OPINION BY Judge COHN.

Before the Court is the question of whether the efficacy of a Workers' Compensation Compromise and Release (CR) Agreement can be attacked on the basis that a claimant was mentally incompetent to comprehend what she was agreeing to or whether such an attack is precluded by the doctrine of collateral estoppel. This is an issue of first impression, and has far-reaching consequences. Marcella Stiles (Claimant) appeals an order of the Workers' Compensation Appeal Board (WCAB) that upheld the order of Workers' Compensation Judge (WCJ) Charles A. Getty, dismissing the petition to set aside on the basis that the litigation was precluded by the doctrine of collateral estoppel.

The pertinent facts are as follows. On October 7, 1995, while employed by the Department of Public Welfare (Employer), Claimant sustained a work-related injury described as "post-concussion syndrome." As a result, she received total disability benefits pursuant to a Notice of Compensation Payable (NCP), dated October 24, 1995, with subsequent periods of partial and total disability pursuant to various supplemental agreements.

In April of 2000, Claimant's then attorney filed a petition on Claimant's behalf, seeking approval of a "Compromise and Release Agreement by Stipulation pursuant to Section 449 of the Workers' Compensation Act" (Act). This proceeding was held before WCJ Francis J. Desimone. The CR Agreement, which was approved by WCJ Desimone, was signed by Claimant, Employer, and their respective counsel. It provided that Employer would pay Claimant one final indemnity payment of $100,000.00, representing all of Claimant's future wage loss claims attributable to her October 7, 1995 work injury, but that Employer would continue to pay all reasonable and necessary medical bills related to that injury. (O.R., CR Agreement at para. 8, 10; WCJ Desimone's Findings of Fact 2.)

At the CR Agreement hearing, Claimant was questioned by her counsel, and by Employer's counsel with respect to the CR Agreement. Responding to questions posed, Claimant agreed that she understood and accepted the terms of the CR Agreement and that she had been fairly represented by her attorney. WCJ Desimone credited Claimant's testimony and specifically found that Claimant "understands the full legal significance of the Compromise and Release Agreement which she signed." (WCJ Desimone's Findings of Fact 4.) Accordingly, he approved the CR Agreement on June 2, 2000. Thereafter, Employer paid Claimant the settlement amount of $100,000.00.

Claimant did not appeal from WCJ Desimone's order approving the CR Agreement. However, in August of 2001, she filed a petition to set aside final receipt and reinstate compensation, in which she alleged that, "[a]t the time [Claimant] entered into her Compromise and Release, she was suffering from severe psychological, psychiatric and physical injuries which gave her post-traumatic stress syndrome and [she] did not understand the economic value of her claim. The agreement was totally inadequate under the circumstances and should be set aside and benefits reinstated." Employer filed a timely answer generally denying the allegations of Claimant's petition and, more specifically, averring that "Claimant received the sum of $100,000 upon approval of a Compromise and Release Agreement issued by [WCJ] Desimone on June 2, 2000. Accordingly, benefits cannot be reinstated."

The petition was assigned to WCJ Getty, who conducted a hearing on September 20, 2001. Claimant's counsel presented no evidence at that hearing but, instead, requested that Claimant's testimony be deferred until counsel could schedule a deposition from Dr. Michelle R. Arbitell, Claimant's treating psychologist. (O.R., N.T. at 4-5.) Employer's counsel submitted a copy of WCJ Desimone's June 2, 2000, decision approving the CR Agreement, as well as a signed copy of the CR Agreement. WCJ Getty admitted both submissions into the record as Judge's Exhibits #1 and #2, respectively. (N.T. at 7-8; WCJ Getty's Finding of Fact 3.) WCJ Getty then marked the matter continued for the deposition of Dr. Arbitell. (N.T. at 9.)

Shortly thereafter, by correspondence dated September 27, 2001, Employer's counsel moved for dismissal of Claimant's petition on the ground that the issue was controlled by the doctrine of collateral estoppel. In the motion to dismiss, Employer's counsel noted that, in the decision approving the CR Agreement, WCJ Desimone had specifically found that Claimant understood the full legal significance of the CR Agreement, which she had signed. Because Claimant never appealed from that decision, Employer's counsel asserted that Claimant's petition to set aside, in which she sought to prove that she did not understand the full legal significance of the CR Agreement, must be dismissed. Both parties submitted legal briefs regarding application of the collateral estoppel defense. After considering the arguments made therein, WCJ Getty concluded that Employer's motion to dismiss should be granted due to WCJ Desimone's finding that Claimant understood her decision to proceed and execute the CR Agreement and Claimant's failure to appeal from that decision. (WCJ Getty's Finding of Fact 5; WCJ Getty's Conclusion of Law 3.) Claimant appealed the WCJ's dismissal order to the WCAB, which affirmed.

Claimant now petitions this Court for review, arguing that Employer waived the right to raise the defense of collateral estoppel by failing to include it in its answer to Claimant's petition. Alternatively, Claimant argues that, even if this defense were properly raised, the doctrine of collateral estoppel does not apply here because Claimant did not have a full and fair opportunity to litigate in the underlying CR Agreement proceeding before WCJ Desimone. Her specific objections to that hearing are that (1) she was not represented by counsel of her own choosing and (2) she was not mentally capable of exercising independent judgment. Claimant reasons that because the CR Agreement procedures suffered from these alleged deficiencies, she should have been provided an opportunity, in the context of her petition to set aside, to present evidence in support of her allegations of mental incapacity.

Before addressing Claimant's arguments, we note that, although Claimant styled her pleading as a petition to set aside final receipt, this was not the proper means by which to request the relief she sought. This is because at the time a final receipt is signed, the parties acknowledge that the claimant is no longer disabled from the work-related injury. Therefore, a claimant seeking to set aside a final receipt must demonstrate by sufficient, competent, credible evidence that all disability attributable to his work-related injury had not ceased at the time of signing. Hartner v. Workmen's Compensation Appeal Board (Phillips Mine Mill, Inc.), 604 A.2d 1204 (Pa.Cmwlth. 1992), petition for allowance of appeal denied, 531 Pa. 662, 613 A.2d 1210 (1992). In this case, however, when Employer and Claimant entered into the CR Agreement, they agreed that Claimant remained totally disabled due, at least in part, to Claimant's 1995 work injury. (O.R., CR at para. 6, 16.) Thus, the circumstances here are not within the ambit of a petition to set aside. However, relief may be granted under a section of the Act different from that invoked by Claimant, provided that relief is appropriate based on the evidence presented. Hartner.

What Claimant actually seeks here is to set aside the CR Agreement approved by WCJ Desimone and, thereby, reinstate her disability benefits. In an effort to secure this relief, Claimant asserts that, contrary to representations in the Employee's Certification portion of the CR Agreement and to WCJ Desimone's Findings of Fact 4, she did not understand the full legal significance of the CR Agreement at the time she signed that document. Moreover, Claimant asserts that, contrary to her signed acknowledgement in the Employee Certification portion of the CR Agreement that she was represented by an attorney of her own choosing as required under Section 449(c)(11) of the Act, 77 P. S. § 1000.5(c)(11), that was not, in fact, the case. In actuality then, Claimant's petition is in the nature of a petition to set aside the CR Agreement pursuant to Section 413(a) of the Act, which gives the WCJ authority to set aside an agreement of the parties "if it be proved that such . . . agreement was in any material respect incorrect." 77 P. S. § 771(a).

With this in mind, we consider whether Claimant's petition was properly dismissed based upon collateral estoppel. The doctrine of collateral estoppel forecloses re-litigation of an issue of law or fact that has been finally decided when the following factors are demonstrated: (1) the legal or factual issues are identical; (2) they were actually litigated; (3) they were essential to the judgment; and (4) they were material to the adjudication. Township of McCandless v. McCarthy, 300 A.2d 815 (Pa. Cmwlth. 1973). The party against whom the plea is asserted must have been a party, or in privity to a party, in the prior action and must have had a full and fair opportunity to litigate the issue in question. Id.

Claimant argues that collateral estoppel does not apply to the question of her mental competence because that issue was not actually litigated in the proceeding before WCJ Desimone. We disagree. Under Section 449(b) of the Act, the WCJ presiding over a Compromise and Release Agreement hearing is mandated to determine that "the claimant understands the full legal significance of the agreement." Inherent in that responsibility is a requirement that the WCJ determine that the claimant is mentally competent to comprehend the legal ramifications of entering into such an agreement. This is exactly what WCJ Desimone did. In his Findings of Fact 4, WCJ Desimone specifically found that Claimant "understands the full legal significance of the Compromise and Release Agreement which she signed." Thus, Claimant's mental competence was an issue actually litigated at the hearing before WCJ Desimone. Based on this same reasoning, Claimant's mental competence was essential to the judgment approving the CR Agreement and material to the adjudication that did so. Therefore, collateral estoppel does preclude re-litigation of this question.

The next issue is whether collateral estoppel bars Claimant's contention that she was not represented by counsel of her choice. The record reflects that the CR Agreement included a section entitled "Employee's Certification," which Claimant admitted she signed. Paragraph 5 of that section of the CR Agreement states, "I have been represented by an attorney of my own choosing during this case. My attorney has explained to me the content of this agreement and its effects upon my rights." This provision was initialed by Claimant. Additionally, the record shows that at the CR Agreement hearing Claimant was specifically asked whether she was satisfied with her attorney's representation of her, to which she replied, "Yes." (N.T. 11-12.) Based on this evidence, we hold that she was precluded under collateral estoppel from re-litigating the issue of whether she was represented by counsel of her choice.

Our decision that the doctrine of collateral estoppel properly applies here is supported by strong public policy favoring voluntary settlements and finality. The importance of giving effect to the finality of a Compromise and Release settlement has been recognized by other courts. In fact, the Supreme Court of Texas rejected the notion that even a mutual mistake of fact could justify opening a Compromise and Release settlement in a workers' compensation case, observing:

[V]oluntary settlements are so favored, that if a doubt or dispute exists between parties with respect to their rights, and all have the same knowledge or means of obtaining knowledge concerning the circumstances involving those rights, and there is no fraud, misrepresentation, concealment, or other misleading incident, a compromise into which they have voluntarily entered must stand and be enforced, although the final issue may be different from that which was anticipated, and although the disposition made by the parties in their agreement may not be that which the court would have decreed, had the controversy been brought before it for decision.

Mullens v. Texas Employers' Insurance Association, 507 S.W.2d 317, 320 (Tex.Civ.App. 1974) (quoting Houston and Texas Central Railroad Company v. McCarty, 60 S.W. 429 (Tex. 1901), overruled on other grounds in Williams v. Glash, 789 S.W.2d 261 (Tex. 1990)). Unlike in Texas, this Court has declined to apply the same level of strictness. Rather, we have permitted a CR Agreement to be set aside in a situation where we perceived a mutual mistake of fact. See North Penn Sanitation Inc. v. Workers' Compensation Appeal Board (Dillard), ___ A.2d ___, (Pa. Cmwlth. No. 2115 C.D. 2003, filed, May 10, 2004). In North Penn, we stated that, "At common law, a compromise and release agreement can be set aside upon a clear showing of fraud, deception, duress or mutual mistake. . . . We see no reason why the test for setting aside releases at common law should not be applied to workers' compensation cases." (Slip op., p 11)., In addition, we have stated, "we believe that the legislature intended that a CR should be on equal footing with civil settlements, which are based on a public policy that encourages settlements and stresses finality." Stroehmann Bakeries v. Workers' Compensation Appeal Board (Plouse), 768 A.2d 1193, 1196 (Pa.Cmwlth. 2001). These important public policy concerns, i.e., encouraging settlements and promoting finality, reinforce the basis for our holding here.

Accordingly, having determined that the doctrine of collateral estoppel did prevent the setting aside of the CR Agreement, and that there are strong policy reasons that militate against allowing persons to disavow such agreements, absent circumstances such as fraud, misrepresentation, concealment, or mutual mistake of fact, which are not present here, we affirm the order of the Board, upholding the dismissal of Claimant's petition.

ORDER

NOW, July 13, 2004, the order of the Workers' Compensation Appeal Board in the above-captioned matter is hereby affirmed.