Stanley Roberts v. City of St. Louis

On August 2, 2006, the administrative law judge issued an award on the above-referenced claim. On August 17, 2006, employee, through counsel, filed an Application for Review seeking review of the award pursuant to $\S 287.480$ RSMo.

On September 22, 2006, we remanded this matter to the Division of Workers' Compensation to conduct an evidentiary hearing regarding the allegations in the Application for Review pertaining to the alleged oral agreement. The chief administrative law judge conducted an evidentiary hearing on December 6, 2006.

We have reviewed the evidence, read the briefs, and heard the oral arguments of the parties. We modify the award of the administrative law judge as set forth herein. The August 2, 2006, award and decision of Administrative Law Judge Joseph E. Denigan is attached hereto and incorporated solely as it relates to Second Injury Fund liability.

Our determination in this matter is governed by the principles and guidance set forth in Highley v. Martin, 784 S.W.2d 612 (Mo. App. 1989). Nothing in § 287.390 RSMo (Cum. Supp. 2006) requires settlement agreements in workers' compensation cases to be in writing and signed by the parties. Id. at 616. In reviewing this award, we must first determine whether a settlement agreement was made by the parties. Id. at 617. If we find that a settlement agreement was made by the parties, we must find what its terms were. We must then decide whether to approve the agreement per § 287.390 . Id. at 618 . If we decide to approve it, we shall enter an award that takes the agreement into account in spelling out the employer's liability to employee. Id.

Section 287.390.1 RSMo (Cum. Supp. 2005) provides:

Parties to claims hereunder may enter into voluntary agreements in settlement thereof, but no agreement by an employee or his or her dependents to waive his or her rights under this chapter shall be valid, nor shall any agreement of settlement or compromise of any dispute or claim for compensation under this chapter be valid until approved by an administrative law judge or the commission, nor shall an administrative law judge or the commission approve any settlement which is not in accordance with the rights of the parties as given in this chapter. No such agreement shall be valid unless made after seven days from the date of the injury or death. An administrative law judge, or the commission, shall approve a settlement agreement as valid and enforceable as long as the settlement is 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.

On April 25, 2006, the parties tried this matter before an administrative law judge. Shortly thereafter, employee and employer agreed to settle this matter. The parties could not reduce the agreement to writing because they needed to determine the amount necessary to fund a Medicare set aside trust. Counsel for employee, counsel for employer and counsel for the Second Injury Fund all appeared before the administrative law judge. Counsel advised the administrative law judge that employer and employee had entered into an agreement to fully resolve employee's claim against employer but additional time was needed to determine the Medicare set aside trust funding requirement. The administrative law judge agreed to delay ruling on the claim.

In the meantime, employer contacted Medicare ${ }^{[1]}$ to inquire about the set aside funding requirement. Medicare informed employer an updated medical report was necessary. Employer set up an appointment with Dr. Kennedy, which appointment employee attended. Dr. Kennedy provided an updated medical report. Employer forwarded the updated report to Medicare for consideration of the set aside trust funding requirements. Medicare informed employer that $\ 44,000.00 was necessary to fund the set aside trust. Employer believed Medicare misunderstood Dr. Kennedy's medical report. Dr. Kennedy provided a clarification to his report, which employer sent to Medicare for consideration.

On August 2, 2006, without warning to the parties, the administrative law judge issued an award. The administrative law judge awarded permanent partial disability in the amount of $\ 55,779.68 against the employer. The administrative law judge awarded enhanced permanent partial disability of $\ 5,441.92 against the Second Injury Fund. Employee filed an Application for Review alleging that employee and employer had an enforceable agreement and the administrative law judge erred in issuing the August 2, 2006, award, as regards employer's liability. Neither employer nor the Second Injury Fund filed Applications for

Employee: Stanley Roberts

Injury No. 02-121517

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Review. The Second Injury Fund urges that the administrative law judge's award against the Second Injury Fund is supported by competent and substantial evidence.

Counsel for employee and counsel for employer testified that the parties had reached a settlement after the trial of this claim and before the administrative law judge issued his award. We conclude, therefore, that the parties entered into a settlement agreement.

Having determined there was a settlement agreement, we must now find the terms of the agreement. Employee alleges that the parties agreed to settle the matter for $\ 200,000.00 plus the amount necessary to establish a Medicare set aside trust. Employer alleges the parties agreed to settle this matter for $\ 200,000.00, inclusive of the amount necessary to establish a Medicare set aside trust.

If, as employer asserts, the parties agreed that employer would pay $\ 200,000.00, inclusive of the set aside trust, employer should have no interest in the amount necessary to fund the trust so long as it is less than $\ 200,000.00. As the above discussion indicates, employer had more than a passing interest in the funding requirement. Employer set up an employee appointment with its physician to get an updated medical report. When Medicare identified that $\ 44,000.00 was needed to fund the set aside trust, employer contacted Dr. Kennedy for a clarification so employer could convince Medicare that the amount necessary to fund the set aside trust was less than Medicare determined. Employer's efforts only make sense if employer agreed to fund the Medicare set aside trust in addition to paying the lump sum of $\ 200,000.00.

Based upon the foregoing, we find that the employee and employer agreed to the following terms to fully resolve this claim.

1. Employer will pay to employee $\ 200,000.00.
2. Employer will fund a Medicare set aside trust in an amount approved by Medicare.

Having identified the terms of the agreement made by the parties, we must determine whether to approve the settlement. Section 287.390 mandates that we approve the settlement so long as it is not the result of undue influence or fraud, employee fully understands his rights and benefits, and employee voluntarily agrees to accept the terms of the agreement. The record contains no evidence to suggest that that agreement was the result of undue influence or fraud. Employee is represented by counsel. Absent evidence to the contrary, we presume employee's counsel explained to employee his rights and benefits under the Workers' Compensation Law and under the agreement and that employee's counsel has ensured that employee's agreement is voluntary. We approve the settlement agreement entered into between employer and employee.

Employee: Stanley Roberts

Injury No. 02-121517

We have found that employee and employer entered into a settlement agreement. We have identified the terms of the agreement. We have approved the settlement agreement pursuant to $\S 287.390$ RSMo. We must now enter an award in accordance with the settlement agreement. We modify the award against employer to the following:

Employer shall pay to employee the lump sum of $\ 200,000.00.

Employer shall fund a Medicare set aside trust in an amount approved by Medicare.

We affirm the administrative law judge's award of $\ 5,441.92, from the Second Injury Fund to employee.

On or about June 5, 2007, employee filed a Motion for Change of Condition. Employer opposes the Motion for Change of Condition. Because we find that employee settled his claim against employer, we deny employee's Motion for Change of Condition.

The compensation awarded to the employee shall be subject to a lien in the amount of 25 % of all payments ordered in favor of attorney Timothy O'Mara, for necessary legal services rendered to employee.

Given at Jefferson City, State of Missouri, this $20^{\text {th }}$ day of July 2007.

LABOR AND INDUSTRIAL RELATIONS COMMISSION

William F. Ringer, Chairman

Alice A. Bartlett, Member

John J. Hickey, Member

Attest:

Secretary

Employee: Stanley Roberts Injury No.: 02-121517

Dependents: N/A Before the

Division of Workers'

Employer: City of St. Louis Compensation

Department of Labor and Industrial

Additional Party: Second Injury Fund Relations of Missouri

Jefferson City, Missouri

Insurer: Self-Insured

Hearing Date: April 25, 2006 Checked by: JED:tr

1. Are any benefits awarded herein? Yes
2. Was the injury or occupational disease compensable under Chapter 287? Yes
3. Was there an accident or incident of occupational disease under the Law? Yes
4. Date of accident or onset of occupational disease: October 15, 2002
5. State location where accident occurred or occupational disease was contracted: City of St. Louis
6. Was above employee in employ of above employer at time of alleged accident or occupational disease? Yes
7. Did employer receive proper notice? Yes
8. Did accident or occupational disease arise out of and in the course of the employment? Yes
9. Was claim for compensation filed within time required by Law? Yes
10. Was employer insured by above insurer? Yes
11. Describe work employee was doing and how accident occurred or occupational disease contracted: Claimant was passenger in large truck rollover accident.
12. Did accident or occupational disease cause death? No Date of death? N/A
13. Part(s) of body injured by accident or occupational disease: low back, neck right shoulder and right elbow
14. Nature and extent of any permanent disability: 33\% PPD of low back, 20\% PPD of left knee; SIF liability of 16 weeks
15. Compensation paid to-date for temporary disability: $\ 18,678.00
16. Value necessary medical aid paid to date by employer/insurer? \$97,211.34

Employee: Stanley Roberts Injury No.: 02-121517

1. Value necessary medical aid not furnished by employer/insurer? None
2. Employee's average weekly wages: Unknown
3. Weekly compensation rate: $\$ 566.00 / \ 340.12
4. Method wages computation: Stipulation

COMPENSATION PAYABLE

1. Amount of compensation payable:

164 weeks permanent partial disability benefits from Employer \$55,779.68

1. Second Injury Fund liability:

16 weeks from the SIF 5,441.92

TOTAL: $\quad \ 61,221.60

1. Future requirements awarded: None

Said payments to begin immediately and to be payable and be subject to modification and review as provided by law.

The compensation awarded to the claimant shall be subject to a lien in the amount of 25 % of all payments hereunder in favor of the following attorney for necessary legal services rendered to the claimant:

Timothy O'Mara

Employee: Stanley Roberts

Injury No.: 02-121517

Dependents: N/A

Before the

Director: City of St. Louis

Division of Wor