Workers’ Compensation Judge Over-Turns an Unrepresented Claimant’s Settlement Due to Alleged Mental Issues, but Appeals Court Reinstates It

Fotolia_62754907_XS (1)Employer and Carrier settled a claim with an unrepresented claimant and thereafter, recited the terms of the settlement in open court at a settlement hearing.  The judge questioned Claimant as to whether he understood that the settlement was a resolution of all matters involving the workers’ compensation claim, and he indicated he did. Claimant stated that he did not wish to have counsel and that he wanted the judge to approve the settlement.  Several weeks later, a written settlement agreement, prepared by counsel for Employer, was presented to Claimant, but he refused to sign it on grounds that it contained material not agreed to by him at the hearing and he subsequently retained counsel.   Employer argued to the Court that a lump sum settlement was perfected as per La. R.S. 23:1272(A), because the terms were recited and acknowledged in open court and were capable of being transcribed. It further argued that the settlement, once approved by the judge, could only be set aside because of fraud or misrepresentations, and because neither of these factors were shown, the settlement was unassailable.

The Judge noted that the written agreement contained matters not addressed at the hearing, and she also noted that Claimant had psychological issues which she had not been aware of when she approved the settlement and that had either party made her aware of claimant’s mental issues, she would not have approved the oral settlement.  After ruling in Claimant’s favor and over-turning the settlement, Employer and Carrier appealed.

The court of appeal found that the failure of employer’s counsel to further pursue the claimant’s mental state (because counsel did not question Claimant at the hearing about mental issues) did not constitute a misrepresentation.  The Employer provided the court with all information in its possession regarding claimant’s mental state. Finding no fraud or misrepresentation, the court reinstated the settlement agreement.

Bussalati v. Sysco Food Service of New Orleans, No. 14-CA-83, La. App. LEXIS 2482 (La. App. 5th Cir. 10/15/14)