Opinion
W.C. No. 3-934-376
October 10, 1995
FINAL ORDER
The respondents seek review of a final order of Chief Administrative Law Judge Felter (ALJ) which reopened a settlement agreement and awarded benefits. We affirm.
The ALJ's findings, insofar as pertinent to this appeal, may be summarized as follows. The claimant sustained two compensable injuries, one in February 1989, and the second in October 1989. The February injury involved the claimant's lower back and neck, and the October injury involved the claimant's neck. On March 12, 1991, the claimant entered into a "Stipulation for Final Settlement" which pertained to both injuries, and was subsequently approved by the Division of Workers' Compensation. The settlement contained a provision which states:
"The claimant realizes that he may have unknown or unanticipated injuries, disabilities, conditions or diseases or unknown or unanticipated consequences of known injuries, disabilities, conditions or diseases as a result of subject injuries. In the negotiation of this final settlement, the parties specifically considered these possibilities (see Gleason v. Guzman, 623 P.2d 378 (Colo. 1981). The Respondents have included within the final settlement the sum of ten percent (10%) or ONE THOUSAND FOUR HUNDRED DOLLARS ($1400.00) as consideration for these possibilities. Claimant accepts this sum and acknowledges and agrees that by doing so he releases and waives the right to make any kind of claim against the Respondents or their employees for any unknown or unanticipated injuries, disabilities, conditions or diseases, or unknown or unanticipated consequences of known injuries, disabilities, conditions or diseases that are a result of all claims that are the subject of W.C. # 3-934-376. This is true whether any of these things exist now or develop in the future."
The settlement agreement also contained a statement that the claimant would not be entitled to receive any additional money or benefits from the respondents except for "fraud or mutual mistake of material fact pursuant to section 8-43-204 of the Act."
The ALJ found that, subsequent to entering into the settlement agreement, the claimant was discovered to have two herniated cervical discs, as well as compression and twisting of the spinal cord. The ALJ found that these conditions were the result of the October injury, and that their existence was not known to the parties at the time of the settlement. Therefore, the ALJ reopened the settlement based on mutual mistake of material fact.
On review, the respondents make two related arguments. First, they contend that the settlement agreement contemplates that the claimant might develop unforeseen consequences of his injuries, and that, in exchange for $1,400.00, the claimant expressly waived his right to make an additional claim based on such injuries. Further, the respondents argue that the evidence does not support the determination that there was a mutual mistake of fact with respect to the claimant's condition. We disagree with these arguments.
The statute, currently codified at § 8-43-204, C.R.S. (1995 Cum. Supp.), provides that where a settlement states that a claim shall not be reopened, "such settlements shall not be subject to being reopened under any provision of articles 40 to 47 of this title other than on the ground of fraud or mutual mistake of material fact." As the claimant correctly states, we have previously held that the legal standard for adjudicating the existence of a mutual mistake of material fact is the standard for setting aside civil releases. Franklin v. Portfolio Inns, Inc., W.C. No. 3-957-460, July 30, 1993, aff'd., Portfolio Inns, Inc. v. Franklin, Colo. App. No. 93CA1386, July 28, 1994 (not selected for publication). The standard for setting aside civil releases was established by our Supreme Court in Gleason v. Guzman, 623 P.2d 378 (Colo. 1981).
In Guzman, the court indicated that a "mutual mistake of material fact" is one which relates to the "nature" of a known injury rather than a prediction about the future course and effects of the injury. However, the court also stated this distinction does not constitute a "litmus-type" test, and the existence of a mutual mistake "is essentially factual in character." Gleason v. Guzman, 623 P.2d 384. A mistake may be found where parties settle a claim without being fully informed concerning the "extent, severity and likely duration" of the injury. Gleason v. Guzman, 623 P.2d 385.
Because a finding of mutual mistake is factual in nature, we must uphold the ALJ's finding of a mutual mistake if supported by substantial evidence in the record. Section 8-43-301(8), C.R.S. (1995 Cum. Supp.). In applying the substantial evidence test, we are obliged to defer to the ALJ's resolution of conflicts in the evidence, his credibility determinations and the plausible inferences which he drew from the evidence. May D F v. Industrial Claim Appeals Office, 752 P.2d 589 (Colo.App. 1988).
The respondents' arguments notwithstanding, the record contains substantial evidence to support the ALJ's finding of a mutual mistake of material fact. As the ALJ pointed out, the claimant was treated by several chiropractors prior to the March 1991 settlement. None of these chiropractors diagnosed the disc herniations or the compression of the claimant's spinal cord. Although the claimant had continuing neck pain after the October injury, the record certainly did not compel the ALJ to conclude that the parties recognized the "extent and severity" of this condition. In fact, as the ALJ pointed out, some physicians expressed surprise at the mildness of the claimant's symptoms in view of the severity of his condition.
It is true that some evidence in the record might have supported a contrary finding and conclusion. However, we decline the respondents' invitation to substitute our judgement for that of the ALJ concerning the inferences to be drawn from the record. May D F v. Industrial Claim Appeals Office, supra.
Neither do we agree with the respondents that the provisions of the settlement agreement abrogated the claimant's right to reopen based upon mutual mistake of material fact. In fact, a similar argument was rejected in Gleason v. Guzman, supra. The court indicated that, for a "general release" to be effective against unknown injuries, "it must appear from the circumstances surrounding the transaction that such was [the releasor's] clear intention." The court went on to state that a party could not be found to have intended to release "future unknown injuries or the later consequences of known or unknown injuries where there is evidence that he was not fully aware of the basic character of the primary injury for which the release was sought and executed." Gleason v. Guzman, 623 P.2d at 387.
The same logic applies here. It cannot be contended that the claimant had the requisite "intent" to release his right to reopen for unknown injuries where there was a fundamental mistake concerning the claimant's underlying condition. Therefore, we are unpersuaded by the respondents' argument that the wording of the settlement agreement precludes reopening.
Moreover, paragraph (N) of the settlement agreement explicitly states, as it must, that the settlement is subject to § 8-43-204. Thus, the parties recognized that the claimant retained the right to reopen based upon fraud or mutual mistake of material fact, and the settlement agreement should not be construed as an attempt to abrogate the claimant's statutory right. Cf. Padilla v. Industrial Commission, 696 P.2d 273 (Colo. 1985).
We are not persuaded by the respondents' argument that "public policy" dictates a contrary result. To the contrary, we view § 8-43-204 as the General Assembly's explicit resolution of the tension between respondents' interests in finality, and claimants' interests in reopening where settlements are founded on mutual mistakes of fact. See Cary v. Chevron, U.S.A., Inc. , 867 P.2d 117 (Colo., App. 1993).
IT IS THEREFORE ORDERED that the ALJ's order, dated June 19, 1995, is affirmed.
INDUSTRIAL CLAIM APPEALS PANEL
___________________________________ David Cain
___________________________________ Kathy E. DeanNOTICE
This Order is final unless an action to modify or vacate the Order is commenced in the Colorado Court of Appeals, 2 East 14th Avenue, Denver, Colorado 80203, by filing a petition to review with the court, with service of a copy of the petition upon the Industrial Claim Appeals Office and all other parties, within twenty (20) days after the date the Order was mailed, pursuant to §§ 8-43-301(10) and 307, C.R.S. (1995 Cum. Supp.).
Copies of this decision were mailed October 10, 1995 to the following parties:
Michael Ursich, 11280 Clermont Ct., Thornton, CO 80233
Prudential Insurance Co., % The Travelers Companies, Attn: Kelly Pierce, P.O. Box 17360
Denver, CO 80217-0360
The Travelers Companies, Attn: Kelly Pierce, P.O. Box 17360, Denver, CO 80217-0360
Ralph Ogden, Esq., 1120 Lincoln St., Ste. 1306, Denver, CO 80203 (For the Claimant)
Larry Blackman, Esq. and Jordan S. Levine, Esq., 1290 Broadway, Ste. 708, Denver, CO 80203
(For the Respondents)
By: _______________________