No. 86-143 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1987 

DARRYL V. WELDELE, 

Claimant and Respondent, 

-vsMEDLEY DEVELOPMENT, Employer, 

and 

STATE COMPENSATION INSURANCE FUND, 

Defendant and Appellant. 

APPEAL FROM: The Workers' Compensation Court, The Honorable 

Timothy Reardon, Judge presiding. 

COUNSEL OF RECORD: 

For Appellant: 

Warden, Christiansen, Johnson & Berg; Stephen C Berg, 

Kalispell, Montana 

For Respondent : 

Trieweiler Law Firm; Michael C. Prezeau, Whitefish, 

Montana 

Submitted on Briefs: Aug. 28, 1986 

Decided: June 25, 1987 

Filed: JUN 2 5 1987 
Mr. Justice F7illiam E. Hunt, Sr., delivered the Opinion of 

the Court. 

The State Compensation Insurance Fund (State Fund) 

appeals a Workers' Compensation Court order setting aside the 

full and final compromise settlement of respondent Darryl 

Weldele's Workers' Compensation claim. 

We affirm. 

The dispositive issue on appeal is whether a mutual 

mistake of material fact, at the time the compromise 

settlement was entered into, prevented the parties from 

effectively consenting to the agreement. The Workers' 

Compensation Court found that there was and we agree. 

In July, 1978, respondent suffered a work-related 

injury while working for Medley Development in Cascade 

County, Montana. The State Fund accepted liability for 

respondent's injury and paid temporary total disability 

benefits to him. At the time of the injury, respondent 

experienced pain from the base of his neck down to his wrist 

and across his right shoulder and shoulder blade. Several 

days after the injury, respondent went to a hospital 

emergency room where he was examined by Dr. George Schemm. 

Dr. Schemm tested respondent at that time and later testified. 

by deposition that the results of the test were consistent 

with carpal tunnel syndrome, which is a compression of a 

nerve in the wrist. Dr. Schemm also testified that he 

considered thoracic outlet syndrome as an explanation for 

respondent's neck and arm pain but that he found no evidence 

of that problem at that time. Dr. Charles Jennings also 

examined respondent and found indications of carpal tunnel 

syndrome and rotator cuff syndrome, the latter being an 

inflammation of shoulder tendons. Dr. Jennings considered 
the possibility that respondent had thoracic outlet syndrome, 

but rejected that diagnosis. In August, 1978, Dr. Schemm 

operated on respondent to relieve respondent's carpal tunnel 

syndrome. 

In July, 1980, respondent, with counsel, petitioned the 

Workers' Compensation Division for a lump-sum payment of 

$14,000 as a full and final compromise settlement of his 

claim. At that time, respondent was still experiencing 

severe discomfort with his right arm. Respondent testified 

that both Dr. Jennings and Dr. Schemm assured him prior to 

his petition that the carpal tunnel syndrome had been treated 

fairly successfully and that his continuing problems with the 

rotator cuff syndrome would very probably dissipate over 

time . 

The State Fund claims examiner approved a full and 

final compromise settlement of respondent's claim for 

$14,000. In August, 1980, the Workers' Compensation Division 

formally approved the settlement. At that time, the claims 

examiner believed respondent's injuries were a right rotator 

cuff tear, a healed carpal tunnel syndrome on the right side 

and some chronic pain. 

Following the execution of the settlement agreement, 

respondent experienced increasing difficulties with pain and 

loss of feeling in his right shoulder and arm. Respondent 

saw a number of doctors in attempting to resolve his 

problems. Beginning in 1982, several doctors mentioned the 

possibility that respondent might be suffering from thoracic 

outlet syndrome. Generally, thoracic outlet syndrome is a 

compression of, or pressure on, certain nerves and/or 

arteries in the chest around the collarbone area which can 

have serious effects on the shoulders, arms and hands of the 

afflicted. 
In 1982, Dr. Bonvallet diagnosed respondent as having 

symptoms of thoracic outlet syndrome on the right side. He 

performed an operation on respondent in November, 1982, to 

attempt to relieve the thoracic outlet syndrome. During the 

course of the operation, Dr. Bonvallet made objective 

findings consistent with that condition. He later testified 

that he thought that it was more probable than not that 

respondent's 1978 work injury was the cause of the thoracic 

outlet syndrome symptoms. Initially, the operation was very 

successful in relieving respondent ' s discomfort. Within two 

months, however, respondent's symptoms had returned almost to 

the same degree. In October, 1983, respondent quit his job 

on the advice of his doctors and because of worsening 

symptoms. He has not been employed since then. 

In January, 1985, Dr. Oreskovich diagnosed respondent 

as suffering from thoracic outlet syndrome on the left side. 

He testified by deposition that he thought respondent 

developed thoracic outlet syndrome because of the 1978 

work-related injury. He stated that he knew that within a 

reasonable degree of medical certainty. Dr. Oreskovich also 

stated that thoracic outlet syndrome is difficult to 

diagnose. Dr. Bonvallet agreed with Dr. Oreskovich on this 

point and added that, in his experience, patients suffering 

from thoracic outlet syndrome are commonly misdiagnosed for 

three or four years. In June, 1985, Dr. Oreskovich operated 

on respondent and performed a first rib resection on the left 

side in an attempt to relieve the thoracic outlet syndrome. 

During the operation, this doctor also made objective 

findings confirming his diagnosis of thoracic outlet 

syndrome. 

In May, 1985, respondent requested his case be reopened 

on the grounds that it had been settled due to a mutual 

mistake of a material fact. The allegedly mistaken fact was 
the nature, and extent, of respondent's medical condition. 

The State Fund declined to reopen the case. The court held a 

hearing on respondent's petition in October, 1985, and in 

January, 1986, the court issued its decision. 

The court found that at the time of the settlement 

agreement both the respondent and the State Fund's claims 

examiner, believed that respondent's injuries were limited to 

a healed carpal tunnel syndrome and a rotator cuff problem. 

The court also found that respondent is suffering from 

thoracic outlet syndrome, which condition resulted from 

respondent's 1978 work injury. The court ruled that both 

parties were operating under a mutual mistake of material 

fact in entering the settlement agreement. Therefore, the 

court held that respondent was entitled to reopen the 

settlement. 

Generally, S 39-71-204, MCA, limits the power of the 

Workers' Compensation Court to amend a compromise settlement: 

Except as provided in 39-71-2908, the 

division of the workers' compensation 

judge shall not have the power to 

rescind, alter, or amend any order 

approving a full and final compromise 

settlement of compensation. 

Section 39-71-204 (2), MCA. 

Under § 39-71-2908, MCA, the Workers' Compensation 

judge may, within ten days of the judge's receipt of the 

order, disapprove an order allowing a full and final 

compromise settlement. "This Court has held in several cases 

that these statutes preclude reopening of [sic] workers ' 

Compensation settlements." Sollie v. Peavey Co. and 

Travelers Indemnity Co. (Mont. 19841, 686 P.2d 920, 41 

St.Rep. 1684. 

However, in Kienas v. Peterson (Mont. 1980), 624 P.2d 

1, 37 St.Rep. 1747, opinion on rehearing, 38 St.Rep. 320, 
this Court established that under ordinary contract law a 

full and final compromise settlement could be set aside if 

the parties to the agreement were operating under a mutual 

mistake of material fact. We said "a universally accepted 

tenet of contract law, statutory in our state, that consent 

to the contract is lacking if it is entered into through 

mutual mistake of a material fact by the parties." Kienas, 

38 St.Rep. at 321. It is well settled that if there is no 

consent, there is no contract. Section 28-2-409, MCA, states 

that: 

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 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. 

In Kienas, we allowed the claimant to reopen his full and 

final compromise settlement because neither party to the 

agreement realized that Kienas' work-related injury could 

have aggravated or accelerated his prior condition of 

cerebral palsy. 

Here, the Workers1 Compensation Court found there was a 

mutual mistake of fact. From the record before us we find 

there is more than sufficient evidence to support the finding 

by the lower court of mutual mistake by the parties. This 

case is similar to Kienas on that issue and we find that case 

to be controlling. Claimant Weldele and the appellant were 

mistaken as to the thoracic outlet syndrome. All doctors 

interviewed in this case testified that thoracic outlet 
syndrome is very difficult to diagnose. One specialist 

stated the syndrome is frequently misdiagnosed for three or 

four years. The doctors who treated the claimant for this 

syndrome believed the syndrome was caused by his 1978 

accident. This syndrome is uniquely difficult to diagnose. 

The evidence shows an unconscious ignorance of a material 

fact on the part of both parties upon which the final 

settlement was based. 

The need to fairly compensate the injured worker is the 

intent and the purpose of the Workers' Compensation law. 

Kienas v. Peterson (Mont. 1980), 624 P.2d 1, 3, 37 St.Rep. 

1751. We find the final compromise settlement was correctly 

set aside by the Workers' Compensation Court. 

We affirm the decision of the Workers' Compensation A 

Court. 

We Concur: 

Chief Justice 

Justice 

Justices 
Mr. Justice L. C. Gulbrandson, dissenting. 

I respectfully dissent. 

In my view, the Kienas decision, which the majority 

found to be controlling, should not be used as authority in 

this case. In Kienas, the claimant, who was not represented 

by counsel, entered into a full and final compromise 

settlement for a payment of $4,040, where the claim involved 

potential payments in excess of $115,000. The Workers' 

Compensation Court refused to set aside the settlement, and 

on appeal, this Court, finding the case to be unique, applied 

contract law and reversed and remanded, without discussing 

§ 39-71-204, and § 39-71-2909, MCA, which limits the power of 

the Workers' Compensation Court to rescind, alter, or amend 

an order approving a final compromise settlement. Upon 

rehearing Kienas, this Court considered § 39-71-204, MCA and 

§ 39-71-2909, MCA, stating the following: 

Petitioner argues that the Workers' 

Compensation court had no power to alter 

or rescind a full and final compromise 

settlement agreement four years after the 

parties - had -executed the same. Section 

39-71-204, MCA. However, in Kienas, the 

Workers' compensation Court did not set 

aside the agreement. This Court set 

-- aside the agreement. Our appellate power 

-- is not limited to section 39-71-204 - nor 

39-71-2909, MCA. See section 3-2-204, 

MCA. (~m~hasK added. ) 

Kienas, 37 St.Rep. at 321. 

In this case, the claimant was represented by a highly 

qualified, experienced attorney who presented the petition 

for full and final compromise settlement in July 1980, and 

obtained approval in August 1980. The request to reopen was 

not made until May 1985, more than four years after the order 

approving final compromise settlement. 
The Workers' Compensation Court was created by the 

legislature and can only act within the jurisdictional limits 

established by the legislature. The majority here has, in my 

opinion, extended the Kienas doctrine by ignoring the 

jurisdictional limits of 5 39-71-2909, MCA, and this Court's 

opinion on rehearing Kienas. 

As an additional basis for dissent, I note that 

5 28-2-409, MCA, requires an unconscious ignorance of a past 

or present fact, material to the contract. 

For application of that section I quote the following: 

The courts have frequently stated, as a 

general principle of the law of mistake, 

that in order to support a claim for 

relief the mistake relied upon must have 

been as to a past or existing fact, and 

that future developments are matters of 

opinion only and mistakes as to such 

matters cannot be the basis for relief 

from a contract. 

This principle has frequently been 

invoked in cases where an attempt was 

made to avoid a release allegedly 

executed under a mutual mistake as to the 

nature and extent of the releasor's 

injuries, the claim usually being made 

that the mistake was only - as to the 

prognosis of known injuries, and so 

related only to opinion. This 

requirement that the mistake must have 

been as to an existing fact has also 

given rise in several jurisdictions to a 

rule that the mistake must have been as 

to an existing but unknown injury, and 

that no relief will be afforded because 

of a mistake as to the consequences or 

developments of an injury known to have 

existed at the time the release was 

Annot., 71 A.L.R.2d 82, 100 (1960). 
In my opinion, this case should be reversed on the 

basis of Sollie v. Peavey Co. (Mont. 1984), 686 P.2d 920, 41 

Mr. Chief Justice J. A. Turnage, dissenting: 

I concur in the foregoing dissent of Mr. Justice 

Gulbrandson.