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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Smith v. CSK Auto, Inc. (04/03/2009) sp-6351
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
| TERRY L. SMITH, | ) |
| ) Supreme Court No. S- 12690 | |
| Appellant, | ) |
| ) Alaska Workers Compensation | |
| v. | ) Appeals Commission No. 06-010 |
| ) | |
| CSK AUTO, INC., ROYAL AND | ) O P I N I O N |
| SUNALLIANCE, and WILTON | ) |
| ADJUSTMENT SERVICE, | ) No. 6351 - April 3, 2009 |
| ) | |
| Appellees. | ) |
| ) | |
Appeal from the Alaska
Workers Compensation Appeals Commission,
Kristin S. Knudsen, Chair.
Appearances: Terry L. Smith, pro se,
Fairbanks. Robert L. Griffin and Krista M.
Schwarting, Griffin & Smith, Anchorage, for
Appellees CSK Auto, Inc. and Royal and
SunAlliance.
Before: Fabe, Chief Justice, Matthews,
Eastaugh, Carpeneti, and Winfree, Justices.
FABE, Chief Justice.
I. INTRODUCTION
An employee who injured his back at work signed a
partial compromise and release (C&R) of his workers compensation
claim, waiving reemployment benefits and permanent total
disability benefits in exchange for $10,000. The Alaska Workers
Compensation Board approved the partial C&R. About two years
later, the employee petitioned to vacate the partial C&R on a
number of grounds. The Board and the Alaska Workers Compensation
Appeals Commission rejected his arguments. Because we determine
that the Board failed to follow its own regulations when it
approved the partial C&R, we reverse the decisions of the
Commission and the Board and remand for further proceedings.
II. FACTS AND PROCEEDINGS
While working for CSK Auto in March 2001, Terry Smith
hurt his back unloading cases of antifreeze from a truck. He
worked the rest of that shift but sought medical attention the
next day. CSK Auto paid temporary total disability (TTD) and
medical benefits related to the injury.1 Smith received
treatment from doctors in both the Fairbanks area and Anchorage
and began to see Dr. Susan Klimow in May 2001. After treatment
and a course of physical therapy, Dr. Klimow determined that
Smith was medically stable but could not return to the work he
was doing when he injured his back; she rated him as having a
five percent whole person permanent partial impairment (PPI) as a
result of the injury. Dr. Klimow treated Smith until December
2001, when he changed doctors to Dr. Roy Pierson. Dr. Pierson
later referred Smith to Dr. Susan Anderson.
CSK Auto requested a reemployment eligibility
evaluation for Smith after receiving Dr. Klimows assessment. The
reemployment benefits administrator (RBA) determined that Smith
was not eligible for benefits because in November 2001 Dr. Klimow
had approved job descriptions for three jobs in the local labor
market that Smith had done in the previous ten years.2 Smith
appealed the RBA decision to the Board in January 2002.
Smith continued to receive medical treatment for his
back throughout 2002. In March 2002 Dr. Anderson recommended an
Intradiscal Electrothermal Therapy (IDET) procedure. The
adjuster who was working on Smiths case later contacted Dr.
Klimow to see if she agreed with Dr. Anderson that Smith might
benefit from an IDET procedure. When Dr. Klimow indicated her
agreement with Dr. Anderson, the adjuster reclassified all the
PPI benefits Smith had received as TTD benefits and began to pay
Smith TTD benefits again.
In July 2002 Barbara Williams, a non-attorney
representative, entered an appearance on Smiths behalf. Williams
attended a prehearing conference where the parties agreed to a
hearing on Smiths claim; the hearing was scheduled for
October 17, 2002. In the month before the hearing, Williams and
CSK Auto negotiated a partial settlement of Smiths claim.
According to the terms of the partial C&R, Smith received $10,000
as payment for his reemployment benefits and permanent total
disability (PTD) benefits. CSK Auto agreed to be responsible for
future reasonable and necessary medical care related to the
injury as well as other future benefits, except for those Smith
specifically waived. CSK Auto retained the right to contest
future medical benefits. Smith signed the partial C&R on October
10, 2002. The partial C&R was filed with the Board, which
approved it on October 17, 2002, after a brief hearing. Williams
was present at the hearing, but Smith was not.
Smith underwent the IDET procedure about two weeks
after the partial C&R was approved. He had scheduled the
procedure with Dr. Anderson before signing the agreement, but the
adjuster did not complete travel arrangements for the procedure
until after Smith had signed the partial C&R.
In July 2003, after Dr. Anderson determined that Smith
was medically stable, CSK Auto required him to attend an
independent medical evaluation (IME) for an impairment rating.
Dr. Patrick Radecki conducted the IME. Dr. Radecki concluded
that Smith was unintentionally magnifying his symptoms. Dr.
Radecki believed that Smith had mild degenerative disc disease
unconnected to his work injury and recommended that Smith not
have further medical care related to the work injury. Shortly
after Dr. Radeckis evaluation, CSK Auto controverted continuing
medical care. Smith responded by rescinding all of his medical
releases. Smith discharged Williams as his representative on
June 4, 2004, and in a petition dated December 31, 2004, asked
the Board to set aside the partial C&R based on fraud, duress, or
misrepresentation.
In his petition Smith alleged that (1) he did not know
the extent of his injuries when he signed the partial C&R, while
CSK Autos attorney and the insurance adjuster, Susan Kosinski,
did and (2) CSK Auto was not paying Smiths medical bills as
promised. Smith later added other reasons to rescind the partial
C&R. Among the theories he advanced to set the agreement aside
were (1) collusion between Williams and the opposing party; (2)
failure to file all medical records as required by regulation;
(3) misrepresentations to the Board about the identity of his
treating physician; (4) threats to refuse the IDET procedure if
Smith did not agree to the settlement; (5) delay in notification
that the IDET procedure had been approved as evidence that CSK
Auto was using the procedure as leverage to make him sign the
agreement; (6) the Boards failure to order an impartial medical
examination; and (7) a violation of his due process rights
because he did not appear before the Board prior to approval of
the partial C&R.
The Board held a hearing on Smiths petition to set
aside the partial C&R on February 16, 2006. Smith represented
himself. Smith and his brother testified on Smiths behalf.
Williams and Kosinski testified on behalf of CSK Auto. Smith
testified that he was not getting the benefit of his bargain with
CSK Auto because he was no longer getting medical benefits.
According to Smith, the IDET procedure failed, and he now had
other spinal problems that would cost over $200,000 to treat.
Because of CSK Autos controversion of his medical care, he was
unable to get needed treatment. Smith also testified that the
adjuster sometimes changed her mind or controverted treatment.
Smith alleged that Williams told him he would not have the IDET
procedure done unless he signed the partial C&R. Smith stated
that he noticed when he signed the partial C&R that not all of
the medical records had been submitted to the Board, but he said
he did not object because he would not have had the IDET
procedure unless he signed the agreement. Smith admitted that he
had scheduled the IDET procedure with his physician before he
signed the partial C&R, but he said that he did not know the
procedure had been preauthorized.
Williams testified that she discussed CSK Autos initial
settlement offer of $7,500 with Smith and that she and Smith
discussed making a counteroffer, ending up with a figure of
$10,000. She stated that she also discussed CSK Autos response
to the counteroffer with Smith. Williams indicated she told
Smith that she was unwilling to represent him at a hearing on the
reemployment benefits appeal and advised him that he had little
chance of prevailing in the appeal; she said that she only became
involved in Smiths case to try to help him settle it. She
testified that she discussed the waiver of PTD and reemployment
benefits with Smith and that he voiced no concerns about missing
medical records. Williams also testified that she believed Smith
was aware before he signed the partial C&R that the IDET
procedure had been approved.
Kosinski testified that Smith was receiving medical and
TTD benefits during negotiations and that she never told Smith
that the IDET procedure was contingent on his signing the partial
C&R. She also testified that she approved the IDET procedure the
day after Smiths physician requested it but did not tell Smith
that it was approved because normally she left it up to the
doctor to contact the patient and schedule the procedure. She
said that when a workers compensation claimant is represented, it
is not her practice to communicate directly with the claimant.
She indicated that Smith contacted her on October 7 about making
travel arrangements for the IDET procedure and that she made them
on October 14. Kosinski denied having told Williams or Smith
that Smith would not get medical treatment if he did not sign the
partial C&R. She also denied having refused to approve a medical
procedure for Smith.
In its March 2006 decision on the petition, the Board
refused to set aside the partial C&R. The Board first stated
that a C&R can only be set aside because of fraud or duress on
the part of the employer; Smiths complaints about Williams
misleading him were therefore irrelevant to the issue whether the
agreement should be set aside. The Board found that Smith was
not credible when he testified that he did not understand the
terms of the partial C&R, but that even if he did not understand
it, his misunderstanding could not be a basis for setting it
aside. The Board found no credible, specific evidence of
misrepresentation, fraud, or duress on the part of CSK Auto to
coerce Smith to sign the agreement. It held that Smiths current
lack of medical benefits was not a reason to set aside the
partial C&R because medical benefits were not affected by it.
Finally, with respect to Smiths argument that the partial C&R
should be voided because CSK Auto did not attach all of Smiths
medical records,3 the Board found that all the available relevant
medical reports at the time of the C&R were already filed with
medical summaries.
Smith petitioned for reconsideration of the decision.
He argued that listing Dr. Klimow as his treating physician in
the partial C&R was misleading and that all of Dr. Klimows
recommendations and her PPI rating were voided by his change of
physician. He alleged that his due process rights were violated
because the Board did not permit him to appear at a hearing
before approving the partial C&R and claimed that Kosinski was
playing games with him by turning on and off his benefits. He
maintained that the Board should not have approved the partial
C&R before the IDET procedure. He also alleged that Williams had
defrauded him of the settlement money and complained that he was
rushed into signing the settlement before the IDET procedure and
never intended to give up PTD benefits. The Board denied
reconsideration.
Smith appealed to the Alaska Workers Compensation
Appeals Commission, which affirmed the Board, holding that the
Board applied the proper legal standards and its findings are
supported by substantial evidence in light of the whole record.
The Commission did not discuss the legal standard for setting
aside a C&R except to say that it agreed the board was not
required to set the agreement aside under Olsen Logging Co. v.
Lawson.4 The Commission determined that substantial evidence in
the record supported the Boards findings that (1) the settlement
was plain and unambiguous; (2) Smith was able to read and
understand the partial C&R when he signed it; and (3) there was
no evidence of misrepresentation, fraud, or duress by the
employer.
Smith appeals.
III. STANDARD OF REVIEW
In this case, we elaborate on Barrington v. Alaska
Communications Systems Group, Inc.5 and the standard of review in
appeals from the Alaska Workers Compensation Appeals Commission.
The legal questions presented here are issues of law involving no
agency expertise, so we apply our independent judgment to those
questions and review the decision of the Commission.6
But here we must also review factual findings. The
Commission is required to review the factual findings of the
Board using the substantial evidence test7 and is bound by the
Boards findings about the credibility of witnesses.8 It may not
accept new or additional evidence related to an appeal except in
limited circumstances.9 In this case, the Commission did not
make factual findings but reviewed the Boards factual findings
for substantial evidence. Because the Commissions decision is
the final administrative action in a workers compensation case,10
we independently review the Commissions legal conclusion that the
Boards factual findings were supported by substantial evidence.
This necessarily requires us to independently review the record
and the Boards factual findings. When we review the Commissions
legal conclusions about the Boards exercise of discretion or
legal rulings, we also independently assess the Boards rulings
and in so doing apply the appropriate standard of review.
Substantial evidence to support factual findings is such relevant
evidence as a reasonable mind might accept as adequate to support
a conclusion.11
IV. DISCUSSION
Smith seeks to set aside the partial C&R on a number of
grounds, including fraud, duress, and mistake of fact. As part
of his fraud claim, he asserts that the settlement should be set
aside because his non-attorney representative breached her duty
to him. He also argues that he was denied due process because he
did not appear at the hearing before approval of the partial C&R
and that the Board failed to follow its regulations in approving
it. We address each contention in turn.
A. Mistake of Fact
Smith first argues that the partial C&R should be set
aside because of a mistake of fact, relying on Witt v. Watkins.12
Witt held that a personal injury settlement could be set aside
because of a mistake of fact; the test set out was whether, at
the time of signing the release, the releasor intended to
discharge the disability which was subsequently discovered.13 But
as the Commission recognized, we decided in Olsen Logging Co. v.
Lawson that the Alaska Workers Compensation Act does not permit
workers compensation settlement agreements to be set aside
because of unilateral or mutual mistake.14 Smiths arguments that
the partial C&R should be set aside because he did not know the
extent of his disability or that the IDET procedure would fail
are both arguments related to mistake15 and, under Olsen Logging
Co., cannot serve as a basis to set aside the partial C&R.
Additionally, the partial C&R stated that the extent of Smiths
disability may not fully be known at this time and that the
disability may be continuing and progressive in nature. Smith
released liability for as yet undiscovered disabilities, injuries
or damages associated with his condition. The Board found that
Smiths assertion that he did not understand the terms of the
settlement was not credible. This credibility determination is
binding for any review of the Boards factual findings.16
Smiths assertions that the Board should have determined
his earning capacity and that he never intended to give up his
PTD benefits are also related to mistake because they are both
based on his assertion that the back injury was worse than he
expected. According to Smith, the Board should have considered
that the IDET procedure failed to help him and that he is now
permanently and totally disabled. Although Smith may have been
mistaken in his belief that the IDET procedure would resolve his
back pain, his mistake cannot serve as a basis for avoiding the
partial settlement. Likewise, even if Smith showed that he never
intended to give up his PTD benefits, that showing could not
serve to set aside the partial C&R. The Commission was correct
in holding that under Olsen Logging Co. v. Lawson, a workers
compensation settlement agreement cannot be set aside because of
mistake.
B. Misrepresentation and Fraud
Smith also seeks to set aside the partial C&R because
of fraud. The Board refused to do so, finding no credible,
specific evidence of misrepresentation or fraud or duress by the
employer to coerce the employee to sign the C&R. Here, Smith
argues that CSK Auto misrepresented who his treating physician
was in the partial C&R, that this misrepresentation was material,
and that he relied on the misrepresentation. CSK Auto responds
that the Commission was correct in concluding that substantial
evidence in the record supported the Boards findings about
misrepresentation and fraud.
We have held that in a workers compensation case, an
employee is required to show the following to avoid a settlement
based on misrepresentation: (1) a misrepresentation; (2) which
was fraudulent or material; (3) which induced the party to enter
into the contract; (4) upon which the party was justified in
relying.17
In the section of the partial C&R setting out the
parties dispute, CSK Auto stated, On November 14, 2001, Dr.
Klimow, the employees treating physician, approved the employee
to return to [positions Smith had held in the ten years prior to
his work-related injury]. The Board described the agreement as
containing an accurate, if sketchy, history of [Smiths] medical
treatment; the Board noted that Dr. Klimow was Smiths treating
physician in November 2001 and that the partial C&R showed that
Smith was being treated by Dr. Anderson as of June 2002.
We agree with the Commission that substantial evidence
in the record supports the Boards conclusion that this statement
was not a misrepresentation. A misrepresentation is a statement
that is not in accord with the facts.18 As the Board noted, Dr.
Klimow was Smiths treating physician on November 14, 2001, when
she indicated that he could return to work he had previously
done. But even if the statement were a misrepresentation that
is, if treating physician meant current treating physician Smith
could not have justifiably relied on it because he knew when he
signed the agreement that Dr. Klimow was not his treating
physician.19 Not only does the partial C&R itself state that Dr.
Anderson was treating Smith in June 2002, Smith listed only Dr.
Pierson as his treating physician on his workers compensation
claim form, and he wrote to Dr. Anderson about the IDET procedure
at the time he signed the partial C&R.
Smith also alleges that Williams withheld information
about PTD benefits or failed to inform him about them and claims
that she misrepresented herself and breached a fiduciary duty to
him in her representation of him in the proceeding. The Board
made no findings related to these allegations, stating, Whether
or not there is any basis for the employees assertions that Ms.
Williams represented him inappropriately, those assertions are
irrelevant. The Commission concurred. We agree with the
Commission and the Board in order for one party to avoid a
contract on grounds of misrepresentation, the misrepresentation
must be made by the other party to the contract.20 Williams was
not a party to the contract, nor was she a representative of CSK
Auto, so any representation she made cannot be a reason to avoid
the partial C&R.
C. Duress
Smith argues that the partial C&R should be set aside
because of duress. He asserts that the insurance adjuster both
withheld the information that she had approved the IDET procedure
and failed to make travel arrangements for the procedure until
after he had signed the settlement agreement. He also says that
he was put under duress by Williams, claiming that she threatened
to withdraw from representing him unless he signed the partial
C&R. The Board concluded that there was no evidence of duress.
It found that the adjuster preauthorized the procedure by calling
Smiths doctor on or about September 11, 2002 and that she never
withdrew or threatened to withdraw the approval. It further
found that Smith received compensation throughout the negotiation
process. It determined that Smiths allegations about Williams
were irrelevant. The Commission decided that substantial
evidence in the record supported the Boards findings.
We agree with the Commission that substantial evidence
in the record supports the Boards finding that there was no
duress by CSK Auto. The adjusters testimony and the written
records support the finding that the IDET procedure was
authorized before Smith signed the partial C&R. The compensation
reports and the adjusters testimony show that Smith received
benefits throughout the negotiations.21 The Boards finding that
CSK Auto never withdrew or threatened to withdraw its approval of
the IDET procedure is supported by the adjusters testimony that
she never told Smith or Williams that Smith would not get medical
treatment if he did not sign the partial C&R.22
D. Interference with Contractual Benefits
Smith contends that the partial C&R should be set aside
because he is not getting the benefit of his bargain. Relying on
Kaiser v. Royal Insurance Co. of America,23 he argues that CSK
Auto violated the covenant of good faith and fair dealing by
taking direct action to deprive him of the benefit of the partial
C&R. His argument is based on the current lack of medical
treatment for his back.
An implied covenant of good faith and fair dealing
exists in all contracts; it requires that each party refrain from
doing anything that would injure the right of the other party to
receive the benefits of the contract.24 But medical care was not
one of the benefits that Smith received from the partial C&R; in
fact, Smiths medical care was not affected by the partial C&R at
all. Smith preserved his right to get medical and other benefits
not specifically waived in the partial C&R, and CSK Auto reserved
the right to controvert future medical care.25 Both the Board and
the Commission correctly interpreted the partial C&R to apply
only to vocational reemployment and permanent total disability
benefits.
E. Regulatory Violations
Smith maintains that the partial C&R did not comply
with the regulatory requirements of 8 AAC 45.160 in that not all
of his medical records were submitted with the agreement.26 He
also argues that the partial C&R should be set aside because he
did not have the opportunity to appear at the hearing before the
Board approved the partial C&R and because the Board did not
order an independent medical examination pursuant to
AS 23.30.012. He additionally contends that the Board violated
his due process rights in conducting the hearing without him.
Finally, Smith insists that the Board should not have approved
the partial C&R before the IDET procedure because he was not
medically stable and did not know the extent of his disabilities
when he signed the partial C&R.
When it considered Smiths request to set aside the
partial C&R, the Board mistakenly believed that no hearing had
been held before approval of the settlement and rejected Smiths
due process claim, deciding that the Alaska Workers Compensation
Act does not require a hearing before approval of a settlement
and finding that no one had requested a hearing on the settlement
in Smiths case.27 The Board relied on AS 23.30.012 in concluding
that no hearing was required. We agree with the Board that
neither a hearing nor an impartial medical examination is
required by this section of the statute: the Board has the
discretion to order a medical examination or to hold a hearing,
but it is not required to do so.28 But AS 23.30.110(c) required
the parties to appear at the scheduled hearing because they
entered into the settlement only one week before the originally
scheduled hearing date of October 17, 2002.29 Smiths non-attorney
representative attended the hearing, but Smith did not. His
absence is unexplained.30
The Board found at the conclusion of the October 2002
hearing that the partial C&R appear[ed] to be in Smiths best
interest, but it is not clear from the record whether the Board
applied the correct subsection of its regulation when it examined
the settlement.31 The Board was required to determine whether the
settlement was in Smiths best interest: Board regulations
generally prescribe Board review of settlement agreements as well
as a finding that the agreement is in the employees best
interest.32 In Smiths case, however, the Board needed to make a
more searching inquiry. When an employee waives permanent
benefits before medical stability and rating, a Board regulation,
8 AAC 45.160(e), creates a presumption that the settlement is not
in the employees best interest, and the Board cannot approve the
settlement unless there is a showing that waiver of these
benefits is in the employees best interest.
8 AAC 45.160(e) provides:
An agreed settlement in which the employee
waives medical benefits, temporary or
permanent benefits before the employees
condition is medically stable and the degree
of impairment is rated, or benefits during
rehabilitation training after the employee
has been found eligible for benefits under AS
23.30.041(g) is presumed not in the employees
best interest, and will not be approved
absent a showing by a preponderance of the
evidence that the waiver is in the employees
best interest. . . .
This regulation affords protection to employees.
Because the parties to a workers compensation settlement
agreement cannot later avoid an agreement when they are mistaken
about the extent of the employees injury,33 the regulation
effectively requires the parties either to delay settlement until
the employee has a clearer idea of the extent of his disability
or to produce affirmative evidence that waiver is in the
employees interest. We conclude that 8 AAC 45.160(e) applied in
Smiths case because he was not medically stable when the partial
C&R was filed with the Board and that the Board erred as a matter
of law by ignoring this regulation when it approved the partial
C&R.
Smith relied on 8 AAC 45.160 before the Board and the
Commission, as well as before this court, insisting throughout
the proceedings that the Board erred in approving the partial C&R
before he had the IDET procedure, while he was still being
treated for his work-related injury. Although he did not
specifically reference subsection (e) of 8 AAC 45.160, Smith did
raise the issue that he was not medically stable when the partial
C&R was signed at the Board hearing, in his briefing before the
Commission, and again in his briefing before us. And in
pleadings before the Board, Smith complained that the Board
chairman did not state what was the best interest of the employee
during a C&R hearing. At oral argument before us, he stated that
the Board, in approving the partial C&R before the IDET
procedure, did not protect him. Because we treat pleadings of pro
se litigants less stringently than those of lawyers, we conclude
that Smith adequately raised the issue that we decide here.34
Here, the partial C&R was equivocal at best in
addressing Smiths medical stability.35 It noted that Dr. Klimow
had found him medically stable in August 2001 but also showed
that Smith was getting TTD benefits and that his TTD benefits
were continuing.36 At the hearing to approve the partial C&R,
counsel for CSK Auto mentioned both that Dr. Klimow had rated
Smith in 2001 and that Smith was still receiving TTD benefits.
The summary form that accompanied the partial C&R noted Dr.
Klimows five percent whole person impairment rating from 2001.
But CSK Auto had accepted that Smith was not and had never been
medically stable in July 2002 when it reclassified all of his PPI
benefits as TTD benefits. In March 2002 Smiths treating
physician, Dr. Anderson, had recommended that Smith undergo an
IDET procedure to relieve his back pain. In July 2002 the
adjuster contacted Dr. Klimow, who agreed that Smith might
benefit from the procedure. The adjuster then noted, We now have
no dispute as to stationary date as the initial doctor agrees
with the IDET. Because there was no factual dispute, we conclude
that Smith was not medically stable when he signed the partial
C&R. Because Smith was not medically stable and the agreement
waived PTD benefits, this partial settlement was presumed not to
be in his best interest and could not be approved absent a
showing by a preponderance of the evidence that Smiths waiver of
permanent total disability benefits was in his best interest.37
The Board has interpreted its regulation as requiring
some evidence that the settlement is in the employees best
interest.38 Generally, the Board considers the employees
testimony in reaching a decision about his best interest.39 Here,
the Board did not identify what evidence, if any, overcame the
presumption that the partial C&R was not in Smiths best interest.
It is not clear from the transcript whether the Board considered
Smith medically stable when it approved the partial C&R. The
Board did not ask Smiths representative what evidence might
overcome the presumption that the settlement was not in Smiths
best interest; it simply inquired whether she discussed with
Smith the difficulties in overturning workers compensation
settlements. The Board could not question Smith about the
partial C&R because he was not there. In the partial C&R, Smith
gave up rights to both reemployment and PTD benefits in exchange
for $10,000. At oral argument before us, counsel for CSK Auto
conceded that if Smith were permanently and totally disabled as a
result of his injury, his claim could perhaps be worth hundreds
of thousands of dollars. The Board did not identify any evidence
that might have overcome the presumption that waiver of PTD
benefits before medical stability was not in Smiths interest.
We are troubled by the Boards ready approval of the
agreement in the absence of testimony from Smith, particularly in
light of the fact that the Board had incomplete medical records
before it when it approved the agreement.40 While failure to
submit complete medical records might not be reversible error in
all cases,41 here it underscores the Boards lack of a complete
record before approval of the agreement, when the agreement was
presumed not to be in Smiths interest. Moreover, the partial C&R
contained only two statements about Smiths best interest: an
assertion that the parties believed the settlement was in the
best interest of the employee and a statement that the employee
believed the partial C&R represented a fair and equitable
settlement of this matter in his best interests. These
boilerplate assertions are inadequate to overcome a presumption
that waiver of PTD benefits was not in Smiths best interest.
The Boards failure to follow its own regulation
regarding settlement of claims before medical stability, its
holding the hearing in Smiths absence, together with the waiver
of a benefit with potentially significant value, convince us that
the Boards action in approving the settlement, and later failing
to set it aside, was an abuse of discretion.42 The Commission
erred as a matter of law in affirming the Boards order.43
V. CONCLUSION
For the reasons set out above, we REVERSE the decisions
of the Board and the Commission and REMAND to the Commission with
instructions to remand to the Board for further proceedings
consistent with this opinion.
_______________________________
1 We refer to CSK Auto, Inc. and its insurance adjuster
collectively as CSK Auto.
2 To be eligible for reemployment benefits, an employee
must be unable to return to his job at the time of injury or to
other jobs existing in the labor market that he held in the ten
years prior to his injury. AS 23.30.041(e).
3 8 Alaska Administrative Code (AAC) 45.160(c)(1) (2004)
requires that a settlement agreement be accompanied by all
medical reports in the parties possession, except for medical
records that have already been filed.
4 856 P.2d 1155 (Alaska 1993) (holding that mistake of
fact cannot be a basis to set aside a workers compensation
settlement agreement).
5 198 P.3d 1122 (Alaska 2008).
6 Id. at 1125. We independently review whether a
regulation applies to a case. Garner v. State, Dept of Health &
Soc. Servs., Div. of Med. Assistance, 63 P.3d 264, 267 (Alaska
2003).
7 AS 23.30.128(b).
8 AS 23.30.122, .128(b).
9 AS 23.30.128(a), (c).
10 Barrington, 198 P.3d at 1125 (citing AS 23.30.008(a);
Alaska Pub. Interest Research Group v. State, 167 P.3d 27, 41, 45
(Alaska 2007)).
11 DeYonge v. NANA/Marriott, 1 P.3d 90, 94 (Alaska 2000)
(quoting Grove v. Alaska Constr. & Erectors, 948 P.2d 454, 456
(Alaska 1997)).
12 579 P.2d 1065 (Alaska 1978).
13 Id. at 1068-69, 1071 n.18.
14 856 P.2d 1155, 1159 (Alaska 1993).
15 See Witt, 579 P.2d at 1069 (describing types of
mistake).
16 AS 23.30.122, .128(b).
17 Seybert v. Cominco Alaska Exploration, 182 P.3d 1079,
1094 (Alaska 2008) (emphasis omitted) (citing Bering Straits
Native Corp. v. Birklid, 739 P.2d 767, 768 (Alaska 1987)).
18 Restatement (Second) of Contracts 159 (1981).
19 See id. 172 cmt. b (noting that when recipient knows
that assertion is false, reliance is clearly not justified).
20 Indus. Commercial Elec., Inc. v. McLees, 101 P.3d 593,
598 (Alaska 2004) (quoting Restatement (Second) of Contracts 164
(1981)).
21 The record reflects that Smith continued to receive TTD
benefits through February 19, 2003, about four months after the
Board approved the partial C&R.
22 As with Smiths misrepresentation and fraud claims, the
Board and Commission correctly determined that any actions or
statements by Williams cannot be attributed to CSK Auto and thus
cannot serve as a basis for setting aside the agreement due to
duress.
23 89 P.3d 740 (Alaska 2004).
24 Id. at 742 (citing Ramsey v. City of Sand Point, 936
P.2d 126, 133 (Alaska 1997)).
25 Smith filed written claims for medical and TTD benefits
in August 2003 and December 2004.
26 8 AAC 45.160(c)(1) requires that every settlement be
accompanied by all medical reports in the parties possession,
except that, if a medical summary has been filed, only those
medical reports not listed on the summary must accompany the
agreed-upon settlement.
27 The Board indicated in its decision that it had not
held a hearing before approving the partial C&R. In fact, CSK
Autos attorney and Smiths non-attorney representative appeared at
the scheduled hearing time on October 17, 2002, to request Board
approval of the partial C&R. After oral argument before us, CSK
Autos attorney supplemented the record with a transcript of the
2002 hearing. Smith was not at the Board hearing. The record
does not explain his absence.
28 Seybert v. Cominco Alaska Exploration, 182 P.3d 1079,
1091 (Alaska 2008).
29 AS 23.30.110(c) states in part, If a settlement
agreement is reached by the parties less than 14 days before the
hearing, the parties shall appear at the time of the scheduled
hearing to state the terms of the settlement agreement. 8 AAC
45.070(d) implements this statutory provision.
30 Smiths representative stated at the hearing that she
believed he was unavailable because he was undergoing the IDET
procedure. Smith underwent the IDET procedure on October 30,
2002.
31 Whether a regulation applies to a case is a legal
question that we independently review. Garner v. State, Dept of
Health & Soc. Servs., Div. of Med. Assistance, 63 P.3d 264, 267
(Alaska 2003).
32 8 AAC 45.160(a). AS 23.30.012(b) currently requires
Board review of settlements when an employee is not represented
by counsel licensed to practice law in Alaska. This provision
was not in effect when Smith signed his settlement agreement.
Ch. 10, 10, FSSLA 2005.
33 Olsen Logging Co. v. Lawson, 856 P.2d 1155, 1159
(Alaska 1993).
34 See DeNardo v. Calista Corp., 111 P.3d 326, 330 (Alaska
2005) (citing Smith v. Sampson, 816 P.2d 902, 906 (Alaska 1991);
Wilkerson v. State, Dept of Health & Soc. Servs., Div. of Family
& Youth Servs., 993 P.2d 1018, 1022 (Alaska 1999)) (concluding
that pro se complaints encompassed discrimination claim even
though they did not refer to anti-discrimination statute).
35 Medical stability is the date after which further
objectively measurable improvement from the effects of the
compensable injury is not reasonably expected to result from
additional medical care or treatment. AS 23.30.395(27).
36 Eligibility for TTD benefits ends when the employee
becomes medically stable. AS 23.30.185.
37 8 AAC 45.160(e).
38 See, e.g., Perkins v. Trident Seafoods Corp., AWCB
Decision No. 06-0189 at 7 (July 13, 2006). It has also construed
the workers compensation statute as imposing an affirmative duty
on the Board to determine the rights of the parties. Id.
39 Id. (citing Kline v. Swansons, AWCB Decision No. 00-
0094 at 4 (May 11, 2000)) (noting that while an employees belief
is not controlling, the Board considers it in making a decision).
40 Our review of the record confirms Smiths assertion that
not all medical records in the adjusters possession were
submitted to the Board before approval of the partial C&R. The
last medical summaries filed before the hearing only listed
medical records through June 25, 2002. Yet the record shows that
the adjuster had medical records from August and September 2002,
including notes from a lumbar discography, before the settlement
was filed with the Board. The Board stated in its decision on
Smiths petition to set aside the partial C&R that all of the
relevant medical records had been filed with medical summaries
before approval of the agreement. The Board decision does not
explain why the omitted medical records were not relevant.
41 Cf. Irvine v. Glacier Gen. Constr., 984 P.2d 1103, 1108
(Alaska 1999) (holding that error in failing to consider
physicians view was harmless).
42 See Garner v. State, Dept of Health & Soc. Servs., Div.
of Med. Assistance, 63 P.3d 264, 269 (Alaska 2003) (holding that
agency abused its discretion in failing to consider applicability
of regulation to case). Because we reverse the Board on other
grounds, we do not need to reach Smiths due process claim.
43 See Irvine, 984 P.2d at 1107 (holding that Board
committed legal error in affirming reemployment decision where
RBA abused his discretion by not following statute).
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