Koval v. Simon-Telelect, Inc.

979 F. Supp. 1222, 1997 U.S. Dist. LEXIS 16334, 1997 WL 610649
CourtDistrict Court, N.D. Indiana
DecidedAugust 14, 1997
Docket3:92-cv-00505
StatusPublished
Cited by9 cases

This text of 979 F. Supp. 1222 (Koval v. Simon-Telelect, Inc.) is published on Counsel Stack Legal Research, covering District Court, N.D. Indiana primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Koval v. Simon-Telelect, Inc., 979 F. Supp. 1222, 1997 U.S. Dist. LEXIS 16334, 1997 WL 610649 (N.D. Ind. 1997).

Opinion

MEMORANDUM AND ORDER

MILLER, District Judge.

Michael and Jean Koval filed a motion to enforce a settlement agreement reached among various parties in and related to this case during a September 18, 1996 mediation. The court held a hearing on the Kovals’ motion on November 25, 1996, heard oral argument from the parties, and set a briefing schedule that included the filing of stipulated facts. The court then issued a proposed order for comment, and comments and objections were filed.

The court adopts the parties’ stipulated facts, filed on December 3. Michael Koval was injured on August 13, 1991 while using an aerial lift device made by Simon-Telelect, Inc. and distributed by the Baker defendants. At the time of his injuries, Mr. Koval was acting in the course and scope of his employment with Henkels & McCoy, Inc., an electrical contracting firm that is not a party to this lawsuit, but which has consented to the court’s resolution of the settlement issue. Henkels & McCoy was partially self-insured; Liberty Mutual Insurance Company was its worker’s compensation carrier. Mr. Koval’s ensuing medical bills were paid through Liberty Mutual, as were temporary total disability benefits. The medical and disability payments totaled $299,609.06; Liberty Mutual holds a worker’s compensation lien for $49,-609.06, while Henkels & McCoy holds a worker’s compensation lien for $250,000.00.

Mr. Koval filed a worker’s compensation claim against Henkels & McCoy on July 27, 1992. Liberty Mutual retained the law firm of Edward N. Kalamaros & Associates to defend the workers’ compensation claim; the Kalamaros firm appeared for Henkels & McCoy before the Indiana Worker’s Compensation Board on September 22, 1992. Mr. Koval filed this product liability suit against Simon-Telelect and the Baker defendants (and eventually, United States Holdings, Inc.) on August 4, 1992. The Baker defendants filed bankruptcy in the Eastern Division of Virginia on September 1, 1995, and these proceedings were stayed.

The Kovals and the Simon defendants reached a tentative settlement in April 1996, under which the Simon defendants would pay $250,000.00. The agreement was contingent on the Baker defendants’ dismissal of an indemnity cross-claim against Simon-Teleleet. The Kovals’ counsel discussed the possibility of mediation with the Baker defendants. In June 1996, counsel for the Kovals (John McCrum), the Baker defendants (Robert Konopa) and Liberty Mutual and Henkels & McCoy (Joseph Forte of the Kalamaros firm) agreed to engage in mediation with attorney Ronald Kuker. The mediation was set for September 18. On June 12, Mr. Kuker sent a letter to counsel that included a form entitled “Terms of Mediation,” which included the following:

7. The following persons shall be present at the mediation unless otherwise agreed by the parties and the mediator: (a) all claimants; (b) all defendants, if there is reason to believe that the defendants may be exposed to personal liability; (c) the attorneys for the parties; (d) the representatives of the parties’ insurers, such representatives having full settlement authority; and (e) any other persons deemed necessary by the parties to reach full settlement of the dispute.
8. If the parties come to any agreement, the mediator will put such agreement in writing. No agreement will be binding on any party as to any subject, unless in writing, and signed by those to be bound by the agreement. Any agreement signed by the parties constitutes evidence that may be introduced in litigation. If any party should attempt to break or question any agreement, or seeks any other remedy regarding the mediation, then such party shall be responsible for the mediator’s fees plus attorney fees, court *1226 costs and other costs and expenses incurred by the mediator as a result of such proceedings.

On June 28, Mr. Kuker wrote to Mr. Forte of the Kalamaros firm recommending that someone from the Kalamaros firm and a representative of the lienholder attend the mediation. Mr. Kuker added, “As I understand it, Liberty Mutual is the lienholder.”

On September 13, Liberty Mutual advised counsel that Carolyn Young would be their representative at the mediation, and that she would have final compromise authority on the lien. This communication led counsel for Liberty Mutual and Henkels & McCoy to believe that Ms. Young had full compromise authority for both lienholders. Ms. Young so believed, as well. On September 17, the bankruptcy court entered an order allowing the mediation.

The mediation conference was held on September 18. Mr. and Mrs. Koval attended with their attorney, Mr. McCrum; the Baker defendants were represented by their representative, Ingrid Halvorsen, and their attorney, Mr. Konopa; Ms. Young and attorney Eric Ciesielski represented Liberty Mutual and Henkels & McCoy. Neither Mr. Ciesielski nor Ms. Young indicated that their authority to settle the worker’s compensation lien was restricted or subject to Henkels & McCoy’s approval, but the agreement between Liberty Mutual and Henkels & McCoy gave Liberty Mutual no authority to compromise the liens without Henkels & McCoy’s prior approval. At the close of the mediation conference, Ms. Young stated that the worker’s compensation liens would be compromised for the payment of $25,000.00 by the Kovals to Liberty Mutual. An agreement was reached under which the worker’s compensation liens would be compromised for $25,000.00; the Baker defendants would pay the Kovals $250,000.00 and to dismiss their cross-claim against Simon-Telelect; the Simon defendants would pay the Kovals $250,-000.00; the Kovals would dismiss their claims against the defendants in this lawsuit and Henkels & McCoy.

On September 26, Mr. Kuker reported to the court that a settlement had been reached, with stipulations and dismissals being exchanged. On September 27, the Kovals’ counsel told Liberty Mutual’s counsel that a release and waiver for the compromise of the worker’s compensation lien was being sent. Liberty Mutual’s counsel received those papers on October 4 and forwarded them to Liberty Mutual on October 9. At about the same time, counsel for the Simon defendants began circulating a global release for signatures of all interested parties and claimants. Counsel for the Baker defendants filed a motion in the bankruptcy court on October 22 for approval of the proposed settlement. The bankruptcy court conducted a hearing on that motion on November 12 and entered an order approving the settlement the following day.

Meanwhile, on October 29, Liberty Mutual had informed its attorney that it needed Henkels & McCoy’s approval to compromise the worker’s compensation claim. On November 13, the day the bankruptcy court approved the proposed settlement, the Kovals’ counsel asked Liberty Mutual’s counsel about the status of the release, and was informed that Liberty Mutual was awaiting authority from Henkels & McCoy to compromise the claim. On November 19, Henkels & McCoy told its attorney that it was unaware of the September 18 mediation, had not authorized that day’s compromise of its claim, and would not authorize it. Counsel for Liberty Mutual relayed that message to the Kovals’ counsel the next day, and also made an offer to the mediator, Mr.

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Cite This Page — Counsel Stack

Bluebook (online)
979 F. Supp. 1222, 1997 U.S. Dist. LEXIS 16334, 1997 WL 610649, Counsel Stack Legal Research, https://law.counselstack.com/opinion/koval-v-simon-telelect-inc-innd-1997.