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

DEBBIE McCASLIN, Applicant

REYNOLDS WHEELS INTL, Employer

ACE AMERICAN INSURANCE CO, Insurer

WORKER'S COMPENSATION DECISION
Claim No. 1998-035358


The employer submitted a petition for commission review alleging error in the administrative law judge's Findings and Order dated October 31, 2001. The applicant submitted an answer and both parties submitted briefs. At issue is review of the compromise agreement pursuant to Wis. Stat. § 102.16(1).

The commission has carefully reviewed the entire record in this matter, and after consultation with the administrative law judge concerning his assessment of the credibility of witnesses, hereby reverses the findings and order below, and substitutes the following therefor:


FINDINGS OF FACT AND CONCLUSIONS OF LAW

The applicant suffered a work-related injury on June 17, 1998, when she was hit on the head and shoulder by the rim of a wheel that fell from a height directly above her head, and sustained a laceration of the left temporal area of the skull, a contusion of the left shoulder and left elbow, and was treated at the emergency room. The applicant also had a contusion in the left anterior orbital area, and had swelling in the left lateral jaw, and developed a TMJ problem as found in her medical notes on June 30, 1998. Dr. Yake indicated on June 30, 1998, there was no question the applicant was hurt in a fairly severe injury, however, she was lucky that she did not have penetration of the skull or brain damage as a result of the work injury. The applicant reported numbness and tingling in the fingers of her hands, and pain and bruising in the left shoulder and left elbow area.

The applicant rehabilitated over several months and continued to have pain in the left shoulder as well as neck pain. Dr. Warren assessed the applicant with 20 percent permanent partial disability of the left shoulder on February 18, 1999. The MRI of the applicant's left shoulder on February 10, 1999, found a partial tear of the supraspinatus, and the applicant also had an inferior spur at the AC joint with a Type II acromion. The applicant continued to undergo physical therapy and treatment for her shoulder and neck pain. The applicant's Functional Capacity Evaluation on February 3, 1999, limited her to 20 pounds lifting occasionally, and limitations in pushing and pulling, and she was to work in the light work category. In addition, Dr. Yake noted the applicant had some elements of emotional overlay and secondary gain, but overall he felt that her continuing symptoms and restrictions were related to the work injury. The applicant's MRI of her jaw on February 12, 1999, revealed abnormality on the right, and anterior dislocation of the articular disc and the jaw without recapture.

The applicant was examined by Dr. Novom on behalf of the employer. Dr. Novom disputed the extent of the applicant's permanent disability at the shoulder, and the causation for her continuing problems. A hearing was scheduled on the applicant's claim on February 3, 2000, before administrative law judge Thomas McSweeney, however, the parties reached a compromise agreement prior to taking testimony at the hearing. The administrative law judge did not delve into the specifics of the terms of the compromise agreement at that time. The parties submitted the terms of the agreement to the department, which issued an order affirming and approving the agreement.

The compromise provided the applicant claimed as a result of her work injury entitlement to temporary and permanent indemnity, medical expense and other claims under the act. The compromise stated the applicant had been fully informed of any rights under the worker's compensation act, and preferred to enter into a compromise settlement. The compromise agreement stated a full and complete compromise and settlement of any and all liability of the employer and the insurer to the applicant under the worker's compensation act, including Wis. Stat. § § 102.35(3) and 102.60, and provided the employer pay to the applicant the sum of $12,500. The compromise agreement further provided "upon such sum being paid the applicant hereby completely releases and forever their discharges the employer and insurer from any and all past and present future claims, demands, obligations, actions and causes of action which the applicant now has or which may hereafter accrue or otherwise be acquired, which may in any way grow out of the applicant's claim for worker's compensation set forth due to the work injury in 1998."

The employer and insurer were relieved of any and all liability to the applicant subject to the review by the department within one year from the date thereof. The applicant knowingly and voluntarily waived any future rights to claim additional medical benefits under the terms of the agreement, and it was expressly stipulated by the parties the alleged condition of the applicant may deteriorate, and future surgery or other medical treatment may be needed, and she has had and may experience difficulty in finding employment in the general labor market, and she may in fact be unable to obtain and perform substantial gainful employment in the future, but nonetheless was desirous of entering into this final compromise agreement.

The applicant subsequently filed for review of the compromise agreement. The applicant alleged fraud on the part of her attorney, Mr. Black, for overreaching and settling the case even though it was not ripe for settlement. The applicant also alleged gross inequity in that the applicant did not have enough information to make an intelligent choice whether or not to settle the case. The applicant contended she has $10,000 of medical bills which were not accounted for, as well as several other causes of action which were not accounted for, and several other body parts which were injured in the work incident which were not accounted for in the agreement.

A compromise agreement may only be set aside on the basis of gross inequity, fraud or duress, newly discovered evidence or a mutual mistake. Compromises are not lightly set aside because a compromise of a worker's compensation claim under Wis. Stat. § 102.16(1) encompasses the qualities of comprehensiveness, finality and risk. The commission noted in its decision in Meyer v. Milliken Millwork, (LIRC dated February 27, 1998) that overreaching or unreasonable misinterpretation of the terms of the compromise may well add up to gross inequity. Overreaching by the employer is not required to establish gross inequity. The commission has the discretion to determine what constitutes gross inequity in each situation presented by the case at hand.

The applicant contends in this case, that she was so ill informed by her attorney about her various claims under the statute and various body parts that were not accounted for in her settlement, she settled for an agreement for a ridiculously low amount which is equal to gross inequity. The applicant testified she had a potential wrongful refusal to rehire claim which she was not aware of, and that her attorney assured her that all of her medical bills would be taken care of which were not included in the compromise agreement. Further, the applicant testified she was unaware of her potential claim for DVR benefits and loss of earning capacity, based on her head and neck injury, and in addition she noted she has scarring from the work incident, and she was never informed about any possible disfigurement claim.

However, the applicant admitted she realized that by signing the compromise agreement she was settling her entire worker's compensation claim for $12,500. The applicant admitted she had met with her attorney on several occasions to discuss the case. The applicant testified she was not informed of all the potential benefits she may have been entitled to prior to the time that she signed the agreement, however, she admitted she signed the agreement when it was mailed to her by her attorney following the initial hearing date in this matter. Upon questioning from the administrative law judge, the applicant reiterated that although she knew by signing the agreement it was a full and final compromise agreement, she did not know how much she was giving up at that time by signing the agreement. The applicant admitted she knew at the time that she signed the compromise agreement that she was giving up all claims for future medical expense.

In a deposition of the applicant's former attorney, Mr. Black, he testified that he met with the applicant on several occasions prior to the initial hearing date on February 3, 2000, and discussed with her the problems that were memorialized in her medical records including the TMJ problems, and Dr. Yake's comments about secondary gain. Mr. Black testified when he received the employer's settlement offer on February 3, 2000, he informed the applicant of the offer, and he was surprised she accepted it so quickly. Mr. Black testified he knew the applicant was working part-time and had family problems, and needed money quickly which he assumed was the reason she accepted the offer so quickly. Mr. Black testified he recalled going over the applicant's potential claims with her, including DVR benefits and unreasonable refusal to rehire, and he informed the applicant this was a full and final release, and that she was giving up all claims forever against the employer and insurer in exchange for $12,500. Mr. Black testified he recalled sitting and talking to the applicant about the offer and saying that this does not include payment of your medical bills, and he did not put the specifics of the settlement offer on the record before the administrative law judge.

The commission consulted the administrative law judge concerning the credibility and demeanor of witnesses. The administrative law judge indicated he found the applicant's testimony to be credible. However, based on the applicant's actions the commission credits Mr. Black's testimony that the applicant was eager to accept the agreement based on her personal financial needs.

This case does not involve overreaching or any wrongdoing on the part of the employer in entering into the compromise agreement. The employer engaged in arms length negotiations with the applicant's attorney, and entered into a full and final compromise agreement in good faith. The evidence does not indicate the compromise agreement was entered into on the basis of any fraud or duress or newly discovered evidence or due to a mutual mistake. The applicant realized that by signing the compromise agreement she was settling her entire worker's compensation claim, and giving up all future claims.

The applicant was represented by an attorney who met with her on several occasions to discuss the specifics of her case. Subsequent to the hearing date the applicant signed the agreement without any further questions for her attorney, and the evidence indicates the applicant freely and voluntarily entered into the compromise agreement. Under these circumstances where the applicant is represented by counsel, and has met with her attorney on several occasions to discuss the various aspects of her case, and the applicant understands the terms and nature of the compromise agreement the commission does not find the agreement can be set aside on the basis of gross inequity. Mr. Black informed the applicant of the various possible claims involved in the case, and the applicant chose to accept the agreement for personal reasons. The applicant had the opportunity to question her attorney about the agreement, including payment of medical expenses, on February 3,2000 and before signing the agreement. Therefore, the applicant's claim to set aside the compromise agreement must be dismissed since there is no evidence of fraud, duress or mutual mistake. NOW, THEREFOR, this


ORDER

The findings and order of the administrative law judge are reversed and the commission's findings and order substituted therefor. The applicant's claim to set aside the compromise agreement is hereby dismissed.

Dated and mailed September 27, 2002
mccasde . wrr : 175 : 8  ND § 10.5

/s/ David B. Falstad, Chairman

James A. Rutkowski, Commissioner

/s/ Laurie R. McCallum, Commissioner

cc: 
Attorney Scott L. Schroeder
Attorney James G. Budish


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