Stipulations/Settlements

Sanchez B. Unilever (BPD) (45 CWCR 238):

Applicant alleged a continuous trauma injury to his body parts ending October 31, 2011 against Alberto Culver, listing Broadspire as the insurer.

Counsel for Unilever, which had acquired Alberto Culver, filed an answer to the application and engaged in discovery.

At a mandatory settlement conference on August 24, 2016 applicant’s attorney and counsel for Unilever stipulated that Alberto Culver, insured by Broadspire, employed applicant from April 2, 1982 through October 31, 2011.

On the initial trial date, the WCJ denied Unilever’s Joinder petition for its lack of a coverage report from the WCIRB and continued the trial as a settlement was pending.

Prior to a new trial date, Unilever filed a new petition for Joinder, this time with a WCIRB printout enclosed reflecting Ace America’s coverage for Alberto Culver Company from October 1, 2010 and October 1, 2011.

The day before the trial, the WCJ ordered Ace America added as a party defendant.

At the trial counsel for applicant and Unilever appeared and stipulated to employment during the period April 2, 1982 through October 31, 2011 by Alberto Culver Company, and that the employer’s worker’s compensation carrier was Insurance Company of Pennsylvania administered by Broadspire.

However, the WCJ also noted defense counsel advised that Unilever purchased Alberto Culver and took charge on October 1, 2011. Up until that point Alberto Culver was liable for worker’s compensation using its own carrier Ace America and Unilever took over when Alberto Culver policy expired.

At the closing hearing the matter remained open for trial briefs and then stood submitted.

Unilever filed its brief contending that the operative date of injury predated October 1, 2011 and it had no liability for the injury.

The WCJ issued a findings and award an order against Alberto Culver and its designated carrier, Ace America.

Ace America filed a petition for reconsideration alleging that Unilever’s insurance carrier, Insurance Company of the State of Pennsylvania was the liable carrier.

Ace America contended there were two separate employers during the alleged cumulative trauma.

The WCJ issued an amended findings and award reflecting an award of life pension.

The WCJ then vacated the decision pursuant to Rule 10859 and set a hearing.

At that hearing applicant elected to proceed against Unilever and Insurance Company of the State of Pennsylvania.

The WCJ issued a second amended findings and award which name both employers and carriers in the case caption but impose liability’s solely on Unilever .

Unilever then filed a Petition for Reconsideration alleging that the WCJ aired by not issuing a finding on the date of injury, the facts did not support a single award against Unilever , the WCJ exceeded his powers by allowing applicant to elect against Unilever and Unilever was denied due process because applicant service of the second amended findings and award omitted a page.

The WCAB first scrutinized the stipulations to employment and coverage made by Unilever in the pretrial conference statement and at the time of trial.

The WCAB cited Labor Code §5702 for the proposition that a party to a dispute may stipulate facts and the Board may inquire into and accept or reject such stipulations.

The panel noted that stipulations are contract shall agreement, though which counsel binds a principal.

However, the panel noted, counsel for Unilever did not represent Albert Culver.

It was undisputed that Alberto Culver employed applicant through September 11, 2011, with Unilever taking over effective October 1, 2011.

Counsel for Unilever had no authority to bind a separate party, Alberto Culver and the stipulation was invalid in its entirety.

The panel agreed with Unilever’s contention that the WCJ had erred by not finding the date of injury pursuant to Labor Code §5412. The panel noted that counsel for Unilever and for applicant had stipulated to a cumulative trauma date of injury ending October 31, 2011, but that Unilever had alleged a date of injury prior to October 1, 2011 in its trial brief.

By that time, the WCJ and all parties understood that there were two employers each with a separate carrier.

Because the record did not close until after submission of the Unilever trial brief, the panel concluded that the WCJ was tasked with determining applicant’s date of injury in order to determine the liable party or parties in awarding benefits to the applicant.

The panel added that if the date of injury is such that both defendants are liable in part, that award must be joint and several against both employers.

Finally, the panel dismissed Unilever’s contention that the WCJ exceeded his powers by allowing applicant elected against Unilever.  Pursuant to Labor Code §5500.5, an applicant may elect to proceed against any party to a cumulative injury claim in order to prevent delay and the expense or hardship of proving a claim against multiple employers or carriers.

The panel referred to Unilever’s participation in discovery and concluded that applicant selection was reasonable because Unilever was the party involved in discovery in litigation from almost the case is inception up to trial. The WCAB granted reconsideration and rescinded the WCJ’s second amended Findings and Award and instructions to revisit coverage for the respective employers and determine the date of injury and liable party or parties.

Washington v. Department of Social Services (BPD) (LEXIS):

The parties filed a pre-trial conference statement at the mandatory settlement conference stating that defendant had paid PDAs in the amount of $2,343.

The parties appeared for trial and reached a resolution.

The parties entered into Stipulations with Request for an Award in the sum of $18,050 for permanent disability, less credit for such payments previously made, and less attorney fees. The WCJ approved the stipulations the same day as the trial.

Defendant subsequently sent a letter to applicant’s counsel notifying him that PDAs were in fact $16,879.70, which they had not previously known. They indicated that brings the total PDAs to $19,222.75.  Indicated that are there was no money for attorney fees or no money for the injured worker.

The matter then proceeded to trial on the issue of credit for the PDAs.

The WCJ issued a finding that defendant was not entitled to subtract the $16,879.75 from the amount of the stipulated award. The WCJ found defendant was bound by their statement in the pre-trial conference statement that had PDAs of $2,343, and therefore could not assert it was also due a credit of $16,879.75 as later discovered.

Defendant filed a petition for reconsideration.

The WCAB stated a stipulation must be construed according to the ordinary interpretation of contracts, with paramount consideration being the parties subjective intention at the time of contracting. The intention of the parties must be first determined from the language of the contract itself. However, where the language of the contract is ambiguous, it is the duty of the court to resolve the ambiguity by taking into account all facts, circumstances and conditions surrounding the execution of the contract.

The WCAB indicated the parties stipulated to an award of permanent disability and a fixed amount, “less credit for such payments previously made.”

The WCAB said this language is susceptible to two interpretations: first, that was meant to refer solely to the $2,343 and PDAs the parties referred to in the pre-trial conference statement, or second, that it was meant to encompass all PDAs, whether known to the parties at the time of stipulation or not.

Because the award itself does not clearly state which possible interpretation was intended by the parties, the WCAB needed to look beyond the language of the stipulation into the circumstances under which was executed.

The evidence was undisputed that defense counsel was not aware of the $16,879.75 in PDAs which was referenced to applicant at the time they negotiated the settlement.

It was clear from the record that defense counsel affirmatively represented to applicant’s counsel at the time they negotiated the stipulated award that PDAs in the case were $2,343.

The WCAB found there was strong evidence that at the time the stipulated award was negotiating, the parties were contemplating an award of $18,050 from which the parties intended to subtract the attorney fee and the PDAs in the sum of $2,343 leaving an award to the applicant roughly $13,000.

Additionally, the Appeals Board found no evidence to support the contention the parties intended to contract for the possibility that other PDAs might be later discovered, and that those PDAs can also be subtracted from the award.

The defendant cited a case involving the language less credit for further PDAs subject to proof. The Appeals Board pointed out that the parties did not add any additional terms to the stipulated award to account for the possibility that other PDAs might later be discovered for which defendant would be entitled to an offset. Moreover, it appeared abundantly clear from the record that defendant does not contest that no one was considering the possibility there were other outstanding PDAs other than the $2,403 which was identified might be potentially deducted from the award.

The Board further indicated the parties entered into negotiations and what was intended was that the applicant would receive roughly $13,000. The opinion of the Board this was the bargain the parties struck, which was evidently acceptable to all involved.

Defendant’s contention that the applicant would be the beneficiary of an unjust windfall if the $16,879.75 is not deducted from the award ignores the fact that defendant was evidently happy to settle the claim for roughly $16,000 including attorney fees.  That they later discovered it might have an entitlement to a larger deduction for PDAs does not change the nature of the bargain it struck when it stipulated to the award in question. To the extent the applicant is gaining a windfall from the stipulated award, that windfall was bargain for and agreed to.

Defendant appears to argue that even though it was not considering the possibility of other outstanding PDAs at the time it stipulated award, it nevertheless is entitled to a credit because the language of the stipulated award is unequivocal. However, defendant overlooks that the fundamental purpose of contract interpretation is to ascertain the intent of the parties at the time of contracting. Here, it is clear the parties intended to settle the claim for an award for which $2,343 and PDAs were to be subtracted, not $19,222.75. The apparent intent of the parties-which defendant does not even appear to contest convinces the Board the phrase “less credit for such payments previously made” referred only to the $2,343 and PDAs the parties had identified.

Defendant also contends the applicant should’ve known about the payment, essentially attempting to blame applicant for its lack of due diligence as to its sums it has paid. Even excepting the dubious premise that applicant would’ve been aware of the legal significance of the payment which was made back in 2013, whether applicant was aware of that payment at the time stipulated award is not the relevant inquiry, the relevant inquiry is whether the parties intended to resolve the claim and for what amount. The Board stated the evidence clearly shows the intent was to resolve the claim with the reduction of $2,343.

The Appeals Board finally observed that time and energy could have been saved in this matter had the party simply specified the exact amount of PDAs to be deducted.

The Appeals support went on to note that if in the future defendants concerned about the possibility that may discovered it had been paid advances that it somehow was not aware of the time it resolves the claims its remedy is clear and simple: simply account for that possibility in the settlement were stipulated award.

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