In the Missouri Court of Appeals Western District SCOTT DAVIDSON, ) ) Appellant, ) WD82573 ) v. ) OPINION FILED: ) September 24, 2019 DAVIDSON MASONRY & ) CONSTRUCTION, LLC, ) ) Respondent. )
Appeal from the Labor and Industrial Relations Commission
Before Division Three: Gary D. Witt, Presiding Judge, Edward R. Ardini, Jr., Judge and Thomas N. Chapman, Judge
Appellant Scott Davidson ("Davidson") appeals from an order of the Labor and
Industrial Relations Commission ("Commission") dismissing Davidson's application to
review his injury settlement with Davidson Masonry & Construction, LLC ("Davidson
Masonry") and its insurer, Grinnell Mutual Reinsurance Co. ("Grinnell Mutual").
Davidson alleges that the Commission erred in finding that it was not authorized to review
the settlement despite Davidson's allegation that it was fraudulently obtained. We affirm. Factual and Procedural Background
Davidson fractured his right ankle on October 29, 2016, while working on a jobsite
for his employer, Davidson Masonry. As a result, Davidson underwent surgery that
included implanting screws and hardware into his ankle. Davidson filed a timely claim for
workers' compensation benefits. Davidson's surgeon released him from treatment and
found that he had reached maximum medical improvement. Following that release, on
September 27, 2018, Davidson along with counsel representing both Davidson Masonry
and Grinnell Mutual appeared before an Administrative Law Judge ("ALJ") seeking
approval of a proposed settlement between the parties.
Davidson appeared pro se at the settlement conference although the ALJ's notes
reflect that Davidson stated he had talked with an attorney prior to the conference. The
ALJ conducted a hearing, which included placing Davidson under oath and asking standard
questions to determine if he understood the nature of the settlement and did in fact agree
to its terms. At the conclusion of the hearing the ALJ approved a Stipulation for
Compromised Settlement ("Settlement") signed by Davidson and counsel for Davidson
Masonry and Grinnell Mutual. Under the Settlement, Davidson received a lump sum
settlement of $11,097.92. The Settlement provided that it left "medical open for removal
of screws and hardware" which the parties agreed would occur at a later date and would be
paid for by Davidson Masonry/Grinnell Mutual.
On October 11, 2018, an attorney entered his appearance as counsel for Davidson
and filed a Motion to Set Aside Settlement Agreement ("Motion"), alleging that Grinnell
Mutual had intentionally misrepresented the applicable temporary total disability rate, thus
2 fraudulently induced Davidson to settle for less than he was entitled. A conference call
was held with the ALJ and counsel for the parties on October 15, 2018, during which the
ALJ advised the parties that he retained no jurisdiction to address the Motion.
Following the conference call, Davidson filed an Application for Review with the
Commission, again asserting that the Settlement should be set aside because it was induced
by fraud. On October 25, 2018, counsel for Davidson Masonry and Grinnell Mutual filed
an Answer to Application for Review asserting that the Commission lacked jurisdiction to
review the Settlement.
On January 30, the Commission entered an order stating that it was "not authorized
to consider employee's application for review," and that the Application for Review was
therefore dismissed. This appeal followed.
Standard of Review
"The commission is a statutorily created entity and its jurisdiction and authority is
defined solely by statute." State ex rel. ISP Minerals, Inc. v. Labor and Indus. Relations
Comm'n, 465 S.W.3d 471, 473 (Mo. banc 2015). "Decisions of the Commission in
workers' compensation proceedings that are clearly an interpretation or application of law,
as distinguished from a determination of fact, are not binding upon [the court of appeals]
and fall within [the appellate court's] province of review and correction." Shockley v.
Laclede Elec. Co-op., 825 S.W.2d 44, 46 (Mo. App. S.D. 1992) (quoting West v. Posten
Const. Co., 804 S.W.2d 743, 744 (Mo. banc 1991)). This Court has authority pursuant to
3 section 287.495.1(1)1 to review whether the Commission acted within its statutory powers.
Section 287.495.1(1). Whether the Commission acted within its statutory powers is a
question of law which this Court reviews de novo. Treasurer of State-Custodian of Second
Injury Fund v. Witte, 414 S.W.3d 455, 460 (Mo. banc 2013).
Discussion
In finding that it lacked statutory authority to review the Settlement, the
Commission relied on Shockley v. Laclede Electric Cooperative, 825 S.W.2d 44 (Mo. App.
S.D. 1992). In Shockley the employee entered into a settlement with his employer
following a workplace injury. Id. at 45. The settlement was approved by an administrative
law judge. Id. at 46. Nearly two years later, Shockley filed an amended claim for benefits
seeking to reopen his claim requesting additional benefits based on the claim that had been
previously settled. Id. at 45. The Commission denied review stating that it lacked
jurisdiction to review settlement; Shockley appealed. Id. at 46. The Southern District of
this Court agreed with the Commission's finding that "[w]hen a settlement is approved, 'the
jurisdiction of the Commission is exhausted, and the matter is at an end so far as the
Commission is concerned." Id.at 47 (quoting Mosier v. St. Joseph Lead Co., 205 S.W.2d
227, 232 (Mo. App. 1947).
Decisions of the court of appeals are, of course, consistent with the foregoing principles. Any relief from a settlement approved by the commission under § 287.390 can be had only in a court of equity on proof of fraud or mistake. Ley v. St. Louis County, 710 S.W.2d 493, 495–496 (Mo.App.1986); Trokey v. United States Cartridge Co., 222 S.W.2d 496, 501[1] (Mo. App.1949); Mosier v. St. Joseph Lead Co., 205 S.W.2d 227, 232[11] (Mo. App.1947); Bliss v. Lungstras Dyeing & Cleaning Co., 130 S.W.2d 198, 201[3] (Mo.
1 All statutory citations are to RSMo 2016 as currently updated, unless otherwise noted.
4 App.1939). The required showing, in an equity action, is fraud or mistake in the very act of obtaining the order of approval of the compromise. Ley v. St. Louis County, supra, at 496. The commission has no power to expound any principle of law or equity. Bliss v. Lungstras Dyeing & Cleaning Co., supra, at 201[4]. A settlement, when approved by the commission, is conclusive and irrevocable. Haase v. New Hampshire Ins. Co., 795 S.W.2d 543, 545[3] (Mo. App.1990).
Shockley, 825 S.W.2d at 47. Davidson Masonry argues in its brief and at oral argument
that Shockley is controlling and the sole jurisdiction to review a claim of fraud in settlement
is with the circuit court. We agree.
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In the Missouri Court of Appeals Western District SCOTT DAVIDSON, ) ) Appellant, ) WD82573 ) v. ) OPINION FILED: ) September 24, 2019 DAVIDSON MASONRY & ) CONSTRUCTION, LLC, ) ) Respondent. )
Appeal from the Labor and Industrial Relations Commission
Before Division Three: Gary D. Witt, Presiding Judge, Edward R. Ardini, Jr., Judge and Thomas N. Chapman, Judge
Appellant Scott Davidson ("Davidson") appeals from an order of the Labor and
Industrial Relations Commission ("Commission") dismissing Davidson's application to
review his injury settlement with Davidson Masonry & Construction, LLC ("Davidson
Masonry") and its insurer, Grinnell Mutual Reinsurance Co. ("Grinnell Mutual").
Davidson alleges that the Commission erred in finding that it was not authorized to review
the settlement despite Davidson's allegation that it was fraudulently obtained. We affirm. Factual and Procedural Background
Davidson fractured his right ankle on October 29, 2016, while working on a jobsite
for his employer, Davidson Masonry. As a result, Davidson underwent surgery that
included implanting screws and hardware into his ankle. Davidson filed a timely claim for
workers' compensation benefits. Davidson's surgeon released him from treatment and
found that he had reached maximum medical improvement. Following that release, on
September 27, 2018, Davidson along with counsel representing both Davidson Masonry
and Grinnell Mutual appeared before an Administrative Law Judge ("ALJ") seeking
approval of a proposed settlement between the parties.
Davidson appeared pro se at the settlement conference although the ALJ's notes
reflect that Davidson stated he had talked with an attorney prior to the conference. The
ALJ conducted a hearing, which included placing Davidson under oath and asking standard
questions to determine if he understood the nature of the settlement and did in fact agree
to its terms. At the conclusion of the hearing the ALJ approved a Stipulation for
Compromised Settlement ("Settlement") signed by Davidson and counsel for Davidson
Masonry and Grinnell Mutual. Under the Settlement, Davidson received a lump sum
settlement of $11,097.92. The Settlement provided that it left "medical open for removal
of screws and hardware" which the parties agreed would occur at a later date and would be
paid for by Davidson Masonry/Grinnell Mutual.
On October 11, 2018, an attorney entered his appearance as counsel for Davidson
and filed a Motion to Set Aside Settlement Agreement ("Motion"), alleging that Grinnell
Mutual had intentionally misrepresented the applicable temporary total disability rate, thus
2 fraudulently induced Davidson to settle for less than he was entitled. A conference call
was held with the ALJ and counsel for the parties on October 15, 2018, during which the
ALJ advised the parties that he retained no jurisdiction to address the Motion.
Following the conference call, Davidson filed an Application for Review with the
Commission, again asserting that the Settlement should be set aside because it was induced
by fraud. On October 25, 2018, counsel for Davidson Masonry and Grinnell Mutual filed
an Answer to Application for Review asserting that the Commission lacked jurisdiction to
review the Settlement.
On January 30, the Commission entered an order stating that it was "not authorized
to consider employee's application for review," and that the Application for Review was
therefore dismissed. This appeal followed.
Standard of Review
"The commission is a statutorily created entity and its jurisdiction and authority is
defined solely by statute." State ex rel. ISP Minerals, Inc. v. Labor and Indus. Relations
Comm'n, 465 S.W.3d 471, 473 (Mo. banc 2015). "Decisions of the Commission in
workers' compensation proceedings that are clearly an interpretation or application of law,
as distinguished from a determination of fact, are not binding upon [the court of appeals]
and fall within [the appellate court's] province of review and correction." Shockley v.
Laclede Elec. Co-op., 825 S.W.2d 44, 46 (Mo. App. S.D. 1992) (quoting West v. Posten
Const. Co., 804 S.W.2d 743, 744 (Mo. banc 1991)). This Court has authority pursuant to
3 section 287.495.1(1)1 to review whether the Commission acted within its statutory powers.
Section 287.495.1(1). Whether the Commission acted within its statutory powers is a
question of law which this Court reviews de novo. Treasurer of State-Custodian of Second
Injury Fund v. Witte, 414 S.W.3d 455, 460 (Mo. banc 2013).
Discussion
In finding that it lacked statutory authority to review the Settlement, the
Commission relied on Shockley v. Laclede Electric Cooperative, 825 S.W.2d 44 (Mo. App.
S.D. 1992). In Shockley the employee entered into a settlement with his employer
following a workplace injury. Id. at 45. The settlement was approved by an administrative
law judge. Id. at 46. Nearly two years later, Shockley filed an amended claim for benefits
seeking to reopen his claim requesting additional benefits based on the claim that had been
previously settled. Id. at 45. The Commission denied review stating that it lacked
jurisdiction to review settlement; Shockley appealed. Id. at 46. The Southern District of
this Court agreed with the Commission's finding that "[w]hen a settlement is approved, 'the
jurisdiction of the Commission is exhausted, and the matter is at an end so far as the
Commission is concerned." Id.at 47 (quoting Mosier v. St. Joseph Lead Co., 205 S.W.2d
227, 232 (Mo. App. 1947).
Decisions of the court of appeals are, of course, consistent with the foregoing principles. Any relief from a settlement approved by the commission under § 287.390 can be had only in a court of equity on proof of fraud or mistake. Ley v. St. Louis County, 710 S.W.2d 493, 495–496 (Mo.App.1986); Trokey v. United States Cartridge Co., 222 S.W.2d 496, 501[1] (Mo. App.1949); Mosier v. St. Joseph Lead Co., 205 S.W.2d 227, 232[11] (Mo. App.1947); Bliss v. Lungstras Dyeing & Cleaning Co., 130 S.W.2d 198, 201[3] (Mo.
1 All statutory citations are to RSMo 2016 as currently updated, unless otherwise noted.
4 App.1939). The required showing, in an equity action, is fraud or mistake in the very act of obtaining the order of approval of the compromise. Ley v. St. Louis County, supra, at 496. The commission has no power to expound any principle of law or equity. Bliss v. Lungstras Dyeing & Cleaning Co., supra, at 201[4]. A settlement, when approved by the commission, is conclusive and irrevocable. Haase v. New Hampshire Ins. Co., 795 S.W.2d 543, 545[3] (Mo. App.1990).
Shockley, 825 S.W.2d at 47. Davidson Masonry argues in its brief and at oral argument
that Shockley is controlling and the sole jurisdiction to review a claim of fraud in settlement
is with the circuit court. We agree.
Davidson argues that the present case is distinguishable from Shockley because,
unlike the settlement in Shockley which was closed and final in all respects, the Settlement
before the Commission in this case was left open as to future medical costs and is, therefore,
more closely analogous to the case of State ex rel. ISP Minerals, Inc. v. Labor and
Industrial Relations Commission, 465 S.W.3d 471 (Mo. banc 2015). In ISP Minerals, Inc.,
the parties had entered into a settlement but agreed "to leave future related pulmonary med.
care open." Id.at 472. Following the settlement, the employer refused to pay for certain
inhaler medicines prescribed to employee. Id. The employee requested a hearing before
the commission to resolve the dispute and the commission entered an order finding that it
retained jurisdiction to determine the employer's liability for future related pulmonary care.
Id. The employer filed a writ with the Missouri Supreme Court seeking to prohibit the
commission from hearing the case due to lack of jurisdiction. Id.
The Missouri Supreme Court found that the settlement in ISP Minerals, Inc. was
materially different from the settlements in Shockley and other similar cases such as Mosier
v. St. Joseph Lead Co., 205 S.W.2d 227, 232 (Mo. App. 1947) (relied on by Shockley and 5 holding that the commission has no jurisdiction to review final settlements). Id. at 475.
Those cases "involved lump sum settlements in which the claimants expressly forfeited
any claim to additional compensation for future medical care." Id. "In both [Shockley and
Mosier], the claimants, after fully and finally settling their claims, requested that the
commission award additional benefits." Id. They were "essentially requesting that the
commission relieve them of their settlement obligations." Id. In contrast, in ISP Minerals,
Inc., the parties sought determination regarding the cost of medical care that was expressly
left open by the settlement. The Court found "the commission retains jurisdiction to
determine [e]mployee's 'open' claim regarding the extent of [e]mployer's liability for future
medical benefits pursuant to the workers' compensation law." Id. at 476.
Davidson argues that the present action is more akin to ISP Minerals, Inc. than
Shockley because the Settlement here leaves open the issue of future medical to pay for the
removal of screws and hardware from Davidson's ankle. If the present dispute was related
to the issue of the open future medical that might be the case. However, Davidson seeks
not to address a dispute as to an issue left open by the Settlement; he seeks to divest himself
of the Settlement completely due to allegations of fraud in the inducement of the settlement.
ISP Minerals, Inc. and its attendant cases2 do not stand for the proposition that the
Commission has authority to review all issues which may arise as to settlements which
contain some open future issues. Instead, ISP Minerals, Inc. expressly states that the
"[e]mployee is seeking to determine whether he is entitled to benefits pursuant to the
2 See Weiss v. Anheuser-Busch, Inc., 117 S.W.2d 682 (Mo. App. 1938); Blissenbach v. General Motors Assembly Div., 776 S.W.2d 889 (Mo. App. E.D. 1989).
6 settlement which expressly left 'future related pulmonary med[ical] care open.'" Id. at 475.
In that case, the issue brought before the Commission for review was the issue specifically
left open for future determination. Such is not the case here. Davidson seeks the
Commission's review of whether the Settlement should be set aside in its entirety because
of the allegation that it was obtained fraudulently based on an improper rate of temporary
total disability. This issue is not tangentially or even tenuously related to the future medical
care issue left open. We find that Shockley is not distinguishable on the issue before us
and is directly controlling. "Any relief from a settlement approved by the commission
under § 287.390 can be had only in a court of equity on proof of fraud or mistake."
Shockley, 825 S.W.2d at 47. The Commission lacked authority to hear Davidson's claim
of fraud and it instead must be brought in circuit court.
Davidson further asks that this Court look to Roth v. LaSociete Anonyme Turbomeca
France, 120 S.W.3d 764 (Mo. App. W.D. 2003) for a frame work of how this case should
be treated. While certainly Roth represents a case in which parties sought to set aside an
insurance settlement based on fraud, it does not address the jurisdictional question before
this Court. Roth was an action brought in the circuit court claiming that plaintiffs were
fraudulently induced to settle their original suit also brought in circuit court. Id. at 769.
The case before this Court hinges on the authority of the Commission to hear the claim.
As noted above, the authority of the Commission is statutorily defined. We cannot expand
that authority, we may only determine whether Davidson's action fits within it. We find it
does not.
7 The Commission had no authority to review Davidson's Motion and did not err in
dismissing his application for review.
Conclusion
For the reasons stated above, we affirm.
__________________________________ Gary D. Witt, Judge
All concur