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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Seybert v. Cominco Alaska Exploration (05/02/2008) sp-6256
Notice: This opinion is subject to correction before
publication in the Pacific Reporter. Readers are
requested to bring errors to the attention of the Clerk
of the Appellate Courts, 303 K Street, Anchorage,
Alaska 99501, phone (907) 264-0608, fax (907) 264-0878,
e-mail corrections@appellate.courts.state.ak.us.
THE SUPREME COURT OF THE STATE OF ALASKA
| KENNETH J. SEYBERT, | ) |
| ) Supreme Court Nos. S- 12085/12115 | |
| Appellant and | ) |
| Cross-Appellee, | ) Superior Court No. |
| ) 4FA-02-02283 Civil | |
| v. | ) |
| ) O P I N I O N | |
| COMINCO ALASKA | ) |
| EXPLORATION and ALASKA | ) No. 6256 - May 2, 2008 |
| NATIONAL INSURANCE CO., | ) |
| ) | |
| Appellees and | ) |
| Cross-Appellants. | ) |
| ) | |
Appeal from the Superior Court of the State
of Alaska, Fourth Judicial District,
Fairbanks, Raymond M. Funk, Judge pro tem.
Appearances: James M. Hackett, Law Office of
James M. Hackett, Fairbanks, for Appellant
and Cross-Appellee. Robert J. McLaughlin,
Mann, Johnson, Wooster & McLaughlin, P.S.,
Tacoma, Washington, for Appellees and Cross-
Appellants.
Before: Fabe, Chief Justice, Matthews,
Eastaugh, and Carpeneti, Justices. [Bryner,
Justice, not participating.]
EASTAUGH, Justice.
I. INTRODUCTION
Kenneth Seybert injured his neck while he was working
as a millwright for Cominco Alaska at the Red Dog Mine in 1992.
He had two surgeries and, after a physician determined he was
medically stable, was evaluated for reemployment benefits. In
January 1995 Seybert and Cominco executed a Compromise and
Release (C&R) to settle Seyberts workers compensation claim.
Seybert was not represented by counsel. The C&R identified two
disputes: (1) whether Seybert could change physicians, and (2)
whether the reemployment plan developed for Cominco was
appropriate. Under the terms of the C&R Seybert was permitted to
change physicians one time and received $30,000 for all claims
except future medical benefits. In 2000 Cominco controverted
Seyberts prescription claims. In May 2001 Seybert, now
represented by counsel, asked the Alaska Workers Compensation
Board to set aside the C&R. After a hearing on his request the
board refused to set aside the agreement. The superior court
affirmed the board in all respects. On appeal Seybert raises
numerous issues related to the board proceedings; Cominco cross-
appeals a superior court order remanding the case to the board
during the pendency of the superior court appeal. Because the
board applied an incorrect legal standard when it evaluated
Seyberts misrepresentation claim, we reverse the boards denial of
Seyberts petition to set aside the C&R and remand the case to the
board for further proceedings. We find no merit in Comincos
cross-appeal and affirm the superior courts decision to remand
the case to the board for evaluation of one of Seyberts claims.
II. FACTS AND PROCEEDINGS
In1992 Kenneth Seybert was living in Elko, Nevada, a
town in northeast Nevada about equidistant from the Utah and
Idaho borders. He had worked as a millwright at various mines
for the previous ten years. Seybert worked for Cominco at the
Red Dog Mine near Kotzebue as a millwright in early 1992. His
work schedule was twenty-eight days on and fourteen off. Near
the end of his second rotation at the mine, he injured his neck
at work. He was rebuilding a pump and had positioned the
discharge end with a forklift. Because it was not aligned
correctly, Seybert used a pry bar to push the discharge end into
proper position. While he was pushing on the pry bar, he reached
to get a bolt; the weight shifted, and he felt his neck pop. He
immediately felt pain and went to the clinic on site at the mine
during his shift that night. The medic on staff diagnosed a
probable shoulder muscle injury and prescribed pain medication
and a muscle relaxant. Seybert worked a few days after the
injury to complete his rotation, even though he continued to
experience pain.
In late April 1992 Seybert went to see Dr. Alvin
Wirthlin, a neurologist in Salt Lake City, Utah, the closest
large city to Elko. Dr. Wirthlin determined that Seybert had a
cervical spine injury and referred him to a neurosurgeon, Dr.
Charles Rich. Dr. Rich operated on Seyberts cervical spine in
May. At about the same time, Seybert requested an eligibility
evaluation for reemployment benefits in case [he] need[ed] it. In
June the Reemployment Benefits Administrator (RBA) sent Seybert a
letter and requested medical reports that predicted a permanent
physical impairment. No one took further action on the
reemployment benefits request at that time.
Seybert stayed in treatment with Dr. Rich for several
months. Seybert saw Dr. Hilari Fleming, another neurosurgeon, in
Reno, Nevada for a second opinion after Dr. Rich suggested a
second surgery. After a course of conservative therapy with no
improvement, Dr. Fleming also recommended a second surgery. At
that point Dr. David Dapra conducted an independent medical
evaluation (IME) on behalf of Cominco and Alaska National
Insurance Co., Comincos workers compensation insurer.1 Dr. Dapra
disagreed with Dr. Flemings diagnosis and recommended against
surgery. After an Alaska National nurse reviewed the medical
reports, Alaska National authorized the surgery with Dr. Fleming.
In May 1993 Dr. Fleming wrote that Seybert had
sustained a permanent partial impairment as a result of his
injury and would not be able to do heavy lifting or other
repetitive heavy work. About a month later, Alaska National
asked the RBA to refer Seybert for a reemployment benefits
eligibility evaluation. Seybert had his second neck surgery in
July 1993. In late July he was referred to a rehabilitation
services office in Reno for an eligibility evaluation. Dr.
Fleming wrote to the rehabilitation specialist working with
Seybert that Seybert would be limited to light or sedentary work
in the future. The rehabilitation specialist recommended to the
RBA that Seybert be found eligible for reemployment benefits.
After the RBA found him eligible for benefits, Seybert chose
Jacqueline Christensen of Reno as his rehabilitation specialist.
Christensen began an assessment of Seybert but did not complete a
reemployment plan for him.
After the second surgery, Seybert reported that his
pain was as bad, if not worse, than before the surgery. In
November 1993 Dr. Fleming recommended that he attend a pain
management program. Alaska National referred Seybert to the pain
clinic at Virginia Mason Medical Center in Seattle. Dr. Fleming
apparently agreed to this pain clinic, although she did not
select it. Alaska National specifically requested that two care
providers at Virginia Mason, Drs. Thomas Williamson-Kirkland and
Steven Fey, provide services to Seybert. The reemployment
efforts were held in abeyance until Seybert completed the
program.
The pain management clinic did not resolve Seyberts
pain complaints. Seybert attended the outpatient program at
Virginia Mason for about four weeks. Dr. Williamson-Kirkland
believed that Seyberts main problem was anger at having been
injured and consequently not being able to continue at his prior
high level of pay. At the end of the pain management clinic, Dr.
Williamson-Kirkland stated that Seybert had reached medical
stability and had a whole person permanent partial impairment
(PPI) rating of twenty-eight percent.2 After receiving Dr.
Williamson-Kirklands report and discussing it with him, Alaska
National determined that Seybert needed no further treatment and
advised Seybert of this by telephone. Seybert filed an
Application for Adjustment of Claim and a supplemental statement
with the Alaska Workers Compensation Board on about March 30,
1994. Alaska National filed an answer on May 3, 1994.
After completing the pain management program, Seybert
returned to Elko. While he was in Elko, Seybert went twice to
consult with Dr. Terry Nevins for neck pain. At that point it
appears that Dr. Flemings office did not feel it could provide
Seybert with further treatment because he did not have surgical
needs. Alaska Nationals attorney, Robert McLaughlin, wrote to
Dr. Nevins on May 24, 1994. In his letter he informed Dr. Nevins
that Alaska National would be controverting his care of Seybert,
that Seybert had seen too many physicians, and that [b]oth Dr.
Fleming and Dr. Williamson-Kirkland have concluded that further
medical care is not indicated. McLaughlin followed up with a
phone call. Dr. Nevins wrote in the chart notes regarding the
conversation that Mr. Seybert apparently has quite a lengthy
history of seeing numerous physicians. In late May Alaska
National formally controverted the medical claims for treatment
by Dr. Nevins. Its controversion was based on an excessive
number of changes of physician and on Dr. Williamson-Kirklands
statement that no further medical treatment was necessary.
Alaska National then asked another vocational
rehabilitation specialist in Reno, Ed Howden, to prepare a
reemployment plan. Howden developed a reemployment plan without
speaking to Seybert. His plan was to retrain Seybert as a mining
or environmental laboratory technician. While the pay scale for
this position was low at the beginning, Howden felt that in as
few as three years, the pay scale could be in the range of $15 to
$20 per hour.
In mid-June Christensen, the rehabilitation specialist
who had been working with Seybert, wrote to the RBA to explain
her delay in plan preparation. According to Christensen the
delay was the result of numerous difficulties, including
obtaining medical records from Virginia Mason and having Seybert
tested in Elko. In addition she stated that Alaska National had
requested that she delay her report so that it could discuss the
matter with Seybert, but it never got back in touch with her. At
the time she filed her report with the RBA in June 1994, she felt
that Seybert would not benefit from an immediate reemployment
plan because he was still having difficulty adjusting to his
injury and was experiencing significant pain. She recommended
some type of interruption in his plan, if permitted, and if the
plan could not be delayed, she thought that it would be
appropriate for the parties to consider settlement.
At about the same time Seybert and Linda Rudolph, the
claims adjuster for Alaska National, first discussed settlement.
Rudolphs telephone log notes from June 2, 1994, indicated that
she would present Seybert with the options of either accepting a
settlement offer or contacting Howden to pursue a vocational
rehabilitation plan. On June 7, 1994, Rudolph wrote to Seybert,
making an offer as described in the log notes. She gave him the
option of participating in vocational counseling with Howden or
settling his permanent impairment claims for a lump sum. Seybert
apparently did not receive this letter. When Alaska National
tried to call him in Elko on June 6, his phone had been
disconnected.
In late May 1994 Seybert and his wife had moved to
Lincoln City, Oregon, about nine hundred miles from Elko, because
his wife had found work there. Before moving to Oregon Seybert
had applied for federal Social Security disability insurance
(SSDI) benefits. He was found eligible on August 26, 1994.
Seybert told Alaska National in September 1994 that he had been
found eligible for SSDI.
During the time he was in Oregon Seybert paid for his
medical care and prescriptions related to his neck pain on his
own. Seybert remembered taking five prescription medications in
1994 and early 1995.
Alaska National submitted Howdens vocational plan to
the RBA in July 1994. The RBA reviewed the plan and denied it.
An informal conference about the reemployment plan was held in
October 1994. Seybert, McLaughlin, and the two vocational
counselors from Nevada participated by telephone. Christensen
stated at the conference that she did not think a plan could be
written for Seybert due to his pain, and Seybert explained that
he was getting SSDI and had permanently relocated to Lincoln
City. At the end of the conference Alaska National requested
that its plan be reviewed with supplemental information that it
had supplied. On October 29, 1994, the RBA rejected Alaska
Nationals reemployment plan and expressed concern that Howden had
not met with Seybert to discuss job options. On November 10,
1994, Alaska National petitioned the board to review the RBAs
decision and on November 14, 1994, asked the RBA to reconsider
his decision. On December 5, 1994, the RBA reaffirmed his
rejection of Alaska Nationals reemployment plan and suggested
that another rehabilitation specialist be assigned because of
Seyberts move to Oregon.
While the reemployment process continued, the parties
discussed settlement. On October 17, 1994, Seybert called
Rudolph and said that he was interested in settling. According
to Rudolphs notes, Seybert told her that he was taking
amitript[y]line, pain meds., anti-inflam., etc. and was paying
for them himself. Her notes then show her calculations regarding
benefits for which Seybert might still be eligible, including PPI
benefits of $14,821.96 and subsection .041(k) benefits that would
total $25,163.32 for a year.3
Alaska National paid for Seybert to see Dr. Fleming in
Reno on November 3, 1994. This was the first time Dr. Fleming
had seen Seybert in about a year. Dr. Fleming examined Seybert
and concluded that he would need ongoing medical care, which she
was not able to provide because he was living in another state.
She informed Alaska National that she strongly recommend[ed] that
he be allowed to find a physician in preferably the Portland or
Salem area to follow up with him for his chronic pain problems.
Alaska National next proposed settlement in a December
2, 1994 letter Rudolph sent to Seybert. In the letter Rudolph
told Seybert that he had three remaining benefits available on
his claim: (1) reemployment benefits; (2) PPI benefits; and (3)
medical benefits. She expressed the opinion that Alaska
Nationals reemployment plan was appropriate and that Seybert
would be required to cooperate with the plan. She said that
Seybert was entitled to further medical care as the result of his
injury but that he had already made a number of physician changes
and had used up [his] statutory allowance of physicians. She
told him that the total of the remaining benefits payable to him
was $18,890.72;4 she offered to settle his claims for $25,000,
minus any PPI benefits paid from November 27, 1994, until the
date of board approval of the settlement and, as part of the
settlement, to permit him to select a new physician in his local
area.
Seybert rejected this offer. Rudolph recorded that on
December 7, 1994, Seybert requested $50,000 to settle the claim
because he had lost [his] livelihood, everything. He also told
her that he might be moving again. Alaska National then decided
to offer $30,000. On December 27, 1994, Rudolph wrote to
Seybert, offering to settle his workers compensation claim for
$30,000, with no deduction for ongoing PPI if Seybert returned
the settlement documents to Alaska National within ten days.
Seybert would also be allowed to select a new physician in his
local area, and Alaska National would be responsible for further
medical care with that physician in accordance with the Alaska
Workers Compensation statutes. She told him that the offer would
remain open until January 9, 1995. On January 6, 1995, after a
long discussion with Rudolph, Seybert agreed to the settlement as
offered.
McLaughlin drafted and sent Seybert a settlement
agreement for his signature. The settlement agreement
specifically waived two benefits that had not been discussed with
Seybert during settlement negotiations: permanent total
disability (PTD) benefits and benefits under AS 23.30.041(k).
Seybert signed the agreement on January 23; the settlement was
approved by the board without a hearing on February 14.
In early 1995 Seybert moved to Butte, Montana. He
began treatment with Dr. Gary Cooney, a neurologist in Missoula,
Montana in the spring of 1995. Dr. Cooneys report indicated that
in his opinion, Seybert was totally disabled. He prescribed
medication and a heating pad to provide symptomatic relief. Dr.
Cooney continued to treat Seybert with pain medications.
In April 2000 Alaska National sent Seybert to Seattle
for an IME with Drs. Williamson-Kirkland and Fey at Virginia
Mason. Their report concluded that Seybert was taking too many
narcotic pain medications, that Dr. Cooney should decrease
Seyberts narcotics, and that the only medications that Seybert
should be taking were Trazodone, an antidepressant to help him
sleep, and Zantac for gastroesophageal complaints. They also
stated that Seybert should have no further medical treatment
related to his neck. Alaska National controverted Seyberts
medical care in May 2000, claiming that the only medications that
Seybert should take were Trazodone and Zantac. Alaska National
wrote that it would support a detoxification program recommended
by Seyberts treating physician. Seybert filed a workers
compensation claim in July 2000; he attached a long letter in
which he requested a hearing, alleged that Rudolph had promised
him lifetime medical benefits and that he was coerced into
signing the settlement, and complained about the doctors at
Virginia Mason.
In May 2001 Seybert, now represented by counsel, filed
a workers compensation claim, asking the board to set aside or
modify the C&R based on misrepresentation and/or fraud. He also
sought PTD benefits. After filing the request to set aside the
C&R, Seybert subpoenaed a complete copy of the insurers file on
his claim, as well as any documents kept in the ordinary course
of business identifying contacts with him by the insurance
company or any of its representatives. Alaska National did not
provide the complete file. It removed correspondence and notes
related to communications between it and its attorney, claiming
privilege. It also did not produce the reserve sheets or serious
loss reports, which showed the carriers potential liability on
the claim.
Seybert moved to compel production of the parts of the
file that had been withheld. The board held a hearing on May 16,
2002 on Seyberts petition to set aside the C&R and his discovery
motion. Seybert and his daughter testified by telephone.
Seybert testified that he had to pay for medical expenses out of
pocket in Oregon and that this caused hardship to him. He
testified that during the settlement negotiations, both Rudolph
and McLaughlin told him that he did not need an attorney. He
testified that he did not understand that he would be giving up
his weekly compensation checks when he signed the agreement. He
also testified that Rudolph told him he could not get medical
care unless he signed the agreement. He said that no one
discussed PTD benefits with him even though he told Rudolph that
he did not think he was capable of working. He related that he
was in a lot of pain and became upset after he found out that
McLaughlin had contacted Dr. Nevins.
Rudolph testified for Alaska National. She indicated
that she was in no hurry to settle the claim and that she
believed that Seybert was not entitled to another change of
physician. She also testified about the circumstances of the
development of Howdens vocational rehabilitation plan and the
settlement negotiations.
At the end of the hearing the board denied Seyberts
requests to compel discovery. It decided that it would not
abrogate the attorney-client privilege because there was no
compelling reason to do so. It refused to compel production of
the reserve information because it found it was not relevant to
its decision.
In its decision of May 31, 2002, the board denied
Seyberts request to set aside the C&R. Using definitions of
duress and fraud from prior board decisions, the board found that
Seybert had failed to prove by a preponderance of the evidence
that Alaska National engaged in fraud or misrepresentation in
negotiating the C&R.5 The board specifically determined that
Seyberts claims that he did not understand the terms of the C&R
and that McLaughlin had repeatedly contacted him at the time of
the C&R were not credible. It also found no credible, specific
evidence of misrepresentation or fraud or duress by the employer
to coerce the employee to sign the C&R. Finally, the board found
that the employers attorney and insurer owed no fiduciary duty to
the employee.
Seybert asked for reconsideration; the board decided to
reconsider for the limited purpose of looking at whether there is
a fiduciary relationship between the insurer and a workers
compensation claimant. The board decided after argument that
there is no such fiduciary duty; it interpreted the Alaska
Workers Compensation Act as setting up an adversarial system to
decide claims. The board therefore reasoned that the employees
interest is in conflict with the employers; because the insurance
contract is between the insurer and the employer, there can be no
fiduciary relationship between the employee and the insurer. It
therefore affirmed its earlier decision.
Seybert appealed to the superior court, where he asked
the court to permit him to supplement or clarify his statement of
points on appeal to include an explicit claim that the C&R should
be set aside because no one informed him of his right to request
a second independent medical evaluation (SIME).6 He argued that
because he testified at the hearing about the issue, it had been
properly raised. Alaska National opposed the motion, arguing
that the issue had not been properly raised before the board and
that granting the motion would cause undue delay. After a
hearing on the motion, the superior court stayed the appeal and
remanded the case to the board so that Seybert could raise claims
related to an SIME.
The board held another hearing on April 8, 2004, to
consider the issues identified in the superior courts remand
order. In its April 23, 2004 decision the board found that the
right to an SIME had not been triggered because there was no
dispute between the employers and employees physicians. It
further found that Seybert had waived procedural, as well as
substantive, rights when he signed the C&R and that one of the
rights he waived was the right to an SIME. It took
administrative notice that all injured workers were, at the time
of Seyberts claim, mailed a copy of Workers Compensation and You,
a booklet containing a condensed but comprehensive description of
substantive and procedural rights under the Alaska Workers
Compensation Act, including a description of SIMEs. The board
found that the parties chose to proceed in a non-adversarial way
rather than pursue their claims through the hearing process and
that the 1995 board that approved the C&R declined to order or
instigate adversarial procedures. The board later denied
Seyberts request for reconsideration of this decision.
The superior court affirmed the boards decisions in all
respects. It agreed with the board that there was no dispute
between the two doctors such that an SIME was necessary.7 It
further held that Seyberts March 2004 request for an SIME8 was an
attempt to create a dispute that did not exist previously and
that Dwight v. Humana Hospital Alaska9 did not require an
explicit waiver of the right to an SIME in all cases and
specifically did not require one in Seyberts case. It decided
that there was substantial evidence in the record to support the
boards finding that Seybert had not shown clear and convincing
evidence of fraud, misrepresentation, or duress. It determined
that while the insurer owed Seybert a duty of good faith, it did
not have a special or fiduciary relationship with him. Finally,
the superior court held that the board had not abused its
discretion in failing to compel production of the documents
Seybert requested. The court reasoned that because the board had
determined that Seyberts claims of fraud were not credible, there
was no reason to abrogate the attorney-client privilege. It also
upheld the boards refusal to compel production of the serious
loss reports and reserve sheets, finding them not relevant.
Seybert appeals the denial of his petition to set aside
the C&R, as well as the boards refusal to compel discovery.
Alaska National cross-appeals the superior courts order remanding
the case to the board to consider the SIME issue.
III. DISCUSSION
A. Standard of Review
In a workers compensation appeal from the superior
court we independently review the boards decision.10 We review
questions of law that do not involve agency expertise using our
independent judgment.11 When using this standard we adopt the
rule of law that is most persuasive in light of precedent,
reason, and policy.12 For questions of law involving agency
expertise we apply the reasonable basis test and defer to the
agencys interpretation if it is reasonable.13 We review factual
findings made by the board to determine whether they are
supported by substantial evidence.14 Substantial evidence is such
relevant evidence as a reasonable mind might accept as adequate
to support a conclusion.15 The boards discovery rulings are
reviewed for an abuse of discretion.16 The superior courts remand
to the board is also reviewed for an abuse of discretion.17 An
abuse of discretion exists when we have a definite and firm
conviction that a mistake has been made.18
B. Alaska National Had No Fiduciary Relationship with
Seybert.
Seybert contends that because he was unrepresented when
the C&R was negotiated and signed, Alaska National had a special
duty to him under 3 Alaska Administrative Code (AAC) 26.100. He
maintains that Alaska National breached that duty by requiring
him to travel to Seattle to attend the pain clinic at Virginia
Mason and by failing to advise him of a variety of benefits that
might be available to him. Relying on a case from Delaware,19
Seybert also asserts that he was a third-party beneficiary to the
insurance contract between Alaska National and Cominco, and as a
third-party beneficiary, he had a special relationship with
Alaska National. The board decided that because the Alaska
Workers Compensation Act creates an adversarial relationship
between an insurer and a workers compensation claimant, there was
no fiduciary relationship between Seybert and Alaska National.
We have determined that a fiduciary relationship exists
when one imposes a special confidence in another, so that the
latter, in equity and good conscience, is bound to act in good
faith and with due regard to the interests of the one imposing
the confidence.20 We have recognized a fiduciary relationship
between business partners, between attorneys and their clients,
and in relationships involving trusts.21 We have also recognized
that inherent in every insurance contract is a fiduciary
relationship that gives rise to an implied covenant of good faith
and fair dealing in execution of the contract.22 We refused to
recognize a fiduciary relationship between a contractor and the
owner of a home, however, because fiduciary duties are reserved
for relationships involving heightened levels of trust.23
The board correctly determined here that because the
Alaska Workers Compensation Act creates an adversarial system,
and because Seyberts and Alaska Nationals interests were in
conflict, there was no basis for a fiduciary relationship between
Seybert and Alaska National. Although 3 AAC 26.100 imposes some
duties on a workers compensation insurer, it does not impose a
fiduciary relationship.24 The regulation requires an insurer to
provide a claimant with assistance that is reasonable so an
unrepresented claimant can comply with the law and reasonable
claims handling requirements.25 It also prohibits an insurer from
requiring a claimant to travel unreasonably for medical care,
rehabilitation services, or any other purpose.26 These
requirements do not impose duties of loyalty and the disavowal of
self-interest that are hallmarks of a fiduciarys role.27 The
workers compensation system is still an adversarial system, and a
fiduciary relationship does not usually exist between opposing
parties in an adversarial system.
Seybert argues that Alaska National violated the
regulation by requiring him to travel to Seattle to attend a pain
clinic. Seyberts attendance at the pain clinic and the travel it
entailed happened months before the parties began serious
settlement negotiations. His travel to Seattle does not appear
to be relevant to the issue of contract formation and the
validity of the C&R, and Seybert offered no argument or evidence
that it in fact influenced his decision to enter into the C&R.
The board and the superior court did not err in disregarding this
rationale for setting aside the C&R.
Alaska National also did not have a fiduciary
relationship with Seybert as a result of its insurance contract
with Cominco. We have recognized that an insurance contract
carries with it a fiduciary relationship between the insurer and
the insured.28 We have never recognized that a workers
compensation claimant is a third-party beneficiary to a workers
compensation insurance contract. Seyberts simple assertion that
he is a third-party beneficiary to the contract does not
adequately brief the issue, so we will not consider it.29
However, even the Delaware Supreme Court, which held in Pierce v.
International Insurance Co. of Illinois that a workers
compensation claimant is a third-party beneficiary to a workers
compensation insurance policy, refused to find a fiduciary
relationship on the facts of that case.30
C. The Board Did Not Violate AS 23.30.012 when It Approved
the C&R.
Seybert contends that the board violated statutory and
regulatory standards in approving the C&R. He specifically
argues that the board violated former 8 AAC 45.160(a) because it
failed to find by clear and convincing evidence that approval of
the settlement would be in Seyberts best interests. He also
argues that the board violated AS 23.30.012 by (1) not holding a
hearing or requiring an impartial medical examination; (2)
approving a settlement that did not strictly comply with the
provisions of the Alaska Workers Compensation Act; and (3)
approving a lump-sum settlement without a showing that the
settlement was in Seyberts best interests.
Alaska Statute 23.30.012(b) provides that an agreement
about a claim:
shall be approved by the board only when the
terms conform to the provisions of this
chapter, and, if it involves or is likely to
involve permanent disability, the board may
require an impartial medical examination and
a hearing in order to determine whether or
not to approve the agreement.[31]
Seybert contends that, because the medical and vocational records
showed that his claim was likely to involve permanent total
disability, the board was required either to order an impartial
medical examination or to hold a hearing. This contention has no
merit. Although medical and vocational records available to the
board suggested that Seyberts claim could involve permanent total
disability,32 the statutory provisions at that time were
discretionary, not mandatory; the board could, in its discretion,
decide not to hold a hearing or order a medical examination.33
Seybert also argues that the settlement did not
strictly comply with the provisions of the Alaska Workers
Compensation Act in that the settlement did not contain an
explicit waiver of his right to request an SIME. But because
there was no disagreement between Seyberts treating physician,
Dr. Fleming, and an employers independent medical evaluation when
the settlement was negotiated and signed, the board did not have
to give Seybert explicit notice of his right to request an SIME,
and Seybert did not have to waive the right explicitly.34
When the C&R was signed there may well have been a
difference of opinion between Drs. Fleming and Williamson-
Kirkland about Seyberts need for continuing treatment after the
pain clinic. Dr. Fleming wrote in November 1994 that Seybert
required continuing medical treatment, while Dr. Williamson-
Kirkland apparently informed Alaska National in March 1994 that
Seybert no longer needed medical care related to his work injury.
But in 1994 and 1995 Dr. Williamson-Kirkland had not performed an
independent medical evaluation for Alaska National; in fact,
Seybert listed Dr. Williamson-Kirkland as an attending physician
on his 1994 workers compensation claim. Dr. Williamson-Kirkland
only became an IME physician to Seybert in 2000, when he again
examined Seybert at the request of Alaska National.
There may also have been a dispute about whether the
reemployment plan obtained by Alaska National was appropriate,
but there was no dispute between an IME and a treating physician
about the plan.35 Dr. Dapras report cannot reasonably be read to
express an opinion about Seyberts functional capacity to
participate in Alaska Nationals reemployment plan because Dr.
Dapra never examined Seybert after his second surgery, his
completion of the pain clinic, and the development of the
reemployment plan. Former AS 23.30.095(k) only applied if there
was a dispute between an attending physician and an employers
independent medical evaluation.36
Seybert also maintains that the board abused its
discretion in approving a lump-sum award. At all times relevant
here, former AS 23.30.012 provided, The board may approve lump-
sum settlements when it appears to be in the best interest of the
employee or beneficiary or beneficiaries.37 Seybert relies on
cases from other jurisdictions, which he claims show a general
rule that lump-sum settlements are disfavored. The cases Seybert
relies on are distinguishable because they deal with commutations
of ongoing awards to lump-sum awards rather than the settlement
of claims.38 As Larson notes, commutation of an award is distinct
from compromise of a claim.39 Here, the money Seybert received
was the result of a compromise of his claim, not the commutation
of an award into a lump sum.40
Seyberts argument that the board could not approve the
settlement absent a finding by clear and convincing evidence that
the settlement was in his best interests is also unpersuasive.
Former 8 AAC 45.160(a) provided as follows:
The board will review settlement agreements
which provide for the payment of compensation
due or to become due and which undertake to
release the employer from any or all future
liability. Settlement agreements will be
approved by the board only where a dispute
exists concerning the rights of the parties
or where clear and convincing evidence
demonstrates that approval would be for the
best interests of the employee or his
beneficiaries.
Here, the parties disagreed, at a minimum, about the
reemployment plan that Alaska National proposed. Because a
dispute existed about the rights of the parties, the board did
not need to find by clear and convincing evidence that approval
would be in Seyberts best interests.
D. The Board Used an Incorrect Legal Standard in
Evaluating Seyberts Misrepresentation Claim.
The central issue in Seyberts appeal is his assertion
that the board erred in evaluating his claim that the C&R should
be set aside because of fraud, misrepresentation, or duress.
Seybert outlines the legal standards from our cases about
contract formation to argue that the board erred in determining
that there was no evidence of fraud or misrepresentation. He
asserts that even if some of Rudolphs statements were non-
fraudulent misrepresentations, her statements were nonetheless
material misrepresentations, that he justifiably relied on them,
and that as a result, the C&R should be set aside. Alaska
National contends that the legal standard for fraud that the
board used is virtually identical to the elements set out in
Industrial Commercial Electric, Inc. v. McLees for voiding a
contract for fraud.41
The board applied the following standard in evaluating
Seyberts assertion that Alaska National had committed fraud in
negotiating the contract: We have determined fraud in the context
of a C&R to be intentional misrepresentation, which induces the
employee to sign the C&R in reliance on that misrepresentation.
It found no credible, specific evidence of misrepresentation or
fraud or duress by the employer to coerce [Seybert] to sign the
C&R. The board made no other specific findings related to
Seyberts fraud claim and did not articulate or apply a separate
standard for misrepresentation. Because the board looked at
whether there was an intentional misrepresentation in its
definition of fraud, we assume that the board analyzed any claim
of misrepresentation as part of Seyberts fraud claim.
We have previously determined that a workers
compensation C&R is a contract and is subject to interpretation
as any other contract.42 Standards of contract formation from our
common law therefore apply to formation and rescission of workers
compensation settlement contracts to the extent these standards
are not overridden by statute.43 Thus, even though a personal
injury settlement agreement may be set aside for mistake,44 we
have held that the workers compensation act does not permit
avoidance of a settlement contract based on mistakes of fact.45
We have also held, however, that the board can set aside a
settlement agreement based on fraud,46 and the board has
interpreted the Alaska Workers Compensation Act as giving it the
authority to set aside a settlement agreement on other bases as
well.47 Alaska National does not challenge the boards authority
to set aside a C&R because of constructive fraud, duress, or
misrepresentation; it argues only that the board correctly found
that there was no evidence of any wrongful behavior by Alaska
National.
In order to sue in tort for damages related to
misrepresentation, an injured party must establish the elements
of fraudulent misrepresentation.48 For purposes of avoiding or
reforming a contract, however, a misrepresentation need not be
fraudulent; it need only be material.49 As we said in McLees,
Restatement (Second) of Contracts 164 (1981) states that a
contract is voidable [i]f a partys manifestation of assent is
induced by either a fraudulent or a material misrepresentation by
the other party upon which the recipient is justified in relying. 50
The standard the board used to evaluate Seyberts claim of
misrepresentation therefore differed in one significant way from
that discussed in McLees: the board only looked to see if there
was an intentional misrepresentation, not a material
misrepresentation.51 In order to avoid a contract based on a
misrepresentation, the party seeking to avoid the contract must
show (1) a misrepresentation; (2) which was fraudulent or
material; (3) which induced the party to enter the contract; (4)
upon which the party was justified in relying.52
Although we agree that substantial evidence supports
the boards finding that there was no intentional
misrepresentation, it was error to consider only whether there
was a fraudulent misrepresentation, and we cannot say that the
error was harmless. There are at least two ways in which
Rudolphs December 2, 1994 letter could have been materially
misleading.
First, Rudolph stated, At this point in your claim,
there are three remaining benefits available. She then
identified three areas of benefits: reemployment benefits,
permanent partial impairment benefits, and medical benefits.
From this statement Seybert could infer that he was potentially
eligible for only these three benefits and no others, i.e., that
no others were remaining.53 Rudolph did not tell Seybert that the
disability benefits available to him, and which he would be
waiving, could include PTD benefits, even though she knew as of
September 26, 1994, that Seybert had been found eligible for SSDI
benefits.54 Counsel for Alaska National conceded at oral argument
before us that Seyberts receipt of SSDI benefits could support
the notion that Seybert might have been eligible for PTD
benefits. Seybert argues that Rudolphs failure to mention
subsection .041(k) benefits as part of the available reemployment
benefits was also a material misrepresentation. The settlement
waived entitlement to subsection .041(k) benefits; those benefits
were not discussed with Seybert before settlement. Rudolph had
calculated six weeks before she wrote Seybert that those benefits
were worth approximately $25,000 for one year.55 The board could
therefore reasonably find that Rudolphs statement about the
benefits remaining in Seyberts claim was not in accord with the
facts she knew of his case.56
Second, Rudolphs statement in the letter concerning
Seyberts right to change physicians is potentially materially
misleading. Her December 2, 1994 letter acknowledged that
Seybert was entitled to further medical care as the result of
[his] injury. It then stated, Because of your recent move to
Oregon, and as a term of our settlement proposal, we will agree
to allow you to select a new physician in your local area and we
will then be responsible for further medical care in accordance
with the Alaska Workers Compensation statutes. But this letter
is unclear as to whether Alaska National acknowledged that
Seybert had a right to a new physician because of his move to
Oregon or Dr. Flemings refusal to treat him, both of which events
were independent of the settlement agreement.57 And the December
27 letter implied that Alaska Nationals willingness to allow him
to see a new physician depended on whether he settled his claims.
Seyberts arguments concerning the change of physicians
focus on his contention that his treatment by Dr. Fleming was a
referral within the meaning of AS 23.30.095(a).58 The board did
not discuss in detail Seyberts contention that the change in
physicians from Dr. Rich to Dr. Fleming was a referral permitted
by AS 23.30.095(a); it simply stated in its summary of the case
that Dr. Rich referred Seybert to Dr. Fleming for a second
opinion. The board may also consider on remand whether Seybert
came under Dr. Flemings care because of a referral. Depending on
whether there was a referral, Rudolphs statements that Seybert
had used his statutorily permitted change in physicians could
have been materially misleading. In addition, the board should
consider whether Seybert had a right, not subject to Alaska
Nationals permission, to change physicians when the C&R was
negotiated by virtue of either his move to Oregon or Dr. Flemings
refusal to treat him further.59
Because the question whether a misrepresentation is
material is a mixed question of law and fact,60 we must remand so
the board can determine whether any of Rudolphs or Alaska
Nationals statements were material misrepresentations. We also
remand for consideration of the other elements of
misrepresentation.61 On remand, the board must consider whether
any misrepresentation was an inducing cause whether Seybert
manifested his assent to the contract in reliance on them62 and
whether Seybert was justified in relying on any
misrepresentation. As to this latter issue, the board may need
to consider whether the representations were statements of
opinion and, if they were, whether Seybert reasonably believed
that Rudolph had special skill or judgment with respect to the
subject matter.63
Underlying the evaluation of Seyberts misrepresentation
and fraud claims is the issue of what duty a workers compensation
insurance adjuster owes to an unrepresented claimant. Although
we decide here that there is no fiduciary duty, the board may
consider on remand what duty the adjuster does owe. Under
certain circumstances non-disclosure of a fact can be equivalent
to an assertion, and according to the Restatement (Second) of
Contracts 161(b), failure to act in good faith and in accordance
with reasonable standards of fair dealing can be relevant in
determining when non-disclosure of a fact is equivalent to an
assertion.64 Counsel for Alaska National stated at oral argument
on appeal that an insurance adjuster has the duty to be honest
with an unrepresented workers compensation claimant, but insisted
that Rudolph did not need to put all [her] cards on the table as
a negotiating strategy. In workers compensation, where there are
complex rules that can carry significant consequences, it is hard
to ignore the disparity in information and knowledge that an
experienced insurance adjuster may possess compared with an
unrepresented claimant. Because knowledge of the business
practices of workers compensation insurers is an area within the
boards special expertise, the board should consider this question
on remand. The issue of what the insurers duties are to an
unrepresented claimant may also be relevant in assessing whether
Seybert was justified in relying on any misrepresentations
Rudolph made.65
Seybert also argues that the board applied an incorrect
legal standard to his claim of duress. Alaska National counters
that the standard the board used is consistent with Alaska case
law on duress. The standard the board applied in Seyberts case
was hardship intentionally created by overreaching or improper
interference by the employer to coerce the employee to sign. We
have held that a party alleging duress must show that (1) he
involuntarily accepted the terms of another; (2) the
circumstances permitted no alternative; and (3) such
circumstances were the result of the coercive acts of the other
party.66 There appear to be some differences in the elements that
must be shown under the two standards: the boards standard does
not require a showing that the circumstances permitted no
alternative, and it appears to require tortious conduct by the
employer.67 In contrast, we have held that the wrongful acts need
only be wrongful in the moral sense.68
Seybert argues that he presented evidence that
satisfied the duress elements set out in Totem Marine Tug &
Barge, Inc. v. Alyeska Pipeline Service Co.,69 but he does not
show how differences between the board and court standards are
material to his case. Absent a more detailed argument about how
the standards differ and how the differences are important to his
facts, and absent a meaningful discussion about why, in the
context of workers compensation claims, it was legal error for
the board to use a standard that differs from the one we have
discussed, we will not consider whether the board used an
incorrect legal standard in evaluating Seyberts claim of duress.
Seyberts argument that the C&R should fail for lack of
consideration has no merit. Even if the dispute about the change
in physicians was not a bona fide dispute, Seybert received
consideration, $30,000, for the release of his claims. Failure
of part of the consideration Seybert received does not void the
entire contract for lack of consideration.70 We are also
unpersuaded by Seyberts argument that the use of the term primary
physician in the settlement agreement was ambiguous and
misleading. In the settlement agreement Alaska National stated
that Dr. Williamson-Kirland was the primary physician in
connection with Mr. Seyberts pain clinic. This is an accurate
statement. The agreement also said, [T]he employer contends that
the employee has had one (1) change of primary physician thus far
in this claim. . . . [T]he employee will be allowed to make one
(1) additional change of treating physician. Although the use of
the terms primary and treating is inconsistent, it was not
materially misleading.71
E. The Board Did Not Err in Failing To Order an SIME.
Seybert argues that he never waived his right to
request an SIME under former AS 23.30.095(k) and that the board
erred in not ordering an SIME in 2004. Seybert requested an SIME
in 2004 based on his assertion that a dispute existed in 1994
between his treating physician, Dr. Fleming, and the employers
physician, Dr. Dapra. The board refused to order an SIME,
finding that there was no medical dispute requiring one and that
Seybert had waived any right he had to one when he signed the
C&R.
We affirm the boards refusal to order an SIME in 2004.
Although there was a difference of opinion in 1993 between Drs.
Fleming and Dapra about the need for a second surgery, Alaska
National agreed to pay for the medical treatment proposed by Dr.
Fleming, Seyberts treating physician. The purpose of an SIME is
to have an independent expert provide an opinion to the board
about a contested issue.72 The board did not need its own expert
in 2004 to resolve a dispute between the opinions of Drs. Fleming
and Dapra because that dispute had been resolved in 1993 when
Alaska National paid for Seyberts second surgery. The board
correctly denied Seyberts 2004 request for an SIME related to the
issues disputed in 1993.
F. Discovery Rulings
Seybert subpoenaed Alaska Nationals file concerning his
claim during pre-hearing discovery. Alaska National failed to
produce the entire file; it claimed privilege with respect to any
correspondence or telephone notes between its staff and its
attorney. It also refused to produce the serious loss reports
and reserve sheets prepared during the pendency of the claim; it
asserted that these documents were proprietary and not relevant.
Seybert asked the board to compel discovery of the withheld
documents. The board refused to do so; it decided that the
documents requested were either privileged or not material. With
respect to the correspondence and records of telephone calls
between Alaska National and its attorney, the superior court
ruled that the board did not abuse its discretion because the
board permissibly could have found that Seybert did not make a
sufficient showing of fraud to justify overriding the attorney-
client privilege. The superior court also held that even though
the serious loss reports were not privileged, the board did not
abuse its discretion in failing to order production of the
documents because they were not material.
We agree with the superior court and the board that
Seybert did not make a showing of fraud sufficient to overcome
the attorney-client privilege. To override the attorney-client
privilege, Seybert was required to make out a prima facie showing
that Alaska National consulted with its attorney for the purpose
of defrauding him.73 To make out a prima facie case, he had to
present more than mere allegations.74 We hold that on these facts
Seybert did not make out a prima facie case of civil fraud
entitling him to discovery of privileged documents. The board
consequently did not abuse its discretion by refusing to compel
production of the documents.
With respect to the reserve sheets and serious loss
reports, the board decided that they were not relevant. Cominco
argues here that the serious loss reports and reserve worksheets
are work product and are not discoverable or that they are
unlikely to lead to the development or disclosure of relevant
evidence. We have previously determined that attorney-client
privilege and work product doctrine do not protect the existence
and amount of loss reserves from discovery when they are
relevant, absent some showing that the documents in question were
prepared at the direction of an attorney.75 Cominco did not make
a showing before the board that the documents were in fact
prepared at the direction of counsel. Because we remand the
misrepresentation claim to the board for application of a
different legal standard, the board may reexamine its ruling to
decide whether the reserve sheets or serious loss reports might
reasonably lead to the discovery of admissible evidence.
IV. ALASKA NATIONALS CROSS-APPEAL
Alaska National cross-appeals the superior courts order
remanding Seyberts case to the board while the superior court
appeal was pending so the board could decide Seyberts claims on
the issue of a SIME as it relates to the settlement agreement.
The superior court stayed the appeal during the remand to the
board. Alaska National contends that remanding the case while
the appeal was pending violates principles of claim splitting or
res judicata and that the superior court therefore abused its
discretion in remanding the case. Seybert counters that a remand
to the board was within the power of the superior court under the
appellate rules, as well as the Administrative Procedure Act, and
that even if the superior court erred by remanding, the error was
harmless.
Alaska Nationals claim that res judicata barred the
superior court from remanding Seyberts case to the board fails
because all of the proceedings were part of the same action.
Although res judicata applies to workers compensation
proceedings, the doctrine is not applied as rigidly in
administrative proceedings as it is in judicial proceedings.76
Res judicata applies to subsequent lawsuits to bar relitigation
of issues that could have been raised in a prior lawsuit.77
Because the remand in Seyberts case was in the middle of the
appeal of the decision, it was not a subsequent lawsuit. The
cases on which Alaska National relies deal with litigation that
ended in a final judgment, followed by a second lawsuit or
administrative action based on the same set of facts as the first
litigation.78 None of the cases deals with a request for remand
to an administrative agency during the course of an appeal to the
superior court.
Appellate Rule 520(c) gives an appellate court
discretion to require such further proceedings to be had as may
be just under the circumstances.79 Alaska Statute 44.62.570 also
gives the superior court the authority to supplement the agency
record on appeal or remand a case to an administrative agency.80
Here, Seybert presented some evidence at his first hearing that
no one had informed him of his right to request an SIME, although
he did not make an explicit legal argument related to the SIME
issue at the first hearing.81 In remanding the case to the board,
the superior court ensured that both parties could present
evidence to support their arguments and rebut the other partys
arguments. It was within the power of the superior court to
remand the case to the board for this purpose.
Moreover, Alaska National does not explain how it was
harmed by the remand.82 The superior court did not abuse its
discretion in remanding the case to the board for further
proceedings while the appeal was pending.
V. CONCLUSION
Because the board used a standard that was too
restrictive to determine whether the C&R should be set aside on
Seyberts misrepresentation theory, we REVERSE the boards order
denying his petition and REMAND to the board for further
proceedings consistent with this opinion. We AFFIRM the superior
courts decision to remand the case to the board for further
proceedings while the appeal was pending.
_______________________________
1 In this opinion, we refer to Cominco and Alaska
National Insurance Co. collectively as Alaska National.
2 This was later reduced to twenty-six percent after
Alaska National questioned the doctors calculations.
3 AS 23.30.041(k) states that if an employees PPI
benefits are exhausted before the end of a reemployment plan, the
employer must provide compensation equal to seventy percent of
spendable weekly wages until completion of the plan.
4 This amount is the sum of the out-of-pocket expenses
that Howden estimated his reemployment plan would cost and the
remaining PPI due Seybert.
5 The standard of proof the board applies for setting
aside a C&R is clear and convincing evidence. Blanas v. Brower,
AWCB Decision No. 97-0252, at 14 (Dec. 9, 1997) (citing Witt v.
Watkins, 579 P.2d 1065, 1067-68 (Alaska 1978)). But the board
here determined that Seybert had not met even the lower standard
of the preponderance of the evidence.
6 An SIME is a board-ordered medical evaluation by an
independent physician selected from a list maintained by the
board; the purpose of an SIME is to assist the board when there
are differences of opinion between the parties physicians. AS
23.30.095(k); 8 Alaska Administrative Code (AAC) 45.090 (2004); 8
AAC 45.092 (2007); Syren v. Municipality of Anchorage, 2006 WL
1075088, at *2 (Alaska Workers Comp. Bd., April 20, 2006).
7 The superior court opinion does not identify the
doctors to whom it refers.
8 The 2004 SIME request was based on the differences of
opinion between Drs. Fleming and Dapra.
9 Dwight v. Humana Hosp. Alaska, 876 P.2d 1114 (Alaska
1994).
10 Dougan v. Aurora Elec. Inc., 50 P.3d 789, 793 (Alaska
2002).
11 George Easley Co. v. Estate of Lindekugel, 117 P.3d
734, 740 (Alaska 2005) (citing Handley v. State, Dept of Revenue,
838 P.2d 1231, 1233 (Alaska 1992)).
12 Id. (citing Guin v. Ha, 591 P.2d 1281, 1284 n.6 (Alaska
1979)).
13 DeNuptiis v. Unocal Corp., 63 P.3d 272, 277 (Alaska
2003) (citing OCallaghan v. Rue, 996 P.2d 88, 94 (Alaska 2000)).
14 DeYonge v. NANA/Marriott, 1 P.3d 90, 94 (Alaska 2000)
(citing Grove v. Alaska Constr. & Erectors, 948 P.2d 454, 456
(Alaska 1997)).
15 Id. (quoting Miller v. ITT Arctic Servs., 577 P.2d
1044, 1046 (Alaska 1978)).
16 Dougan, 50 P.3d at 793.
17 See Sw. Marine, Inc. v. State, Dept of Transp. & Pub.
Facilities, 941 P.2d 166, 172 (Alaska 1997).
18 Dougan, 50 P.3d at 793 (citing Morgan v. State, Dept of
Revenue, 813 P.2d 295, 297 n.4 (Alaska 1994)).
19 Pierce v. Intl Ins. Co. of Ill., 671 A.2d 1361 (Del.
1996).
20 Munn v. Thornton, 956 P.2d 1213, 1220 (Alaska 1998)
(quoting Paskvan v. Mesich, 455 P.2d 229, 232 (Alaska 1969)).
21 Id.
22 O.K. Lumber Co. v. Providence Wash. Ins. Co., 759 P.2d
523, 525 (Alaska 1988).
23 Munn, 956 P.2d at 1220.
24 3 AAC 26.100 (2005).
25 3 AAC 26.100(2) (2005).
26 3 AAC 26.100(1) (2005).
27 Munn, 956 P.2d at 1220 (quoting Wagner v. Key Bank of
Alaska, 846 P.2d 112, 116 (Alaska 1993)).
28 O.K. Lumber, 759 P.2d at 525.
29 Adamson v. Univ. of Alaska, 819 P.2d 886, 889 n.3
(Alaska 1991) ([W]here a point is given only a cursory statement
in the argument portion of a brief, the point will not be
considered on appeal.).
30 Pierce v. Intl Ins. Co. of Ill., 671 A.2d 1361, 1365-66
(Del. 1996). We also note that the Delaware court distinguished
our case law from its decision in Pierce because we had
determined that in Alaska a workers compensation claimant who
alleges bad faith on the part of the insurer has a cause of
action in tort rather than contract. Pierce, 671 A.2d at 1367
(citing Stafford v. Westchester Fire Ins. Co., 526 P.2d 37
(Alaska 1974), overruled on other grounds by Cooper v. Argonaut
Ins. Cos., 556 P.2d 525 (Alaska 1976)).
31 AS 23.30.012(b).
32 Seyberts receipt of SSDI could, as counsel for Alaska
National conceded at oral argument before us, support the notion
that Seybert was permanently and totally disabled.
33 The 2005 amendments to the Alaska Workers Compensation
Act require the board to review settlements when the claimant is
not represented by an attorney licensed in Alaska. Ch. 10, 10,
FSSLA 2005. We express no opinion about what this review should
entail.
34 Dwight v. Humana Hosp. Alaska, 876 P.2d 1114, 1119
(Alaska 1994) (holding that board is required to give parties
notice of right to request SIME in event of medical dispute).
Here there was no medical dispute as defined in former AS
23.30.095(k).
35 Former AS 23.30.095(k) (providing for SIME in event of
medical dispute regarding ability to enter reemployment plan).
36 Id.
37 The current statute provides, A lump-sum settlement may
be approved when it appears to be to the best interest of the
employee or beneficiary or beneficiaries. AS 23.30.012(b).
38 Dameron v. Neumann Bros., 339 N.W. 2d 160, 161 (Iowa
1983) (after employee was awarded weekly PTD benefits, he applied
to have them commuted to lump-sum award; commutation was
permitted as being in employees best interest); Codling v. Aztec
Well Servicing Co., 549 P.2d 628, 632 (N.M. App. 1976) (reversing
lump-sum commutation of PPI award where insufficient evidence
supported exceptional circumstances to justify commutation);
Bailey v. Colonial Freight Sys., Inc., 836 S.W.2d 554, 557 (Tenn.
1992) (trial court must consider whether commutation of award is
in employees best interests as well as employees ability to
manage his money).
39 8 Arthur Larson & Lex K. Larson, Workers Compensation
Law 132.07[1] (2007). AS 23.30.160 prohibits commutations of
compensation or benefits except as provided in the workers
compensation act. PPI benefits can be paid as a lump sum in some
circumstances under AS 23.30.190(a), and AS 23.30.215(d) permits
commutation of an award payable to an alien dependent.
40 For this same reason, Seyberts claim that the
settlement was presumptively unreasonable under former 8 AAC
45.160(e) has no merit. 8 AAC 45.160(e) provided that lump-sum
settlements of board-ordered PTD claims were presumed
unreasonable. There was never a board-ordered PTD claim in
Seyberts case.
41 Indus. Commercial Elec., Inc. v. McLees, 101 P.3d 593
(Alaska 2004).
42 Williams v. Abood, 53 P.3d 134, 139 (Alaska 2002).
43 See Walton v. Ramos Aasand & Co., 963 P.2d 1042, 1045
(Alaska 1998) (holding that basic contract-law principles of
contract formation apply to settlement agreements); Olsen Logging
Co. v. Lawson, 856 P.2d 1155, 1158-59 (Alaska 1993) (holding that
AS 23.30.012 prohibits setting aside workers compensation C&R
based on mistake).
44 Witt v. Watkins, 579 P.2d 1065, 1067 (Alaska 1978).
45 Olsen Logging Co., 856 P.2d at 1158-59.
46 Blanas v. Brower Co., 938 P.2d 1056, 1061-62 (Alaska
1997).
47 Smith v. Commonwealth Elec. Co., AWCB Decision No. 94-
0141 (June 16, 1994).
48 See Thomson v. Wheeler Constr. Co., 385 P.2d 111, 113
(Alaska 1963) (noting that defrauded party to contract has option
of seeking damages based on fraudulent misrepresentation); see
also Joseph M. Perillo, 7 Corbin on Contracts 28.13, at 71-72
(rev. ed. 2002); compare Restatement (Second) of Contracts 164
(1981) with Restatement (Second) of Torts 525, 526, 538 (1977).
The elements of fraudulent misrepresentation include a false
representation of fact, scienter, intention to induce reliance,
justifiable reliance, and damages. Barber v. Natl Bank of
Alaska, 815 P.2d 857, 862 (Alaska 1991) (citing Restatement
(Second) of Torts 525 (1976)).
49 McLees, 101 P.3d at 598 (citing Cousineau v. Walker,
613 P.2d 608, 612 (Alaska 1980)).
50 Id.
51 The board may also have required Seybert to show
coercion as part of his misrepresentation and fraud claims,
because its finding states, [W]e find no credible, specific
evidence of misrepresentation or fraud or duress by the employer
to coerce the employee to sign the C&R. Coercion is not an
element of fraud or misrepresentation, only duress. Barber, 815
P.2d at 862; Helstrom v. N. Slope Borough, 797 P.2d 1192, 1197
(Alaska 1990) (setting out elements of duress).
52 Bering Straits Native Corp. v. Birklid, 739 P.2d 767,
768 (Alaska 1987) (citing Johnson v. Curran, 633 P.2d 994, 997
(Alaska 1981)).
53 See Restatement (Second) of Contracts 159 cmt. a
(1981) (noting that meaning of statement depends on all the
circumstances, including what may fairly be inferred from them).
54 To be found eligible for social security disability
benefits, a claimant must show that based on his functional
limitations, age, education, and past work history, he is unable
to engage in substantial gainful work that exists in the national
economy. 42 U.S.C. 423(d)(2)(A) (2004).
55 A worker can receive subsection .041(k) benefits for up
to two years from the date of plan approval. AS 23.30.041(k).
56 See Restatement (Second) of Contracts 159 (1981).
57 Rudolphs notes show that Dr. Flemings office felt in
March 1994 that there was nothing her office could do for Seybert
because his problems were not neurosurgical. Dr. Fleming also
clearly stated in her November 3, 1994 letter to Alaska National
that she would not prescribe medication for Seybert because of
his move to Oregon and that it was not in his interest to have
her treat him because of the distance between his new home and
Reno. The record does not explain why Alaska National paid for
Seybert to visit Dr. Fleming in November 1994.
58 AS 23.30.095(a) provides, in part:
When medical care is required, the
injured employee may designate a licensed
physician to provide all medical and related
benefits. The employee may not make more
than one change in the employees choice of
attending physician without the written
consent of the employer. Referral to a
specialist by the employees attending
physician is not considered a change in
physicians.
59 See Bloom v. Tekton, Inc., 5 P.3d 235, 239 (Alaska
2000) (noting that when workers attending physician becomes
unwilling or unable to continue care, concerns over doctor
shopping cannot override statutes primary purpose of allowing
injured workers to choose their attending physicians); see also
Clymer v. Wilton Adjustment Servs., AWCB Decision No. 95-0068
(March 19, 1995); Williams v. Cal Worthington Ford, AWCB Decision
No. 93-0254 (Oct. 13, 1993).
60 Diblik v. Marcy, 166 P.3d 23, 25 (Alaska 2007) (citing
Cousineau, 613 P.2d at 613).
61 Seybert also argues that Alaska Nationals actions
constituted constructive fraud, but the issue of constructive
fraud in his case is encompassed in our ruling on the material
misrepresentation issue. See Adams v. Adams, 89 P.3d 743, 750
(Alaska 2004) (comparing constructive fraud to
misrepresentation).
62 Restatement (Second) of Contracts 167 (1981).
63 Id. 168-70.
64 Id. 161(b); see also id. 161 cmt. d (noting that
party is expected to act in accordance with reasonable standards
of fair dealing, as reflected in prevailing business ethics).
65 Id. 169-70.
66 Helstrom v. N. Slope Borough, 797 P.2d 1192, 1197
(Alaska 1990) (quoting Totem Marine Tug & Barge, Inc. v. Alyeska
Pipeline Serv. Co., 584 P.2d 15, 21 (Alaska 1978)).
67 The board did not define overreaching or improper
interference in its decision. We note that overreaching is
defined as taking unfair commercial advantage of another,
especially by fraudulent means. Blacks Law Dictionary 1136 (8th
ed. 2004). Improper interference, discussed in a somewhat
different context when it is claimed that there has been
improper interference with a contract is a tort. Restatement
(Second) of Torts 766-67 (1979).
68 Totem Marine Tug & Barge, 584 P.2d at 22.
69 Totem Marine Tug & Barge, Inc. v. Alyeska Pipeline
Serv. Co., 584 P.2d 15, 21 (Alaska 1978). The elements are the
same in Helstrom, 797 P.2d at 1197.
70 Restatement (Second) of Contracts 80 (1981).
71 Seybert argues separately that the C&R terms related to
medical care were unconscionable. We do not need to decide this
issue because of our decision on his misrepresentation claim.
72 See Osborne Constr. Co. v. Jordan, 904 P.2d 386, 389
n.3 (Alaska 1995); Dwight v. Humana Hosp. Alaska, 876 P.2d 1114,
1119 (Alaska 1994).
73 Munn v. Bristol Bay Hous. Auth., 777 P.2d 188, 195
(Alaska 1989).
74 United Servs. Auto. Assn v. Werley, 526 P.2d 28, 32
(Alaska 1974).
75 Loyal Order of Moose, Lodge 1392 v. Intl Fid. Ins. Co.,
797 P.2d 622, 628 n.14 (Alaska 1990).
76 Robertson v. Am. Mech., Inc., 54 P.3d 777, 779-80
(Alaska 2002) (citing McKean v. Municipality of Anchorage, 783
P.2d 1169, 1171 (Alaska 1989)).
77 See State, Commercial Fisheries Entry Commn v. Carlson,
65 P.3d 851, 874 (Alaska 2003).
78 Robertson, 54 P.3d at 780 (workers second compensation
claim barred by res judicata because both claims had same core
set of facts); DeNardo v. State, 740 P.2d 453, 454-55, 457
(Alaska 1987) (second lawsuit against state barred by res
judicata); Calhoun v. Greening, 636 P.2d 69, 72 (Alaska 1981)
(res judicata barred second motion for relief from judgment when
first motion for relief from judgment was denied and no appeal
was taken).
79 Alaska R. App. P. 520(c).
80 AS 44.62.570(d).
81 He argued that he did not fully know what his rights
were when he signed the C&R.
82 See Municipality of Anchorage v. Devon, 124 P.3d 424,
432 (Alaska 2005) (citing Dobos v. Ingersoll, 9 P.3d 1020, 1024
(Alaska 2000) (noting that party alleging error has burden of
showing prejudice)).
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