RICHARD GUSTAFSON, Employee, v. HENNEPIN COUNTY MED. CTR., SELF-INSURED, Employer/Petitioner, and VOCATIONAL REHAB. and HEALTHPARTNERS, INC., Intervenors.

 

WORKERS= COMPENSATION COURT OF APPEALS

AUGUST 1, 2005

 

No. WC05-201

 

HEADNOTES

 

VACATION OF AWARD - VOIDABLE AWARD.  Where the employee rescinded a separate settlement agreement that was a material and integral part of the workers= compensation settlement agreement between the parties, the Award on Stipulation is voidable, and is vacated and set aside.

 

Petition to vacate award on stipulation granted.

 

Determined by: Johnson, C.J., Wilson, J., and Stofferahn, J.

 

Attorneys: Dean Margolis, Thill Law Firm, St. Louis Park, MN, for the Respondent.  Mary L. Egan, Assistant Hennepin County Attorney, Minneapolis, MN, for the Petitioner. 

 

 

OPINION

 

THOMAS L. JOHNSON, Judge

 

The petitioner seeks to set aside an award on stipulation.  We conclude the petitioner has established good cause and grant the request to vacate the award.

 

BACKGROUND

 

Richard Gustafson, the employee, was employed as a stock clerk in the pharmacy of the Hennepin County Medical Center, the employer.  The employee contends he sustained a personal injury on January 29, 2004, arising out of and in the course of his employment.  The self-insured employer denies the employee sustained a personal injury or, in the alternative, contends the employee=s injury was a temporary strain/sprain that resolved without any permanent disability.

 

In December 2004, the parties entered into a settlement of the employee=s claims for benefits arising out of the alleged January 29, 2004, personal injury.  In addition to the settlement of the employee=s claims for workers= compensation benefits, the settlement agreement contained the following language:

 

6.  The employee further agrees to execute a separate Settlement Agreement and Release that includes his resignation from employment with the employer.  The employee understands and agrees that this separate Settlement Agreement and Release and submission of his resignation is additional consideration for this full, final and complete settlement of his workers= compensation claims.  The employee further agrees and understands that if he rescinds the separate Settlement Agreement and Release and/or fails to submit his resignation from employment, this full, final and complete settlement of his workers= compensation claim will be null and void and no payment will be made by the employer.

 

An Award on Stipulation was served and filed on December 23, 2004.

 

The self-insured employer filed a motion to vacate the Award on Stipulation.^[1]  By affidavit, Mary L. Egan, attorney for the employer, stated that under the law governing the separate settlement agreement and release entered into by the parties, the employee had 15 days to rescind the agreement.  Ms. Egan further stated the employee did rescind the agreement within the 15-day period.  Under the terms of the stipulation, the employer contends the workers= compensation settlement is null and void and asks the award on stipulation be set aside.

 

DECISION

 

In certain cases, an erroneous settlement or one founded on some irregularity may be voidable.  In determining whether a voidable award should be vacated, this court will consider whether the stipulation was reasonable, fair and in conformity with the Workers= Compensation Act at the time it was entered into, whether the stipulation appears to fairly reflect the intent of the parties, whether there is any prejudice to the parties and the equities involved.  Sondral v. Del Hayes & Sons, Inc., 47 W.C.D. 659 (W.C.C.A. 1992).

 

The stipulation for settlement specifically provides that if the employee rescinds the separate settlement agreement, Athis full, final and complete settlement of his workers= compensation claim will be null and void and no payment will be made by the employer.@  It is undisputed the employee did rescind the separate settlement agreement.  Although the terms of the separate settlement agreement are not part of the record before this court, the employee=s resignation from his employment with the employer was part of that agreement.  One=s right to employment is generally considered a valuable right which would not be relinquished without the receipt of something valuable in exchange.  Absent any evidence to the contrary, we conclude the separate settlement agreement was a material and integral part of the workers= compensation settlement.

 

After signing the workers= compensation settlement agreement, the employee rescinded the separate settlement agreement.  It is clear from the workers= compensation settlement agreement that the parties intended to be bound either by the provisions of both settlement agreements or neither agreement.  Although the employee apparently had the legal right to rescind the separate settlement agreement, such recision now leaves the employer with no means to enforce the employee=s agreement to resign his employment.  Considering the intent of the parties as stated in the settlement agreement, the possibility of prejudice to the employer and the equities involved, we conclude the parties settlement is voidable.  The Award on Stipulation, served and filed December 23, 2004, is vacated and set aside.