Opinion
No. WWM CV07 5002035
July 21, 2010
The plaintiffs, Robert E. Wells and Helen Wells, bring this action against the defendant, Staples Connecticut, Inc. The plaintiffs seek monetary damages for personal injuries Robert allegedly sustained on the premises of the defendant. Robert was employed by the intervening plaintiff, New England Motor Freight, at the time of the subject incident and was allegedly acting within the scope of his employment. The present action proceeded to mediation and was settled by the parties. The intervening plaintiff moves for court approval of the settlement agreement, pursuant to Massachusetts workers' compensation law, as well as an order enforcing the settlement agreement. The defendant likewise moves to enforce the settlement agreement.
This memorandum of decision shall refer to Robert E. Wells and Helen Wells, collectively, as the plaintiffs. Individually, the plaintiffs will be referred to by their first names.
In the second count of the complaint Helen claims damages for expenses related to Robert's medical care and attention, doctor's fees, medicines and drugs, and pharmaceutical supplies, as well as for her loss of consortium.
The present action was commenced on October 19, 2007, by service of process on the defendant. On November 28, 2007, the intervening plaintiff filed an intervening complaint in the present action for recovery of Massachusetts workers' compensation benefits paid to the plaintiff. In particular, the intervening plaintiff sought to protect a workers' compensation lien in the amount of $277,846.
On February 4, 2010, the present action proceeded to mediation. A settlement was reached as a result of the mediation in the amount of $275,000. The plaintiffs were apportioned $85,000 of the mediated settlement while $190,000 of the settlement proceeds were apportioned to the intervening plaintiff in satisfaction of its workers' compensation lien. Plaintiffs' counsel, apparently at the request of non-appearing, Massachusetts-based counsel for the plaintiffs, subsequently objected to the mediated settlement on the ground that the proposed distribution of the mediated settlement amount was improper under Massachusetts law.
On March 17, 2010, the intervening plaintiff filed a motion for court approval of the settlement pursuant to Massachusetts General Laws ch. 152, § 15. Additionally, on or about March 23, 2010, the plaintiffs' Massachusetts-based counsel petitioned the Massachusetts Department of Industrial Accidents (the "DIA") to secure a ruling as to a proposed distribution of the mediated settlement. On March 23, 2010, the plaintiffs filed an objection in the present matter to the motion for approval of the settlement. Thereafter, on March 26, 2010, the defendant filed a motion to enforce the settlement agreement and, on March 29, 2010, the intervening plaintiff likewise filed a motion to enforce the settlement agreement. The plaintiffs have not filed oppositions to the motions for enforcement. Arguments on the motion for court approval, the objection thereto and the motions to enforce settlement were heard at the short calendar on March 29, 2010.
The intervening plaintiff, in its motion for court approval of settlement, argues that the mediated settlement, purportedly resolving the present action, is a valid agreement and should be approved by this court pursuant to Mass. Gen. Laws ch. 152, § 15. Furthermore, the intervening plaintiff and the defendant, in their respective motions to enforce the settlement agreement, argue that the terms of the settlement are clear and unambiguous.
The plaintiffs object to the intervening plaintiff's motion for approval on the ground that the plaintiffs' counsel misapprehended Massachusetts law and practice provisions governing amounts allocable to workers' compensation insurers for resolution of claimed liens. As such, the plaintiffs argue, their counsel's representation that they would agree to the proposed allocation of the mediated settlement figure was "ill-advised."
The plaintiffs further request, in their objection to the motion for approval, that allocation of the mediated settlement award "be determined by the [DIA]; and that the [$275,000] settlement figure be modified so as to be in full compliance with the Massachusetts law and procedures governing the same."
"A trial court has the inherent power to enforce summarily a settlement agreement as a matter of law when the terms of the agreement are clear and unambiguous." Aududon Parking Associates Limited Partnership v. Barclay Stubbs, Inc., 225 Conn. 804, 811, 626 A.2d 729 (1993). "Once reached, a settlement agreement cannot be repudiated by either party. Whether the parties in fact concluded a settlement agreement is determined by 'the intention of the parties manifested by their words and acts.'" Hess v. Dumouchel Paper Co., 154 Conn. 343, 347, 225 A.2d 797 (1966). A settlement agreement need not be signed or in writing to be enforceable. Nanni v. Dino Corp., 117 Conn.App. 61, 66, 978 A.2d 531 (2009). Nor must the agreement be reported to the court or otherwise placed on record. DAP Financial Management Co. v. Mor-Fam Electric, Inc., 59 Conn.App. 92, 755 A.2d 925 (2000); Montgomery v. Smith, 40 Conn.Sup. 358, 359, 499 A.2d 444 (1985).
The parties do not dispute that a settlement was reached in the present matter, nor do the parties dispute the total amount of the mediated settlement, which they agree to be $275,000. The plaintiffs admit in the first paragraph of their objection to the motion for court approval of the settlement that an agreement was reached between the parties. The clarity of the settlement agreement is not disputed and the parties make no claim that the agreement was ambiguous. Where the parties disagree is in the proper allocation of the $275,000.
Although the plaintiffs argue that their attorney misapprehended Massachusetts law in agreeing to the present allocation of the $275,000, such misunderstanding does not render their agreement to the proposed settlement a nullity. The enforceability of a settlement agreement is determined by the principles of contract law. Aududon Parking Associates Limited Partnership v. Barclay Stubbs, Inc., supra, 225 Conn. 809. To establish a claim for rescission or reformation of the settlement agreement on the basis of unilateral mistake, the plaintiffs must establish actual or constructive fraud, or inequitable conduct on the part of the intervening plaintiff. See Finley Associates, Inc. v. Crossroads Investment Company, L.P., Superior Court, complex litigation docket at New Britain, No. X03 CV 99 0499388 (December 17, 2001, Aurigemma, J.); Greenwich Contracting Co. v. Bonwit Construction Co., 156 Conn. 123, 126-27, 239 A.2d 519 (1968). Here, the plaintiffs have failed to allege, and their averments in opposition to the motion for court approval do not establish, that the intervening plaintiff engaged in inequitable conduct, let alone actual or constructive fraud. As such, the court finds that the parties agreed to a valid, unambiguous and enforceable settlement in the primary amount of $275,000.
Mass. Gen. Laws ch. 152, § 15 prohibits the making of any settlement with a third party without the "approval of either the board, the reviewing board, or the court in which the action has been commenced after a hearing in which both the employee and the insurer have had an opportunity to be heard." "[O]ne of the primary purposes of § 15 is to make the compensation insurer whole from the proceeds of the third-party action." Taylor v. Trans-Lease Group, 34 Mass.App.Ct. 404, 409, 612 N.E.2d 254 (1993). "[W]hen allocating the proceeds from the settlement of a third party tort action brought by an injured employee, an insurer's right to full reimbursement of benefits paid . . . may not be compromised, abridged or equitably allocated to others so as to deprive the insurer of its lien." Hutlin v. Francis Harvey Sons, Inc., 40 Mass.App.Ct. 692, 694-95, 666 N.E.2d 1323 (1996).
In particular, Mass. Gen. Laws ch. 152, § 15 provides in relevant part: "Where the injury for which compensation is payable was caused under circumstances creating a legal liability in some person other than the insured to pay damages in respect thereof, the employee shall be entitled, without election, to the compensation and other benefits provided under this chapter. Either the employee or insurer may proceed to enforce the liability of such person . . . The sum recovered shall be for the benefit of the insurer . . . Except in the case of settlement by agreement by the parties to, and during a trial of, such an action at law, no settlement by agreement shall be made with such other person without the approval of either the board, the reviewing board, or the court in which the action has been commenced after a hearing in which both the employee and the insurer have had an opportunity to be heard."
This court shares jurisdiction with the DIA over the approval of the mediated settlement under Mass. Gen. Laws ch. 152, § 15. The intervening plaintiffs moved for approval of the mediated settlement on March 17, 2010. The plaintiffs opposed such motion, requesting that the DIA be afforded the opportunity to adjust the allocation amount to conform with Massachusetts law. "[A] judge has no discretionary power to review and determine the fair allocation of proceeds between an insurer and the insured. Until an 'excess' recovery exists, the entire recovery is for the insurer." Rhode v. Beacon Sales Co., 416 Mass. 14, 18-19, 616 N.E.2d 103 (1993). Neither DIA, nor this court in its application of Mass. Gen. Laws ch. 152, § 15, can modify the allocation of a settlement award. Nonetheless, an insurer may stipulate to a settlement agreement awarding the insurer less than full reimbursement. See Taylor v. Trans-Lease Group, supra, 34 Mass.App.Ct. 409.
The parties entered into a clear, unambiguous settlement, the terms of which are fair. The intervening plaintiff holds a lien in the amount of $277,846 and the allocation of $190,000 to the intervening plaintiff, agreed upon by the parties to the mediation, is less than the amount of such lien. The intervening plaintiff has agreed to accept less than full reimbursement for purposes of settlement. Thus, the court will not disturb the existing allocation of $190,000 to the intervening plaintiff and $85,000 to the plaintiffs because such allocation does not contravene Massachusetts workers' compensation law.
Although the plaintiffs' Massachusetts-based counsel has filed a petition for approval of settlement with the DIA containing a modified allocation, the DIA has not ruled on that filing. Since this court has jurisdiction over the approval of the settlement allocation, and the present allocation is not violative of Massachusetts workers' compensation law, the motion for court approval is granted, the allocation in the amount of $190,000 to the intervening plaintiff and $85,000 to the plaintiffs is approved, and the motion to enforce the settlement agreement is hereby granted.
For the foregoing reasons, the intervening plaintiff's motions for approval of the settlement and for enforcement of the settlement are granted. The defendant is ordered to pay to the intervening plaintiff the principal amount of $190,000 and to the plaintiffs the principal amount of $85,000 in full settlement of their claims. The plaintiffs and the intervening plaintiff are ordered to withdraw all claims against the defendant within 10 days of this order and are further ordered to release the defendant of liability as to the underlying incident. Pursuant to the terms of the settlement, there shall be no offset against future payments of benefits to the plaintiffs under Massachusetts workers' compensation provisions.
Accordingly, the defendant's motion to enforce the settlement is rendered moot.