Thursday, May 8, 2008

Case Update - Mediation in Workers' Compensation Claims

The North Carolina Industrial Commission began a mandatory mediation program in 1995. Since then the statistics have been pretty steady with almost 75% of all mediations ending in settlement. The current mediation related issues at the Industrial Commission mostly focus on the enforcement of mediated settlement agreements (msa) and here's a 1st quarter case update for your consideration. The main lesson as mediator is to make sure you have all the required language in the agreement and make sure it is signed!

McAllister v Wellman, Inc, IC 144769 March 2008

In this case, the parties reached a msa concerning the payment of medical expenses pre 11/16/04 in a pre Hyler claim. The case went to hearing on a claim for additional medical expenses post 11/16/04. At hearing, DC Harris approved the msa and rejected a compromise settlement agreement which included “an overreaching release of all claims . . . [which] might be construed as more expansive than the language in the mediated settlement agreement.” From a practice standpoint, you may want to explore specific release language with counsel at mediation.

Hinceman v Food Lion IC 391486 FC March 2008

The parties reached agreement at mediation for the payment of $60,000 plus payment of all related and authorized medical bills. Defendant prepared a clincher; however, claimant declined to sign. At the DC and Full Commission hearing, the Commission considered the testimony of claimant’s former counsel concerning the nature of the settlement and of counsel’s review of the settlement with claimant.

The issue of claimant’s mental capacity was also raised and the Commission considered medical testimony concerning claimant’s psychological condition and medications taken on the date of mediation. The Commission gave greater weight to Dr. Aronoff’s opinion that claimant did have “the mental competence to understand and comprehend the consequences of her actions at the mediation.”

As a result the Full Commission enforced the msa and then conducted a Rule 502 review. While post mediation medical evidence showed continued treatment; nonetheless, the Full Commission held that the settlement “was fair and just to all parties at the time the agreement was entered into.” The Full Commission explained that “The Industrial Commission may not set aside an agreement ‘merely because one party to the agreement acquired new information or evidence.’” (citing Glenn v McDonald’s, 109 N.C. App. 45 (1993))

This decision is well worth your review as it provides an excellent review of the law around mental capacity, the enforcement of msa’s per Lemly, and the “time” to be used for review as it relates to after acquired information.

Branch v Dollar Tree IC 564626 February 2008 The parties reached agreement at mediation and executed a msa. A clincher was subsequently drafted, but claimant refused to sign. Defendant requested a hearing to enforce the msa. At hearing, claimant argued that some of her medical records were missing at the time of mediation; however, DC Ledford found that since claimant did not supply additional records then there were no additional records to review. Further, DC Ledford found that claimant had received extensive medical treatment and review of her condition.

With respect to the msa, DC Ledford held that claimant understood the msa and was not coerced into signing it. Claimant’s former counsel had withdrawn; however he “thought plaintiff got a ‘good deal’ as to the amount of money paid by defendants to obtain the clincher.” The mediator prepared an affidavit which included a statement that “plaintiff actively participated in the mediated settlement conference.”

DC Ledford held that “[t]here was a meeting of the minds among the parties as to all essential terms of the agreement at the mediated settlement conference held on June 25, 2007, including the payment of medical bills. The terms set forth in the Mediated Settlement Agreement are sufficiently certain and definite, and sufficient to form a binding contract.” DC Ledford also made a number of the standard 97-17 and Rule 502 findings and enforced the msa as fair and in the best interests of all parties.

Without reviewing the msa, it is unclear from this decision whether the 97-17 and Rule 502 language was included in the msa or was incorporated by the Deputy holding. While the better practice would be to include the language in the msa, this case suggests that the Commission can also supply the needed language.

Mooring v Target Stores IC 002328 January 2008 The parties reached a msa in February 2002 and a clincher was subsequently executed and approved by the IC. Claimant continued with medical treatment, had a back fusion surgery and was found disabled by Social Security.

In November 2006, claimant requested a hearing seeking to set aside the clincher. Claimant argued that the clincher had been approved without all medical and vocational reports and records. DC Deluca agreed and held that the “failure to submit all medical records voids the Settlement Agreement.” DC Deluca also held that “Defendants have not advanced any grounds that require enforcement of the compromise settlement agreement or the mediated settlement agreement.”

It appears that the decision not to enforce the msa is based primarily on fairness and best interests as opposed to some technical defect of the msa.

Whaley v McLamb IC 548959 FC January 2008 The parties did not reach agreement at mediation, but claimant later agreed to a settlement. A clincher was drafted, but claimant declined to execute it. The claim was later denied by DC Holmes who held that no enforceable msa had been reached. On appeal, the FC, Balance, Mavretic and Scott affirmed, also holding that there was no enforceable msa. This is another case that confirms the law in this area – if you want an enforceable msa, get it in writing!


Anonymous said...

Very informative about the part about what medication what taken the day of the mediation.

Gary Javitch said...

Thanks for sharing an amazing story.
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