                               NO.    94-181
            IN THE SUPREME COURT OF THE STATE OF MONTANA
                                     1994
JONATHAN S. SANFORD,
      Petitioner and Appellant,
      -v-
BRANDON OWENS, INC.
      Employer
and
STATE COMPENSATION MUTUAL
INSURANCE FUND,
      Defendant and Respondent.




APPEAL FROM:     Workers' Compensation Court
                 The Honorable Mike McCarter, Judge presiding.


COUNSEL OF RECORD:
            For Appellant:
                 Erik Rocksund, Columia Falls, Montana
            For Respondent:
                 Todd Hammer, Warden, Christensen, Johnson & Berg,
                 Kalispell, Montana


                              Submitted on Briefs:     September 15, 1994
                                            Decided:   November 22, 1994
Filed:
Justice Fred J. Weber delivered the Opinion of the Court.

     Claimant       Jonathan       S.   Sanford appeals the decision of the

Workers'    Compensation Court which disallowed his petition to set
aside a full and final compromise settlement with respect to a knee
injury he suffered in 1989.                   The    Workers'      Compensation      Court

determined there had not been a mutual mistake of fact concerning

the nature and seriousness of his condition.                       We affirm.

     The sole issue for appellate review is whether the findings

and conclusions of the Workers 1 Compensation Court are supported by
substantial       credible    evidence.

     Jonathan       S.    Sanford (Sanford) sustained a knee injury in
December of 1989 while working as a skidder operator for Brandon
Owens,     Inc.    in    Lincoln    County,       Montana.        He slipped and fell

backwards off a tractor he was operating, seriously injuring his
right knee.       At the time of the injury, his employer was insured by
State Compensation Mutual Insurance Fund (State Fund).                          At age 17,

Sanford     had     undergone       a   meniscectomy         to    the   same    knee.   A

meniscectomy is a removal of the meniscus covering the knee.

     Sanford initially saw his family doctor, Dr. Raine, who

referred him to Dr. Lawrence Iwersen, an orthopedic surgeon. On

January 22, 1990, Dr. Iwersen diagnosed chondromalacia                      patella and

prescribed    physical       therapy.     When the knee did not respond to the

physical therapy, Dr. Iwersen performed a diagnostic arthroscopy on

March 13, 1990.          The arthroscopy did not identify any significant

abnormality other than that resulting from the prior meniscectomy.

During the arthroscopy, Dr. Iwersen visually observed and manually

                                              2
probed Sanford's posterior cruciate ligament (PCL), noting that it

was "intact."

      Sanford continued to experience severe knee pain and in May

1990, Dr. Iwersen prescribed a magnetic resonance image               @RI). The
MRI also showed the PCL to be intact.          Also in May of 1990, Sanford

was seen in consultation by Dr. John Hilleboe, an associate of Dr.

Iwersen,     who found no laxity associated with the cruciate or

lateral ligament testing as observed from the videotape of the

arthroscopy, the MRI and his examination.
      Sanford then went to Dr. Raine again and was referred to Dr.

Michael Sousa, a Missoula orthopedic surgeon. Dr. Sousa wrote in
a letter to Dr. Iwersen dated July 3, 1990:

      [T]his patient has some instability secondary to cruciate
      ligamentous   laxity and patellar symptoms, possibly
      secondary    to   a   painful   bipartite    patella  o r
      chondromalacia patella.

Dr.   Sousa advised that Sanford follow-up with Dr. Iwersen and

suggested that he might require a "cruciate          ligament   reconstruction

and/or a partial patellectomy to relieve his symptoms."                He noted

that the results of this surgery were by no means 100% guaranteed.

      Because Sanford's condition did not substantially improve, Dr.

Iwersen did a second arthroscopy on September 11, 1990; at the same

time he performed a partial patellectomy (partial removal of the

kneecap) to try to lessen Sanford's pain.           During this surgery, Dr.

Iwersen     physically   probed   and   visually   observed   the   PCL,   noting

again that it was intact.          Like the first arthroscopy, this was

also recorded on videotape and is part of the record in this case.

      Dr.    Iwersen's post-operative diagnosis is described in an
                                         3
office note dated December 20, 1990, in which he wrote:

     The [patient] was in today, long discussion and another
     exam.    I think that basically, he has lateral and
     posterolateral instabilitv. He has a difficult problem
     with this and we may be able to help him with a lateral
     reconstruction but I wouldn't mind getting an opinion
     from one of the knee surgeons in Salt Lake or Seattle as
     this is quite an unusual problem. He, on the other hand,
     would like to be rated and end all this.     He has been
     helped with the brace and is tired with surgery, though
     I think we could help him with a reconstruction of his
     lateral collateral ligment [sic]. He does not wish this
     at this time, so I will rate him and see him on a PRN
     basis.   (Emphasis supplied.)
Dr. Iwersen testified that he told Sanford in discussions occurring

prior to his April 1991 settlement that he had posterolateral

instability,   that the problem was a difficult one,       and that

additional surgery was likely.   He told him his knee was unstable
because of damaged ligaments and recommended that Sanford seek help

from a knee specialist in Salt Lake City or Seattle. Dr. Sousa

agreed that a reconstruction of Sanford's knee ligament would be in
his best interest.

     Pursuant to the April 1991 settlement agreement with the State
Fund, Sanford received a $29,000.00 lump sum payment and $10,325.73

in biweekly payments.   He reserved medical and hospital benefits.

He acknowledged at trial that he was aware prior to the settlement
that his knee could require further surgery and that Dr. Iwersen

had suggested getting another opinion from a specialist in Salt

Lake City or Seattle.    He further acknowledged that he had not
wanted to submit to the surgery suggested by Dr. Iwersen and that

he wanted to end it all and bring his claim to closure. Dr.

Iwersen performed reconstructive surgery in November 1991.


                                 4
       Sanford testified that his knee condition caused his knee to

"pop out" on hundreds of occasions and on a daily basis following
the March 1990 arthroscopy performed by Dr. Iwersen.         He testified

that in January 1992, the worst instance of the knee popping out

occurred as he was going down a flight of stairs in his home.

Following that occasion, he told his physical therapist that he had
fallen on his knee.     During the trial, he minimized the degree of

seriousness of the fall when he testified that he remembered it

because his daughter was with him and she was hurt.         At trial, he

testified that he did not fall on his knee but rather had fallen

with his shoulder against the paneled wall and that he was sore all
over for a few days.

       Sanford had further surgeries on the right knee performed by

Dr. Lonnie Paulos in Salt Lake City, Utah.       Dr. Paulos performed an
arthroscopy on September 29,       1992,     and a posterolateral knee

reconstruction on January 28, 1993.

      Dr.   Paulos testified by deposition as to his belief that a

tear in the PCL had been present but healed at the time Dr. Iwersen

saw an intact PCL.     Dr. Paulos did not have the benefit of viewing

Dr.   Iwersen's videotapes from the two     arthroscopies   done prior to

Sanford's    settlement,   nor had he reviewed the depositions of

Sanford and his wife, the physical therapy records, or Dr. Sousa's

medical records and he did not know that Sanford had fallen down

the stairs in January of 1992.             Without this very pertinent

information,    Dr.   Paulos   concluded that Dr.      Iwersen did not

'*appreciate the instability" of Sanford's knee. Dr.              Iwersen


                                    5
testified in his deposition              that he did not appreciate the

instability of Sanford's knee early on in his care of Sanford but
did so by the fall of 1990.           This was after the second arthroscopic

surgery and prior to Sanford's settlement with the State Fund.

       Sanford was not represented by counsel in negotiating the

April 1991 settlement agreement.              In this action, he has attempted

to reopen that settlement agreement based on mutual mistake of
material fact.    He contends that he and the State Fund were unaware

that he had sustained a tear of his PCL ligament.                    He   further

contends that there was a mistake in the nature and extent of the

injury and in the belief that he could return to work.
       Sanford's request in this case is for a review of evidence

presented    mostly    by   medical    doctors.    Upon review of the entire

record,   this Court will uphold the Workers' Compensation Court's
factual     findings    and    conclusions if        they   are   supported by

substantial    credible     evidence.     Simons v. State Compensation Mut.
Ins. Fund (1993),      262 Mont. 438, 445, 865 P.2d 1118, 1122; Pepion
v. Blackfeet Tribal Indus. (1993), 257 Mont. 485, 489, 850 P.2d

299,   302; Rose v. Burdick's Locksmith (Mont. 1994),             875 P.2d 337,

338, 51 St.Rep. 447, 448.         In cases where all medical testimony is

not offered by deposition, the Court will not reweigh the medical

deposition    testimony.       Simons,   865 P.2d at 1122.        In this case,

most but not all of the significant medical testimony was presented

by deposition and, thus, our review of the factual findings and

conclusions is limited to whether the findings are supported by

substantial    credible     evidence.


                                          6
        Are the findings and conclusions of the Workers' Compensation
        Court supported by substantial credible evidence?

        The   factual     findings     and     conclusions   which    are   being

challenged in this appeal relate to the significance of the PCL
injury, the effect of the pre-settlement diagnosis of lateral and

posterolateral        rotary   instability, and whether Sanford may return

to work.       For the reasons discussed below, we conclude that the
Workers'      Compensation Court's decision refusing to set aside the

settlement agreement is supported by substantial credible evidence.
                                  THE PCL INJURY

        The evidence was undisputed that Sanford's PCL in the right

knee was found to have been partially torn and healed over by
scarring on September 29, 1992, the date of Dr. Paulos' first

surgery.       This was eight months after the fall on the stairs at

home,     nearly eighteen months after the settlement and close to

three years after the compensable injury.              The testimony conflicts

as to when the tearing of the PCL may have occurred.

        There is no question that Sanford sustained a very serious
work-related injury when he fell from the tractor in December of

1989.     Dr. Paulos opined that this must have been the time when the

PCL tear occurred.         Sanford relies on Dr. Paulos' opinion for his
claim of mutual mistake of fact.               He contends that the PCL injury

resulted from the December 1989 accident although the damage was

not recognized or identified until after the settlement. He
further contends that the Workers' Compensation               Court's     findings

and     conclusions    supporting    the   ultimate   conclusion   that   the   PCL

damage occurred as a result of the 1992 fall were based on the

                                           7
testimony of State Fund's expert witnesses, Drs. Sechrest an

Friedrick,        and    are contrary to the opinions and records of

Sanford's treating physicians, Drs. Iwersen and Paulos.

     The Workers' Compensation Court Finding of Fact No. 27 states
in pertinent part:

     e)   It is more likely than not that the PCL tear
     identified by Dr. Paulos was caused by Sanford's January
     1992 fall down the stairs at home. Both Dr. Sechrest and
     Dr. Friedrick reviewed videotapes of Dr. Iwersen's first
     two surgeries as well as a physical therapy report
     following Sanford's January 1992 fall.     Based on their
     review of those items, as well as other records and
     depositions, they testified that it was more probable
     than not that the PCL damage occurred as a result of the
     January 1992 fall down the stairs.     Prior to the fall
     down the stairs, claimant's knee popped out "hundreds of
     times." . . . The fall down the stairs, however, was
     different in degree.     Claimant described his fall as
     follows:

             A:  That's the worst time because the knee -- the
             knee popped quite a ways out.    It wasn't just a
             little.  It wasn't just a slide.  It was an out.

             Q:     And that one really put you down?
             A:     Yes.

     Dr.   Friedrick   observed   videotapes of     the   1990
     arthroscopies and opined that Dr. Iwersen's probings of
     the PCL were inconsistent with the existence of a PCL
     tear at that time. . . . Dr. Iwersen did not express an
     opinion but pointed out that falling down the stairs did
     not cause Sanford's instability, which already existed,
     and that the fall could have caused a PCL tear or further
     tear.   (Citations omitted.)

     Dr.   Iwersen's videotapes of the first two arthroscopies both

show that Dr.           Iwersen probed the PCL and concluded that it was

intact.    The testimony presented establishes that a finding that

the PCL is "intact" does not mean it is in perfect condition and

that an injured PCL is only one of a number of problems which can


                                        8
cause a knee to be unstable.   It further established that although

the PCL may have been stretched and may have contributed to the

laxity of the knee as a whole, that sort of condition is not as
apparent soon after an injury as it is after a period of time.

This is apparently because the muscles which help to support the

knee, including the four quadriceps in the thigh, weaken and become
atrophied from disuse.    In the beginning post-injury stages, it is

more difficult to detect exactly what       is injured because the

patient may involuntarily guard the knee by motor control due to
good muscle tone, thereby shielding the exact nature of the injury

from detection.

       At trial, Dr. Sechrest testified in person.    Dr. Sechrest had

thoroughly reviewed all the medical records of all the physicians

who treated Sanford;      he had reviewed the depositions of Dr.

Iwersen, Dr. Paulos, Dr. Friedrick, Sanford and Sanford's wife; he

had reviewed the physical therapy reports; and he had seen Dr.

Iwersen's   videotapes.

       Dr. Sechrest testified that if you have continued giving way

of the knee, you may have significant instances of reinjury. He

further testified that the instability may increase over a period

of time and ligaments of the knee may be damaged or further damaged

more easily with incidents of trauma.     He testified that the PCL

may   not be functioning the way it should and yet still appear

intact,   show up on an MRI scan intact, and only over time become

stretched out and unable to function properly.       He testified that

there was a definite possibility that the PCL was further damaged


                                  9
when Sanford fell on the stairs and that, based on the information

he reviewed in the chart, it was more likely than not that further
injury occurred to the PCL at that time. Dr. Sechrest further

testified that after his review of the objective data provided to
him, including the report of the MRI scan, the videotapes, and the

results of the examinations by three orthopedic surgeons--Drs.
Sousa,   Hilleboe and Iwersen--his opinion was that the PCL was

intact prior to the time Sanford saw Dr. Paulos.   He testified that

the weakening and resultant atrophy of muscles and other connective

tissues from disuse can cause a "set-up for further injury . . .

[lowering] the threshold at which any connective tissue is going to
be damaged" and that where the muscles are weak and atrophied, it

can take an incident of less trauma to further affect the

structures in the knee.

      The State Fund also provided the deposition testimony of Dr.

Friedrick, another orthopedic surgeon.    Dr. Friedrick testified to
his   opinion,   based on a review of all the records, that it was

medically more probable than not that the PCL was torn or partially

torn at some time subsequent to the settlement in April of 1991.

He testified that if the PCL had been significantly disrupted, Dr.

Iwersen's probing as demonstrated by the videotapes would have

either lengthened or completely separated the fibers of the PCL,

depending on the degree of the injury.

      Sanford argues that Dr. Iwersen never diagnosed the PCL damage

prior to the April 1991 settlement. Dr. Iwersen's    records do not

specify a problem with the PCL prior to the April 1991 settlement.


                                  10
However,     Dr.    Iwersen testified that his diagnosis included the

possibility of PCL damage even though it was not specifically
identified. Dr. Iwersen stated that an identification of the PCL

injury was not crucial to his overall diagnosis of posterolateral

rotary      instability.       Dr. Sechrest also testified that he did not

consider the identification of a particular injury to the PCL to be

a   determining       factor.     In fact,     all of the medical testimony

indicates that a diagnosis of PCL damage is not critical and that
a functional diagnosis of lateral and posterolateral rotary

instability implicitly carries with it the possibility of PCL
damage.

      Dr.     Sechrest testified that such a functional diagnosis

describes a pattern of instability in the knee based on a physical

examination of the mechanics of the knee.                     Prom the physical
reaction to certain physical maneuvers,                 a physician can imply

injury to certain groups of ligaments. Dr. Iwersen made this
functional         diagnosis    after    his   second    arthroscopic      surgery

performed in September of 1990.                   All doctors agreed that the

                                           posterolateralrotary instability
in this case--was the critical determining factor in determining

how next to proceed.            The   diagnosis    included   the   possibility   of

some damage to the PCL but damage in the nature of laxity rather
than an outright tear which would have been observable by means of

the arthroscopies.

      Sanford attempted to deny that his at-home injury was serious
enough to tear his PCL.           His testimony at trial contradicted that


                                          11
of his deposition.       In his deposition testimony, he testified that

the incident on the stairs was the worst incidence of the knee

popping   out;   at the trial,     he claimed that he remembered the

incident because his daughter was hurt.                   He told his physical

therapist that he had landed on his right knee; at trial, he denied

falling on his knee and stated that he had hit his shoulder lightly

on the paneled wall and that his entire right side was sore.

     Sanford's contention that the Workers'                 Compensation   Court

disregarded the testimony of his treating physicians is not

persuasive. Dr.      Paulos did not have a complete foundation from

which to make a conclusion.        Moreover, Dr. Paulos did acknowledge
that the PCL could have torn at the time of the fall on the stairs.

Dr. Iwersen also testified it was possible that the PCL could have
been torn in the fall on the stairs but stated that he had no

opinion on that issue.         In contrast, both Dr. Sechrest and Dr.

Friedrick had reviewed all of the medical records and depositions

in this case.     Furthermore,    Dr. Sechrest testified in person and

the Workers' Compensation Court found him to be a very credible and

knowledgeable    witness.     Clearly,      there   was    substantial   credible
evidence to support a finding that the PCL was torn when Sanford

fell on the stairs in his home.        We will not reweigh that evidence.

We conclude the Workers'         Compensation Court's discounting the

weight attributable to Dr.         Paulos'      testimony is supported by

substantial   credible     evidence.

                     THE    PRE-SETTLEMENT      DIAGNOSIS

     Sanford contends that the Workers 1 Compensation Court erred by


                                       12
finding and concluding that the basic nature and extent of his

condition was recognized even though his treating physicians may

not have identified the specific ligaments involved.        He contends

that Dr. Iwersen admitted there was no specific reference to the

PCL being damaged prior to the 1991 settlement and that the pre-
settlement diagnosis did not include PCL damage.

      The State Fund contends that these arguments and assertions
assume that damage to the PCL was present after the original injury

and prior to the settlement and did not result from Sanford's

falling down the stairs in January of 1992.        It further contends

that this Court need not address this issue any further because it

assumes that the PCL was damaged prior to the settlement.
      Although we have addressed the issue of damage to the PCL at

length above, this issue is not as simple as respondent would make
it.   The medical testimony in this case is clearly in agreement

that other ligaments as well as the PCL are likely involved in an
unstable    knee.   In fact, the evidence is emphatic that rarely is
there only one ligament involved. Dr.          Iwersen's   diagnosis of

lateral and posterolateral instability is a complex of injuries to
various soft tissues in the knee and may or may not involve damage

to the PCL. Moreover, it was explained at trial and in depositions

that as the supporting structures become weakened and atrophy from
disuse,     it becomes easier to make an accurate diagnosis of the

particular structures contributing to the instability.

      Dr.   Sechrest   testified in detail during the trial concerning

the concept of functional diagnosis.     He explained that a diagnosis


                                    13
of lateral and posterolateral rotary instability is a functional

diagnosis which is generally the result of a combination of

injuries.          He    further        explained      that    while    a     specific
identification of a tear                in a ligament may be important in
determining the plan for a specific surgical procedure, it is not

significant in determining the nature and extent of the injury.
Dr.     Sechrest also stated that tearing or further tearing of

ligaments may occur where this sort of functional diagnosis is
made,    particularly     when    the   leg     musculature    subsequently    becomes
weakened and atrophied.

        The deposition testimony of Dr. Friedrick and Dr. Iwersen
agreed with the testimony of Dr. Sechrest concerning the nature of

the   diagnosis.        Their testimony indicated that the PCL may have

sustained some damage as a result of the 1989 injury which remained
undetected      initially        and    which     contributed to        the overall
instability of the knee.                 Both    Dr.   Sechrest and Dr.        Iwersen

explained that specific reference to the PCL was unnecessary for

reaching a correct assessment or diagnosis of Sanford's condition.
        Dr.   Iwersen     explained       the    nature   of    the    diagnosis    of

posterolateral     rotary    instability:

        [Wlhether you have a complete tear of your posterior
        cruciate ligament to me doesn't -- That's not crucial.
        What is crucial is that he has this instability problem
        that is going to be disabling.        It's a difficult,
        difficult problem to deal with.       And the posterior
        cruciate to me just -- It doesn't mean anything.     What
        has happened is Doctor Paulos elected to reinforce that
        posterior cruciate ligament in order to take care of this
        posterolateral  instability.

Dr. Iwersen also testified that even when the PCL is intact, it may


                                           14
be necessary to tighten or reconstruct the ligament.           Prior to the
settlement,   he assessed Sanford's injury as a difficult one to
address and encouraged a referral to an expert in Salt Lake City or

Seattle.   Dr. Iwersen stressed to Sanford that he would likely need

additional surgery in the future and that he could possibly need a

total knee replacement.

      There are numerous other indications in the record to support
the fact that the seriousness of the injury was recognized by Dr.

Iwersen prior to the settlement in April of 1991.              In an office
note dated July 30, 1990, he states that "really I am unsure what's

going on here."     He testified that initially, he did not appreciate
the nature of the injury,        but certainly did so prior to the

settlement.    The record supports this statement. Dr. Iwersen had

the written report of Dr. Sousa's evaluation in which Dr. Sousa

stated that it was possible Sanford would require a cruciate

ligament   reconstruction   and/or   partial   patellectomy.    Indeed, Dr.
Iwersen had wanted to perform another surgery and particularly

advised Sanford that he had a difficult problem                 not easily

identified.   Dr. Iwersen eventually did perform a third surgery but
not until several months after the settlement.        Clearly the problem
was   identified,   however, that the condition would require future

surgery to take care of laxity which would occur as a natural
progression. Dr.     Iwersen also told Sanford that he may require a
total knee replacement at some later date. Dr. Paulos also opined

that a total replacement may be necessary in the future.              It is
hard to imagine what further extent of the effect of the injury


                                     15
could be contemplated beyond a total knee replacement.
      Dr. Sechrest testified that Dr. Iwersen had not misdiagnosed

Sanford's condition and that the diagnosis made by Dr. Iwersen

after the second arthroscopy was a functional diagnosis which is

usually the result of a combination of injuries. Dr. Sechrest
further explained that although a specific identification of a tear

may be important in determining when to perform a specific surgical

procedure,    it was not significant in determining the nature and
significance of the injury here. Dr. Paulos also agreed with the

functional diagnosis of posterolateral rotary instability and did

not agree with Sanford that Dr.             Iwersen had misdiagnosed his
condition.

      Setting aside a settlement based on mutual mistake of fact

requires a change in diagnosis.            The diagnosis here included the

possibility that Sanford could further injure the knee as a result

of   its   condition.       A diagnosis of       instability       involves the

possibility   of   future   damage   because   the     condition   is   unstable.

That possibility of future damage became reality here when Sanford

further injured the knee due in wart to the instability wreviouslv

diaanosed bv Dr.        Iwersen which caused his knee to be more

susceptible to injury.       Simply put, the diagnosis remained the same

irrespective of a PCL injury.               Further,    all doctors were in

agreement that it was the 1989 injury and not the fall on the

stairs that caused the instability.

      The alleged material mistake of fact concerning the nature and

extent of the injury here is not analogous to the sort of mistake


                                      16
which can result in a setting aside of a workers' compensation
settlement such as in Kimes v. Charlie's Family Dining & Donut Shop
(1988), 233 Mont. 175, 759 P.2d 986, where it was discovered after
settlement that the claimant had suffered a torn meniscus which
created the conditions for probable degenerative changes in the
knee joint.   See also Wolfe v. Webb (1992), 251Mont. 217, 824 P.2d
240 (claimant suffered injury to clavicle and after settlement, his
physicians discovered previously undiagnosed damage to his right
shoulder); Kienas v. Peterson (1980), 191 Mont. 325, 624 P.2d 1
(medical assessment of a back injury did not take into account its
effect of aggravating the preexisting cerebral palsy); and Weldele
v. Medley Dev. (1987), 227 Mont. 257,       738 P.2d 1281 (treating
physician's initial assessment was a misdiagnosis of the actual
extent of the injury).
     We conclude there was no misdiagnosis of the nature and extent
of the injury here which constitutes a mutual mistake of fact.   The
nature of the injury here was a general instability of the knee
with the possible extent being a total knee replacement in the
future.   The diagnosis did not rule out the possibility of future
surgeries to repair laxity or other problems caused by the
instability of the knee falling short of a total replacement.
                           RETURN TO WORK
     Although   Sanford   claims   he has not been able to obtain
employment, we conclude the Workers * Compensation Court did not err
in determining that Sanford's employment prognosis has not changed.
Prior to settlement in April of 1991, Dr. Iwersen determined that

                                   17
Sanford could return to sedentary employment and, most recently,
Dr.   Paulos has       also testified that he       is able to return to
sedentary employment.
      We   hold       the   findings   and   conclusions   of   the   Workers'
Compensation Court are supported by substantial credible evidence.
      Affirmed    .


We Concur:
