The insurer Midwest Family Mutual Insurance (MFMI) seeks vacation of an Award on Stipulation between the employee and the employer and insurer State Fund Mutual Insurance (SFM), served and filed on October 22, 2013.  We conclude MFMI lacks standing, and dismiss the appeal.

The employee, Gary Mude, was 60 years old at the time of the settlement.  He has been employed as a diesel mechanic by Fox Brothers of Sanborn since 1971.  The employee sustained an admitted injury to his left wrist on June 20, 2006, while SFM was on the risk.  SFM insured the employer until January 2, 2010; the employer has been insured by MFMI from January 3, 2010 to the present time.

In January 2013, the employee filed a claim petition against the employer and both insurers, alleging a specific injury to his wrists on June 20, 2006, and a Gillette^[1] injury culminating on May 23, 2012.  A settlement conference was set for August 2, 2013.  Prior to the conference, counsel for MFMI advised the parties that his client would not consider a settlement unless the employee resigned from his employment at Fox Brothers.  The employee did not want leave his employment, and pursued a separate settlement with SFM only.

The employee and SFM reached an agreement, and a Stipulation for Settlement was executed by SFM on September 25 and by the employee on October 8.  The stipulation provides for a full, final, and complete settlement of any and all claims the employee might have, including medical and rehabilitation benefits, as a result of the June 20, 2006, injury to the left hand and wrist and any alleged consequential injury to the right hand and wrist, in return for a payment of $17,000.00, less attorney fees.  The stipulation was received at the Office of Administrative Hearings (OAH) on October 18, 2013.

Counsel for the employee asserts that, prior to submission of the stipulation, he called the attorney for MFMI and stated that upon approval of the stipulation he would be withdrawing the claim petition.  Counsel for MFMI disputes this statement.  The attorney for MFMI asserts that before receiving a copy of the stipulation, he served and filed a Petition for Contribution against SFM.  This petition was received at OAH on or about October 11, 2013.  On or about October 21, 2013, MFMI filed at OAH an objection to the Stipulation for Settlement.  The stipulation was considered and approved by Compensation Judge Kelly on October 21, 2013, and served and filed on October 22, 2013.

On October 22, 2013, counsel for the employee sent a letter to the compensation judge, received at OAH on October 28, stating that, on behalf of his client, he was withdrawing the claim petition.  MFMI faxed a response to the letter on November 7, 2013, objecting to any dismissal of the claim petition until MFMI’s petition for contribution and objection to the stipulation were ruled upon.  On November 19, 2013, MFMI filed a Notice of Appeal seeking vacation of the Award on Stipulation.

It is well established that an insurer not a party to a settlement lacks standing to seek vacation of an award on stipulation between the employee and another insurer.  However, such a settlement may not be reached to the prejudice of the non-settling party.^[2]

Midwest Family Mutual Insurance asserts the settlement between the employee and SFM prejudices MFMI because it lacks required Pierringer^[3] language preserving the potential claims of MFMI.

As a general rule, in an action involving joint defendants, a full, final, and complete settlement of one defendant’s liability releases all defendants from liability, barring recovery from the remaining, non-settling defendant.  A Pierringer release is intended to mitigate this consequence by including an express reservation of the employee’s surviving claim against the non-settling party, and the employee’s agreement to hold harmless the settling party from any claims for contribution or reimbursement by the non-settling party.^[4]

Pierringer release language is intended to preserve the employee’s right to pursue his claim against the non-settling party (MFMI) and to protect the settling party (SFM) from liability in the form of a claim for contribution or reimbursement by the non-settling party.  In this case, the employee elected not to reserve his claim against MFMI and withdrew his claim petition.  There is no surviving claim pending against MFMI.  There is no prejudice to MFMI due to the lack of inclusion of Pierringer release language in the settlement at issue.

Midwest Family Mutual Insurance also asserts it is prejudiced by the Award on Stipulation because the stipulation dismisses SFM from the action, eliminating MFMI’s equitable right to claim contribution and/or apportionment against SFM.

To establish prejudice, the complaining party must show actual prejudice as a result of the settlement.  In this case, MFMI maintained a denial of primary liability, has made no payments of any benefits or compensation to or on behalf of the employee, and there is no claim pending against MFMI.  The employee is not obligated to pursue a claim against MFMI.  MFMI objects to the possibility of liability if, at some time in the future, the employee files a claim for workers compensation benefits for a period of time during which MFMI was on the risk.

Midwest Family Mutual Insurance contends that because its claim for contribution against SFM is derivative of the employee’s claim, and the employee is precluded by the settlement from further action against SFM, MFMI is similarly precluded from seeking contribution or reimbursement from SFM in the future if the settlement is not vacated.  Generally, “a settlement covers only those claims or rights that are specifically mentioned in the agreement.”^[5]  The specific language of the stipulation between the employee and SFM settles “any and all claims . . . which the Employee may have as a result of the injury of June 20, 2006 to the left hand and wrist and also . . . any and all claims . . . as a result of the alleged consequential injury to the right hand and wrist.”  It does not include the (now withdrawn) alleged May 23, 2012, Gillette injury.  Although the stipulation recites that SFM “contends that the Employee may have sustained a Gillette-type aggravation in May 2012,” as a stranger to the settlement, MFMI is not bound by a facts stipulated to in the settlement agreement.^[6]  The sole effect of the stipulation is to release SFM from that portion of the employee’s claim relating to SFM’s liability for the June 20, 2006, admitted injury and any right hand/wrist consequential injury arising from that personal injury.  The issue of whether the employee has or has not sustained a Gillette injury has not been litigated, determined, or settled.  This case is no different from any other case in which an employee may subsequently claim a Gillette injury for which a previous employer or insurer may have some liability by virtue of the contribution of the employee’s work activities at that employer.^[7]

Midwest Family Mutual Insurance has failed to establish actual prejudice and lacks standing to seek vacation of the October 22, 2013, Award on Stipulation between the employee and the employer and State Fund Mutual Insurance.  The appeal is dismissed.