15 Sep 2022

California: Settlement; Good Cause Shown to Set Aside; Duress or Undue Influence

In a noteworthy board panel decision, the WCAB, granting reconsideration, affirmed the WCJ’s decision that there was good cause to set aside an order approving compromise and release for $95,000.00 at the request of the Applicant, two months after its execution and settlement funds were paid, when the Applicant established that the agreement was secured by duress or undue influence, and the WCAB determined that applicant was psychiatrically unfit to enter the compromise and release as demonstrated by medical reports issued in months prior to settlement. Read our headnote below:

CA - NOTEWORTHY PANEL DECISIONS

Marachelle Jackson, Applicant v. Door To Hope, New York Marine and General Insurance Company, Defendants

W.C.A.B. No. ADJ11061012—WCAB Panel: Commissioners Sweeney, Dodd, Razo

Workers’ Compensation Appeals Board (Board Panel Decision)

Opinion Filed September 2, 2022

Publication Status: CAUTION: This decision has not been designated as a “significant panel decision” by the Workers’ Compensation Appeals Board. Practitioners should proceed with caution when citing to this panel decision and should also verify the subsequent history of the decision, as these decisions are subject to appeal. WCAB panel decisions are citeable authority, particularly on issues of contemporaneous administrative construction of statutory language [see Griffith v. WCAB (1989) 209 Cal. App. 3d 1260, 1264, fn. 2, 54 Cal. Comp. Cases 145]. However, WCAB panel decisions are not binding precedent, as are en banc decisions, on all other Appeals Board panels and workers’ compensation judges [see Gee v. Workers’ Comp. Appeals Bd. (2002) 96 Cal. App. 4th 1418, 1425 fn. 6, 67 Cal. Comp. Cases 236]. While WCAB panel decisions are not binding, the WCAB will consider these decisions to the extent that it finds their reasoning persuasive [see Guitron v. Santa Fe Extruders (2011) 76 Cal. Comp. Cases 228, fn. 7 (Appeals Board En Banc Opinion)]. LexisNexis editorial consultants have deemed this panel decision noteworthy because it does one or more of the following: (1) Establishes a new rule of law, applies an existing rule to a set of facts significantly different from those stated in other decisions, or modifies, or criticizes with reasons given, an existing rule; (2) Resolves or creates an apparent conflict in the law; (3) Involves a legal issue of continuing public interest; (4) Makes a significant contribution to legal literature by reviewing either the development of workers’ compensation law or the legislative, regulatory, or judicial history of a constitution, statute, regulation, or other written law; and/or (5) Makes a contribution to the body of law available to attorneys, claims personnel, judges, the Board, and others seeking to understand the workers’ compensation law of California.

Disposition: Reconsideration is granted, and the July 23, 2020 Order is affirmed.

Compromise and Release Agreements—Setting Aside for Good Cause—Undue Influence—WCAB, after granting reconsideration, affirmed WCJ’s order setting aside Order Approving Compromise and Release (OACR), which settled applicant counselor’s claim for orthopedic and psychiatric injuries for $95,000.00, when applicant sought to set aside Compromise and Release approximately two months after its execution and after settlement funds were paid, asserting that settlement was secured through duress and undue influence by her attorney, and WCAB concluded that applicant established good cause to set aside OACR under Labor Code § 5803 based on her uncontradicted testimony regarding actions of her attorney and how they influenced her decision to settle her claim, and WCAB also determined that applicant was psychiatrically unfit to enter Compromise and Release as demonstrated by medical reports issued in months prior to settlement documenting applicant’s severe psychiatric distress, and by WCJ’s observations of applicant’s behavior during trial, which were consistent with medical evidence that she was depressed, anxious and suicidal during treatment, and WCAB rejected defendant’s assertion that to set aside OACR specific medical determination was needed at time of settlement to establish applicant was mentally unfit to make sound decisions. [See generally Hanna, Cal. Law of Emp. Inj. and Workers’ Comp. 2d § 29.05[1], [2]; Rassp & Herlick, California Workers’ Compensation Law, Ch. 18, § 18.11.]