Opinion
I.C. NO. 475806.
Filed 3 April 2002.
This matter was reviewed by the Full Commission on 2 November 2001 upon appeal of defendants from an Opinion and Award by Deputy Commissioner Amy L. Pfeiffer filed on 16 July 2001.
Plaintiff: Ganly Ramer Strom, Asheville, North Carolina; Thomas F. Ramer, appearing.
Defendants: Hedrick Eatman Gardner Kincheloe, Charlotte, North Carolina; L. Kristin King, appearing.
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The undersigned have reviewed the prior Opinion and Award based upon the record of the proceedings before Deputy Commissioner Pfeiffer and the briefs and oral arguments before the Full Commission. The appealing party has shown good ground to reconsider the evidence. The Full Commission reverses the Deputy Commissioner's Opinion and Award and enters the following Opinion and Award.
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The Full Commission finds as fact and concludes as matters of law the following, which were entered into by the parties as:
STIPULATIONS
1. The parties are subject to and bound by the provisions of the North Carolina Workers' Compensation Act.
2. An employment relationship existed between plaintiff and defendant-employer.
3. Lumbermans Mutual Casualty Company was the carrier on the risk for workers' compensation purposes.
4. Plaintiff's average weekly wage was $225.00 per week. This wage yields a compensation rate of $150.01.
5. Plaintiff sustained an admittedly compensable injury by accident arising out of and in the course of his employment to his back on 5 August 1994.
6. Plaintiff was diagnosed with a herniated disc at L5-S1, and on 7 October 1994 he underwent surgery performed by Dr. Steward Harley. Plaintiff was thereafter released from care with a 10% permanent partial impairment rating. Plaintiff was also released to return to work as a truck driver. Dr. Harley prescribed a corset and recommended plaintiff use a pillow when driving his truck.
7. On or about 7 February 1995, plaintiff and defendants entered into an agreement to settle plaintiff's workers' compensation claim. Attorney Anthony T. Lathrop was retained by defendants to draft a Compromise Settlement Agreement. On 14 February 1995, plaintiff, who was not represented by legal counsel, signed this agreement. The agreement was approved by the Industrial Commission on 2 March 1995, and plaintiff received compensation in the amount of $10,000.00 pursuant to the approved agreement.
8. Plaintiff thereafter retained legal counsel. On 27 February 1997, plaintiff's counsel filed a Motion to Set Aside the Compromise Settlement Agreement. Plaintiff's counsel also filed a request for a hearing claiming a change of condition.
9. On 5 September 1997, plaintiff's counsel deposed then-Special Deputy Commissioner Ronnie E. Rowell of the North Carolina Industrial Commission. A copy of the deposition transcript is a part of the Industrial Commission file in this matter, and is made a part of the evidentiary record in this case.
10. On 3 December 1997, Deputy Commissioner Kim L. Cramer heard this case in Franklin. Upon agreement of the parties, the hearing was limited to the sole issue of whether the compromise settlement agreement could be set aside. At the hearing, plaintiff's counsel moved for production of the insurance carrier's claim file and for permission to call Anthony Lathrop, former defense counsel, as a witness. Defendants objected to plaintiff's motions. Thereafter, plaintiff's counsel wrote to Deputy Commissioner Cramer on 15 December 1997, and made a motion to compel the production of additional evidence.
11. On 11 June 1998, Deputy Commissioner Cramer entered an order denying plaintiff's motion to take Anthony Lathrop's testimony and further denying plaintiff's motion for production of the claim file. Plaintiff had also made an alternative motion for voluntary dismissal of the claim without prejudice. Deputy Commissioner Cramer also denied this motion in the 11 June 1998 order.
12. On 8 October 1998, Deputy Commissioner Cramer entered an order dismissing plaintiff's claim. The order stated that, "[u]pon further consideration," the deputy commissioner was of the opinion that plaintiff's motion for a voluntary dismissal should be allowed.
13. Plaintiff's counsel filed a Form 33 on 12 November 1998 to request a hearing in the matter. Defendants retained attorney L. Kristin King as counsel.
14. This case was scheduled to be heard by Deputy Commissioner Mary Moore Hoag in Sylva on 15 April 1999. The parties entered into a pretrial agreement dated 6 April 1999. That pretrial agreement is incorporated by reference into the evidentiary record in this case. Deputy Commissioner Hoag continued this case from the 15 April 1999 hearing calendar.
15. Defendants filed a motion to bifurcate the proceedings. On 8 September 1999 Deputy Commissioner Hoag entered an order granting defendants' motion for a bifurcation of the proceedings. It was ordered that the case would be placed on the next available docket and that the issues would be limited to: (1) whether the compromise settlement agreement approved by the Commission on 2 March 1995 should be set aside for the reasons set forth in Vernon v. Mabe, 366 N.C. 425 (1994); (2) whether the compromise settlement agreement approved by the Commission on 2 March 1995 should be set aside pursuant to N.C. Gen. Stat. § 97-17; and/or (3) whether defendants are entitled to attorney's fees pursuant to N.C. Gen. Stat. § 97-88.1.
16. This case then appeared on the hearing calendar of Deputy Commissioner Stephen T. Gheen for 14 November 2000 in Murphy. This case was continued from this hearing docket.
17. Deputy Commissioner Amy L. Pfeiffer then scheduled this case for hearing in Franklin on 23 January 2001. The parties, however, agreed that a hearing was not necessary, and that the parties could instead stipulate to certain facts and evidence in lieu of taking testimony at a hearing. The parties agreed to take the testimony of Anthony Lathrop by deposition, which took place on 6 February 2001.
18. The parties have stipulated into evidence in this matter the following: all forms (Forms 19, 33, and 33R, the latter two of which were previously marked as stipulated exhibits 7 and 8) and orders of the North Carolina Industrial Commission (specifically, the orders entered by the Commission on 11 June 1998, 8 October 1998, and 8 September 1999); the Agreement of Final Settlement and Release (previously marked as stipulated exhibit 2); all correspondence between the parties relating to the Agreement of Final Settlement and Release (previously marked as stipulated exhibits 4 through 6); the Order Approving Compromise Settlement Agreement (previously marked as stipulated exhibit 3); all exhibits admitted into evidence at the 3 December 1997 hearing (stipulated exhibits 1 through 9); the pretrial agreement entered into by the parties on 6 April 1999; plaintiff's motion to set aside the compromise settlement agreement dated 27 February 1997; the deposition transcripts of Ronnie E. Rowell and Anthony T. Lathrop, and all medical records that were in existence at the time of the approval of the compromise settlement agreement (previously marked as stipulated exhibit 1). In addition, the testimony taken at the 3 December 1997 hearing of plaintiff and of adjuster Robert R. Thompson is incorporated into the record.
19. The issues to be determined by the Full Commission are whether the compromise settlement agreement should be set aside, and whether defendants are entitled to sanctions pursuant to N.C. Gen. Stat. § 97-88.1.
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The Full Commission rejects the findings of fact found by the Deputy Commissioner and finds as follows:
FINDINGS OF FACT
1. Plaintiff sustained an admittedly compensable injury by accident to his back on 5 August 1994. Plaintiff was 33 years old at the time of the injury.
2. Plaintiff was treated by Dr. Stewart T. Harley, an orthopedic surgeon, who diagnosed a herniated disc at L5-S1. On 7 October 1994, Dr. Harley performed a microlumbar discectomy at L5-S1 on the right with decompression of the S1 nerve root.
3. On 11 January 1995, Dr. Harley assessed plaintiff as being at maximum medical improvement with a ten percent permanent partial impairment rating to his back on the basis of intermittent back and leg pain. Dr. Harley gave plaintiff a prescription for a corset to wear when working and advised using a pillow when driving, but did not place any work restrictions on plaintiff. Dr. Harley released plaintiff to return as needed.
4. Plaintiff attempted to return to work for defendant-employer driving a truck. Plaintiff was able to work for only three or four days and then had to stop due to pain. Defendant-employer had no other suitable jobs available for plaintiff after his unsuccessful return to work. There is conflicting testimony regarding whether or not defendant-carrier had knowledge of plaintiff's unsuccessful return to work.
5. At the time of his release from Dr. Harley's care, plaintiff was receiving weekly temporary total disability checks and those checks continued pursuant to the provisions of the Form 21 that defendants previously sent to plaintiff. However, plaintiff contacted Robert R. Thompson, Branch Claims Manager for Kemper Insurance Companies, and stated that he was having a difficult time living off his weekly benefit check. In response to plaintiff's statement, Mr. Thompson offered to pay plaintiff his disability rating in a lump sum under the provisions of N.C. Gen. Stat. § 97-31.
6. Mr. Thompson explained to plaintiff that the ten percent permanent partial disability rating to his back would give him $4,500.00. Plaintiff refused this amount but later, through negotiations with Mr. Thompson, agreed to a lump sum payment of $10,000.00 to settle his workers' compensation claim. Mr. Thompson explained to plaintiff that if they agreed upon a final settlement amount for a compromise settlement agreement plaintiff would not be entitled to any additional workers' compensation benefits, either medical or any other type of benefits. Plaintiff agreed to settle his claim for the $10,000.00 offered.
7. Mr. Thompson forwarded plaintiff's medical records and a printout showing the ongoing temporary total disability payments to plaintiff to Anthony Lathrop, attorney for defendant-carrier. Also indicated on the printout, in a handwritten note, was the total amount due for permanent partial disability, $4,500.00, and the total offer amount of $10,000.00. Apart from plaintiff's medical records, the computer printout was the only information Mr. Lathrop was provided regarding plaintiff's claim. Using this information, Mr. Lathrop drafted the compromise settlement agreement by inserting plaintiff's information into his firm's standard compromise settlement agreement language.
8. Mr. Lathrop testified that he knew that plaintiff was not working at the time that he drafted the compromise settlement agreement, but was not aware of the fact that plaintiff had attempted an unsuccessful return to work. Mr. Lathrop inserted language into the clincher which stated that plaintiff was certifying that he was not seeking partial or total wage loss. Because Mr. Lathrop used this particular language, he did not include additional provisions relating to plaintiff's age, education level and vocational history When asked by plaintiff's counsel at his deposition why he did not contact plaintiff to certify that plaintiff agreed with the language inserted in the clincher, Mr. Lathrop stated that upon receiving the agreement plaintiff signed, he assumed that plaintiff read the agreement and therefore agreed to its terms.
9. Upon completing the compromise settlement agreement, as was his law firm's custom when dealing with unrepresented claimants, Mr. Lathrop placed a red "X" on the line for plaintiff's signature. Plaintiff signed the agreement upon receipt, had it notarized as instructed by defendants, and sent it back to Mr. Lathrop.
10. After the parties executed the compromise settlement agreement, it was sent to the North Carolina Industrial Commission for review and approval. Then-Special Deputy Commissioner Ronnie E. Rowell reviewed the agreement and the attached medical records. Based on this information, Special Deputy Commissioner Rowell recommended to the Executive Secretary that the agreement be approved.
11. In his deposition testimony, Special Deputy Commissioner Rowell detailed the process used by the Commission for reviewing compromise settlement agreements. He stated that in this particular case, and as usual in every case that he reviewed, he started with the information provided in the compromise settlement agreement. Next, he reviewed the documentation contained in the Industrial Commission file, including any Industrial Commission forms. Finally, Mr. Rowell examined the medical records submitted with the agreement. Mr. Rowell indicated that he used a checklist that included information such as the age of the claimant, his or her work status, the average weekly wage, compensation rate, any rating information pursuant to N.C. Gen. Stat. § 97-31, and some information about the offer pursuant to the settlement including the consideration amount over the rating, any information relating to whether there are any unpaid medicals and whether or not they will be paid as part of the settlement.
12. Special Deputy Commissioner Rowell testified that he thoroughly reviewed all of the information submitted with the compromise settlement agreement and the entire Commission file. He noted that the medical records indicated that plaintiff was released to return to work with a ten percent permanent partial disability rating to his back. Based on his knowledge that plaintiff was 33 years old and had been released to a manual labor job, Mr. Rowell stated that he felt that the terms of the agreement were fair and complied with the requirements of Rule 502. Additionally, Mr. Rowell stated that he was comfortable with the offer of $10,000.00 in the case which was over twice the amount plaintiff was entitled to receive under N.C. Gen. Stat. § 97-31.
13. The Full Commission does not find plaintiff's pursuit of this claim to be based upon stubborn, unfounded litigiousness.
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Based upon the foregoing stipulations and findings of fact, the Full Commission concludes as follows:
CONCLUSIONS OF LAW
1. A compromise settlement agreement cannot be set aside absent a showing of error due to fraud, misrepresentation, undue influence or mutual mistake. N.C. Gen. Stat. § 97-17. The record contains no evidence of any fraud, undue influence or mutual mistake. Rather, plaintiff bases his request to set aside the compromise settlement agreement on misrepresentation. The essential elements of misrepresentation are: (1) false representation or concealment of a material fact; (2) reasonably calculated to deceive; (3) made with the intent to deceive; (4) which does in fact deceive; (5) resulting in damage to the injured party. 15 Strong's N.C. Index 4th, Fraud, Deceit, and Misrepresentation § 7 (1992).
2. In the present case, plaintiff contends that defendants committed misrepresentation upon both plaintiff and the Commission. Specifically, plaintiff argues that defendants misrepresented to plaintiff the fact that he may have been entitled to elect a more favorable remedy, such as ongoing temporary total disability compensation benefits. The record is unclear whether Mr. Thompson, the claims manager, had knowledge of or understood what additional benefits plaintiff, under certain fact situations, might have been entitled to receive. Plaintiff also argues that defendants misrepresented to the Commission that plaintiff had certified that he was not seeking partial or total wage loss benefits. The actions or inactions by defendants do not rise to the level of misrepresentation. First of all, there is no proof of the essential element of intent to deceive either plaintiff or the Commission on the part of any agent of defendants. Additionally, the courts have not imposed a duty on insurance adjusters or defense attorneys to explain all possible options to an unrepresented plaintiff. Therefore, there is no basis for a claim for misrepresentation by defendants.
3. When a compromise settlement agreement is submitted for review and approval to the Industrial Commission, the Commission has an obligation to act in a judicial capacity and thereby to undertake a full investigation to determine that the terms of the settlement agreement are fair and just to plaintiff. Vernon v. Steven L. Mabe Builders, 336 N.C. 425, 444 S.E.2d 191 (1994); Caudill v. Manufacturing Co., 258 N.C. 99, 128 S.E.2d 128 (1962). In this particular case, the Special Deputy Commissioner acted in a judicial capacity and made a full investigation in reviewing the agreement submitted by the parties.
4. Plaintiff's pursuit of this claim was not unreasonable. N.C. Gen. Stat. § 97-88.1; Sparks v. Mountain Breeze Restaurant, 55 N.C. App. 663, 286 S.E.2d 575 (1982).
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Based on the foregoing findings of fact and conclusions of law, the Full Commission enters the following:
ORDER
For the reasons set forth herein, plaintiff's claim to set aside the compromise settlement agreement approved by the Industrial Commission on 2 March 1995 in the above-captioned case is HEREBY DENIED.
This the _____ day of January 2002.
S/_____________________________ LAURA KRANIFELD MAVRETIC COMMISSIONER
CONCURRING:
S/_____________________________ BUCK LATTIMORE CHAIRMAN
DISSENTING:
S/_____________________________ THOMAS J. BOLCH COMMISSIONER
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In my view the actions of the insurance adjuster and the carrier's attorney amounted in law to misrepresentation both to the employee and to the Industrial Commission. Since what amounts to misrepresentation under N.C. Gen. Stat. § 97-17 is a question of law rather than of fact, the action of the majority is fully reviewable by the Court of Appeals.
The plaintiff was 33 years old, had completed the 6th grade and was not able to read or write. On August 15, 1994, plaintiff sustained an injury by accident arising out of and in the course of his employment when he was lifting a bulldozer blade to change it to another angle and strained his lower back. At the time of the incident the employee worked as a logger at an average weekly wage of $225 which yields a compensation rate of $150.
Subsequent to the date of injury the defendant carrier began payment of TTD benefits to plaintiff and forwarded an Industrial Commission Form 21 to plaintiff who testified he did not understand what to do with it and therefore did not execute it. Subsequent to submitting the Form 21 to plaintiff, defendant carrier did not inquire nor follow-up regarding execution or submitting of the agreement to the Commission. Defendants failed to file the Form 21 Agreement to Pay Compensation with the Industrial Commission.
Plaintiff was initially evaluated by Dr. Paul Pfleuger of Sylva, North Carolina who diagnosed him with a herniated L5-S1 disk and ordered a myelogram. Dr. Pflueger subsequently referred plaintiff to Dr. Stewart Harley a spine specialist in Asheville. Dr. Harley initially tried conservative care and subsequently performed a lumbar diskectomy at L5-S1 on the right with decompression of the S1 nerve root on October 7, 1994. Dr. Harley continued to follow-up with plaintiff's care and on reexamination on November 21, 1994 Dr. Harley noted plaintiff was doing very well with some occasional pain in his back especially when driving for long periods of time. Dr. Harley reported that plaintiff "does have his job available, that of truck driving, when his back is better . . . we will have him return to his job the second week of January 1995".
On January 11, 1995 Dr. Harley stated plaintiff has reached maximum medical improvement and opined he retained a 10% permanent partial impairment rating to his back. Dr. Harley also noted that Mr. Blevins "has some intermittent lower back pain, it usually last two or three days with associated pain in his leg, but this is intermittent also . . . attimes the pain is quite severe in his leg but he seems quite comfortable today and is moving around quite freely." Dr. Harley then recommended work precautions of "a corset to wear when he works and was told to use a pillow when he is driving his truck" and was released to return as needed.
Thereafter, Mr. Blevins attempted unsuccessfully to return to work for three to four days for the defendant/employer but had to stop due to increasing pain in his back. Defendant employer then informed plaintiff they had no work available which he could perform within his abilities.
After his unsuccessful attempt to return to work plaintiff was contacted by the Mr. Robert Thompson, claims manager for the carrier, to discuss payment of his impairment rating and closing his claim. During these conversations the plaintiff informed Mr. Thompson the employer did not have any suitable work available to the plaintiff and that he could not read or write. Mr. Thompson failed to contact the employer to determine what work, if any, was available for the plaintiff.
Robert Thompson, claims manager for the defendant carrier, testified at the hearing he did not recall Mr. Blevins informing him that he could not read or write. However, Mr. Thompson did not deny such conversation. Mr. Thompson also testified several times he "did not recall" any conversation with the plaintiff where Mr. Blevins notified him that Mr. Blevins had attempted to return to work 3 or 4 days but was unable to do so because of his continuing back problems. However, Mr. Thompson later admitted he was aware that plaintiff had not returned to work and further admitted Mr. Blevins had in fact informed him "that Mr. Millsaps didn't have any work for him."
During these conversations with Mr. Thompson the plaintiff was advised he was only entitled to $4,500 for his impairment rating and told "That's all they could give me on my back." Plaintiff then asked if that was all his back was worth at which point "they told me I could get $10,000." Plaintiff also contends he reported to the carrier that he was not able to read or write. Based on this conversation plaintiff testified he was advised they would send him an agreement to sign with a big red X marked on it which he should sign, have notarized and return to them.
Mr. Thompson admitted he was aware that because suitable work wasn't available plaintiff may be eligible for continuing temporary total disability benefits. When asked if he discussed with Mr. Blevins his rights to ongoing temporary benefits versus payment for his permanency, Mr. Thompson responded he only "informed Mr. Blevins that he was entitled to permanent partial disability benefits."
Upon receipt of the settlement agreement, the plaintiff followed the carrier's instructions by executing it at the big red X and having it notarized by the "tag woman."
Mr. Thompson was specifically asked about how the language that the plaintiff was "was not seeking partial or total wage loss" happened to get into the settlement agreement, to which he responded he did not know. He was then asked:
A. Did you discuss with him [Mr. Blevins] that he would need to certify he was not seeking partial or total wage loss as a result of his injury?"
A. No, I did not.
Accordingly, there was no discussion or agreement by the parties as to plaintiff's waiver of his rights to partial or total wage loss although the Compromise Settlement Agreement falsely misrepresented that there was.
Subsequent to the telephone conversations between the claims manager and the plaintiff, the file was transmitted to the carrier's attorney for preparation of a clincher agreement. The carrier's attorney testified that he did not receive any written or oral instructions for preparation of the clincher agreement.
On the issue of the unsuccessful return to work the carrier's attorney was asked:
Q. Before you prepared the agreement were you aware that Mr. Blevins had unsuccessfully returned to work?
A. No, I don't remember if I was.
In preparation of the clincher agreement the carrier's attorney did not attempt to comply with Rule 502 (2) (h) of the Industrial Commission and summarize Mr. Blevins's age, educational level and vocational experience. He explained he did not do this because "I inserted in the clincher that paragraph that states he certifies he is not seeking partial or total wage loss." He then was asked "Who told you to insert the provisions that Mr. Blevins was certifying he is not seeking partial or total wage loss?" He responded "Nobody." Thus it is undisputed that the carrier's attorney unilaterally inserted a new term into the agreement without the consent of Mr. Blevins, or without notifying him in the transmittal letter of such change.
The clincher agreement also stated the "Employer hereby certify that they have supplied the N.C. Industrial Commission copies of all vocational, medical and nursing rehabilitation reports, opinions andinformation relative to the employee which Employer or Insurer now have knowledge of or in their possession." This is a misrepresentation as the insurance carrier was aware that plaintiff had unsuccessfully attempted to return to work, and that the employer could not provide any suitable work to the plaintiff. This is "information relative to the employee" which the insurer had in its possession that was not provided to the Industrial Commission.
The clincher agreement was submitted to then Special Deputy Commissioner Ronnie Rowell who indicated he reviewed the medical records and he was also aware that the plaintiff was receiving benefits but no Form 21 agreement had been filed with the Commission. Deputy Rowell also reviewed the medical records including the January 11, 1995 note indicating plaintiff was released with a 10% impairment rating, given a prescription to wear a corset while working, and a recommendation to utilize a pillow while driving a truck.
Deputy Commissioner Rowell stated he did not consider continuing § 97-29 benefits or § 97-30 partial disability benefits and did not feel the need to "call this particular claimant" because he had reached MMI, was rated released to return to work, and had a job to go back to. [which was specifically not true and known to the defendants but not communicated to Deputy Commissioner Rowell] He further stated there was nothing in the medical records or material provided by the defendants "that speaks to a not return to work status . . . I did have a note that he was apparently doing some logging business which to me indicates, you know, some manual type of labor."
Deputy Commissioner Rowell again repeated "based on what I had before me at the time there was nothing that indicated to me or was a red flag to me that the person was incapable of returning to work."
Deputy Commissioner Rowell also stated if he knew Mr. Blevins had not returned to work coupled with the notes from Dr. Harley indicating continuing pain in his back, at times which was noted to be severe, and the fact that no Form 21 agreement "would have been a concern . . . . as to a concern, if I was representing this person it would have been a concern for me.
Deputy Commissioner Rowell further stated "if there is something in the medicals or something that I saw that indicated the person had the right to § 97-30, § 97-29 entitlement, then I think that coupled with a no return to work would have been, probably rose to the level that I would have called the individual at that time, especially since he was unrepresented."
The law is well established that once a compromise settlement agreement is approved by the Industrial Commission it may not be set aside "unless it shall be made to appear to the satisfaction of the Commission that there has been error due to fraud, misrepresentation, undue influence or mutual mistake of fact." N.C. Gen. Stat. § 97-17.
In this case Deputy Commissioner Pfeiffer made Conclusion of Law No. 3 which ruled "defendants misrepresented to the plaintiff that he may have been entitled to elect a remedy that would be more favorable to him, such as ongoing temporary total disability benefits" and the plaintiff relied on to his detriment, and justify setting aside this clincher agreement.
As to the first conclusion there is no dispute the claim manager called plaintiff to discuss payment of the impairment rating, which was equal to $4,500. First, plaintiff specifically ask the claims manager "is that all I can get?" Even though aware that plaintiff had attempted to return to work and was unsuccessful due to increased pain, and was further aware the employer could not provide suitable work Mr. Thompson failed to advise plaintiff of his right to draw continuing temporary total disability benefits. Mr. Thompson admitted he was aware the plaintiff may be eligible for continued TTD benefits, however, he specifically testified he informed the plaintiff he was entitled to a second opinion. Such a declaration to the plaintiff was false, misleading and a misrepresentation to the plaintiff.
The carrier again misrepresented the agreement to the plaintiff when Mr. Thompson informed Mr. Blevins he would pay $10,000 and he would send some paper for him to sign. However, he specifically failed to discuss this was a final compromise of plaintiff's future rights, or that plaintiff was certifying he was not seeking partial or total wage loss. By his own admission Mr. Thompson at no time discussed waiver of future rights to continued TTD or TPD. Mr. Thompson specifically stated:
Q. Did you discuss with him that he would need to certify he was not seeking partial or total wage loss as a result of his injury?"
A. No, I did not.
Mr. Thompson was then asked if he could explain how this provision was included in the clincher agreement. He indicated "I do not know."
Mr. Thompson honestly did not know because there was no discussion with plaintiff about complete compromise of his claim, or waiver of his future rights. If, as defendants contend, plaintiff was fully advised by Mr. Thompson of his rights and he voluntarily agreed to waive his future rights, then Mr. Thompson would know how and why this statement was in the agreement. He would have simply stated because that is what we discussed and Mr. Blevins agreed to. However, Mr. Thompson did not state that. Mr. Thompson's response specifically refutes defendants' claim that Mr. Blevins made an informed decision and confirms Deputy Commissioner Pfeiffer's finding of facts and conclusions of law that defendants misled plaintiff.
Because of this misrepresentation Mr. Blevins was not aware he was electing a lump sum compromise settlement, including waiver of his future rights. Accordingly, he was not permitted to make an informed election of remedies which the Supreme Court has held is required. Therefore, Deputy Commissioner Pfeiffer did not commit error in setting aside the clincher agreement on this ground.
Deputy Commissioner Pfeiffer, in Conclusion of Law No. 4, ruled "defendants misrepresented to the Commission that plaintiff had certified that he was not seeking partial or temporary wage loss benefits" based on the failure of the parties to discuss such essential term of the clincher agreement. As set forth hereinabove, by the admission of defendants' own claims manager, there was absolutely no discussion of this term of the agreement. Mr. Thompson mentioned plaintiff's right to a second opinion and his right to permanent partial disability. However, contrary to the defendants' assertion in the clincher agreement, there was never a discussion of plaintiff's waiver of his rights to future TTD or TPD.
Failure of the parties to agree on this term should have triggered the requirements of Industrial Commission Rule 502 (2) (g) and (h) which required defendants to summarize in the agreement "the employee's age, educational level, past vocational training, past work experience, and any impairments, emotional, mental or physical." However by asserting to the Commission that plaintiff waived his future TTD and TPD defendant mislead the Commission into believing compliance with Rule 502 (2) (g) and (h) was not necessary.
In preparation of the clincher agreement the carrier's attorney did not attempt to comply with Rule 502 (2) (h) and summarize Mr. Blevins's age, educational level and vocational experience. He explained he did not do this because "I inserted in the clincher that paragraph that states he certifies he is not seeking partial or total wage loss." However, when asked "Who told you to insert the provisions that Mr. Blevins was certifying he is not seeking partial total wage loss?" He responded "Nobody." Mr. Lathrop's admission further supports the deputy's conclusion that Mr. Lathrop unilaterally inserted a new term into the agreement without the consent of Mr. Blevins, or Mr. Thompson, which fact was not communicated to the Commission.
Accordingly, Deputy Commissioner Pfeiffer's Conclusion of Law No. 3 and 4 are supported by not only the testimony of Mr. Blevins, but also the admissions of Mr. Thompson and the carrier's attorney and should be affirmed.
Defendants have taken exception to Deputy Commissioner Pfeiffer's Finding of Fact No. 13 which states "in addition, despite the adjuster having actual knowledge that plaintiff had unsuccessfully attempted to return to work, and that the defendant-employer had no other suitable employment available for plaintiff, the adjuster did not impart this information to counsel. Accordingly, this significant piece of information was absent from the terms and provisions of the compromise settlement agreement."
This finding of fact is based on the defendants misrepresentation to the Commission that they "certify that they have supplied the N.C. Industrial Commission copies of all vocational, medical and nursing rehabilitation reports, opinions and — information relative to the employee, which Employer or Insurer now have knowledge — or in their possession."
Robert Thompson, the claims manager, admitted he was aware Mr. Blevins had unsuccessfully attempted to return to work, and that the employer could not provide work suitable to his capacity. He further admitted he knew the plaintiff might have been eligible for continuing TTD benefits until he returned to work. In spite of this "information relative to the employee" which the insurer did "have knowledge of," this relevant information was not "supplied to the N.C. Industrial Commission." As Deputy Commissioner Rowell testified, if he was aware of the unavailability of a job or the inability to work he would not have approved the agreement.
Pursuant to N.C. Gen. Stat. § 97-17 the Compromise Settlement Agreement must be set aside.
This 22nd day of March 2002.
S/_____________________________ THOMAS J. BOLCH COMMISSIONER