The Law Office of Kurt H King

November 12, 2012

A Signed Missouri Workers’ Compensation Settlement But The PTD Client Dies Before Settlement Approved

A new and rare appellate court decision has been handed down on Missouri Workers’ Compensation law involving a Permanent Total Disabled worker who signed off on a settlement to take a lump sum instead of continuing weekly payments for life, AND THEN DIED BEFORE THE COMMISSION APPROVED THE SETTLEMENT.  The case is out of the Western District of the Missouri Court of Appeals, Nance v. Maxon Electric, WD74942, filed November 6, 2012, written by Judge Gary D. Witt (formerly a judge of Platte County, Missouri).

To make a long story short, this appeal is an effort by the employer, Maxon Electric, to get out of a bad deal.  The company ultimately offered to pay the injured worker just over $180.000 to save having to pay him a weekly payment and medicals for the rest of his lifetime.   Maxon Electric made the deal, drafted and signed the settlement, had the worker sign it also, and sent it to the Labor and Industrial Relations Commission for approval only for employee to die the very day the settlement was received by the Commission and filed–but not yet approved as required by law in order to go into effect.

Had there been no settlement, the worker’s right to weekly workers’ compensation benefits and future medical at the employer’s expense would have ended at the death of the employee.  To try to save the $180,000 they had agreed to pay, Maxon Electric persuaded the Commission that it did not have the legal authority to approve the settlement since no compensation was now due the deceased PTD worker.  This appeal by the worker’s surviving spouse followed to cause the Commission to approve the settlement, forcing Maxon Electric to honor its settlement agreement.

In deciding the case, the Court of Appeals rejected the argument by Maxon Electric that the Commission could not approve the settlement because in it the company agreed to pay considerably more than required by law even if the worker had not died–not to mention that no compensation was due after the death of the worker.   The court’s rationale is that those approval requirements in section 287.530 for contested claims before the Commission asking it to commute  future workers’ compensation benefits into a lump-sum payment do not control when the claim is non-contested as here where the parties have settled by signed agreement.  Rather, in a uncontested claim where the parties have agreed to lump-sum settlement, the court finds per section 287.390.1 that the Commission “shall” approve the settlement if: 1) there is no undue influence or fraud, 2) the terms are understood by the employee/worker, and 3) the employee voluntarily agrees to accept the terms of the agreement.  All three of these elements existed in sufficient quantities here so the Commission was obligated by law to approve the settlement.

Maxon Electric also argued, with no legal authority in support noted, that the Commission could not approve the settlement after the death of the worker.   The court read the plain language of section 287.530.1 which speaks of approval of motions for a lump-sum payment when for the best interests of “the employee or the dependents of the deceased employee.”   The court held that the quoted language empowers the Commission to proceed to approve the lump-sum settlement after the death of the employee, contrary to Mason Electric’s position.

The court ended by ordering the Commission to approve the claim, thus requiring Maxon Electric to pay out the $180,000 to the surviving spouse.  A Proverb advises us to honor our agreements even when it hurts.  Had Mason Electric done so it would have saved what must have been a good-sized attorney fee bill.

Kurt H. King

Law Office of Kurt H. King, 20 E. Franklin, Liberty, Clay County, Missouri 64068; 816.781.6000

Workers’ Compensation, Personal Injury, General Litigation

Chapter 7 Bankruptcy for Debtors, Family Law

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