Waxies Enterprises v. Labor Commission

2025 UT App 7
CourtCourt of Appeals of Utah
DecidedJanuary 16, 2025
DocketCase No. 20230789-CA
StatusPublished

This text of 2025 UT App 7 (Waxies Enterprises v. Labor Commission) is published on Counsel Stack Legal Research, covering Court of Appeals of Utah primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Waxies Enterprises v. Labor Commission, 2025 UT App 7 (Utah Ct. App. 2025).

Opinion

2025 UT App 7

THE UTAH COURT OF APPEALS

WAXIES ENTERPRISES INC. AND AMERICAN ZURICH INSURANCE CO., Petitioners, v. THOMAS J. HALLADAY AND LABOR COMMISSION, Respondents.

Opinion No. 20230789-CA Filed January 16, 2025

Original Proceeding in this Court

Bret A. Gardner and Kristy L. Bertelsen, Attorneys for Petitioners Jay K. Barnes and Virginius Dabney, Attorneys for Respondent Thomas J. Halladay

JUDGE RYAN D. TENNEY authored this Opinion, in which JUDGES MICHELE M. CHRISTIANSEN FORSTER and DAVID N. MORTENSEN concurred.

TENNEY, Judge:

¶1 Thomas Halladay was injured when he fell off a ladder while working for Waxies Enterprises (Waxies). Halladay filed a claim with the Labor Commission seeking compensation for his injuries, and the parties later reached a settlement agreement. After the parties had signed the agreement and the Labor Commission approved it, however, Waxies and Halladay learned that they had divergent ideas about how to interpret one of its material terms. When Waxies asked Halladay to sign certain documents that would effectively decide the question in its favor, Halladay refused. Waxies Enterprises v. Labor Commission

¶2 Waxies then filed a motion asking the Labor Commission to compel Halladay to sign the requested documents. In the alternative, Waxies asked the Labor Commission to set aside its prior approval of the settlement agreement. The Labor Commission denied both requests.

¶3 Waxies now seeks judicial review. For the reasons set forth below, we decline to disturb the Labor Commission’s decision on the motion to compel, but we vacate its denial of the motion to set aside its approval of the settlement agreement.

BACKGROUND

¶4 In November 2012, Halladay was working for Waxies when the ladder that he was standing on slid out from under him, causing him to fall and sustain injuries to his spine and the left side of his body. In late 2020, Halladay brought a claim against Waxies seeking an award of disability benefits. 1 The parties litigated the matter, and an administrative law judge (ALJ) found that causation had been established and awarded permanent total disability benefits to Halladay. The Labor Commission’s Appeals Board (the Appeals Board) affirmed that decision.

¶5 Waxies sought review from this court, but the parties were directed to mediation. During that subsequent mediation, the parties agreed to the terms of a settlement agreement (the

1. American Zurich Insurance Co. was Waxies’ insurance provider and is a named party. Waxies and American Zurich have litigated together throughout this case. For simplicity, we’ll refer to them collectively as Waxies throughout this opinion.

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Settlement Agreement), and the Labor Commission, through an ALJ, approved it two months later. 2

¶6 The Settlement Agreement primarily consisted of two parts. First, Waxies agreed to pay Halladay a lump sum of $250,000, which represented “ongoing indemnity benefits” for Halladay because of his limited “ability to engage in substantial, gainful employment [going] forward.” Second, Waxies agreed to provide a “Medicare Set-aside Allocation” (MSA) to cover Halladay’s future medical expenses. The form and function of this MSA was laid out in the Settlement Agreement as follows:

• “[Waxies] will pay to [Halladay] the total of $166,246.47 . . . for future medical expenses related to the November 5, 2012 work accident . . . .”

• “It is further agreed by the parties that the MSA . . . of $166,246.47 will be paid to [Halladay] in the form of a structure[d] annuity. An initial MSA seed payment of $23,183.00 will be paid to [Halladay] by not later than 30 days from the date that the Utah Labor Commission approves this Settlement Agreement. Thereafter, annual annuity payments will be made to [Halladay] of $10,218.00 on the anniversary date of the initial payment and shall continue to be paid each year thereafter on or about the anniversary date and each anniversary date thereafter so long as [Halladay] lives.”

• “The MSA of $166,246.47 is not guaranteed to be paid to [Halladay] in its entirety, and shall be paid to [Halladay] so

2. As will be discussed in more detail below, an ALJ has statutory authority to approve settlement agreements on behalf of the Labor Commission in workers’ compensation cases. See Utah Code § 34A-2-420(4).

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long as [Halladay] lives. No MSA annuity payments will be made after [Halladay’s] date of death.”

• “[Halladay] elects to have the MSA professionally administered for him by [third parties].” 3

¶7 According to Waxies’ subsequent account, “within a few hours” after the Labor Commission approved the Settlement Agreement, Waxies asked Halladay, for the first time, to sign two additional documents. One was titled the “Terms of Structured Settlement with Assignment” (the TSSA), and the other was titled the “Qualified Assignment and Release Agreement” (the QARA). Both of these documents contained language assigning Waxies’ obligations to make the annual MSA payments to a third party. Moving forward, we’ll refer to the two documents together as the Assignment Documents.

¶8 Of note, the TSSA described the MSA payments as “beginning 4/1/2024, paid for 14 years, only if . . . Halladay is living when the payment is due.” And the QARA likewise described the MSA as a “Temporary Life Annuity” with periodic payments made “for a maximum of 14 year(s).”

¶9 After reviewing these documents, Halladay refused to sign them. And in discussions between the two sides’ attorneys, it became clear that the two sides had differing ideas about whether these documents accurately reflected the nature of the Settlement

3. As noted, in this provision, Halladay agreed to have the MSA professionally administered by third parties. The Settlement Agreement did reference Halladay signing one document, a “Certified MSA Self Administration Support Service Agreement,” and Halladay signed that document without incident. But this provision did not reference the assignment of the MSA, nor did it mention any other forms that might be necessary to carry out the third-party administration.

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Agreement itself. In Waxies’ view, because the Settlement Agreement said that Waxies would pay a “total” amount of $166,246.47 for “future medical expenses,” with those medical expenses being paid to Halladay through the MSA, and because the Settlement Agreement also said that Halladay would receive an initial payment of $23,183.00 followed by annual annuity payments of $10,218.00, this meant that Waxies’ obligations would end after 14 years. 4

¶10 In Halladay’s view, however, what mattered was that the Settlement Agreement specifically provided for “annual annuity payments” of $10,218.00 “so long as [Halladay] live[d].” 5 Because the Assignment Documents explicitly limited the overall MSA obligations to 14 years of payments, Halladay believed that they made “significant changes” to the Settlement Agreement’s substantive terms. It was for this reason that, on the advice of counsel, he refused to sign them.

¶11 On May 9, 2023, Waxies filed a motion asking the Labor Commission to compel Halladay to sign the Assignment Documents. In this motion, Waxies argued that the Assignment Documents were necessary for the structured annuity to be funded and professionally administered. Because Halladay had agreed to have the MSA professionally administered by a third party, Waxies asked the Labor Commission to order him to sign

4.

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Bluebook (online)
2025 UT App 7, Counsel Stack Legal Research, https://law.counselstack.com/opinion/waxies-enterprises-v-labor-commission-utahctapp-2025.