

claim. 

The Petition for Full and Final Compromise Settlement was 

subsequently submitted to the Division of Workers1 Compensation. 

The Division approved the settlement on January 17, 2986. The 

Workers1 Compensation Court approved the settlement on January 21, 

1986. 

The claimant s back problems have bothered him consistently 

since the March 5, 1985 injury. He was admitted to the hospital 

by Dr. Teal in late September 1986 because of his continuing low 

back pain. On September 29, 1986, a CT scan showed constriction 

of the claimant's spinal canal. On Octobes 3, 1986, a myelogram 

was performed which showed spinal stenosis at the L3-4 level. The 

stenosis was due to the bulging of the disc and/or bone spurs that 

projected into the spinal canal. 
Dr. Teal explained in his deposition that the claimant's 

joints are wearing out, which produces constriction of the spinal 

canal so that the nerves have less room. As the condition 

progresses, the spinal canal becomes narrower and the vertebrae 

become more unstable and loose as time passes. Dr. Teal suspected 

spinal stenosis in April 1985 because of the claimant Is significant 

degenerative disc disease. However, his suspicions were not 

confirmed until the October 3, 1986, myelogram. 

Dr. Teal testified that based upon the findings of the CT scan 

and the myelogram, he discussed with the claimant the possibility 

of future surgery to relieve the constriction in his spinal canal. 

He advised the claimant to consider surgery and to return in 

November 1986 to discuss it further. 

The claimant pursued his claim for social security disability 

benefits during this period of time. As part of that claim 

process, the claimant's counsel submitted a letter with exhibits 

to the administrative law judge on October 23, 1986, asserting that 

the findings of the CT scan and the myelogram supported Rathls 

claim for disability benefits. The letter makes it clear that Dr. 

Teal had discussed with the claimant the possibility of surgery as 

a course of treatment for his condition. The claimant argued that, 

given his condition, he was not capable of performing any 

competitive employment, and therefore, was totally disabled. 

Although Dr. Teal requested that the claimant return in 

November 1986 to discuss surgery for his back problems, the 

claimant did not return until July 1987, at which time he continued 
to complain of low back pain. In May 1988, the claimant told Dr. 

Teal that his pain was as severe as in March 1985. X-rays did not 

reveal any significant change in the claimant's condition. 

The claimant returned to Dr. Teal on May 9, 1989, complaining 

of pain in his back. A CT scan showed stenosis of the spinal canal 

at L3-4. When compared with the CT scan of September 1986, this 

CT scan showed basically no change in the claimant's condition 

except for a little more stenosis at the L3-4 level. 

An MRI completed on July 19, 1989 reconfirmed Dr. Teal's 

belief that claimant suffered from spinal stenosis. Dr. Teal 

recommended surgery. Surgery was performed on November 3, 1989, 

to decompress and remove bone spurs at L3-4 and to extend the 

fusion to the third lumbar vertebra. At the time of his deposition 

on September 6, 1990, Dr. Teal did not believe the claimant had 

reached a point of maximum healing and had not released the 

claimant to work. The claimant has not worked since his March 5, 

1985 injury. 

On July 9, 1990, the claimant filed a petition with the 

Workers' Compensation Court to set aside the Full and Final 

Compromise Settlement he had entered into on January 17, 1986, on 

the grounds of mutual mistake of the fact that he would be required 

to have additional back surgery after the settlement of his claim. 

A trial on the matter was held on September 24, 1990. The claimant 

testified briefly at the trial. Further testimony of the claimant, 

as well as testimony of his treating physician, Dr. Teal, his 

counsel at the time of settlement, Thomas Lynaugh, three of the 
respondent's claims personnel and the claimant's vocational 

rehabilitation expert, was submitted by depositions filed with the 

Workers' Compensation Court. 

On December 13, 1990, the Workers' Compensation Court entered 

its findings of fact, conclusions of law, and judgment refusing to 

set aside the settlement. The Workers' Compensation Court ruled 

that there was no mutual mistake of fact as to the claimant's 

medical condition at the time of the settlement, and that his 

petition to reopen the settlement was barred by the statute of 

limitations pursuant to 5 27-2-203, MCA. This appeal followed. 

The claimant contends on appeal that the Workers' Compensation 

Court erred in concluding that there was no mutual mistake of fact 

regarding the condition of his back at the time of the January 17, 

1986, Full and Final Compromise Settlement. In addition, the 

claimant contends that the Workers' Compensation Court erred in 

concluding that his petition to reopen the settlement was barred 

by the statute of limitations. 

The claimant maintains that he never had knowledge that his 

condition might require further surgery until he received a letter 

from Dr. Teal dated July 29, 1989. He asserts that the court 

ignored the testimony of Dr. Teal that in an office visit on 

July 7, 1987, after the October 3, 1986, myelogram, there was no 

discussion of surgery. He argues that Dr. Teal's office note of 

this visit reflected that Dr. Teal had not yet determined a 

definite diagnosis of spinal stenosis and that Dr. Teal's primary 

diagnosis was depression. He further asserts that in his next 
visit to Dr. Teal on May 31, 1988, he again was treated 

conservatively with no discussion of surgery. The claimant argues 

that this evidence is consistent with his own testimony that he 

believed Dr. Teal thought his subjective complaints of pain had a 

psychological, rather than a physiological, basis. He further 

argues that the two-year statute of limitations contained in 

5 27-2-203, MCA, did not begin to accrue until he actually 

discovered his mistake regarding the condition of his back in July 

1989. 

This Court will not overturn findings of fact of the Workers1 

Compensation Court if there is substantial evidence in the record 

to support them. Kraft v. Flathead Valley Labor & Contr. (1990), 

243 Mont. 363, 365, 792 P.2d 1094, 1095. Conclusions of law, 

"whether the conclusions are made by an agency, workers1 

compensation court, or trial court," will be upheld if the 

tribunal's interpretation of the law is correct. Steer, Inc. v. 

Dept. of Revenue (Mont. 1990), 803 P.2d 601, 603, 47 St.Rep. 2199, 

2200. We will also uphold the result reached below if correct, 

regardless of the reasons given for the conclusion. Jerome v. 

Pardis (19891, 240 Mont. 187, 192, 783 P.2d 919, 922. 

The Full and Final Compromise Settlement entered into by the 

parties is a contract. In Kienas v. Peterson (1980), 191 Mont. 

325, 624 P.2d 1, this court established that under general 

principles of contract law a full and final compromise settlement 

could be set aside in limited situations if the parties to the 
agreement were operating under a mutual mistake of fact. Section 

28-2-409, MCA, describes what constitutes a mistake of fact: 

What constitutes mistake of fact. Mistake of fact is a 

mistake not caused by the neglect of a legal duty on the 

part of the person making the mistake and consisting in: 

(1) an unconscious ignorance or forgetfulness of 

a fact, past or present, material to the contract; or 

(2) belief in the present existence of a thing 

material to the contract which does not exist or in the 

past existence of such a thing which has not existed. 

Section 27-2-203, MCA, sets forth the applicable statute of 

limitations for an action to reopen a full and final compromise 

settlement on grounds of mutual mistake. 

Actions for relief on ground of fraud or mistake. The 

period prescribed for the commencement of an action for 

relief on the ground of fraud or mistake is within 2 

years, the cause of action in such case not to be deemed 

to have accrued until the discovery by the aggrieved 

party of the facts constituting the fraud or mistake. 

Actual knowledge of the mutual mistake is not required to start the 

running of the statute of limitations. DrAgostino v. Swanson 

(lggO), 240 Mont. 435, 443, 784 P.2d 919, 924. Rather, the statute 

of limitations begins to run when the facts are such that the party 

bringing the action would have discovered the mistake had he or she 

exercised ordinary diligence. D' Aqostino, 240 Mont . at 443, 784 

Here, the Workers' Compensation Court concluded that, based 

upon the medical evidence presented, it could find nothing to 

indicate that the parties were mutually mistaken about the 

condition of the claimant's back at the time of the settlement. 

In addition, the court ruled that the claimant's petition was 
barred by the two-year statute of limitations, apparently reasoning 

that because there was no mutual mistake of fact at the time the 

settlement was entered into in January 1986, the two-year period 

for bringing the action expired in January 1988, 

Our review of the record shows that even if the parties were 

mutually mistaken as to the condition of the claimant's back at the 

time they entered into the settlement, as the claimant asserts, the 

claimant's petition was barred by the statute of limitations. 

Contrary to the claimant's assertions, the record clearly indicates 

that the claimant discovered no later than October 1986 that 

additional back surgery was a possibility. Dr. Teal testified 

that, based upon the findings of the September 1986 CT scan and the 

October 1986 myelogram, he discussed with the claimant the 

possibility of further surgery, advised him to consider it and 

requested him to return in November to discuss it further. The 

claimant did not return to Dr. Teal until July 1987. In his 

deposition, Dr. Teal explained that he did not discuss surgery with 

the claimant at that time because he was "impressed . . . with the 

severity of [the claimant's] emotional depression and felt that we 

shouldn't be--we should be treating that and shouldn't be putting 

him through an operation." 

Furthermore, in October 1986, the claimant's attorney notified 

the administrative law judge in the claimant's social security 

claim of Dr. Teal's conclusion that surgery was a possible course 

of treatment. Moreover, when the administrative law judge ruled 

in the claimant's favor, the decision awarding social security 
disability benefits was based in part on the medical findings that 

surgery was possible for the claimant in the future. 

Given this evidence, the two-year period in which to bring a 

claim based on mutual mistake pursuant to 5 27-2-203, MCA, expired, 

at the latest, in October 1988. Because the claimant did not file 

his petition to reopen the settlement until July 1990, his claim 

was barred by the statute of limitations. Accordingly, the result 

reached by the Workers' Compensation Court is correct. 

Affirmed. 

-y#!* Chief Justice 
August 13, 1991 

CERTIFICATE OF SERVICE 

I hereby certify that the following order was sent by United States mail, prepaid, to the 

following named: 

John S. Yoder 

YODER LAW OFFICE 

P.O. Box 3333 

Billings, MT 59103-3333 

Michael P. Heringer 

ANDERSON, BROWN, GERBASE, CEBULL, 

FULTON, HARMON & ROSS 

P.O. Drawer 849 

Billings, MT 59103-0849 

ED SMITH 

CLERK OF THE SUPREME COURT 

STAT%% MONTANA