LAURIE P. LARSON a/k/a LAURIE J. LARSON, Employee/Cross-Appellant, v.UNIVERSITY OF MINN., SELF-INSURED, adm=d by SEDGWICK CLAIMS MGMT. SERVS., INC., Employer/Appellant, and ST. PAUL RADIOLOGY, SUMMIT/LANDMARK ORTHOPEDICS, LTD., BLUE CROSS & BLUE SHIELD OF MINN. & BLUE PLUS, and CENTER FOR DIAGNOSTIC IMAGING, Intervenors.

 

WORKERS= COMPENSATION COURT OF APPEALS

JANUARY 16, 2004

 

HEADNOTES

 

PRACTICE & PROCEDURE; STIPULATION FOR SETTLEMENT.  Where the parties disputed whether the compensation judge had subject matter jurisdiction to issue a previous Decision and Order pursuant to Minn. Stat. ' 176.106, the validity of the decision was properly the subject of a settlement agreement.  As the agreement is not a full, final and complete settlement of the employee=s medical and rehabilitation benefits, it is conclusively presumed reasonable, fair and in conformity with Chapter 176, and the compensation judge erred in disapproving the parties= settlement.

 

Order vacated; remanded to OAH for hearing.

 

Determined by Johnson,C.J., Stofferahn, J., and Pederson, J.

Compensation Judge:  Catherine A. Dallner.

 

Attorneys:  Roderick C. Cosgriff, Heacox, Hartman, Koshmrl, Cosgriff & Johnson, St. Paul, MN, for the Appellant.  James E. Speckmann, Attorney at Law, Shoreview, MN, for Cross-Appellant

 

 

OPINION

 

THOMAS L. JOHNSON, Judge

 

The self-insured employer and the employee appeal from a compensation judge=s order disapproving a stipulation for settlement.  We conclude the parties= settlement was proper, vacate the order, and remand the case to the Office of Administrative Hearings for determination of the employee=s claim petition. 

 

BACKGROUND

 

The essential facts in this case are undisputed.  Laurie Larson, the employee, sustained a personal injury on August 8, 2001, while employed as a janitor for the University of Minnesota, the self-insured employer.  The employer admitted the employee injured her right foot and ankle but contends the injury was temporary.  The employee asserts that, in addition to the admitted injury to her right foot and ankle, she also sustained injuries to her left hip, right big toe and left knee.

 

In October 2001, the employee was diagnosed with a left hip problem that required surgery.  When the employee alleged this condition was work related, the employer filed a Notice of Primary Liability Determination on November 6, 2001, in which it admitted liability for a temporary aggravation of a pre-existing right foot and ankle condition, but denied liability for the left knee or left hip condition.  The employee then filed a Medical Request seeking payment of medical bills for the care and treatment of her left hip condition.  In its Medical Response, the employer again denied liability for the employee=s claimed left hip and left knee conditions.

 

In a Decision and Order Pursuant to Minn. Stat. ' 176.106, filed May 13, 2002, Compensation Judge Harold W. Schultz found the employee injured her left hip on August 8, 2001, and ordered the self-insured employer to pay the claimed medical expenses.  The employer did not request a formal hearing.^[1]  Thereafter, the employee had several surgeries on her left hip and knee.  In December 2002, the employer filed with the Office of Administrative Hearings a Petition to Vacate the May 13, 2003 Decision and Order contending the compensation judge lacked jurisdiction under Minn. Stat. ' 176.106 to determine primary liability at an administrative conference.^[2] 

 

The employee then filed a claim petition seeking temporary total disability benefits and medical expenses.  In its answer, the employer denied liability for an injury to the employee=s left hip and left knee.  Prior to the scheduled hearing, the parties and the intervenors entered into a Stipulation for Settlement in which they agreed to the following:

 

1.  That the Decision and Order of Judge Schultz dated May 13, 2002, is null and void and shall not govern the rights of the parties hereto now or in the future.

 

2.  That the parties agree that the self-insured employer shall withdraw and not pursue a petition to vacate said order in light of this Stipulation.

 

3.  That the self-insured employer further agree not to dispute the reasonableness and necessity of the medical expenses claimed by the employee herein or the intervenors, other than to dispute that the employee=s left hip condition occurred on August 8, 2001 or is causally related to the employee=s claimed injury.

 

4.  That the parties hereto agree to reserve and all other rights and defenses herein.

The Stipulation for Settlement was submitted for approval at a hearing before Compensation Judge Catherine A. Dallner.  In an Order Disapproving Stipulation for Settlement and Order Continuing Hearing filed August 6, 2003, the compensation judge disapproved the Stipulation for Settlement and continued the scheduled hearing.  The employer and employee appeal from the judge=s order.

 

DECISION

 

The compensation judge concluded she lacked jurisdiction to enter an order declaring the decision of another compensation judge null and void.  The judge further found the terms of the proposed stipulation were not fair and reasonable under Minn. Stat. ' 176.521, subd. 2, because the parties failed to prove why it was reasonable for the employee to forego payment of the medical expenses ordered paid in the May 13, 2002 Decision and Order.  Accordingly, the compensation judge disapproved the proposed stipulation for settlement.  The employer contends the compensation judge=s disapproval of the Stipulation for Settlement was legally erroneous.  We agree.

 

As a general rule, public policy favors the settlement of disputed claims without litigation.  Hentshel v. Smith, 278 Minn. 86 153 N.W.2d 199 (1986).  The settlement of workers= compensation disputes should be favored because they avoid the delay of litigation and expedite the granting of relief.  Senske v. Fairmont & Sign Waseca Canning Co., 232 Minn. 350, 45 N.W.2d 640, 16 W.C.D. (1951).  Claims asserted based on reasonable grounds and in good faith are proper subjects for a contract of settlement.  Mulligan v. Farmers= Nat=l Bank of Alexandria, 194 Minn. 451, 260 N.W. 630 (1935).

 

The parties, in their settlement agreement, agreed the May 13, 2002, Decision and Order was null and void and would not govern the rights of the parties.  Whether this Decision and Order was legally valid was the subject of a dispute and was therefore properly the subject of a settlement agreement.  We are aware of no legal rule which precludes settling parties from waiving any rights or claims which are the subject of good faith dispute.  Further, the employee and employer were both represented by counsel and the settlement agreement is not a full, final and complete settlement of the employee=s right to medical or rehabilitation benefits.  Accordingly, the settlement is conclusively presumed reasonable, fair and in conformity with Chapter 176.  Minn. Stat. ' 176.521, subd. 2.

 

The Order Disapproving Stipulation for Settlement is hereby vacated.  The Stipulation for Settlement filed with the Office of Administrative Hearings on July 31, 2003, is hereby signed and filed as provided by statute.  This case is remanded to the Office of Administrative Hearings to schedule a hearing on the employee=s claim petition.