RONALD G. ROSSBACH, Employee/Petitioner, v. ROSSBACH CONSTR., INC. and SFM MUT. INS. CO., Employer-Insurer/Respondent, and BLUE CROSS BLUE SHIELD AND BLUE PLUS OF MINN., NOVACARE REHAB., and CTR. FOR DIAGNOSTIC IMAGING, Intervenors.

The employee petitions to set aside an Award on Stipulation, filed January 5, 2015, on the grounds either of fraud or mistake of fact. Because it is unclear whether or not the compensation judge issued the Award on Stipulation without review and approval as required when a party is not represented by counsel pursuant to Minn. Stat. § 176.521, we conclude that the award is voidable. We refer the parties’ Stipulation for Settlement to the Office of Administrative Hearings for review by a compensation judge to determine whether the settlement reflected the intent of the parties at the time of the stipulation and was fair, reasonable, and in conformity with the Workers’ Compensation Act. Upon return of the findings, this court will determine whether the Award on Stipulation should be vacated.

Ronald Rossbach worked as a superintendent carpenter for Rossbach Construction, Inc. On March 21, 2013, while carrying a large piece of siding at work, the employee tore his right rotator cuff and bicep tendon. He underwent surgery and was disabled from returning to his regular job. The employer and its insurer, SFM Mutual, admitted liability and paid medical and indemnity benefits in excess of $60,000.00.

In June 2013, a QRC was assigned to the employee for vocational rehabilitation assistance. In October 2014, the QRC completed a Rehabilitation Plan Amendment (R-3), outlining the projected cost of future vocational rehabilitation which included job placement services. The cost of future vocational rehabilitation was estimated to be $11,300.00.

A month later, in November 2014, the claims adjuster from SFM contacted the employee offering to settle. He wrote a letter to the employee stating:

The employee accepted the offer of $11,500.00. The employee later alleged^[2] that at the time of the settlement, he believed that he was giving up his right to vocational rehabilitation benefits only, not his right to future wage loss benefits. However, the Stipulation for Settlement outlined that the settlement was for a full, final, and complete settlement of the employee’s workers’ compensation claims, past, present and future, with the sole exception of medical expenses to the right shoulder. The stipulation noted that the employee was unrepresented by counsel. In addition, the stipulation provided a $150.00 fee to allow the employee to seek the advice of counsel before signing the stipulation. The employee did not seek counsel. The stipulation was signed by the employee and the claims adjuster in December 2014.

On December 29, 2014, the claims adjuster sent a letter to the Office of Administrative Hearings (OAH) enclosing the signed stipulation and a proposed Award on Stipulation. The proposed award incorrectly referred to the parties as “each being represented by legal counsel.”^[3] The claims adjuster sent the proposed award to the compensation judge with a letter which stated:

The stipulation and proposed award were received at OAH on December 31, 2014. The proposed Award on Stipulation was signed by the compensation judge the next business day, January 2, 2015.

On June 8, 2017, the employee filed a petition with this court seeking to vacate the Stipulation for Settlement and the Award on Stipulation on the grounds of fraud or mutual mistake of fact under Minn. Stat. § 176.461 and Minn. Stat. § 176.521, subd. 3. The employer and insurer have filed a response opposing the petition.

The employee requests a vacation of the award because the award incorrectly stated that both parties were represented by counsel. Because of misleading language in the proposed award, the employee believes a fraud was committed by the employer and insurer, or that there was a mutual mistake of fact. The employee further argues for vacation on the grounds of fraud or mistake in that he asserts that he believed he was settling only his vocational rehabilitation benefits. As the settlement was the amount of the vocational rehabilitation costs projected, he argues that he reasonably believed that the close out was for rehabilitation only. In response, the employer and insurer argue that the employee has not met his burden in showing that the stipulation should be vacated on the basis of fraud or mutual mistake of fact. In the alternative, the employer and insurer request a referral to OAH on the issue of alleged fraud.

This court has jurisdiction to vacate an award on stipulation on a showing of one of four enumerated causes listed in Minn. Stat. § 176.461. We also have jurisdiction to set aside an award based on Minn. Stat. § 176.521, subd. 3.^[4] Section 176.521 requires that, where both parties are not represented by counsel, the compensation judge must review the stipulation and may not approve it unless the parties have shown that the settlement is fair, reasonable, and in conformity with the Workers’ Compensation Act. However, in cases where all parties are represented and all statutory requirements are met,^[5] the statute imposes a presumption of fairness and reasonableness and mandates immediate issuance of the award.

In a long line of prior cases, we have declined to hold an award on stipulation void where the statutory requirements were not followed, instead holding that such an award is voidable and may be voided after consideration of the equities involved. See Sondrol v. Del Hayes & Sons, Inc., 47 W.C.D. 659, 665 (W.C.C.A. 1992).^[6] Where the facts demonstrate that the award was not issued in accordance with the statute, this court has applied a Sondrol “voidable” analysis where the matter came before us as a petition to vacate an award on other grounds. Where the award is voidable, and the equities favor voiding it, we have not deemed it necessary to reach the alleged other grounds for vacating the award, since the voided award rendered the other grounds moot. See, e.g., Sovell v. Swift-Eckrich, Inc., 62 W.C.D. 93 (W.C.C.A. 2001), summarily aff’d, (Minn. Feb.19, 2002).

Upon reviewing the Award on Stipulation which was served and filed on December 31, 2015 and signed by the judge on January 2, 2016, it is apparent that the compensation judge made a mistake or error in issuing the Award on Stipulation.

If the parties to a settlement are represented by counsel, then the stipulation is presumed to be fair and reasonable and in conformity with the chapter. Minn. Stat. § 176.521, subd. 2.^[7] In those cases, the settlement is not subject to an approval. Consequently, upon receipt of the stipulation for settlement, the judge must immediately sign the award and file it with the commissioner. Minn. Stat. § 176.521, subd. 2a.^[8] If, as here, the parties are not represented by counsel, the statute prescribes a two-step review. First, the parties must establish that the stipulation is reasonable, fair, and in conformity with the Act. Second, the settlement must be “approved” by the compensation judge. Minn. Stat. § 176.521, subds. 2 and 2a. Neither step was followed here.

The documents submitted in this matter, along with the facts as agreed by the parties, establish on their face that the 2014 stipulation was not issued in accordance with the Workers’ Compensation Act. The facts show, and the parties agree, that the stipulation for settlement was submitted to a compensation judge along with a proposed Award on Stipulation which incorrectly recited that both parties were represented by counsel, although the employee was not represented. The award states that the parties “each being represented by legal counsel,” had submitted a Stipulation for Settlement, and then simply states that “now, therefore, it is hereby ordered that payment shall be made in accordance with the terms and provisions set forth in the Stipulation for Settlement.” Contrary to the statute requiring a stipulation to be approved by a compensation judge in cases where the employee is unrepresented, the award contains no language indicating that the compensation judge had reviewed and approved the stipulation.

The employer and insurer argue that we should nevertheless presume that the judge reviewed and approved the settlement, pointing out that paragraph XI of the stipulation, on page 6, states that the employee is unrepresented by counsel. They argue that the judge would therefore have known that the statement that the employee was represented in the proposed award was a clerical error, and that the judge then would have performed the appropriate review. However, having received a proposed award which suggested that an approval was unnecessary because all parties were represented, the compensation judge more likely would have concluded that he was not required to approve the stipulation, only to sign it.^[9] Absent any indication that the stipulation was reviewed and approved, we must assume that it was not. The statutory requirement for review and approval of the settlement by the compensation judge thus was not met in this case.

We are unable to address the employee’s petition to vacate the Award on Stipulation because the circumstances presented in this case raise the question of whether the agreement itself is voidable or void. In Sondrol and its progeny, we considered four factors: 1) whether the stipulation was fair, reasonable and in conformity with the Workers’ Compensation Act; 2) whether the stipulation appears to fairly reflect the intent of the parties; 3) whether there is any prejudice to the parties; and 4) the equities involved. Minn. Stat. § 176.521 requires that when a party is not represented by counsel, the parties bear the burden of proving that the stipulation is fair, reasonable and in conformity with the Act, and the stipulation must be approved by a compensation judge. We refer this matter to the chief administrative law judge pursuant to Minn. Stat. § 176.521, subd. 3 to find whether the stipulation here was fair, reasonable and in conformity of the Act, and if appropriate approve the stipulation. If the Award on Stipulation is approved, the matter shall be returned for this court to address the employee’s petition to vacate.