CAUTION
TO CLAIMANTS ON WORKERS’ COMPENSATION SETTLEMENTS
By Attorney Dennis Kurth
Snow, Carpio & Weekley
The Industrial Commission was given jurisdiction to
approve settlements of workers’ compensation cases by virtue of a Supreme Court
case in 1986[1]
followed by the adoption in 1987 of a set of administrative rules for ALJ’s to
follow in approving settlement agreements.
A bona fide dispute and a written settlement
agreement signed by the parties with the claimant certifying that they have
read and understand the terms of the settlement agreement and were not signing
under duress or coercion, are required.
(ICA policies and procedures as published in the ICA Manual, however, do
not have the force and effect of the Industrial Commission Rules of Procedure
or the workers’ compensation statute).
The question of whether a purely verbal agreement to
settle a workers’ compensation case is enforceable against an insurance carrier
arose in the context of a claimant who died in a car crash while on his way to
his attorney’s office to sign a settlement agreement.[2]
The claimant’s heirs sought to enforce the verbal agreement but the carrier, of
course, claimed that it could not be enforced because the written agreement had
not been signed.
The Industrial Commission, in Tabler, refused
to enforce the verbal settlement agreement and the claimant’s heirs appealed. The Court of Appeals held that a verbal
agreement could be enforceable if the parties intended to be bound by the
verbal agreement and set aside the Industrial Commission’s award. The case was remanded to the Industrial
Commission to hold hearings to determine the intent of the parties. In an important footnote, however, the Court held
that it was not addressing the issue of whether a verbal settlement
could be enforced against an injured worker.
The case was then settled between the heirs and the
insurance carrier. Since then no changes
have been made to the statue or the Industrial Commission rules regarding
settlements. Still, except for the
Industrial Commission policies and procedures, no written agreement is
required.
Recently, in a memo decision, the Court of Appeals
held that an oral settlement could be enforced against the claimant who had
simply changed her mind about settling her case and refused to sign the written
settlement agreement.[3] In
the True Value case, the claimant, whose attorney had withdrawn when she
changed her mind about the settlement, was unrepresented in the Court of
Appeals and did not even file an answering brief, thereby confessing
error. In addition, the Court felt that,
“on this record”, the verbal agreement should be enforced.
The True Value case, even though not a legal
precedent, creates a dilemma for claimants, represented or unrepresented. While
the carriers and their attorneys, in euphoria over the ruling, will seek to
enforce verbal settlements, claimants and their attorneys must now be extremely
cautious in settlement negotiations to anticipate every eventuality that could
affect their decision as they may not have the luxury of reconsidering their
decision before the settlement documents arrive.
True Value will probably
not be the last word in the enforce-ability of verbal settlements against
claimants and should not be taken as such.
It would be very bad policy for the Industrial Commission to follow for
many reasons including that facts can change quickly and injured workers should
not be held to verbal agreements under the workers’ compensation law, which is
solely designed to help them, until they have read and understood the language
of the settlement agreement.
All claimants contemplating settling their cases
should seek the advice of experienced counsel first. For claimants’ attorneys, the best policy is
to advise the carrier or their attorney that they do not intend to be bound by
the settlement until the C & S is fully executed and the claimant certifies
that they understand all the terms.
For more information on Workers'
Compensation or Social Security Disability, please contact Snow, Carpio &
Weekley toll-free at 855-325-4781 or visit our website at www.workinjuryaz.com. We serve the
entire State of Arizona and have offices located in Phoenix, Tucson, Yuma and
Lake Havasu City.
No comments:
Post a Comment