This story is reprinted with permission from FC&&S Legal, the industry's only comprehensive digital resource designed for insurance coverage law professionals. Visit the website to subscribe.
When negotiating settlements, especially in workers' compensation cases, it's the responsibility of the claimant's attorney to be sure that the client completely understands the terms of the settlement and what is and isn't included. In one recent Pennsylvania case, a workers' comp claimant challenged a settlement, asserting that she didn't understand what she was signing. But was that an accurate assertion?
|The case
Luz Mary Carmona filed a worker's compensation claim asserting that she had sustained a work injury on Feb. 7, 2014. Her employer accepted liability for a neck and low back strain.
On April 29, 2014, Carmona's employer sent a notice to her that her compensation would terminate on May 1, 2014, because she had returned to work without restrictions.
Carmona, however, said that she continued to experience pain and, on Aug. 13, 2015, her doctor determined that she was not capable of working. When she didn't return to work, her employment was terminated.
Carmona alleged that she was totally disabled by the work injury. Her employer denied the allegations in her claim petition, and the matter was assigned to a workers' compensation judge (WCJ).
At the first hearing, Carmona was the sole witness, and she testified about her work duties, her injury and her medical treatment. The WCJ then scheduled a second hearing.
At the beginning of the second hearing, several months later, the parties informed the WCJ that they had reached a settlement. In exchange for a lump-sum payment of $45,000, Carmona agreed to release her employer from all liability under the workers' compensation law. Specifically, Carmona released her employer from any liability for medical expenses related to her injury incurred after May 1, 2014.
The parties filed a petition for approval of the compromise and release (C&R) agreement, which the WCJ addressed at the second hearing. When the WCJ asked if Carmona had reviewed and signed the C&R agreement, she responded affirmatively to both questions.
On Sept. 13, 2016, the WCJ approved the C&R agreement. Crediting Carmona's testimony, the WCJ found, as fact, that she had demonstrated an understanding of the legal significance of the C&R agreement and had entered into it voluntarily.
On Oct. 26, 2016, Carmona appealed, alleging that her counsel had been deceptive about the terms of the C&R agreement and that she had not been given an opportunity to review the document. After the workers' compensation appeals board rejected her appeal, she went to court.
Among other things, she alleged that she had been directed by her counsel to sign and initial the C&R agreement where indicated; that she had been misled by her lawyer regarding her future medical expenses; that she had not learned that her employer was not responsible for paying them until one month after the C&R agreement had been approved; that her employer had agreed to pay for her future medical treatment; and that she never would have signed the agreement had she known those expenses would not be covered.
Related: 5 reasons to consider an injury-prevention and treatment program
|The court's decision
The court rejected Carmona's appeal. In its decision, the court explained that the C&R agreement specifically advised that “[n]o medical bills will be paid for dates of service after 5/1/2014”; that Carmona “releases all liability for medical benefits incurred after 5/1/2014”; that Carmona “will set aside $3,600 out of her settlement funds to be used for treatment for the work-related injury that might otherwise be covered by Medicare”; and that Carmona “feels that this is adequate to cover doctor visits, possibly some physical therapy, possibly some injections or prescriptions medications.”
Moreover, the court continued, the record did not support Carmona's contention that she did not know what was in the C&R agreement and only signed it because of her lawyer's assurances that future medical benefits would be paid. The court pointed out that:
- The WCJ asked Carmona if she had time to review the C&R agreement before she signed it, and she responded “[y]es”;
- Carmona's counsel asked her “do you understand that if the judge approves this agreement, the insurance company, the workers' compensation insurance company, will not be required to pay any additional medical bills?,” and Carmona replied, “[t]hat's fine”;
- Carmona's counsel asked, “did you and I have approximately 45 minutes to go over this agreement together?,” and Carmona replied, “[c]orrect”; and
- At the conclusion of the hearing, the WCJ asked Carmona whether she understood all of the questions and if she wanted the C&R agreement approved, and she responded “[y]es, I do.”
Carmona's testimony, the court concluded, indicated that “she understood future medical benefits would not be paid.”
The case is Carmona v. Workers' Compensation Appeal Board.
Steven A. Meyerowitz, Esq., ([email protected]) is the director of FC&S Legal, the editor-in-chief of the Insurance Coverage Law Report, and the founder and president of Meyerowitz Communications Inc. This story is reprinted with permission from FC&S Legal.
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