STATE OF WISCONSIN
LABOR AND INDUSTRY REVIEW COMMISSION
P O BOX 8126, MADISON, WI 53708-8126 (608/266-9850)

RAUL HERNANDEZ, Applicant

MASCO CONTRACTOR SERVICES EAST INC, Employer

TRAVELERS PROPERTY CAS CO OF AMERICA, Insurer

WORKER'S COMPENSATION DECISION
Claim No. 2004-034423


An administrative law judge (ALJ) for the Worker's Compensation Division of the Department of Workforce Development issued a decision in this matter on June 14, 2010. No hearing was held before the ALJ; the matter was submitted to him on briefs by stipulation of the parties.

The applicant filed a timely petition for review of the ALJ's decision. The commission has considered the petition and the positions of the parties, and it has reviewed the evidence submitted to the ALJ. Based on its review, the commission makes the following:

FINDINGS OF FACT AND CONCLUSIONS OF LAW

This case arises out of a limited compromise between the parties executed in the summer of 2005. At issue is whether the employer and its insurer (collectively, the respondent) are required to pay additional medical expenses under the limited compromise, including expenses incurred after the date of the compromise.

The limited compromise stated the matters in dispute included the applicant's claim of about 11 months of temporary total disability and permanent partial disability at 22 percent, presumably to the body as a whole. The respondent's position was that the back condition for which the applicant claimed disability compensation was not the result of a work injury, based on the medical report of Dr. David Mellencamp.

After identifying those "matters in dispute" the limited compromise went on to state:

2. Matters in Dispute. ...

By virtue of the foregoing medical report, there does exist a valid dispute regarding the nature and extent of the injury. In order to compromise the existing dispute, the applicant and respondents agree to enter into this Limited Compromise Agreement in which some of their issues will be compromised. Respondents agree to pay the equivalent of 22 percent PPD to the body as a whole in the amount of $48,840.00 and a TTD payment of $13,440.00. Respondents agree to pay all past medical expenses related to the alleged work injury. Respondent also agrees to pay all future medical expenses.

By accepting this Limited Compromise Agreement, the applicant stipulates that the adjustment in handling of all the above compromised claims have been done in good faith and in a reasonable manner and the applicant further waives any claims or potential claims he may have regarding the above compromised claims.

3. Future Claims. The parties agree that this Limited compromise Agreement does not compromise future claims for benefits including, but not limited to, loss of earning capacity and vocational retraining. The respondents reserve the right to dispute causation as to future claims.

The limited compromise was approved by ALJ Roberta Arnold by order dated July 19, 2005. ALJ Arnold's order required the respondent to make the disability payments specified in the limited compromise (after accounting for the attorney fee and costs). Her order also incorporates the terms and limitations contained in the limited compromise agreement, as if set forth in the order.

After the limited compromise was approved into, the parties litigated the applicant's uncompromised claim for permanent total disability on a vocational basis for loss of earning capacity at a hearing before ALJ Janine Smiley on December 5, 2006. ALJ Smiley denied the applicant's claim for permanent total disability in a final order dated December 29, 2006, that dismissed the application with prejudice. The ALJ specifically concluded that the applicant failed to establish that he suffered a work injury. The commission affirmed by order dated October 29, 2007.

In November 2009, the applicant filed an application, seeking payment of additional medical expenses which he contends are due under the limited compromise agreement, but which the respondent has refused to pay. The respondent asserts there can be no jurisdiction under the application because the commission has already found there is no work injury and because all relevant periods for appeal and reconsideration have expired.

The commission first notes that this case differs from the normal situation where a worker seeks payment of worker's compensation--either for disability or medical expense--based on an injury he or she clams is compensable under the provisions of Wis. Stat. ch. 102. Rather, the applicant is attempting to achieve enforcement of his understanding of the limited compromise agreement. In other words, this case poses what is fundamentally a contract claim, not a disputed claim for disability.

The department and the commission have, of course, authority to set aside a compromise "or otherwise determine the rights of the parties" for up to one year after the compromise agreement is entered into under Wis. Stat. § 102.16(1). In this case, however, that one-year period had long since passed when the applicant filed his application in November 2009. The commission located no published appellate decision or other authority addressing the issue of whether it has jurisdiction to interpret and enforce compromise agreements after the one period has run, or whether it should direct the applicant to court to bring a cause of action on the contract to resolve what, again, is fundamentally a contract dispute.

While the commission recognizes the question of its jurisdiction is uncertain, it shall nonetheless take jurisdiction in this case. The department and the commission routinely examine limited compromises to determine whether issues raised in subsequent disputed claims fall within their terms. Further, the commission has authority under Wis. Stat. § 102.18(3) to consider appeals in claims awarding or denying compensation. Compensation is broadly defined under the worker's compensation statute to include all allowances, recoveries and liabilities under Wis. Stat. ch. 102. See: Wis. Stat. § 102.01(1). Arguably, a liability under a limited compromise agreement authorized under Wis. Stat. § 102.16 is a liability under ch. 102.

The next question is how the limited compromise agreement should be interpreted. ALJ Roberts' decision now on appeal suggests that the limited compromise agreement did not survive ALJ Smiley's subsequent finding that the applicant failed to establish a work injury. The commission cannot agree.

When the limited compromise agreement was entered into there was a valid dispute which provided the basis for the consideration necessary for a valid compromise. The department also approved the limited compromise by ALJ Arnold's order, as required by statute. Further, the commission has observed on numerous occasions that:

Compromises are not lightly set aside because a compromise of a worker's compensation claim under sec. 102.16 (1), Stats., encompasses qualities of comprehensiveness, finality and risk. Indeed, the supreme court has stated that "[b]y using the word 'compromise' we usually mean that we assume the risk of a mistake for which otherwise one would be entitled to a different result." C.F. Trantow v. Industrial Commission, 262 Wis. 586, 589 (1952).

Yench v. UW Oshkosh, WC Claim No. 90029552 (LIRC July 31, 1995). See also: Larry Gray v. City of Milwaukee, WC claim no. 1997-048196 (LIRC, March 28, 2005) and Franklin v. Best Buy Co., Inc., WC claim no. 1998-055330 (LIRC, October 30, 2006). Normally, the commission makes this observation in upholding compromises in situations where a worker faces an unexpected increase in disability or medical expense after compromise, but it applies with equal force to the situation in this case.

In this case, when the parties executed the limited compromise, they obviously contemplated the possibility that an ALJ might subsequently find (as ALJ Smiley ultimately did find) that a compensable injury was not proven. That the respondent would remain bound by its contract in that event is not an "absurd result," as the respondent now contends, but a risk of compromise of the nature described in Trantow.

The commission, finally, is satisfied, that the parties agreed under the limited compromise that the respondent would pay future medical expenses related to the alleged work injury. The agreement itself quite clearly so provides. The agreement does contain subsequent more general provisions that seem to conflict with that clear statement, but it is well established that when general and specific provisions of a contract conflict, the specific provision prevails. Ruppa v. American States Ins. Co., 91 Wis. 2d 628, 641-42 (1979); Isermann v. MBL Life Assur. Corp., 231 Wis. 2d 136, 153 (1999); Goldmann Trust v. Goldmann, 26 Wis.2d 141, 148 (1965).(1)

In sum, under the limited compromise, the respondent agreed to pay all future medical expenses related to the alleged work injury. The department approved that agreement and incorporated it by reference in its ALJ Arnold's order dated July 19, 2005. The respondent remains liable for those expenses, ALJ Smiley's subsequent decision notwithstanding.

The applicant requests an interlocutory order. Jurisdiction is reserved solely on issues regarding payment under the limited compromise of future medical expenses related to the alleged injury.

NOW, THEREFORE, the Labor and Industry Review Commission makes this

INTERLOCUTORY ORDER

The administrative law judge's decision dated June 14, 2010 is reversed. The employer and its insurer are liable for all future medical expenses related to the alleged work injury.

Jurisdiction is reserved solely on issues regarding payment under the limited compromise of future medical expenses related to the alleged injury.

Dated and mailed:  January 31, 2011
hernand:wrr:101:1  ND6 11.3, 11.5, 11.6 

 

BY THE COMMISSION:

/s/ James T. Flynn, Chairperson

/s/ Robert Glaser, Commissioner

/s/ Ann L. Crump, Commissioner

cc: Attorney Aaron Halstead
Attorney Joseph Danas


Appealed to circuit court.  Affirmed February 1, 2012.  Appealed to court of appeals.

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Footnotes:

(1)( Back ) The court of appeals has held that "[i]f possible, contradictory statements in a contract must be harmonized; but where it is impossible to give meaning to both parts, the court must determine which is to be given effect." Isermann v. MBL Life Assur. Corp., at 231 Wis. 2d 154. The commission gives effect to the more specific statement in this case.

 


uploaded 2011/03/17