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Workers' Compensation

Missouri: Claimant’s Death Did Not Unravel Settlement Offer

The court of appeals found a ‘deal was a deal’ and the employer was stuck with its offer to settle a case for $181,434 representing future disability payments, even though claimant died the day the joint motion for commutation of a permanent total award was submitted to the Commission for approval. Nance, dec. v Maxon Electric, WD 74942 (Mo. App. Nov 6, 2012); 2012 Mo. App. Lexis 1401.

The employer attempted to withdraw its motion when claimant died suddenly.  The Commission concluded it did not have statutory authority to approve the proposed settlement.  The court of appeals found the Commission misapplied the law. The court found the commission had limited discretion under §287.390 even in a pre-reform case whether or not to approve a settlement or a joint motion for commutation.  The commission could only reject a settlement unless it finds that the agreement was the result of undue influence or fraud or that the employee did not understand his or her rights and benefits or did not voluntarily agree to accept the terms of the agreement.

The court also found the employer construed §287.530, which governs modifying final awards, too narrowly. The employer argued since claimant died no ongoing benefits existed to support an award of benefits. The statute contemplated that the survivors might pursue such a motion, too, because the statute requires consideration of the best interest of the dependents. The court mentioned, but did not resolve, whether the surviving spouse had any additional claim for benefits in this case or whether that issue was expressly addressed in the contract.

In the case the employer had paid benefits for about 18 years and had previously tried unsuccessfully to obtain approval of a commutated settlement. Claimant had been awarded PTD benefits for scleroderma and Reynaud’s arising from his work as a grinder, and died from unrelated cancer. The employer had agreed to a joint motion to settle the case for a payment representing life payments for another 24 years, even though its own expert projected claimant may not live that long.

The opinion suggests the settlement may have been a ‘bad deal’ because the employer misjudged its exposure how long claimant would live. The employer disputed its promise was not enforceable on the basis of statutory interpretation rather than any contingencies in the contract itself. The original offer had been made one month before the diagnosis of advanced cancer. The court noted that the employer still agreed to proceed with the offer even after it became aware of the fatal unrelated medical condition.

Source: Martin Klug, Huck, Howe & Tobin. Read Martin Klug's Mo. Workers' Comp Alerts.

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