Historically, when injured workers settled their workers compensation claim under F. S. 440.20(11), settlement was not final until the Judge of Compensation Claims entered an order approving the settlement finding it to be in the best interest of the injured worker. In 2001 the Florida Legislature amended the settlement provisions of F.S. 440.20(11) by adding sub-subsection (c) which provides in pertinent part:
When a claimant is represented by counsel, the claimant may waive all rights to any and all benefits under this chapter by entering in to a settlement agreement releasing the employer and the carrier from liability for worker’s compensation benefits in exchange for a lump-sum payment to the claimant. The settlement agreement requires approval by the judge of compensation claims only as to the attorney’s fees paid to the claimant’s attorney by the claimant. The parties need not submit any information or documentation in support of the settlement, except as needed to justify the amount of attorney’s fees….Payment of the lump-sum settlement amount must be made within 14 days after the date the Judge of Compensation Claims mails the order approving the attorney’s fees…
Notwithstanding the seeming simplicity and all encompassing nature of F.S. 440.20(11)(c)(2001), this provision has become the source of a great deal of litigation concerning enforcement of settlements with no less than seven appeals on the issue in the 2006 year alone.1 This article does not attempt to answer every question which may arise in the worker’s compensation settlement context. Instead, it is intended to provide the attorney with an overview of the general principles involved in workers’ compensation settlements obtained at mediation where the claimant is represented by counsel. In Jacobsen v. Ross Stores, 882 So.2d 431 (Fla. 1st DCA 2004) the First District Court of Appeal reiterated that the Judges of Compensation Claims have jurisdiction to determine whether a workers’ compensation settlement has been reached and to enforce the terms of settlement. Hearings before the Judge of Compensation Claims to enforce settlement agreements typically involve documents executed at mediation and subsequently either the employee or the employer/carrier attempt to renege on the agreement.2 Settlements are governed by the rules for interpretation of contracts.3 The test of the meaning and intentions of the parties is the content of the written document. 4 Where the terms of the agreement are unambiguous, the parties intent must be discerned from the four corners of the document. In the absence of ambiguity, the language itself is the best evidence of the parties intent and the plain meaning controls.5 To be enforceable, the agreement must set forth the requirements of Florida contract law including offer, acceptance, consideration, and sufficient specification of the essential terms.6 The enforceability of the contract does not depend on whether the parties meant the same thing. Instead, it depends on whether the parties said the same thing. Robbie v. City of Miami, 469 So.2d 1384 (Fla. 1985) Construction of a contract is a matter of law, so an appellate court is free to reassess the contract and arrive at a conclusion different from the trial court. Therefore, the appellate court may consider whether the contract terms are unambiguous.7 The typical mediation settlement agreement will set forth language establishing offer, acceptance and consideration. Nevertheless, difficulties arise with language such as “this agreement is binding and effective on approval of attorney’s fee by the Judge of Compensation Claims” or “the employee agrees to execute a general release and resignation”. Other language such as “this mediation settlement agreement is not final and is contingent on both parties approval of Medicare Set-Aside Allocation” or “this mediation agreement is contingent on satisfaction of any medicare liens” can cause difficulty concerning the determination of an enforceable settlement agreement. When these types of phrases are included in the settlement agreement the terms “condition precedent” and “condition subsequent” come to mind. A “condition precedent” is one that is to be performed before the agreement becomes effective, and which calls for the happening of some event or the performance of some act after the terms of the contract have been agreed to, before the contract shall be binding on the parties e.g. under a disability insurance contract, insured is required to submit proof of disability before insurer is required to pay.8 On the other hand, “condition subsequent” is defined as “any condition which divests liability which has already attached on the failure to fulfill the condition…a provision giving one party the right to divest himself of liability and the obligation to perform [the contract] further if the other party fails to meet the condition, e.g. submit dispute to arbitration. 9 According to the Restatement Second of Contracts, a condition is “an event, not certain to occur, which must occur, unless occurrence is excused, before performance under the contract becomes due.”10 The use of this definition has the support of leading authorities on contract law.11 The use of the term “condition” as a defined in the Restatement Second of Contracts is limited to the context of an existing contract. It excludes events, such as offer and the acceptance that must occur before the contract is made.12 The definition of “condition” as used in the Restatement Second of Contracts has abandoned the term “condition subsequent” and refers to an event that “terminates an obligors duty of immediate performance or duty to pay damages for breach.”13 Suffice it to say that a great deal of definitional ambiguity surrounds the terms “condition”, “condition precedent” and “condition subsequent”. The First District Court of Appeal has not gone into the definitional distinctions set forth above in the cases that have come before it in 2006. Instead, in Quinlan v. Ross Stores, 31 FLW D1131 (Fla. 1st DCA 2006) the court agreed with the Judge of Compensation Claims that a mediation settlement agreement was not final and enforceable because the “contingencies” to final settlement had not occurred. The mediation settlement agreement was contingent upon both parties’ approval of the Medicare Set-aside amount and was also contingent upon resolution of any medicare lien that may be determined to exist. The failure of the mediation settlement agreement in Quinlan rested, in part, with each side’s ability to approve or disapprove the Medicare Allocation and the “contingency” involving the resolution of any medicare lien that may have existed. Also, in Quinlan the claimant signed a “draft” proposed settlement agreement prepared by the carrier’s attorney. Nevertheless, the Employer/Carrier did not execute the proposed agreement. The Judge of Compensation Claims noted that one “contingency” contained within the mediation agreement which did not occur included “subsequent documents will be prepared and signed by the parties.”14 Perhaps the better analysis for the determination of whether a mediation settlement agreement is a binding and enforceable contract should include the assessment as to whether or not the parties have demonstrated the intent that they be allowed to withdraw, at their option, from the agreement based on future information or events and/or whether the mediation settlement agreement contemplates that either side may at a later point, at its election, decline to execute subsequent workers compensation settlement documents. It is clear that the First District Court of Appeal has taken the position that F.S. 440.20(11)(c)(2001), is to be broadly construed and no technical terms are required to effectively settle a worker’s compensation case at mediation. This position is in keeping with Florida law where settlements are highly favored and will be enforced whenever possible.15 In Gudino v. Oasis Outsourcing, supra, the court held that a mediation settlement agreement which provided “Full/Washout Settlement” of the workers’ compensation case with payment of a monetary sum in exchange for relinquishment of “any and all claims for indemnity and medical care, past, present, and future” was sufficient to settle a workers’ compensation claim. In Patco v. Estupinan, 30 FLW D3797 (Fla. 1st DCA 2005), the claimant executed a general release to resolve a civil suit filed against the employer. The court found the operative language of the general release also settled the worker’s compensation claim. It provided: Any and all past, present, or future claims, demands, obligations, actions, causes of action, rights, damages, costs, losses of services, expenses and compensation of any nature whatsoever, whether based on a tort, contract or any other theory of recovery, which the Plaintiff now has, or which may hereafter accrue or otherwise be acquired on account of, or may in any way grow out of, or which are the subject of the Complaint (and all related pleadings) In fact, in Patco the court held that a settlement agreement as between an employee and an employer was binding and effective even though the Judge of Compensation Claims never entered an order approving the payment of attorney’s fees by the employee to his attorney. Furthermore, the First District has held that a worker’s compensation settlement is still enforceable at the election of the non-breaching party where the breaching party refuses to execute a general release and a wavier of claims or voluntary resignation. Calderone v. J.B. Nurseries, supra. There is a distinction between the formation of a contract and performance of the contract. An obligor Settlement of Workers’ Compensation Claim can properly delegate the performance of his duty to another unless the contract provides otherwise, is against public policy, or the contract contemplates personal services involving personal skill or discretion. 16 This is particularly significant where the employee settles his case through a mediation settlement agreement but passes away prior to execution of the employer/carrier settlement paperwork or the general release. A properly appointed personal representative of the estate of a deceased employee has the power to perform, compromise, or, when proper, refuse to perform the deceased employee’s contracts. Also, the personal representative is empowered to satisfy and settle claims. F.S. 733.612. Similarly, where the employee settles his case through a mediation settlement agreement, and subsequently becomes incompetent or incapacitated, person with a durable power of attorney or a properly appointed guardian can perform the contract.17 While it is not uncommon for Employer/Carriers to prepare and submit voluminous settlement packets for the claimants execution subsequent to the mediation settlement agreement, the mediation settlement agreement is in fact the enforceable settlement contract, assuming that all of the elements of an enforceable contract are met, and parties do not agree that additional settlement paper will be executed as a prerequisite to settlement.18 With the distinction between contract “formation” and contract “performance” in mind, F.S. 440.20(11)(c) makes it clear that its provision, “… payment shall be made within 14 days after the Judge of Compensation Claims mails the order approving attorney fees…”, addresses the time to perform the already existing contract. When enforcing the typical “mediation settlement agreement” the parol evidence rule should be considered. Parol evidence is oral or verbal evidence which is given by word of mouth; ordinarily given by witnesses in court.19 The parol evidence rule seeks to preserve the integrity of written agreements by refusing to permit contracting parties to attempt to alter their contract through the use of contemporaneous oral declarations. Under this rule when the parties to a contract embody their agreement in writing and intend the writing to be a final expression of their agreement, the terms of the writing may not be varied on contradicting evidence of any prior written or oral agreement in the absence of fraud, duress, or mutual mistake.20 It should be noted that the initial determination of whether a contract is ambigious presents a question of law.21 In two of the appellate decisions coming from the First District in 2007 the parol evidence rule played into enforcement of the settlement agreement. In Calderon v. J.B. Nurseries, supra, it is apparent the the Judge of Compensation Claims considered testimony of witnesses who testified that the claimant, an uneducated, non-English speaking person did not understand the settlement agreement. In Gudino v. Oasis Outsourcing, supra, it appears that the Judge of Compensation Claims took testimony from the claimant at least to the extent that the claimant testified that he signed the mediation settlement agreement and was not forced to sign the same.22 When enforcing a mediation settlement agreement the attorney should object to the submission of any parol evidence to dispute the clear and unambiguous language of a mediation settlement agreement. It is true that the construction of a settlement contract is a matter of law, so an appellate court may assess the contract and arrive at a conclusion different from the trial court. Nevertheless, the admission of impermissible parol evidence, absent a timely objection, may provide the Judge of Compensation Claims with a basis to find that a binding settlement was not reached. The First District Court of Appeal will generally defer to the Judge of Compensation Claim’s determination as to whether a binding settlement has been accomplished.23 The contracual principle of novation may also come into play regarding the settlement agreement and changes thereto. The requisites of the novation are a previous valid obligation, an agreement of all the parties to a new contract, the extinguishment of the old obligation, and the validity of the new one.24 When the mediation settlement agreement is in fact a binding and enforceable contract, the execution of subsequent documents in the form of the typical settlement packet which include new, different, or additional terms, could very easily be viewed as a novation. Practically speaking, unless the subsequent settlement packet includes new, different, or additional terms, the execution of the subsequent paperwork is nothing more than an exercise in redundancy. Its only effect is to needlessly delay settlement, unnecessarily consume the claimants and his attorneys time and increase the employer/carriers attorneys fees. Unless the parties expressly agree that other settlement papers shall be executed as a prerequisite to settling the workers compensation claim or the parties retain the right to decline moving forward with settlement based on future events or information, a mediation settlement agreement executed by the parties which incorporates language such as a “Full washout settlement of any and all claims for indemnity and medical care, past, present and future” demonstrates a full and final settlement. Likewise, if the settlement agreement states that it is being made in accordance with F.S. 440.20(11)(c), which provides that the claimant may “waive all rights to any and all benefits under this chapter.”, then a full and final settlement has been reached.
Settlements of worker’s compensation claims, where the employee is represented by an attorney are now enforceable employing the general contract law provisions including offer, acceptance, consideration, mutual assent, and sufficient specificity of terms. Settlements do not require any specific language or terms of art. In enforcement proceedings, the attorney, by timely objection should be careful to prevent the adversary from creating ambiguity through the presentation of parol evidence, assuming that the contract is clear and unambiguous. Furthermore, assuming that the claimant’s attorney is amenable to executing the traditional Employer/Carrier settlement packet, the claimant’s attorney should exercise great caution in reviewing the subsequent documents to ensure that they adequately reflect the terms of the prior mediation settlement agreement as any additions, modifications, or omissions, in subsequent settlement paperwork will in all likelihood be considered a novation of a prior enforceable contract.
- Calderon v. J.B. Nurseries, 31 FLW D392 (Fla. 1st DCA 2006), Quinlan v. Ross Stores, 31 FLW D1131 (Fla. 1st DCA 2006) Coral v Shear Express Inc., 31 FLW D1666; Gudino v. Oasis Outsourcing, 31 FLW D1666; Jones v. Miami-Dade Community College, slip opinion filed July 13, 2006 (Fla. 1st DCA 2006); Cartaya v. Coastline Distribution, slip opinion filed August 10, 2006 (Fla. 1st DCA 2006); Tammy Gunderson as Personal Representative of Alan Gunderson v. School District of Hillsborough County,937 So.2d 777 (Fla. 1st DCA 2006)
- Calderon v. J.B. Nurseries, supra; Gudino v. Oasis Outsourcing, supra; Tammy Gunderson as personal representative of the estate of Alan Gunderson v. School District of Hillsborough County, supra.
- Robbie v. City of Miami, 469 So.2d 1384 (Fla. 1985); Suggs v. DeFranco’s Inc., 626 So.2d 1100 (Fla. 1st DCA 1993)
- Gendezier v. Dielecki, 97 So.2d 604 (Fla. 1957)
- Cartaya v. Coastline Distribution, supra, Barakat v. Broward County Housing Authority, 771 So. 2d 1193 (Fla. 4th DCA 2000)
- St. Joe Corp. V. McGuyver, 875 So.2d 375 (Fla. 2004)
- Sugar Cane Growers Co. Op. Of Florida v. Pinnock, 735 So.2d 1202 (Fla. 4th DCA 1999).
- Black’s Law Dictionary, 6th Edition, pg. 293 (1990), Sherman v. Metropolitan Life Insurance Co., 8 N.E. 2d 892.
- Black’s Law Dictionary, 6th Edition, pg. 293-294. Settlement of Workers’ Compensation Claim, from page 21
- Contracts, Farnsworth, copyright 1982, pg. 537 and Restatement Second of Contracts, section 224.
- Contracts, Farnsworth, copyright 1982, pg. 537 and Restatement Second of Contracts, section 224; Corbin, Conditions in the law of Contract, 28 Yale L.J. 739, 743 (1919); Williston’s Contracts, section 633(3d ed.) (1961).
- Contracts, Farnsworth, copyright 1982, pg. 540.
- Contracts, Farnsworth, copyright 1982, pg. 541; Restatement Second of Contracts, section 230.
- See Compensation Order entered May 19, 2005, OJCC #00-02610WPB
- Robbie v. City of Miami, supra.
- Section 318, Delegation of Performance of Duty, Restatement Second of Contracts and comment(c).
- F.S. 709.08, F.S. 744.361
- In a recent settlement agreement to which the author has been a part, the Employer/Carrier submitted a settlement packet requiring the claimant to sign 14 times on various documents and required notarization at least 10 times.
- Black’s Law Dictionary, 6th Edition, pg. 1117 (1990)
- Black’s Law Dictionary, 6th Edition, pg 1117 (1990); F.M.W. Properties, Inc. V. People First Financial Savings, 606 So.2d 372 (Fla. 1st DCA 1992) citing Vensa v. Development Corp. Southeast Mortgage Co. 297 So.2d 86(Fla. 3rd DCA 1974)
- Cartaya v. Coastline, supra, Strama v. Union Fid. Life Ins. Co., 793 So.2d 1129,1132 (Fla. 1st DCA 2003)
- See compensation order entered October 25, 2004, OJCC #02-001839CMH
- Calderon v. J.B. Nurseries, supra; Gudino v. Oasis Outsourcing, supra, Coral v. Shear, supra.
- Young v. Morris Reality, 569 So.2d 813 (Fla. 1st DCA 1990)
William H. McKnight is a sole practitioner representing employees in workers’ compensation litigation and in appellate proceedings before the First District Court of Appeal. He was admitted to the Florida Bar in 1987 and is a member of the Florida Bar Trial Lawyer’s Section and the Florida Bar Workers’ Compensation Section. He is also a member of the Hillsborough County Bar Association and a member of their Trial Lawyers and Workers’ Compensation Sections. He is admitted to practice before the United State District Court, Middle District of Florida and the United States Eleventh Circuit Court of Appeal. He was appellant’s counsel in Tammy Gunderson, as personal representative of Alan Gunderson v. The Hillsborough School District, supra, wherein the 1st DCA enforced a mediation agreement even though the claimant had passed away before execution of additional settlement paperwork. The court held that a properly appointed personal representative was empowered to execute paperwork on the deceased claimant’s behalf and that the mediation agreement executed before the claimants death was an enforceable agreement.. He may be contacted at 813-870-1020 regarding any questions or comments.