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The DWC has announced that per a KBA opinion issued May 1, 2017, preparation and filing of a Form 110-Agreement as to Compensation constitutes the practice of law under SCR 3.020.  Therefore, the DWC will no longer accept Form 110 settlement agreements prepared by individuals not licensed to practice law in the Commonwealth of Kentucky.

Beginning July 1, 2017, all Department of Workers’ Claims (DWC) submissions must be made in electronic format via the DWC’s Litigation Managment System (LMS).  However, due to the ongoing development of the capacity of the LMS to receive and process settlement agreements in electronic format, the DWC will continue, until further notice, to accept Form 110 Settlement Agreements in paper format subsequent to July 1, 2017.

Howard v. Basin Energy Company, et al, 2006-84485 (WCB 2013).  Boiler plate language in an order approving a settlement agreement overrides the specific terms set forth in the agreement.

This is a Kentucky Workers’ Compensation Board (WCB) decision regarding a medical fee dispute.  The dispute and motion to reopen was brought by the employer to contest the reasonableness and necessity of specific medical treatment.  The Chief ALJ allowed the dispute to proceed , and after the taking of proof and a hearing, the ALJ ruled in favor of the employer.  Plaintiff appealed.

Instead of addressing the issues presented on appeal, the WCB focused on boiler plate language in the order approving the original settlement agreement, the specific terms of which left open plaintiff’s right to future medical benefits.  The specific language of the agreement provided:

Settlement is for complete and total dismissal with prejudice of any and all claims, except that Plaintiff preserves and does not waive his right to future medical expenses that are reasonable and necessary and for his physical injuries. The open medical obligation of the Defendant/Employer is defined as a cervical and lumbar strain and right shoulder impingement syndrome.

There is a partial waiver of future medical expenses in connection with the psychological/psychiatric claim. Plaintiff preserves and does not waive his right to future medical expenses for an open medical obligation of the Defendant/Employer which is defined as cervical and lumbar strain and right shoulder impingement syndrome. Medical expenses for any other medical conditions are waived, and $1,000.00 of the settlement proceeds constitutes consideration for this partial waiver of future medical expenses.

Due to the risks and costs of further litigation, Plaintiff and the Defendant/Employer have agreed to compromise and settle this claim for a complete and total dismissal with prejudice of all claims including a waiver of medical expenses, a waiver of vocational rehabilitation and a waiver of the right to reopen; except that Plaintiff preserves and does not waive his right to future medical expenses that are reasonable and necessary and for the following defined open medical obligation; cervical and lumbar strain and right shoulder impingement syndrome. In consideration of the payment of $85,000.00 in a lump sum all claims are waived except that Plaintiff preserves and does not waive his right to future medical expenses covered under the open medical obligation as described above.

The Plaintiff acknowledges the effects of the settlement. The Plaintiff has been advised that a dismissal with prejudice of all claims for indemnity means that he shall have no right to further payment of any income benefits whatsoever as a result of the work accident referenced herein. Plaintiff understands that he shall receive no further income benefits; vocational rehabilitation; or TTD benefits at anytime [sic] in the future. Plaintiff has been warned of the effects of this settlement agreement; Plaintiff desires to go forward with the settlement agreement due to the risk of loss and costs of further litigation.

            The language of the order approving the agreement, however, contained broader, boilerplate language:

This matter is before the Administrative Law Judge on motion of the Defendant-Employer to approve a Form 110-I settling the above-captioned claim. The Administrative Law Judge having reviewed the motion and being fully advised; IT IS HEREBY ORDERED that the Plaintiff’s claim will be and the same is hereby ordered DISMISSED, with prejudice, as SETTLED.

            Despite the very specific delineation of future medical benefits as not being waiver, the WCB apparently focused on the ALJ’s order approving the agreement and found that the entire claim was dismissed with prejudice (even though there was no consideration for a waiver of the future medical benefits and the agreement specifically provided for continued payment of future medical benefits) and held the Chief ALJ was without jurisdiction to rule on the motion to reopen in the first place. Therefore, the board dismissed the appeal and remanded to the Chief ALJ with instructions to deny the motion to reopen.

COMMENTARY:  This was the wrong decision on various grounds and likely will not withstand an appeal. The WCB ignored the very specific language of the agreement, the lack of consideration for any alleged waiver of future medical benefits, the understanding of the parties and the fact subject matter jurisdiction was not preserved (although arguably they could have addressed that issue sua sponte). If anything, they should have remanded for clarification of the intent of the parties or to allow the motion to reopen to be amended to also allege mistake.

dwclogo1The following is an announcement from the Chief Administrative Law Judge of the Kentucky Department of Workers’ Claims regarding scanned settlement agreements:

Subject: Scanned documents submitted for approval

It has come to our attention that certain employer representatives are submitting for approval by ALJs Forms 110 which do not contain original signatures. Apparently several of these employer representatives have “gone paperless.” When a Form 110 that has been executed by the plaintiff’s side is sent for the signature of the employer representative, the form is electronically scanned and then the original is immediately destroyed. The scanned document bearing the scanned signature of the plaintiff, and in some instances counsel for plaintiff, is then signed by the employer representative and forwarded on for approval. In some instances the employer representative signs the settlement agreement before it is scanned and then destroys the original document after scanning, resulting in none of the signatures on the settlement agreement being original signatures.

The Commissioner has instructed me to notify all employees of the Department of Workers Claims that no settlement agreement can be approved if it does not bear the original signature of all parties to the agreement. Any such agreements presented for approval shall be returned with the explanation that original signatures of all parties to the agreement are required for approval by an ALJ.

J. Landon Overfield
Chief Administrative Law Judge
Kentucky Department of Workers’ Claims
657 Chamberlin Avenue
Frankfort, KY 40601
Phone: 502-564-5550
Fax: 502-564-0682

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