J. Hymms v. Com. of PA (WCAB) ( 2022 )

IN THE COMMONWEALTH COURT OF PENNSYLVANIA
James Hymms, :
Petitioner :
:
v. :
:
Commonwealth of Pennsylvania :
(Workers’ Compensation Appeal :
Board), : No. 909 C.D. 2021
Respondent : Submitted: March 18, 2022
BEFORE: HONORABLE PATRICIA A. McCULLOUGH, Judge
HONORABLE CHRISTINE FIZZANO CANNON, Judge
HONORABLE LORI A. DUMAS, Judge
OPINION
BY JUDGE FIZZANO CANNON FILED: August 11, 2022
James Hymms (Claimant) petitions for review of an order of the
Workers’ Compensation Appeal Board (Board) that affirmed a Workers’
Compensation Judge’s (WCJ) approval of a Compromise and Release Agreement
(C & R Agreement) executed by Claimant and the Commonwealth of Pennsylvania
(Employer).1 Claimant contends that the agreed upon settlement amount was
calculated incorrectly, thus requiring this Court to remand to the WCJ for a hearing
to determine whether the parties made a mutual mistake. Following review, we
affirm.
1
Employer’s interests were executed through Inservco Insurance Services, Inc. See
Reproduced Record (R.R.) at 19a.
Claimant filed2 a pro se claim petition alleging that on January 21,
2020, he got dizzy and fell at work, hit his head on a wall, and sustained a loss of
hearing. Reproduced Record (R.R.) at 5a-6a. On March 19, 2020, Employer filed
an answer denying Claimant’s allegations. Id. at 11a-12a. On September 24, 2020,
Claimant, now represented by counsel (Counsel), and Employer entered into a C &
R Agreement pursuant to the provisions of the Workers’ Compensation Act (Act).3
The C & R Agreement states that Claimant suffered a binaural hearing loss on
January 21, 2020, and that the Agreement will resolve “all claims . . . for specific
loss / hearing loss benefits” for a lump sum payment of $34,000, minus counsel fees
of $6,800, for a net total payment of $27,200. C & R Agreement ¶¶ 1, 4, 10; R.R. at
19a-20a. Additionally, Employer would remain responsible for Claimant’s binaural
hearing loss medical benefits for one year after the WCJ hearing, up to, but not on
or after, October 5, 2021. C & R Agreement ¶ 10 & Addendum; R.R. at 20a, 23a.
A telephonic hearing was held on October 5, 2020, before the WCJ
regarding approval of the C & R Agreement. Claimant testified that he read and
signed the C & R Agreement, with consultation from Counsel. Hearing of
10/5/2020, Notes of Testimony (N.T.) at 7; R.R. at 73a. The WCJ had Claimant
look at the C & R Agreement and asked if he understood that he was settling all of
his rights to hearing loss benefits for a lump sum “reflected on the second page,
paragraph ten[,]” minus the amount to be paid to Counsel. N.T. at 7-8; R.R. at 73a-
74a. Claimant responded “[y]es.” N.T. at 8; R.R. at 74a. Claimant was also asked
if he understood that Employer would remain responsible for medical treatment for
2
It appears that the claim petition was received by the Workers’ Compensation Office of
Adjudication on March 9, 2020. R.R. at 7a.
3
Act of June 2, 1915, P.L. 736, as amended, 77 P.S. §§ 1-1041.1, 2501-2710.
2
his hearing loss for one year, after which it would become Claimant’s responsibility.
Claimant again responded “[y]es.” Id. Additionally, Employer’s counsel advised that
the C & R Agreement did not reflect that Employer would reimburse Claimant for
out-of-pocket medical expenses. N.T. at 9; R.R. at 75a. However, Employer would
reimburse Claimant once he submitted the necessary receipts and invoices. Id.
The WCJ then informed Claimant that once she approved the C & R
Agreement, Claimant would “not be able to come back to Workers’ Compensation
for any money relating to this injury . . . except for what was agreed to with the
medical bills.” N.T. at 11; R.R. at 77a. Moreover, she explained, even “if at some
time in the future you believe you settled for too little money, it is still over when I
approve it.” Id. Claimant acknowledged this and affirmed that he still wanted to
settle his case. Id.
On October 8, 2020, the WCJ granted the petition to enter into a C & R
Agreement. WCJ 10/8/2020 Decision & Order, R.R. at 15a-18a. Specifically, the
WCJ found that Claimant understood the full legal significance of the C & R
Agreement and understood the effect it would have on future payments of
compensation and medical expenses. Id., Finding of Fact (F.F.) No. 2.
On October 28, 2020, Claimant appealed to the Board. R.R. at 28a-
31a. Therein, Claimant contended that the parties agreed on a formula consistent
with Section 306(c)(8)(ii) of the Act, 77 P.S. §513(8)(ii) (establishing specific loss
benefits for permanent loss of hearing not caused by occupational noise, but due to
other occupational causes).4 However, he claimed that the parties “mutually made
4
Section 306(c)(8)(ii) of the Act sets forth, inter alia, the following formula: “[t]he number
of weeks for which compensation shall be payable for such loss of hearing in both ears shall be
determined by multiplying the percentage of impairment by two hundred sixty weeks.” 77 P.S.
§ 513(8)(ii). Claimant’s percentage of impairment is not part of the certified record.
3
computational errors by which the amount set forth in the [C & R Agreement] did
not capture the intent of the parties.” Id. at 29a. Claimant denied that the mistake
was due to “fraud, deception, duress[,] or any other type of similar misbehavior.”
Id. On November 2, 2020, Employer responded to Claimant’s appeal.5 Id. at 36a-
37a. Employer stated that Claimant’s appeal was meritless because he was
“contesting the dollar amount reflected in the [C & R] Agreement. There is no
mutual mistake as alleged by counsel.” Id. at 36a. Further, Employer argued,
Claimant understood the legal significance of the C & R Agreement. Id.
On July 15, 2021, the Board issued its opinion. R.R. at 42a-49a. Noting
that the C & R Agreement can only be set aside upon clear proof of fraud, deception,
duress, mutual mistake, or unilateral mistake caused by the opposing party, the
Board reiterated Claimant’s testimony and found that he failed to satisfy his burden.
Id. at 45a-48a. Specifically, the Board reasoned that the C & R Agreement did not
mention an examination by a specialist, any percentages of hearing loss attributable
to each ear, or the utilization of formulas for purposes of calculating the lump sum
settlement. Id. at 48a. Further, none of those items were mentioned at the hearing
before the WCJ on approval of the C & R Agreement. Id. Rather, the C & R
Agreement simply stated that Claimant agreed to settle his claim for $34,000, minus
attorney’s fees, and Claimant admitted that he signed the Agreement freely and
understood what he was signing. Id. Moreover, Claimant reviewed the C & R
Agreement with Counsel, and the WCJ specifically found that Claimant understood
the effect and legal significance of the C & R Agreement, and she therefore approved
5
While Employer characterized its filing as a “cross appeal,” Employer’s response to
Claimant’s appeal did not challenge the WCJ’s decision, but instead simply denied the averments
of Claimant’s appeal of the WCJ’s decision and requested that the decision be affirmed. R.R. at
36a.
4
it. Id. The Board also noted Employer’s response that the parties never intended to
use a formula. Id. Accordingly, in the absence of any evidence to support his claim,
the Board declined Claimant’s invitation to consider matters not contained within
either the C & R Agreement or in the record and determined that Claimant failed to
meet his burden of proving mutual mistake. Id. It therefore affirmed the WCJ’s
decision approving the C & R Agreement. Id. at 48a-49a.
Claimant now petitions this Court for review of the Board’s order.
Claimant contends that either (1) a mutual mistake, or (2) a unilateral mistake that
converted into a mutual mistake occurred regarding the calculation of his lump sum
payment contained in the C & R Agreement. He asks that this Court remand the
case to the WCJ for a hearing to determine whether a cognizable mutual mistake
occurred.
We begin with a review of the law. Section 449 of the Act, 77 P.S.
§ 1000.5,6 governs the compromise and release of workers’ compensation claims.
This section provides that settlement agreements are not valid or binding until
approved by a WCJ. Id. Further, “[t]he [WCJ] shall not approve any [C & R]
agreement unless he first determines that the claimant understands the full legal
significance of the agreement.” 77 P.S. § 1000.5(b).7 It is well established that once
approved, a valid C & R agreement is final, conclusive, and binding on the parties.
Dep’t of Lab. & Indus., Bureau of Workers’ Comp. v. Workers’ Comp. Appeal Bd.
(Ethan-Allen Eldridge Div.), 972 A.2d 1268, 1271 n.2 (Pa. Cmwlth. 2009). At
6
Added by the Act of June 24, 1996, P.L. 350.
7
We have previously observed that in enacting Section 449 of the Act, the legislature
intended a C & R agreement to be “on equal footing with civil settlements, which are based on a
public policy that encourages settlements and stresses finality.” Stroehmann Bakeries, Inc. v.
Workers’ Comp. Appeal Bd. (Plouse), 768 A.2d 1193, 1196 (Pa. Cmwlth. 2001).
5
common law, a C & R “agreement can be set aside only upon a clear showing of
fraud, deception, duress, or mutual mistake.” Farner v. Workers’ Comp. Appeal Bd.
(Rockwell Int’l), 869 A.2d 1075, 1078 (Pa. Cmwlth. 2005). Courts may rescind a C
& R agreement based on a clear showing of fraud, deception, duress, or mutual
mistake. Hoang v. Workers’ Comp. Appeal Bd. (Howmet Aluminum Casting, Inc.),
51 A.3d 905, 908 (Pa. Cmwlth. 2012). “Compared to fraud, deception[,] or duress,
the test to set aside a C & R agreement on the basis of mutual mistake is more
stringent.” Farner, 869 A.2d at 1078. Therefore, “in order for mutual mistake to
constitute a basis for invalidating a C & R agreement, the party seeking to set aside
the agreement must prove both parties are mistaken as to a present, material fact that
existed at the time the agreement was executed.” Id. at 1078-79. Moreover,
“evidence demonstrating a mutual mistake must be clear, precise[,] and indubitable.”
Hoang, 51 A.3d at 909. If a unilateral mistake is alleged, to afford relief, it generally
must be the opposing party’s fault. Farner, 869 A.2d at 1078 n.5. However, “[i]f
a party to a contract knows or has reason to know of a unilateral mistake by the other
party and the mistake, as well as the actual intent of the parties, is clearly shown,
relief will be granted to the same extent as if a mutual mistake existed.” Welsh v.
State Emps. Ret. Bd., 808 A.2d 261, 265 (Pa. Cmwlth. 2002). The party seeking to
set aside the agreement has the burden of proof. N. Penn Sanitation, Inc. v. Workers’
Comp. Appeal Bd. (Dillard), 850 A.2d 795, 799 (Pa. Cmwlth. 2004).
In his brief, Claimant argues that he is entitled to relief based on the
doctrine of mutual mistake. He explains that at all times up to and including at the
hearing, he and his Counsel8 believed that the $34,000 lump sum payment listed in
8
Claimant’s brief was drafted by Robert Land, Esquire, who was Counsel below and
signed the C & R Agreement as such. R.R. at 22a.
6
the C & R Agreement was correct. Claimant’s Br. at 7. However, he explains further
that only after the hearing, and during the appeal period, did he and his Counsel
realize their, and Employer’s, error regarding the calculation of the lump sum
payment. Id. Specifically, Claimant contends that “[t]here was total agreement
between the parties regarding [Claimant’s specialist’s] evaluation of hearing loss
percentages[,]” and that the lump sum payment should have been calculated pursuant
to those percentages and in accordance with the formula set forth in Section
306(c)(8)(ii) of the Act, 77 P.S. § 513(8)(ii). Id. Thus, Claimant asserts that the
$34,000 lump sum payment memorialized in the C & R Agreement is incorrect, and
that the total amount should actually be $36,377.57. Id. at 6-9. Alternatively,
Claimant appears to argue that the error constitutes a unilateral mistake on
Employer’s part because it had reason to know, by virtue of having relied on the
specialist’s calculations and the Act’s formula in calculating the lump sum payment,
that $34,000 was not the correct amount. Id. at 9.
Employer responds that Claimant is unable to prove that a mutual
mistake occurred. Employer highlights that, before the WCJ, Claimant agreed to the
$34,000 lump sum payment, and that the WCJ found that Claimant understood the
terms and legal significance of the C & R Agreement and approved it. Employer’s
Br. at 9-12. Employer also points out that the record contains no evidence of the
parties’ purported agreement that the lump sum payment was based on a formula or
the findings made by a specialist. Id. Moreover, the record and the C & R
Agreement are devoid of anything suggesting a mutual mistake. Id. Thus, according
to Employer, Claimant cannot meet his burden of proof. Id.
7
We find McGinley v. Workers’ Compensation Appeal Board (County
of Delaware) (Pa. Cmwlth., No. 1082 C.D. 2015, filed March 7, 2016),9 relevant to
Claimant’s allegations regarding the doctrine of mistake. There, the claimant
entered into a C & R agreement (agreement) wherein the parties agreed to resolve
the claimant’s wage loss and medical benefits through a lump sum payment of
$81,000. The agreement also provided, inter alia, that the employer would pay the
claimant an additional $19,000 “for payment of any and all medical bills and any
and all outstanding liens against” her, which would resolve all of her claims for past,
present, and future medical benefits and/or any liens against her. Id., slip op. at 3-4.
At the hearing before the WCJ, the claimant agreed that she understood she would
receive $19,000 under the agreement to cover her medical bills. Id., slip op. at 5-9.
The claimant also acknowledged that her outstanding medical bills exceeded that
amount. Id. However, the outstanding amounts had been negotiated with the
medical providers, and the $19,000 would cover all of the outstanding bills. Id. The
claimant’s counsel advised the WCJ that she had negotiated the outstanding medical
debt and had agreements with the medical providers that $19,000 would cover the
debt. Id. The WCJ ultimately approved the parties’ agreement, finding that the
claimant fully understood its legal significance. Id., slip op. at 9.
The claimant, through new counsel, appealed to the Board, claiming
that she did not understand the full legal significance of the agreement and that her
former counsel’s representations regarding the amount of the outstanding medical
bills were false. McGinley, slip op. at 9-10. The Board determined that the claimant
failed to meet her burden of establishing the existence of a mutual mistake, or a
9
McGinley is cited for its persuasive value pursuant to Section 414(a) of this Court’s
Internal Operating Procedures. See 210 Pa. Code § 69.414(a).
8
unilateral mistake of which her employer was aware, and that she asserted only acts
of negligence by her former counsel and disputes regarding medical bills rather than
any claims of fraud or duress. Id., slip op. at 10. Concluding that the claimant
understood the full legal significance of the agreement, the Board affirmed the
WCJ’s order approving the agreement. Id.The claimant appealed to this Court, again arguing that the WCJ’s order
should be reversed because she did not understand the legal significance of the
agreement. McGinley, slip op. at 10-11. Specifically, she asserted that she submitted
credible evidence to the Board showing that her former counsel had not in fact
resolved the medical bills prior to the hearing, but the Board refused to consider such
evidence because it was not of record. Id., slip op. at 11. She claimed it would have
been impossible to present this evidence at the hearing, as it did not surface until
after approval of the agreement by the WCJ. Id.In affirming the Board’s decision, we determined that the claimant
failed to meet her burden of proving a unilateral mistake by the employer10 occurred,
because she failed to assert that her employer knew or should have known that its
payment of $19,000 was insufficient to cover all of the claimant’s medical bills.
McGinley, slip op. at 13-16. We pointed out the claimant’s acknowledgment at the
hearing that $19,000 was the limit of her employer’s obligation under the agreement
even despite that her medical bills exceeded that amount. Id., slip op. at 13-14.
Further, we noted, she attributed blame not to her employer, but to her former
counsel’s purported misrepresentations concerning the claimant’s outstanding
medical bills. Id. We also observed that while the claimant’s claims sounded in
10
Before this Court, the claimant no longer argued that a mutual mistake occurred.
McGinley, slip op. at 13.
9
legal malpractice, and that she may have been mistaken herself at the time she
entered into the agreement, the claimant failed to establish her employer’s
“knowledge of her mistake or intent at the time they entered into the [a]greement.”
Id., slip op. at 14. Based upon the testimony at the WCJ hearing and the express
language of the agreement, we held that the WCJ’s determination that the claimant
fully understood the legal significance and effect of the agreement was supported by
substantial evidence. Id., slip op. at 14-16.
In Hoang, the claimant also attempted to set aside an agreement based
on both unilateral and mutual mistake. Under the agreement in that case, the
claimant settled his claim for a lump sum payment of $9,900, minus attorney’s fees,
and it was approved by a WCJ. 51 A.3d at 906-07. Thereafter, the claimant learned
he had an outstanding medical bill of $37,674. Id. at 907. The claimant then filed a
review petition,11 which was assigned to a different WCJ, arguing that the agreement
should be rescinded due to mutual mistake of fact because both parties were unaware
that there was an outstanding medical bill. Id. at 907-08. The WCJ, deciding the
case on the papers without holding a second hearing, rejected that a mutual mistake
occurred, finding there was no direct evidence that the employer was mistaken at the
time the agreement was executed. Id. The WCJ also observed that there had been
no discussion about medical expenses at the WCJ hearing on approval of the
agreement, and that the agreement did not contain language acknowledging that all
medical bills had been paid. Id. As such, the WCJ denied the claimant’s review
petition. Id. at 908.
The claimant appealed to the Board, asserting, inter alia, that the WCJ
erred in his findings and conclusions with respect to mutual mistake and neglected
11
The claimant also filed a penalty petition, which was denied.
10
to address his claims of unilateral mistake. Hoang, 51 A.3d at 908. The Board
determined that the claimant failed to present clear evidence that the employer was
mistaken regarding the unpaid bills or that the employer was aware of a mistake on
the claimant’s part, thereby negating his claims of mutual or unilateral mistake. Id.Before this Court, the claimant argued that the agreement should be
rescinded based on either a mutual or a unilateral mistake of fact. Hoang, 51 A.3d
at 908. In affirming the decision of the WCJ, we first rejected that the claimant
established a mutual mistake occurred, noting that he failed to establish with any
credible evidence that the employer “was mistaken regarding the unpaid medical bill
at the time of settlement.” Id. at 909. We also noted that the WCJ rejected, as not
credible, the claimant’s evidence purporting to show the employer’s beliefs at the
time of settlement, and that the medical bills were neither mentioned in the
agreement nor discussed at the first WCJ hearing on approval of the agreement. Id.As to the claimant’s assertion that the agreement should be rescinded
because he operated under a unilateral mistake regarding the unpaid medical bills,
which we also rejected, we observed that the claimant failed to present any credible
evidence regarding the employer’s intent. Further, the record contained no evidence
that the claimant communicated to his employer his belief that the agreement did not
apply to unpaid medical bills or that the employer knew or should have known of
the claimant’s mistaken belief regarding the unpaid medical bills. Hoang, 51 A.3d
at 910-13. Accordingly, because the claimant failed to meet his burden of
demonstrating mutual or unilateral mistake, we affirmed the Board’s order. Id. at
913.
In the instant matter, Claimant argues that a mutual or unilateral
mistake was made. First, regarding Claimant’s claim of mutual mistake, Claimant
11
“must prove both parties are mistaken as to a present, material fact that existed at the
time the agreement was executed.” Farner, 869 A.2d at 1078-79. In his brief,
Claimant states that he believed the lump sum payment of $34,000 was correct at
the time he testified before the WCJ because he thought it was based on the hearing
loss percentages determined by his specialist. He claims that Employer was in “total
agreement” with the specialist’s hearing loss percentages. Claimant’s Br. at 7. In
its brief, Employer denies Claimant’s theory that there was a mutual mistake
regarding the lump sum payment in this case, as the record evidence, including the
C & R Agreement and Claimant’s own testimony, is devoid of any indication that
the parties agreed to utilize a formula in accordance with Claimant’s specialist’s
findings in calculating the lump sum payment or that Employer was even aware of
such agreement. Employer submits that “[b]uyer’s remorse is not a reason to set
aside a C & R [agreement],” and that, while the C & R Agreement in this case may
have been less than satisfactory in Claimant’s view, “this does not amount to a
showing of fraud, deception, duress, or mutual mistake of fact.” Employer’s Br. at
12. We agree with Employer.
As in Hoang, there is no evidence of record supporting Claimant’s
claim of mutual mistake. The C & R Agreement does not mention Claimant’s
specialist or a formula, and Claimant’s specialist’s findings were not submitted into
evidence before the WCJ. Moreover, at the hearing before the WCJ, Claimant
testified that he understood he was agreeing to settle all of his rights to hearing loss
benefits for a total lump sum payment of $34,000, minus attorney’s fees, and neither
he nor his Counsel suggested that the payment was based on a formula. R.R. at 73a-
77a. Claimant also acknowledged the WCJ’s warning at the hearing that even if
Claimant believed at some point in the future that he settled for too little money, he
12
could not then come back and ask for more, and indicated that he still wished to
settle his case. R.R. at 77a. As such, the certified record and the C & R Agreement
are devoid of any proof of a mutual mistake. Even Claimant’s argument to this Court
lacks factual evidence of a mutual mistake. In his brief, Claimant merely contends
that Employer was in “total agreement” with the specialist’s hearing loss
percentages. Claimant’s Br. at 7. Claimant has not asserted that Employer agreed
that the settlement amount was to be based solely on the specialist’s findings.
Therefore, Claimant did not meet his burden of proving Employer was also mistaken
as to a present, material fact that existed at the time the C & R Agreement was
executed. Farner, 869 A.2d at 1078-79. Thus, the Board did not err in concluding
that Claimant failed to establish a mutual mistake occurred in calculating his lump
sum payment of $34,000.
Further, regarding Claimant’s claim of unilateral mistake, we note that,
before the Board, Claimant did not claim a unilateral mistake was made. Rather, in
his appeal to the Board, he claimed only that “the parties simply and mutually made
computational errors by which the amount set forth in the [C & R Agreement] did
not capture the intent of the parties.” R.R. at 29a. Hence, the Board’s opinion
addresses only whether a mutual mistake was made. Because Claimant now raises
his claim of unilateral mistake for the first time in his appeal to this Court, the claim
is waived.12 See Pennsylvania Rule of Appellate Procedure 1551(a), Pa.R.A.P.
1551(a) (limiting appellate review to matters raised before government unit); see
also Budd Baer, Inc. v. Workers’ Comp. Appeal Bd. (Butcher), 892 A.2d 64, 67 (Pa.
12
We note that, to establish a unilateral mistake, Claimant needed to prove that Employer
knew or had reason to know that Claimant believed a formula would be used to calculate his lump
sum payment. As explained above, Claimant made no showing that Employer was aware of
Claimant’s belief in that regard. As such, even if this claim was properly before us, we would find
it to be meritless.
13
Cmwlth. 2006) (issues not raised before the Board are deemed waived on appeal to
this Court).
For the above reasons, we affirm the Board’s order.
__________________________________
CHRISTINE FIZZANO CANNON, Judge
14
IN THE COMMONWEALTH COURT OF PENNSYLVANIA
James Hymms, :
Petitioner :
:
v. :
:
Commonwealth of Pennsylvania :
(Workers’ Compensation Appeal :
Board), : No. 909 C.D. 2021
Respondent :
ORDER
AND NOW, this 11th day of August, 2022, the order of the Workers’
Compensation Appeal Board, dated July 15, 2021, is AFFIRMED.
__________________________________
CHRISTINE FIZZANO CANNON, Judge