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Kidd v. Crossrock Drilling, LLC

Supreme Court of Kentucky

August 24, 2017

LARRY KIDD APPELLANT
v.
CROSSROCK DRILLING, LLC; HON. STEVEN G. BOLTON, ADMINISTRATIVE LAW JUDGE; AND WORKERS' COMPENSATION BOARD APPELLEES

         ON APPEAL FROM COURT OF APPEALS CASE NO. 2015-CA-001239-WC WORKERS' COMPENSATION BOARD NO. 13-WC-89060

          COUNSEL FOR APPELLANT: Glenn Martin Hammond Matthew R. Hall GLENN MARTIN HAMMOND LAW OFFICES, PLLC

          COUNSEL FOR CROSSROCK DRILLING, LLC: Timothy Joe Walker Aziza Hanna Ashy FOGLE KELLER PURDY, PLLC

          OPINION

          VANMETER JUSTICE.

         When an employer and employee reach a settlement agreement with respect to a worker's compensation case, proof of settlement must be filed, either by memorandum or by satisfactory proof of settlement. At issue in this case is whether the Administrative Law Judge ("ALJ") erred in failing to give effect to a settlement agreement reached after the issuance of its Order and Opinion, and raised in a petition to reconsider. We hold that the ALJ did not err and therefore affirm both the Workers' Compensation Board and the Court of Appeals. Larry Kidd now appeals to determine whether the ALJ should have considered the terms of the settlement.

         I. FACTUAL AND PROCEDURAL HISTORY.

         In late.2013, Kidd filed a claim alleging work-related injuries against his employer, Crossrock Drilling, LLC. Following a December 2014 hearing on the contested issues, [1] Kidd's attorney and Crossrock's insurance adjuster engaged in settlement negotiations. The ALJ and Crossrock's attorney were unaware of these negotiations. On February 24, 2015, the adjustor indicated agreement that Crossrock would make a $55, 000 lump-sum payment with a waiver of vocational rehabilitation benefits. Kidd's attorney was to prepare appropriate settlement documents.

         Four days prior, however, on February 20, the ALJ issued its opinion and award denying Kidd permanent partial disability, permanent total disability, and future medical benefits. The effect of the award was that Kidd was entitled to approximately $17, 600 for temporary total disability. Kidd's attorney received the opinion and award on February 25.

         Kidd timely filed a petition for reconsideration based on the settlement reached prior to receipt of the opinion. The ALJ denied the petition, concluding that Kidd failed to properly present the settlement by filing Form 110[2] or by presenting a verified motion to adopt the settlement agreement, thus the settlement was outside the scope of a petition for rehearing. Both the Board and the Court of Appeals affirmed. Kidd now appeals.

         II. ANALYSIS.

         The sole issue on appeal is whether Kidd properly preserved the issue of the alleged settlement agreement. The ALJ, the Board, and the Court of Appeals all held that Kidd did not properly raise this issue, and the ALJ did not err in declining to review the agreement.

         The issue of correspondence constituting a settlement agreement in worker's compensation is not a new one. Kidd argues that this case fits within existing jurisprudence allowing correspondence to sufficiently memorialize a settlement agreement without a formal filing. See Coalfield Tel Co. v. Thompson, 113 S.W.3d 178, 181 (Ky. 2003) (holding that KRS 342.265(1) does not require a formal document that is signed by the parties or their representative when correspondence between the parties clearly indicates the terms to which they have agreed, and the terms of the agreement are not asserted to be incomplete; the ALJ should then address "the substance of the agreement rather than its form[]"); Skaggs v. Wood Mosaic Corp., 428 S.W.2d 617, 619 (Ky. 1968) (holding that an agreement is not required to be in writing "at least so long as there is written evidence (such as the letter and cancelled checks in this case) for the 'memorandum' which the statute says shall be filed[]"); see also Hudson v. Cave Hill Cemetery, 331 S.W.3d 267, 271 (Ky. 2011) (holding the essential terms of an agreement must be settled by the written evidence in order for the agreement to be complete: the agreement was incomplete because the lump sum proceeds to be allocated to a Medicare Set-Aside Account had not been settled, and "[t]he allocation is an essential element of a settlement that includes such an account[]").

         Kidd contends that the email correspondence between the parties is sufficient to memorialize the essential terms and that the ALJ erred in not considering the substance of the settlement. However, the issue is not whether the terms of the alleged settlement between Kidd and Crossrock's insurance adjustor were complete but rather whether this settlement was properly introduced into the record for the ALJ to consider at all.

         By statute, in order for a settlement agreement to be enforced, it must be filed with ...


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