Litigation

So What Exactly Did We Settle, Anyway?

By Bruce Nye

Workers' compensation and workers' compensation liens are often an issue in personal injury cases and the settlement of personal injury cases.  But most of the time, when the 
tort defendant isn't a party to the workers' comp matter, the lien is really the plaintiff attorney's problem.  But what about when the tort defendant was also an employer?

In California as in most states, an employee can't sue his or her employer for injuries arising out of and in the course and scope of the employment (Labor Code §3601.)  But there are instances where an employee has parallel civil cases and workers' compensation claims against the same company:  for example, in a toxic exposure case where some of the exposure took place while working for the employer and some of it involved exposure to the employer's product while working for someone else (a surprisingly common fact pattern). 

Or, as in Steller v. Sears, Roebuck and Co. ( October 14, 2010) ___Cal.App.4th___ (Second App. Dist., No. B219935), there's the scenario where the employee files a worker's compensation case against the employer and a civil case for disability discrimination.  Here's a suggestion for employers in either scenario:  when you settle one case, settle them both.

In Stellar, the Defendant made an offer of judgment under Code of Civil Procedure § 998.  The offer stated that in exchange for payment of $95,000, the appellant / plaintiff would release:

all claims for, [appellant's] alleged damages, costs and expenses, attorneys' fees and interest asserted or that could have been asserted by [appellant] in this action, as well as all demands, actions, liabilities, obligations, damages and/or causes of action arising from this lawsuit or relating to [appellant's] employment with [respondent]." (Italics added.)

Then the parties went to a Superior Court settlement conference where the plaintiff announced she was accepting the offer.

And then the parties got into a kerfluffle over what was accepted.  According to the plaintiff, ""'the only legally permissible interpretation of the §998 Offer is that it did not include the settlement of the Workers['] Compensation proceeding within the dollar amount contained in the offer.'"  Of course, according to the employer, everything was settled.

The parties filed cross-motions, each seeking to enforce her or its own version of the deal.  They submitted declarations to help the court interpret the deal.  The trial court, however, held that the settlement unambiguously included the works comp claim.  Huh?  Really?  So, said the trial court, there's no need to even look at the declarations.

In a settlement where the subject of workers' compensation wasn't mentioned in the documents and where settlement would be invalid if not approved by the Workers' Compensation Appeals Board, the Court of Appeal wasn't prepared to go quite that far.  Instead, the Court said, well, yes, the settlement is ambiguous (ya' think?).  But once we look at the declarations, "the only plausible interpretation of the settlement agreement is that it encompassed both the disability discrimination and workers' compensation claims."  Well, ok, if you say so.

Advice for everybody on both sides:  don't lose sight of the ball.  Make it explicit what you're settling and what you aren't settling.   Skip the Court of Appeal part.  Save yourself some attorneys' fees.  Just sayin'.

Full post as published by CalBizLit on October 19, 2010 (boomark / email).