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Missouri: Court Compels Commission To Approve Settlement

July 09, 2014 (2 min read)

A surviving widow negotiated  with the employer to obtain a lump sum settlement but the Commission refused to approve the settlement and asserted that the agreement was not in accordance with her rights because it was less than the present value of the claim.  Hinkle v A.B. Dick, WD 76952, 2014 Mo. App. LEXIS 753 (, 2014 Mo. App. LEXIS 753 (Lexis Advance) (July 8, 2014).  The court required the Commission to approve the settlement.

Section 287.390 (, 287.390 (Lexis Advance) defines when the Commission must approve a settlement:  a settlement must be not the result of undue influence or fraud, the employee fully understands his or her rights and benefits and voluntarily agrees to accept the terms of the agreement.  The same provision requires approval  "in accordance with the rights of the parties.". The Commission asserted essentially that if the settlement was not enough money in their opinion then it could not be in accordance of the rights of the injured worker and it didn't matter whether the parties wanted to settle or not. 

The Court found the Commission misapplied the law.  Nance v. Maxon Electric, Inc., 395 S.W.3d 527 (, 395 S.W.3d 527 (Lexis Advance) (Mo. App. W.D. 2012) (Nance I) addressed a similar issue, but in Nance the employer unsuccessfully tried many times to obtain a settlement and then tried to stop a proposed settlement when the worker died unexpectedly from unrelated causes when the settlement was pending approval.  The court noted:  "This court rejected the employer’s argument that the Commission lacked authority to commute the payments for a lump sum that is either more or less than the present value of the future payments explaining that the parties agreed and stipulated to the present value of the claimant’s future benefits award." 

The Commission's position in Hinkle is disturbing by the lack of deference given to the plaintiff's bar for advocating effectively on behalf of injured workers.  In this case it is Mrs. Hinkle, and not the employer, who argued the Commission refused to follow stare decisis and not let represented parties to the case strike their own bargain.

The parties can settle after an award by  commutation of the award or by settlement which may involve different standards and may result in different sums  of money.  Hinkle merely affirms this point that was settled 2 years ago in  Maxon.

The case does not distinguish between represented and unrepresented parties.  An important fact in Hinkle is that claimant was represented by counsel who advocated for the approval of the settlement.  This is distinguishable from cases involving unrepresented workers who may have less of an understanding of their respective  "rights and benefits."

The parties had agreed to a $200,000 lump sum after paying death benefits for about 6 years.  The amount represented 49% of the present value. 

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

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