Gallup v. Keystone Automotive Industries, Inc. & 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 still came from the original work injury. The employee worked as a driver for Keystone Automotive Industries. In 2008, he sustained a right shoulder injury at work. He suffered from right shoulder problems prior to the injury for which he received treatment.

A Consent Decree occurred at that time. 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, in part, the reason the employee had surgery on the shoulder. He lost time from work between May and October of that year. Then, the employee underwent a second surgery on the right shoulder in 2010. Finally, he underwent a reverse shoulder arthroplasty in 2017.

The issue before the Appellate Division included whether the 2017 surgery and ongoing capacity resulted from the 2008 work injury. The ALJ found that they were not. Based on the opinion of the 312 examiner, Dr. Matthew Donovan attributed the more recent problems to the natural progression of the preexisting shoulder condition instead of the work injury.

The employee appealed. He argued that the ALJ, bound by the res judicata effect of the prior Consent Decree, found the current problems related to the 2008 work injury. Specifically, the employee argued that the 2009 independent medical exam formed the basis for the Stipulated Decree. Therefore, its conclusions regarding the preexisting medical condition must be accorded full and final preclusive effect.

The Appellate Division ultimately affirmed the ALJ’s decision. They found that the Consent Decree did not address nor 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 was entitled to res judicata effect. No preclusive language in the Consent Decree indicated that the employment caused the current right shoulder condition rather than the natural progression of the underlying condition as opined by the 312 examiner.

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