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When negotiating settlements, especially in workers'compensation cases, it's the responsibility of the claimant'sattorney to be sure that the client completely understands theterms of the settlement and what is and isn't included. In onerecent Pennsylvania case, a workers' comp claimant challenged asettlement, asserting that she didn't understand what she wassigning. But was that an accurate assertion?

The case

Luz Mary Carmona filed a worker's compensation claim assertingthat she had sustained a work injury on Feb. 7, 2014. Her employeraccepted liability for a neck and low back strain.

On April 29, 2014, Carmona's employer sent a notice to her thather compensation would terminate on May 1, 2014, because she hadreturned to work without restrictions.

Carmona, however, said that she continued to experience painand, on Aug. 13, 2015, her doctor determined that she was notcapable of working. When she didn't return to work, her employmentwas terminated.

Carmona alleged that she was totally disabled by the workinjury. Her employer denied the allegations in her claim petition,and the matter was assigned to a workers' compensation judge(WCJ).

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At the first hearing, Carmona was the sole witness, and shetestified about her work duties, her injury and her medicaltreatment. The WCJ then scheduled a second hearing.

At the beginning of the second hearing, several months later,the parties informed the WCJ that they had reached a settlement. Inexchange for a lump-sum payment of $45,000, Carmona agreed torelease her employer from all liability under the workers'compensation law. Specifically, Carmona released her employer fromany liability for medical expenses related to her injury incurredafter May 1, 2014.

The parties filed a petition for approval of the compromise andrelease (C&R) agreement, which the WCJ addressed at the secondhearing. When the WCJ asked if Carmona had reviewed and signed theC&R agreement, she responded affirmatively to bothquestions.

On Sept. 13, 2016, the WCJ approved the C&R agreement.Crediting Carmona's testimony, the WCJ found, as fact, that she haddemonstrated an understanding of the legal significance of theC&R agreement and had entered into it voluntarily.

On Oct. 26, 2016, Carmona appealed, alleging that her counselhad been deceptive about the terms of the C&R agreement andthat she had not been given an opportunity to review the document.After the workers' compensation appeals board rejected her appeal,she went to court.

Among other things, she alleged that she had been directed byher counsel to sign and initial the C&R agreement whereindicated; that she had been misled by her lawyer regarding herfuture medical expenses; that she had not learned that her employerwas not responsible for paying them until one month after theC&R agreement had been approved; that her employer had agreedto pay for her future medical treatment; and that she never wouldhave signed the agreement had she known those expenses would not becovered.

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The court's decision

The court rejected Carmona's appeal. In its decision, the courtexplained that the C&R agreement specifically advised that“[n]o medical bills will be paid for dates of service after5/1/2014”; that Carmona “releases all liability for medicalbenefits incurred after 5/1/2014”; that Carmona “will set aside$3,600 out of her settlement funds to be used for treatment for thework-related injury that might otherwise be covered by Medicare”;and that Carmona “feels that this is adequate to cover doctorvisits, possibly some physical therapy, possibly some injections orprescriptions medications.”

Moreover, the court continued, the record did not supportCarmona's contention that she did not know what was in the C&Ragreement and only signed it because of her lawyer's assurancesthat future medical benefits would be paid. The court pointed outthat:

• The WCJ asked Carmona if she had time to review the C&Ragreement before she signed it, and she responded “[y]es”;
• Carmona's counsel asked her “do you understand that if thejudge approves this agreement, the insurance company, the workers'compensation insurance company, will not be required to pay anyadditional medical bills?,” and Carmona replied, “[t]hat'sfine”;
• Carmona's counsel asked, “did you and I have approximately 45minutes to go over this agreement together?,” and Carmona replied,“[c]orrect”; and
• At the conclusion of the hearing, the WCJ asked Carmona whethershe understood all of the questions and if she wanted the C&Ragreement approved, and she responded “[y]es, I do.”

Carmona's testimony, the court concluded, indicated that “sheunderstood future medical benefits would not be paid.”

The case is Carmona v. Workers' Compensation AppealBoard.

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Steven A. Meyerowitz, Esq., ([email protected])is the director of FC&S Legal, the editor-in-chief of theInsurance Coverage Law Report, and the founder and president ofMeyerowitz Communications Inc. This story is reprinted withpermission from FC&S Legal.