Friday, February 1, 2013

Post Settlement Review- Not Allowed!

As an increasing number of PA work comp cases are concluded via Compromise and Release Stipulation settlements, the finality of these settlement agreements is of paramount importance to the Insurers, the Employers and their attorneys.

An Employee may not petition to Review the description of injury after a Compromise and Release Stipulation, even where the agreement allows for the payment of future work related medical expenses.
Importantly, the Employer/Insurer documented their negotiations with Employee as to the specific injuries "accepted" as work-related for purposes of this settlement.

DePue v. WCAB (N. Paone Construction, Inc.) decided by the Commonwealth Court of Pennsylvania on January 30, 2013, at No. 1113 C.D. 2012, opinion authored by Judge Leadbetter.

Procedural Background
1996 Head injury
1996 NCP issued by Employer
March 2008 Compromise and Release settlement decision
July 2010 Employee Penalty petition for non-payment medical bills
September 2010 Employee Petition Review description of Injury
WCJ deny Penalty and Review Petitions
WCAB affirm denials
Commonwealth Court affirm denials

Factual Background

In 2008 the parties entered into settlement discussions and exchanged correspondence and draft settlement documents (LIBC 755 and addendum pages).
Employee proposed addendum described the work injury as "closed head injury, seizure disorder, left shoulder fracture, chronic pain, loss of short-term memory and bi-polar disorder.
Employer returned this document, "crossing out" the shoulder, chronic pain and bi-polar descriptions.
Employer note stated "we already negotiated the accepted injuries in 2007 and those are the only injuries I will outline on the agreement".

The C&R documents were prepared to describe:
"any and all injuries suffered at (employer) including but not limited to the accepted injuries of severe closed head injury with seizure disorder and short term memory loss".
Another settlement term was that Employer agreed to pay " all reasonable and related medical bills".

The settlement documents with the above injury description were executed and presented as exhibits at the March 2008 WCJ hearing. The Commonwealth Court decision reviewed these documents and Employee's March 2008 testimony.

Employee testimony reflected that:
there had been discussion of settlement for months;
he read and signed the agreement;
he understood medical expenses that were reasonable and necessary and causally related to his injury would continued to be paid;
he had enough time to review the agreement;
the terms were explained to his satisfaction;
he was not promised anything that was not in the agreement;
he understood that once approved he cannot go back and ask anyone for additional payments of wage loss benefits.

The "C&R" WCJ found as fact and concluded that Employee understood the full legal significance of the agreement "as regards [his] work related injury and right to workers' compensation benefits".
She concluded that the parties entered into "a valid and binding agreement".

Commonwealth Court decision

As noted above, I believe a significant factor in this positive litigation outcome was that the Employer Counsel documented the pre-settlement discussions with Employee counsel regarding the description of injuries that were considered "the work related injury".  This is particularly important where you are agreeing to pay for future medical expenses. The documentation of these communications were submitted as exhibits in support of Employer's arguments in the litigation of the 2010 Review and Penalty Petitions.

 Employee argument that the C&R Agreement should be "corrected" to add the shoulder injury as this was "erroneously" omitted from the final drafts was rejected.  This was not consistent with the evidence,  the pre-C&R hearing correspondence among the attorneys regarding the injury description.
After negotiations with Employer, Employee agreed to omit the shoulder injury description and signed those documents.
An approved C&R agreement may be set aside only upon a clear showing of fraud, deception, duress, mutual mistake or unilateral mistake caused by an opposing party's fault.
[ citing, Farner, Barszczewski, Dillard].
Once approved, a valid C&R agreement is final conclusive and binding upon the parties.

Employee asserted the Employer "routinely" paid medical bills for the shoulder and knew that the bills were causally related.
Employee argued legal principals of:  Promissory estoppel; equitable estoppel and res judicata.
[ these arguments recur in work comp, so I will reference this discussion]

Promissory Estoppel may be invoked to enforce a promise made by a party to an opposing party when there is no enforceable agreement between the parties.
Equitable Estoppel may be invoked to enforce a promise where there is the party's inducement of the other party to believe certain facts to exist and the other party's reliance on that belief to act.

"Nothing in the record suggests that Employer promised to continue to pay medical bills for the left shoulder injury and that Claimant relied upon such promise to enter into the C&R agreement".
 slip opinion p. 10.
Commonwealth Court repeated the general rule that an employer's voluntary payment of medical bills does not constitute an admission of liability for the left shoulder injury and cannot be construed as a promise to continue to make such payments. slip opinion p. 10-11.

Practice Pointers

1. Confirm all settlement terms in writing ASAP after the mediation or verbal settlement

2. Where there is a term that was discussed and not included, I like to add language, something to
    the effect, " during litigation of the claim petition claimant alleged his neck was
   also  injured at the time of his low back injury, but employer has disputed any relationship and
   has not accepted liability for that medical condition or related treatment, as a term of this

3. I no long try to "do things last minute".  Reschedule the hearing. Take the time to review and
    consider the language you use in the settlement documents.
   [Here I like the fact that Defendant Counsel documented his discussions with Claimant 
   Counsel, IMO this was significant in obtaining a successful result]

No comments:

Post a Comment

Note: Only a member of this blog may post a comment.