Dickemann v Costco Wholesale Corp.,
S.C. 96513 (May 22, 2018)
The Supreme Court affirms the court of appeals that parties cannot reach a settlement after a final award and any commutation must be equivalent to the commutable value.
The court found an award was not a "claim" so the Commission lacked authority under that statute to obtain approval under 287.390 as requested by the parties.
The court found that the commutation statute of 287.530 required both a finding why commutation was appropriate and why the proposed settlement represented the commutable value. In this case, the parties presented no evidence on the first issue and on the second issue they sought to reduce an award equivalent to $590,000 to $400,000. The Commission had calculated the higher figure on a 4% discount rate and based on the stipulated life expectancy of 20 years.
This decision seems to suggest that commutable vale can vary based on life expectancy, but that the present value needs to be approximate the stipulated life expectancy. The parties elected to proceed on appeal and not address the "shortcomings" noted by the Commission. It is unclear if the claimant's rated age could have supported a lower life expectancy closer to the proposed settlement amount.
2017 MO App. Lexis 472
Parties are not allowed to strike their own deal after an award according to the latest case out of the court of appeals - Eastern District, in direct conflict with the Western District, in an important issue that may ultimately need to be resolved by the Supreme Court.
The court of appeals affirms the Commission has no authority to consider joint agreements for approval under 287.390 (settlements of claims) and the proposed agreement fails because it does not meet the requirements of 287.530 (commutation)
This decision has huge implications for people who have awards, and seek to close out obligations that might stay open for decades and for injured workers who would rather have their money now than later.
This issue is deja vu for the Commission.
The Commission has refused to approve post-award settlements in the past that it did not represent the full value of future installments.
The Western District has told it to approve settlements if the settlement met the requirements of 287.390.1 if it is not the result of undue influence or fraud, the employee understands his or her rights or benefits, and voluntarily agrees to accept the terms. In Hinkle v A.B. Dick Co, 435 S.W.3d 685 (Mo App. 2014) the Commission balked about approving a settlement which paid 49% of the present value until it was ordered by the Western District to approve the settlement, following Nance, which found the controlling statutory authority for settlements was governed by 287.390.1 for non-contested commutations and not solely 287.530.
Dickemann is factually similar to Hinkle, in some respects. The proposed settlement of $400,000 is not equal to the commutable value of future installments. The parties seek to end their liability to pay future installments by a lump sum. In this case, the employee seeks the settlement and the employer adopts the arguments and proposal.
Dickemann case declines to follow Nance or Hinkle, and claims the only controlling authority for post-award settlements is 287.530, and the parties fail to show the settlement proposal meets the statutory requirements of 287.530: that the proposal is equal to commutable value and that unusual circumstances exist in the best interest of the parties (for example, a shorter life expectancy as in Nance) to support any commutation. The court finds under the rubric of strict construction it cannot find a "claim", like the court in Nance, and finds only parties to claims can strike their own deals.
Section 287.530 applied as the procedure to settle post-award liability whether the commutation was "contested" or not
The parties sought approval through criteria of 287.390 rather than 287.530 following precedent in Nance and Hinkle , and argued the doctrine of stare decisis to follow the Western District's precedent.
The court suggests 287.390 allowed the Commission to approve settlements only "in accordance with the rights of the parties" and the provision may conflict with the criteria of "undue influence, understood rights, and voluntarily agrees..." but waited for a "future case which would directly present the issue" for consideration. Nance followed the latter criteria.
The court noted the joint agreement failed to list any of the statutory grounds of 287.530: best interest of the parties, unusual circumstances, or present value. The proposal represented about 2/3 of the present value.
The court and commission relies upon strict construction of 287.800 and concludes that it was legislative intent to allow post-award negotiation as an exception and only in very narrow circumstances.
The Western District now allows parties to strike their own deal, even after an award, and determine what is in their best interest. The Eastern District now backs a long-standing position of the Commission that workers and their employers lose that chance to negotiate further after a final award and they must live by the deal, good or bad, and there are no second bites at the apple.
Judge Hess authored the opinion.