Can I Re-Open My Workers Compensation Claim Once It Is Settled?

Can I re-open my workers Compensation claim once it is settled?

The answer may be yes depending on whether you left your Workers Compensation case open or you closed it. Even if you have closed it, there may be a limited number of situations where you may be able to re-open the settled case. This Article only deals with the situation where the case is allegedly closed. Please see the Article entitled for re-opening cases that are left open.

There are several scenarios where an injured party may think it is too late but still have time to change their mind on a case that they believe is closed.

  1. All parties have agreed to settle the case sometimes having even put the agreement on the record, but the parties have not executed the settlement agreement that is to be approved by the workers compensation commission.

Safeway Stores v. Altman, 296 Md. 486, 463 A.2d 829. In that case, Safeway, the employer, appealed a determination by the Commission that Altman, the employee, had sustained an accidental injury on the job. 296 Md. at 487, 463 A.2d 829. Shortly before trial, the parties entered into an oral settlement agreement that was to be reduced to writing and submitted to the commission. As a result, the trial was postponed. After learning that future medical expenses were not going to be paid by her husband’s employer, Altman changed her mind about going through with the settlement and refused to sign the written agreement. 296 Md. at 488, 463 A.2d 829. Altman v. Safeway Stores, 52 Md. App. 564, 571, 451 A.2d 156 (1982). This Court held that there was not a binding agreement due to a lack of a meeting of the minds of the parties. 296 Md. at 489, 463 A.2d 829. Since the required approval of the Commission had not been obtained, “the right to enforce the proposed agreement did not exist.”.

  1. All parties have agreed to settle the case and all parties have signed the settlement agreement.

Maryland Labor and Employment code annotated section 9-722

(a)  In general. —  Subject to approval by the Commission under subsection (c) of this section, after a claim has been filed by a covered employee or the dependents of a covered employee, the covered employee or dependents may enter into an agreement for the final compromise and settlement of any current or future claim under this title with:

    • (1)  the employer;
    • (2)  the insurer of the employer;
    • (3)  the Subsequent Injury Fund; or
    • (4)  the Uninsured Employers’ Fund.

(b)  Contents. —  The final compromise and settlement agreement shall contain the terms and conditions that the Commission considers proper.

(c)  Approval. —  A final compromise and settlement agreement may not take effect unless it has been approved by the Commission.

(d)  Effect. —

    • (1)  When approved by the Commission, a final compromise and settlement agreement is binding on all of the parties to the agreement.
    • (2)  Unless the Commission orders otherwise, a final compromise and settlement agreement between a covered employee or the dependents of a covered employee and the employer or its insurer precludes the right of the covered employee or the dependents of the covered employee to proceed against the Subsequent Injury Fund on the claim.

(e)  Survival of right to payment. —  If an individual entitled to payment under a final compromise and settlement agreement dies before the individual receives the total amount payable, the balance payable is an asset of the estate of the individual.

Frank Joy Company v. Issac 333 Md. 628, 636 A.2d. 1016 (1994)

Thus, any payments to an injured worker cannot be demanded under the terms of the agreement until the Commission puts its imprimatur on what was negotiated and agreed upon by the parties. That does not mean, however, that the parties have total freedom to renege a valid bilateral agreement they have formally submitted for Commission approval in compliance with the Act. When they present a duly executed settlement agreement to the Commission, the parties thereby relinquish control of the matter to the supervisory powers, authority, and discretion bestowed upon the Commission. Then a party, acting unilaterally, does not have unfettered license to withdraw what that party has submitted in good faith.

A party becoming unhappy with the agreement negotiated, however, and desiring to forgo it, is not without hope. At the hearing to determine the approval of the agreement, the discontented party may attempt to establish to the satisfaction of the Commission that there is good cause for complete withdrawal by that party from the agreement, or urge that the Commission exercise its discretion to modify, strike, or add certain provisions to satisfy the party’s objections. Of course, the party happy with the agreement may argue that the agreement be approved. If the final result is that the agreement ends up with terms and conditions that the Commission considers proper and in the best interest of the employee, the Commission may exercise its discretion to approve the agreement; otherwise, the Commission may exercise its discretion to disapprove it. If it is approved, it is effective and binding on all of the parties to the agreement; if it is disapproved, it is not effective and may not be enforced. What a party may not do is flout the legislative intent by unilaterally removing a settlement agreement from the supervisory powers of the Commission once the agreement has been formally submitted by the parties to the Commission for approval.

  1. Settlement has already been signed by all parties, submitted to the workers Compensation Commission and has been approved within the last 15 days.

A petition for rehearing could be filed asking the Workers Compensation Commission to have a new hearing on whether the settlement agreement should be approved.

  1. Settlement has already been signed by all parties, submitted to the workers Compensation Commission and has been approved and more than 15 days has passed since the agreement was approved.

This situation is the toughest type of settlement to have set aside. In most situations this settlement is going to remain in place unless you can prove one of the following, fraud, coercion, undue influence, or mutual mistake of fact. There are no Maryland appellate cases that have re-opened an approved workers compensation claim, but there are at least two cases that have entertained the possibility and then decided the proper circumstances and facts were not apparent in those cases. This leaves open the possibility that under the proper set of facts the Maryland Workers Compensation Commission and or the Maryland appellate courts would consider setting aside a full and final settlement.

In Frank Joy Company v. Issac 333 Md. 628, 636 A.2d. 1016 (1994) the Maryland Court of Appeal stated: We start with the determination that the Agreement here was a valid bilateral contract. The preamble to the Agreement declared that “the parties have reached an agreement,” and the body of the Agreement was prefaced by the statement “it is hereby agreed as follows….” …The Agreement was executed by the parties; there was no suggestion that it was tainted by fraud, coercion, undue influence, or mistake. The employer and its insurer were sophisticated parties and Isaac was represented by an attorney throughout the negotiations. All of them knew exactly what they were doing and the consequences of their action. We believe that whether the condition be deemed a condition precedent or a condition subsequent is of no consequence in the circumstances. We look outside the law of contracts and focus on the intent of the Legislature. Frank Joy Company v. Issac 333 Md. 628, 636 A.2d. 1016 (1994)

In Dyson v. Pen Mar Co. Inc., 195 Md. 107, 73A.2d 4 (1950)  a settlement was approved however after the settlement was approved there was evidence available of mutual mistake of fact in that Dr. Wilkerson’s opinion that at the time of settlement the patient had entirely recovered from the injury, except for partial deafness, was clearly in error in that he has now been diagnosed with casually connected  “traumatic encephalopathy. It was contended that there was a mistake of diagnosis, not merely one of prognosis, that would justify the setting aside of the settlement and release. The motion to set aside the settlement was ultimately denied because this evidence was not offered at the workers compensation commission level after the request to re-open but only at the Circuit Court level. The case suggests that the Court may have ruled otherwise as might have the workers Compensation Commission had they heard this testimony.

Insofar as the matter of approval or disapproval as to the terms and conditions of the agreement is left to the Commission’s discretion, there would be no issue of fact to determine. Cf. Bonner v. Celanese Corporation, 195 Md. 9, 72 A.2d 686; Allen v. Glenn L. Martin Co., 188 Md. 290, 297, 52 A.2d 605; and Bethlehem Shipyard v. Damasiewicz, 187 Md. 474, 481, 483, 50 A.2d 799. See also Bethlehem-Sparrows Point Shipyard v. Bishop, 189 Md. 147, 55 A.2d 507, 511. Moreover, the ground upon which the Commission was asked to reconsider its approval, mutual mistake of fact, 115*115 is one within the historic jurisdiction of equity, not the common-law courts where questions of fact are submitted to a jury or to the court sitting as a jury. Cf. England v. Universal Finance Co., 186 Md. 432, 437, 47 A.2d 389.

It has been held in some states that resort may be had to equity to set aside settlements approved by an Industrial Accident Commission on equitable grounds. Perkin’s Case, 278 Mass. 294, 180 N.E. 142; O’Reilly’s Case, 258 Mass. 205, 154 N.E. 851; Panozzo v. Ford Motor Co., 255 Mich. 149, 237 N.W. 369. But in U.S. Fidelity & Guaranty Co. v. Taylor, 136 Md. 545, 110 A. 883, it was clearly stated that the statutory remedy of resort to the Commission was exclusive, although the Court also found that the insurer was barred by negligence in failing seasonably to discover the alleged mistake.

In any event the question of a possible remedy in equity is not before us, and in the absence of a plenary right of appeal, the only jurisdiction that could be invoked in a court of law would be the jurisdiction to review action of the Commission claimed to be arbitrary, capricious, illegal, or unsupported by substantial evidence. Cf. Bonner v. Celanese Corporation, supra, and cases cited. We see no reason why the scope of such review may not include a lack of substantial evidence to support a refusal to set aside an award on equitable grounds. The question presented is whether the action of the Commission was arbitrary in this sense.

Dr. Wilkerson, the physician employed by the appellees, found on August 17, 1945 that the claimant’s accident resulted in “fracture base of skull. Cerebral concussion”. He was unable to state whether the injury would be permanent or how long treatment would be required. He referred the patient to Dr. Freedom, who reported on November 9, 1945, after he had left the hospital, that “in my opinion this man is suffering from a residual cerebral concussion syndrome. He will require treatment for several more months before he is able to return 116*116 to work. In the meantime he should be given plenty of sedation and rest.” He reported that the patient complained of a roaring in the left ear, some deafness and dizziness, but no pain. He found the left ear perforated. Dr. Looper, an ear specialist, in a report dated April 17, 1946, found that the claimant had sustained a 56 per cent permanent loss of hearing in the left ear. Dr. Wilkerson had also referred the claimant to Dr. Otenasek for a brain and neurological examination; the claimant went to the hospital, but did not see Dr. Otenasek and never returned. Dr. Wilkerson reported on April 17, 1946, that “clinical examination reveals that there are no residual objective findings from the injuries he suffered, except that he has a loss of hearing of 56 per cent in the left ear. It is my opinion that the patient has recovered from the injuries suffered, except for the loss of hearing in the left ear, which, in my opinion, will be permanent in nature.”

The report of Dr. Wilkerson, and presumably the other reports in the file, were before Commissioner Koon (himself an experienced physician) at the hearing on the settlement agreement. The Commissioner made it plain to the claimant that if the agreement was approved, the claimant would be forever barred and could not claim additional compensation “whether you get better or worse”. The claimant said he still “had a dizzy feeling” and was not working. Nevertheless, he stated that he wanted to settle. Mr. Aubrey, the attorney for the insurer, told the claimant the 56 per cent loss of hearing in his ear was worth about $550, and the $200 in addition was to cover any other claims. The agreement recites “the divergent views held by the respective parties as to the character and scope of said injury”. It covered all present and future claims, as permitted by the statute.

At the hearing before the Commission on the petition to reopen, it does not appear from the transcript that counsel for the petitioner produced any evidence except the testimony of the petitioner, consisting principally of statements that he still suffered from dizziness and was 117*117 unable to work. He thought his head would get better before the payments ran out, but it had not. The appellees produced Mr. Aubrey and Dr. Wilkerson; the latter reiterated his previous opinion and did not admit any mistake. It is difficult to see how the Commission could have done otherwise than to deny the petition upon this testimony.

The appellant relies strongly upon the testimony of Dr. Rubenstein, a neurologist who examined the claimant on November 21, 1946, who testified at the subsequent hearing in court that the patient had a “traumatic encephalopathy — this means brain damage on the basis of injury — with late post-concussional defects, such as, dizziness and defective sense of smell * * * a probable residuum from his post-concussion.” He had an electroencephalogram taken, which disclosed a “focus of partial inert tissue * * * on the basis of a tumor or scar tissue.” He stated that the prognosis was doubtful. It is argued that this finding shows that Dr. Wilkerson’s opinion that at the time of settlement the patient had entirely recovered from the injury, except for partial deafness, was clearly in error. It is contended that there was a mistake of diagnosis, not merely one of prognosis, that would justify the setting aside of the settlement and release, citing cases many of which are noted in Serr v. Biwabik Concrete Aggregate Co., 202 Minn. 165, 278 N.W. 355, 177 A.L.R. 1022 and 48 A.L.R. 1464. We find it unnecessary to pass upon this contention.

The evidence produced at the hearing in court could have no bearing on the question whether the Commission’s action was arbitrary. Hyman v. Tyler, 188 Md. 301, 304, 52 A.2d 610. We cannot speculate as to what the action of the Commission might have been if Dr. Rubenstein had testified before it, or if Dr. Wilkerson had admitted that his opinion was in error in the light of subsequent objective findings. The right of the Commission to review its previous order of approval does not carry with it a right in a petitioner to trial de novo in a court. We have clearly indicated that attempts to 118*118 by-pass the Commission cannot be tolerated. Hathcock v. Loftin, 179 Md. 676, 22 A.2d 479; Oxford Cabinet Co. v. Parks, 179 Md. 680, 683, 22 A.2d 481; Benoni v. Bethlehem-Fairfield Shipyard, Inc., 188 Md. 306, 309, 52 A.2d 613.

Since there was substantial evidence to support the Commission’s finding of no such mutual mistake as to require the reopening of the case, we shall affirm the judgment below.

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