Gallup v. Keystone Automotive Industries, Inc. and Sedgwick Claims Management Services, Inc.

Decided: March 30, 2021
Topic: Res Judicata

This decision involved a determination of whether the res judicata effect of a prior Consent Decree compelled a finding that the employee’s ongoing problems years later were still caused by the original work injury.

The employee was working as a driver for Keystone Automotive Industries in 2008 when he sustained a right shoulder injury at work. He had right shoulder problems prior to the injury for which he had received treatment.

A Consent Decree was entered at that time in which the parties agreed that the 2008 work injury represented a significant aggravation of the pre-existing shoulder condition. The parties further agreed in the Consent Decree that the 2008 injury was at least, in part, the reason the employee had surgery on the shoulder and lost time from work between May and October of that year.  The employee then underwent a second surgery on the right shoulder in 2010, and finally a reverse shoulder arthroplasty in 2017.

The issue before the Appellate Division was whether the 2017 surgery and ongoing capacity were the result of the 2008 work injury.  The ALJ found that they were not, based on the opinion of the 312 examiner, Dr. Matthew Donovan, who attributed the more recent problems to natural progression of the preexisting shoulder condition instead of the work injury.  The employee appealed, arguing that the ALJ was bound by the res judicata effect of the prior Consent Decree to find that the current problems were still related to the 2008 work injury.  Specifically, the employee argued that the 2009 independent medical exam formed the basis for the Stipulated Decree and therefore, its conclusions regarding the nature of the preexisting medical condition must be accorded full and final preclusive effect.

The Appellate Division ultimately affirmed the ALJ’s decision, finding that the Consent Decree did not address nor did it decide the issue of the precise medical nature of the employee’s underlying shoulder condition.  The Appellate Division determined that the lone reference to the underlying condition (that a compensable right shoulder injury occurred and represented a significant aggravation of the pre-existing condition) was entitled to res judicata effect, but that there was no preclusive language in the Consent Decree to indicate that the current right shoulder condition was caused by the employment rather than the natural progression of the underlying condition as opined by the 312 examiner.

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