MO: Settlement Contract Put Asunder No ‘Thriller’ For Comp Employers

MO: Settlement Contract Put Asunder No ‘Thriller’ For Comp Employers

Settle a case, write a check, and most employers believe a worker's compensation case is over.  It's not so easy, sometimes.   Some claimants come back, like zombies in a b-movie thriller, haunting employers once again fighting over just what a settlement means.

Say what you mean.

How bad can things get?  Nearly nine  years after an employer in 2002  "settled" a case involving a back fusion with infection, the same employer continued to fight over the meaning of three words in the contract in which  the employer agreed to keep medical open for a year for treatment "to the back."  The court of appeals in 2011 finally decided it was a question for a jury to decide whether the employer's stipulation to pay for care "to the back" also included about $190,000 in medical bills for the heart for a staph infection, incurred after to the settlement. The court noted that the employer could have expressly excluded in the contract any treatment for staph, but did not do so.  Gasner v Raynor Mfg., No 8-L-35 (2nd Dis. 4-27-2011).  

An employer may not mean to leave the door open to re-activate a settled claim, although the standard Missouri settlement contract includes this provision.  Missouri settlements allow re-activation under §287.140.8 related to prosthetic devices or "life-threatening procedures."  This arguably means any MRSA settlement potentially becomes tomorrow's nightmare, when a recurrent infection might require surgery.

Hagene, like Gasner, involved a dispute over who pays medical bills. An employer couldn't possibly have meant not to pay about $20,000 in medical bills, according to the court of appeals, even though the employer settled the case in 2004 and stated all bills were in dispute.  The court of appeals nearly five years later indicated the employer should have specified which specific bills were in dispute if it really didn't mean to pay them.  Hagene v Derek Polling Construction, 902 N.E.2d 1269 (Ct. App. 2009).

Another issue is whether a settlement includes companion or related cases.   An employer in 2001 settled with court approval a disability payment at both elbows with additional comments to close out "all issues and claims." This language did not stop a subsequent 2005 carpal tunnel claim resulting in more than $36,000 in further benefits.  Claimant's carpal tunnel at the time of the first settlement was diagnosed and not otherwise treated.  The employer did not specifically indicate carpal tunnel on the release or that the settlement included the hands, arms or wrists. Kelley v St. Francis Medical Center, DOLIR 2-25-08.

Mean what you say.

A Missouri settlement approved by an administrative law judge is conclusive and irrevocable.  Conley v Treasurer of the State of Mo., 99 S.W.2d 269 (Mo. App. 1999).  That depends that there is a settlement on all material issues, the settlement is "approved" and the parties agree what the contract terms mean.

An employee may mean to settle, but a settlement doesn't mean anything in Missouri until approved by an administrative law judge.  Section 287.390 provides no settlement is enforceable unless approved and the claimant fully understands his rights and the acceptance is voluntary and in accordance with the rights of the parties.  A claimant was not bound by an agreement to resolve his case when a judge concluded that claimant did not understood his legal rights, even though he had been represented by three previous attorneys.  Vincent v Mo. State Treasurer, 287 S.W.3d 715 (Mo. App. 2009).

A thwarted employer attempted to enforce a settlement with an unresolved Medicare issue.   Roberts v City of St. Louis, 292 S.W.3d 566 (Mo. App. 2009).  The parties tried the case in 2006 and asked the judge to postpone issuing an award. The judge, nevertheless, issued an award for about $56,000.  The claimant sought to enforce an agreement before the award to settle the case for $200,000.  The employer then sought to enforce the lower award from the ALJ. The court found insufficient meeting of the minds due to the unresolved Medicare issue, and ultimately awarded claimant permanent total disability benefits against the employer.

A claimant indicated in a settlement that a subsequent injury was "not work related" but the Commission found the claimant apparently didn't really mean it and considered the statement as a 'stray' remark.   Edwards v Honeywell, DOLIR 1-13-11. 

Or one thing leads to another.

The fight over interpreting and enforcing a worker's compensation settlement contract is a long-tail monster that takes more fight, more money, and more time to subdue.   Claimants may not see any settlement dollars for many years, contrary to the statutory purpose behind a simple, informal and expeditious comp system.  The employer, typically, will not end up with the deal they thought they bargained for.  The parties who drafted the contract may have a conflict of interest because of a potential E&O claim.  An employer may require new counsel.  The recent Gasner case shows how an improbable turn of medical events and large bills can keep litigation knocking at the door.   As the old adage goes, when it comes to drafting settlement contracts the devil is in the details. No one benefits by an appellate court a decade after a settlement reforming an agreement or giving a wag of the finger at someone for not saying what they mean or meaning what they say.

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

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