By Sarah Byrne, staff attorney, Nashville
Recently, in Torres v. Allvan Corp., the Appeals Board affirmed a trial court’s decision not to approve a disputed settlement in an accepted claim, since the parties didn’t present sufficient information to convince the judge of a dispute as to “the amount of compensation due” or that the settlement was in the employee’s best interest.
When it’s in an employee’s best interest, a court can approve a settlement under section 50-6-240(e) without considering whether the agreement pays substantially the benefits owed—if a dispute exists about compensability or about the amount owed in permanent disability benefits.
Compensability wasn’t disputed here, nor did the parties have differing opinions on impairment that would affect the amount owed. Rather, they had no opinion. The authorized doctor had surgically repaired a hernia, leaving mesh, but hadn’t expressed any opinion on maximum recovery or permanent impairment.
Of course, an impairment rating is necessary to calculate the amount owed in permanent disability benefits, even if nothing is owed based on a 0% impairment rating.
Without an impairment rating, the trial court couldn’t discern a dispute about the amount owed, as a dispute typically involves opposing opinions. And an agreement to a 0% rating is an agreement, not a dispute.
“[T]he lack of any medical opinion on impairment provides no evidence of a dispute over the amount of compensation [due],” wrote the trial court in its decision. “[I]f parties can simply choose not to seek a rating or opinion of maximum medical improvement and then agree to characterize that as a dispute, section 240(e), which explicitly requires a dispute…would be nullified.”
Neither could the trial court ascertain how settling the claim on a disputed basis met the employee’s best interest, since approving a disputed settlement would have ended future medical benefits, yet the employee seemed to have a “lingering problem with his surgical mesh.”
When your opinion doesn’t count
The parties jointly appealed the trial court’s decision. Torres’s counsel contended that having no impairment rating permitted differing opinions to exist and created a dispute, as the rating “could be a 0% impairment rating, but…could be more.”
Rather than parsing out what counts as disputed and what counts as merely unknown, the Board restated, from a previous opinion, that opinions from lawyers simply don’t count.
“[T]he court based its decision, in part, on the lack of an impairment evaluation,” emphasized the Board. “An employee, an employer, legal counsel, the trial judge, and we are not medical experts and are ill-suited to make medical determinations.”
The Board’s decision implied that asking for evidence of an impairment evaluation is not unreasonable, where the judge is shouldering responsibility for the decision and the treating physician is required to give an impairment rating anyway under Rule 0800-02-17-.25(2).
“The statute places the responsibility for determining whether the settlement is in the best interest of the employee squarely on the shoulders of the trial judge,” wrote the Board, “not the parties or the parties’ lawyers.”
As for the treating doctor’s responsibility, the Board quoted the above rule with emphasis, albeit in a footnote, to remind that an authorized doctor “is required and responsible for…providing the employee’s impairment rating.”
When self-determination has its limits
In oral arguments, counsel for both parties argued for respecting an employee’s self-determination. Defense counsel called the trial court’s decision a “judicial overstep,” asserting an employee knows better than anyone what is in his best interest. Similarly, counsel for Torres said the trial court had “overwhelmed” her client’s right to make his own decision.
Yet those arguments disregard “procedural safeguards” recognized by Tennessee Supreme Court precedent and don’t align with the statute either, according to the Board’s decision. Whether a disputed settlement meets an employee’s best interest must be determined—not by the employee—but “by a workers’ compensation judge,” the Board emphasized, quoting directly from section 240(e).
“If the parties maintain that a trial court’s sole function in considering such a settlement is to determine whether the employee understands the terms… of the settlement and the risks…,” wrote the Board in a footnote, “and that the responsibility for determining whether the settlement is in the employee’s ‘best interest’ rests, ultimately, with the employee, such arguments directly contradict express statutory language.”
About that blog post…
Counsel submitted the paperwork before the approval for the judge’s review. Before the date for their appearance, the judge’s staff emailed the attorneys to express his concern about the lack of a rating and that he might be unable to approve a doubtful settlement under these circumstances. The judge wrote, “Please see the blog post for guidance. Templates Revised for Disputed Cases: No Doubt – From the Bench (wccourt.com).”
The parties maintained the trial court impermissibly relied on a blog post, but the Board found that a mischaracterization. Instead in that email to the parties’ attorneys, “the court referenced a blog post…apparently in an effort to provide the parties with additional guidance.”
“We find no evidence,” concluded the Board, “that the court used anything other than its independent review and discretion in declining to approve the proposed settlement.”
Ultimately, the Board found “no error in the trial court’s request for further information” and that “[t]he parties did not provide sufficient information necessary for the court to determine that the settlement was in the Employee’s best interest as required by section 50-6-240(e).”
Under Rule 0800-02-21-.13(1) and (2), settlement approvals aren’t recorded, although parties may hire a court reporter (which they didn’t in this case). It’s unusual for a judge to write an order explaining why a settlement isn’t approved.
So, guidance from the Board on what constitutes a “doubtful” settlement is rare and quite helpful—especially because, like most civil cases, the vast majority of workers’ compensation claims settle. This case is essential reading for practitioners.
Last year’s eclipse. Photo by the author.
From the Bench 