Fezouati (Golan) v. Lee & co/us Fidelity

NOTICE: NOT FOR OFFICIAL PUBLICATION.
UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL
AND MAY BE CITED ONLY AS AUTHORIZED BY RULE.
IN THE
ARIZONA COURT OF APPEALS
DIVISION ONE
MIKE FEZOUATI GOLAN,
Petitioner Employee,
v.
THE INDUSTRIAL COMMISSION OF ARIZONA,
Respondent,
LEE & CO,
Respondent Employer,
UNITED STATES FIDELITY & GUARANTY,
Respondent Carrier.
No. 1 CA-IC 21-0003
FILED 10-26-2021
Special Action - Industrial Commission
ICA No. 96178-936687
INSCA No. 127-CB-VMQ3069-T
INSCA No. UC000012293015461
The Honorable Amy L. Foster, Administrative Law Judge
DECISION SET ASIDE
APPEARANCES
Mike Fezouati Golan, San Antonio, TX
Petitioner Employee
Industrial Commission of Arizona, Phoenix
By Gaetano J. Testini
Counsel for Respondent
Norton & Brozina, PC, Phoenix
By Christopher S. Norton
Counsel for Respondent Employer & Respondent Carrier
MEMORANDUM DECISION
Judge David D. Weinzweig delivered the decision of the Court, in which
Presiding Judge Peter B. Swann and Judge Paul J. McMurdie joined.
W E I N Z W E I G, Judge:
¶1 Mike Golan (“Employee”) and U.S. Fidelity & Guaranty
(“Carrier”) petition for special action review of the Industrial Commission
of Arizona’s decision upon review vacating the Commission’s approval of
a settlement agreement between Employee and Carrier. We set aside the
decision.
FACTS AND PROCEDURAL BACKGROUND
¶2 Employee fractured his ankle working for Lee & Co. in 1979,
and successfully applied for worker’s compensation benefits. In 2017,
Carrier closed Employee’s claim with a permanent impairment. Employee
petitioned to reopen the claim.
¶3 In August 2020, Employee and Carrier entered a Full and
Final Settlement Agreement, and the parties moved the Industrial
Commission to approve the settlement. The agreement included the
language and attestations required under A.R.S. § 23-941.01(B) and (C). It
provided that Employee “fully underst[ood]” and “agreed to the terms of
this settlement and request[ed] approval of it by the Industrial Commission
of Arizona,” adding that “coercion, duress, fraud, misrepresentations, or
undisclosed additional agreements” had not “been used” to secure the
agreement. Employee also attested that he “declined the opportunity to
seek legal advice or be represented by counsel,” “understands the rights
being settled and released by the agreement,” and “understands that
monies received for future medical treatment associated with the industrial
injury should be set aside to ensure that the costs of the treatment will be
paid.” See A.R.S. § 23-941.01(C).
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FEZOUATI (GOLAN) v. LEE & CO/US FIDELITY
Decision of the Court
¶4 A month later, an ALJ questioned the Employee under oath
“to make sure [he has] a thorough understanding of the terms of the
settlement,” “to make sure that [he] understand[s] what legal rights [he’ll]
be giving up,” and “to ensure that [he has] entered into the settlement
knowingly and voluntarily.” The hearing lasted a few minutes. Employee
confirmed he read and voluntarily signed the settlement agreement and
reiterated his desire to “proceed with this settlement.” At the same time,
the Employee expressed ambivalence about the agreement, saying he was
not “happy” but “my back [is] against the wall,” and the agreement offered
“peace of mind.” Asked whether he has “a thorough understanding of the
settlement,” the Employee answered “[l]egally not” and asked the ALJ two
questions, including when the money would be available and who receives
it if “I die before I spend the money.”
¶5 The ALJ approved the settlement agreement on September 16,
finding the agreement satisfied all statutory requirements and that
Employee’s testimony “confirmed the statements and understandings
contained in the Full and Final Settlement.” The ALJ also found that
Employee “intend[ed] to resolve” his claim, “knew that he was not legally
obligated to enter into this proposed settlement, and did so with a thorough
understanding of the settlement and the effect of the settlement on his
ability to receive future benefits,” adding that Employee “expressed and
acknowledged an understanding that monies allocated and received for
future medical treatment should be set aside to ensure that the costs of such
treatment will be paid.”
¶6 Once approved, the Carrier issued Employee a check for the
negotiated amount of $147,000. Employee cashed the check on October 9.
A week later, Employee sent the ALJ a one-sentence request for review: “I
have concerns regarding the outcome of this case date September 17, 2020
and would like to request a review.” Employee refused to return the
settlement proceeds. The Carrier filed no response.
¶7 On December 9, the ALJ vacated its prior order and “denied”
the proposed settlement, explaining its rationale in one paragraph:
FINDINGS
Applicant’s Request for Review only stated that he had
concerns regarding the outcome of the case but did not state
any other grounds for review. However, given the extent of
the rights forfeited by a Full and Final Settlement, it is
appropriate to vacate the approval and deny the Fully and
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FEZOUATI (GOLAN) v. LEE & CO/US FIDELITY
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Final Settlement if Applicant is not in full agreement.
Therefore, the Decision Upon Hearing is vacated and the Full
and Final Settlement Agreement is denied.
¶8 From there, Employee petitioned this court for review,
expressing surprise that much of “the settlement was earmarked for the
procedures that had been previously denied” and “earmarked for
medication,” and “requesting that the settlement be increased to cover my
recovery and rehabilitation.” Carrier responded, asking this court to set
aside the ALJ’s denial of the already-approved settlement agreement. We
have jurisdiction. See A.R.S. §§ 12-120.21(A)(2), 23-951(A); Arizona Rule of
Procedure for Special Actions 10.
DISCUSSION
¶9 Employee petitions this court to review the ALJ’s decision
vacating and denying his settlement agreement with the Carrier, asking
that we increase the amount he receives under the agreement, but asserting
he “did not agree” the settlement was void. Although we have jurisdiction
to review the ALJ’s decision, we have no jurisdiction to increase Employee’s
settlement. Indeed, when reviewing an award of the Commission, this
court has only two options—affirm the award or set it aside. We cannot
alter or modify the award. Marriot Corp. v. Indus. Comm’n, 147 Ariz. 116,
118 (1985).
¶10 On appeal, Carrier asks us to reinstate the settlement
agreement, arguing the ALJ erroneously vacated the agreement after
initially approving it. We review de novo questions of statutory
interpretation, Duff v. Lee, 250 Ariz. 135, 138, ¶ 11 (2020), and contractual
interpretation, Grosvenor Holdings, L.C. v. Figueroa, 222 Ariz. 588, 593, ¶ 9
(App. 2009), deferring to an ALJ’s factual findings unless clearly erroneous,
Meno's Constr., LLC v. Indus. Comm'n, 246 Ariz. 521, 524, ¶ 10 (App. 2019).
¶11 Arizona law authorizes employees and insurance carriers to
negotiate a full and final settlement of an accepted claim for compensation
once the period of temporary disability has terminated by final notice of
claim status. See A.R.S. § 23-941.01(A). The settlement agreement must be
in writing, signed by the parties, and the employees must acknowledge
they “had the opportunity to seek legal advice and be represented by
counsel.” A.R.S. § 23-941.01(B). The agreement must also include seven
signed attestations set forth in the statute, including that “[t]he employee
understands the rights settled and released by the agreement,” “[t]he
employee understands that monies received for future medical treatment
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Decision of the Court
associated with the industrial injury should be set aside to ensure that the
costs of the treatment will be paid,” and “[c]oercion, duress, fraud,
misrepresentation or undisclosed additional agreements have not been
used to achieve the full and final settlement.” A.R.S. § 23-941.01(C)(1), (4),
(7).
¶12 The parties must submit their settlement agreement to the
Industrial Commission for approval. And when counsel does not represent
an employee, the Commission has additional statutory requirements:
If the employee is not represented by counsel, the employee
shall appear before an [ALJ] of the commission and the [ALJ]
shall make specific factual findings regarding whether the
requirements of [§ 23-941.01 (B) and (C)] are satisfied. The
[ALJ] shall conduct a hearing and perform a detailed inquiry
into the attestations provided by the unrepresented employee
pursuant to [§ 23-941.01 (C)]. The inquiry shall include
whether the unrepresented employee understands the
specific rights being settled and released, the information,
computation and methodology provided by the carrier,
special fund or self-insured employer, and the employee's
responsibility to protect the interests of other payors and
ensure the payment of future treatment costs.
A.R.S. § 23-941.01(E). “The commission may not approve a full and final
settlement if the requirements of [§ 23-941.01 (B) and (C)] are not met.”
A.R.S. § 23-941.01(F)
¶13 Here, the settlement agreement was in writing, signed by the
parties, and included the language and attestations required under § 23-
941.01(C). During the brief virtual hearing with the ALJ, the Employee
reiterated his agreement under oath. And despite his ambivalence, the
Employee said he wanted to “proceed with this settlement.” The ALJ thus
approved the settlement agreement, finding it satisfied all statutory
requirements and that Employee’s testimony “confirmed the statements
and understandings contained in the Full and Final Settlement.” A few
weeks later, after receiving the Employee’s one-sentence letter with
undefined “concerns” about the “outcome,” the ALJ reversed course. The
ALJ vacated its prior approval of the settlement agreement and rejected the
agreement, reasoning: “[G]iven the extent of the rights forfeited by a Full
and Final Settlement, it is appropriate to vacate the approval and deny the
Full and Final Settlement if [Employee] is not in full agreement.”
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FEZOUATI (GOLAN) v. LEE & CO/US FIDELITY
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¶14 That was error. Once approved by the ALJ, the settlement
agreement was final and enforceable. Absent arguments on contract
formation, neither party could seek review of the accepted settlement
agreement. See Pac. W. Constr. Co. v. Indus. Comm’n, 166 Ariz. 16, 19 (App.
1990) (once the parties entered a settlement agreement, the ability of a party
to set it aside was “limited to his ability to prove duress, mental
incompetency, fraud, misrepresentations or mutual mistake of fact”). The
legislature never authorized such review, and even the Commission’s
“suggested best practices” contemplate only that an “interested party to a
rejected Full and Final Settlement Agreement may file a request for review
pursuant to A.R.S. §§ 23-942 & 23-943.” See Industrial Commission,
Information and Suggested Best Practices, (Aug. 3, 2018), www.azica.gov
(emphasis added). As a result, we set aside the Commission’s decision.
CONCLUSION
¶15 We set aside the Commission’s denial of the settlement
agreement.
AMY M. WOOD • Clerk of the Court
FILED: JT
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