Driver's lack of legal representation doesn't void settlement agreement

Tennessee courts rarely set aside workers' compensation settlements for mistake, inadvertence, surprise, or excusable neglect. A mistake of law stemming from an employee's decision not to secure counsel is not a basis for relief.

Case name: Henderson v. SAIA, Inc., et al., No. M2009-01723-SC-R3-WC (Tenn. 08/24/10).

Ruling: The Tennessee Supreme Court held that a settlement agreement was valid and binding.

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What it means: Tennessee courts rarely set aside workers' compensation settlements for mistake, inadvertence, surprise, or excusable neglect. A mistake of law stemming from an employee's decision not to secure counsel is not a basis for relief.

Summary: A truck driver was injured when she fell while exiting the cab of her truck. She had hip surgeries. The driver was contacted by her employer's insurer in an attempt to settle her workers' compensation claim. An agreement was reached. The driver signed the documents, and the settlement was approved by a judge. Six months later, the driver sought to set aside the settlement. The Tennessee Supreme Court held that the agreement was valid and binding.

The driver argued that she did not understand the meaning of maximum medical improvement when she signed the affidavit asking the court to approve the agreement. However, the documents she signed made it clear that she understood that if she chose to litigate her case, she might receive a better or different amount. The driver implied that she was not aware of her legal rights because she did not have an attorney. The court stated that the driver at all times had the right to consult an attorney.

The driver asserted that incorrect information her husband allegedly received from the Department of Labor consisted of fraud, misrepresentation or other misconduct. The court would not impute the information to the employer. Additionally, the documents prepared by the employer clearly and accurately explained the settlement process to the employee.

The court noted that it was reasonable to conclude that the employee believed that the settlement's terms were fair at the time she signed it. The settlement the driver received exceeded the statutory cap on benefits.

The court declined to find that the driver's appeal was frivolous or taken solely for the purpose of delay. It did not impose penalties against the driver.

Read more at the WorkersComp Forum homepage.

November 8, 2010

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