BAUGH v. CLUB PRODUCTS COMPANY, 1996 AWCC 41

CLAIM NO. D611888

FRANKLIN BAUGH, EMPLOYEE, CLAIMANT v. CLUB PRODUCTS COMPANY, EMPLOYER, RESPONDENT, HOME INSURANCE COMPANY, INSURANCE CARRIER, RESPONDENT NO. 1, DEATH AND PERMANENT TOTAL DISABILITY TRUST FUND, RESPONDENT NO. 2

Before the Arkansas Workers’ Compensation Commission
OPINION FILED FEBRUARY 12, 1996

Upon review before the FULL COMMISSION in Little Rock, Pulaski County, Arkansas.

Claimant represented by THOMAS H. McGOWAN, Attorney at Law, Little Rock, Arkansas.

Respondent employer represented by JAMES C. BAKER, JR., Attorney at Law, Little Rock, Arkansas.

Respondent No. 1 represented by R. KENNY McCULLOCH, Attorney at Law, Little Rock, Arkansas.

Respondent No. 2 represented by DAVID L. PAKE, Attorney at Law, Little Rock, Arkansas.

Decision of Administrative Law Judge: Vacated and remanded.

[1] OPINION AND ORDER
[2] Claimant appeals an opinion of the Administrative Law Judge interpreting a document entitled “Joint Stipulation of Disbursement of Settlement Proceeds of Frank Baugh’s Safety Violation Claim and Attorney’s Fee Claim.”

[3] After our de novo review of the Joint Stipulations and the briefs of the parties, we find that the opinion of the Administrative Law Judge must be vacated and this matter remanded for further proceedings to determine the intent of the parties.

[4] The Administrative Law Judge, citing the parol evidence rule, found that the Joint Stipulation was unambiguous and therefore, a hearing was not necessary.

[5] We would initially point out that the parties cannot stipulate how the proceeds of a settlement will be disbursed without the approval of the Commission. Thus, if a dispute arises between the parties concerning such an agreement, the dispute must be resolved by the Commission, after allowing the parties an opportunity to be heard. An appropriate analogy involves joint petition settlements. Even though the parties may enter into an unambiguous agreement, the Commission is not obligated to approve or grant the petition. In fact, the Commission has the duty to determine whether the settlement is in claimant’s best interests.

[6] Furthermore, we find that the agreement as a whole is ambiguous. The best indication for this ambiguity is that the parties themselves disagree as to the intent of the stipulations. Claimant’s attorney argues that the clear intent throughout theagreement is that claimant settled the safety violation for $7,000.00 on the basis of receiving indemnity benefits reinstated at the earlier date of October 15, 1996 and, that in addition, respondents were responsible for an additional 13.7 weeks, or $2,395.86, for the balance of their statutory liability in permanent and total disability benefits.

[7] Additionally, in our opinion, both respondents and the Administrative Law Judge erroneously concluded that the final sentence in paragraph 10 is unambiguous and therefore, controlling. Admittedly, the final sentence in paragraph 10, standing alone, is unambiguous; however, when the entire document is reviewed, the intent of the parties is not clear.

[8] Accordingly, we find that the opinion of the Administrative Law Judge must be vacated and this matter remanded to an Administrative Law Judge for further proceedings to determine the intent of the parties.

[9] IT IS SO ORDERED.

DAVID GREENBAUM, Special Chairman PAT WEST HUMPHREY, Commissioner

[10] Commissioner Holcomb dissents.

[11] DISSENTING OPINION
[12] I respectfully dissent from the majority’s opinion vacating and remanding this matter to determine the intent of the parties. In my opinion, the contract is clear and respondent (hereinafter “Home”) should begin paying 13.7 weeks of benefits on October 15, 1996 at the rate of $175 until $2,395.86 has been paid in full. Since the Joint Stipulation is not ambiguous, a hearing is not necessary.

[13] The plain language of the Joint Stipulation states that on October 15, 1996, Home must begin paying $175 per week for 13.7 weeks. The total amount to be paid by Home is $2,395.86. There is no indication that Home must pay $175 for 40 weeks which equals $7,000. The $7,000 referred to in the Joint Stipulation is used as a time reference to establish the date on which payments are to commence. The date is October 15, 1996, 40 weeks before the day the credit expires, July 15, 1997. Thus, in exchange for paying a $3,000 attorney’s fee, Home has to begin paying weekly benefits to claimant 40 weeks earlier than they would have had to otherwise.

[14] The following are the paragraphs of the Joint Stipulation necessary to understand the parties’ dispute.

8. Claimant is entitled to receive permanent total disability benefits in the amount of $175.00 per week. At the present time the $55,454.14 credit to which Respondent Home Insurance Company is entitled will expire on or about July 15, 1997, assuming that the amount of the credit is not reduced by any related medical bills.
9. Home has paid ninety eight weeks of indemnity benefits at $175.00 per week for a total of $17,150.00 paid since the Claimant’s healing period ended on August 28, 1989, until payment ceased on June 11, 1991. Adding $17,150.00 to Home’s credit of $55,454.14 equals $72,604.14. Subtracting this amount from $75,000.00 equals $2,395.86. Therefore, when the credit expires on or about July 15, 1997, Respondent Home Insurance Company will be responsible for payment of $2,395.86 in weekly benefits to Claimant at the rate of $175.00 per week. Home will be responsible for 13.7 weeks of payment at which time its statutory cap of $75.000.00 in permanent total disability benefits will be reached.
10. In order to amicably settle the safety violation and attorney’s fee issues Claimant and Respondents have agreed to the following terms. Claimant will receive the equivalent of $10,000.00 payable as follows. Claimant’s attorney, Tom McGowan, will receive $3,000.00 as attorney fees on the disputed credit issue and the safety violations issue. The remaining $7,000.00 will not be paid directly to Claimant but instead Home Insurance Company will begin weekly payments at $175.00 per week at an earlier date than the July 15, 1997, date when payments would normally begin. In effect. Respondents will begin payments forty weeks prior to the expiration of the credit which expires on or about July 15, 1997. $7,000.00 divided by $175.00 per week equals forty weeks. The parties hereby agree that Home will begin payments at the rate of $175.00 per week for a total of 13.7 weeks on or about October 15, 1996, which is forty weeks earlier than July 15, 1997, assuming the credit is not reduced by related medical bills, until the $2,395.86 balance is paid and/or the $75,000.00 permanent total disability maximum under Arkansas law has been reached. (Emphasis mine.)

[15] The parties agree that Home is entitled to a $55,454.14 credit. The credit expires on July 15, 1997 assuming that the amount of credit is not reduced by any related medical bills.

[16] Paragraph 9 indicates that 98 weeks of benefits were paid by Home. Ninety-eight weeks of indemnity benefits paid at a rate of $175 per week totals $17,150. Adding $17,150 to $55,454.14 equals $72,604.14. Subtracting $72,604.14 from $75,000 (the maximum for permanent total disability benefits owed by Home) equals $2,395.86. Two thousand three hundred and ninety-five dollars and eighty-six cents equals 13.7 weeks of benefits at a rate of $175 per week. Thus, without considering the alleged safety violation, Home is liable for benefits equal to $2,395.86 and payments should begin on July 15, 1997.

[17] Paragraph 10 discusses the safety violation. In order to amicably settle the safety violation and attorney’s fees issues, Home and claimant came to an agreement. Ten thousand dollars is the amount agreed to in order to amicably resolve the safety violation issue. Claimant’s attorney received $3,000 as attorney’s fees paid on the disputed credit issue and the safety violation issue. Thus, $7,000 remains. Paragraph 10 clearly states that the remaining $7,000 “will not be paid directly to claimant but instead Home Insurance will begin paying weekly payments at $175 per week at an earlier date than the July 15, 1997, date when payment would normally begin.” Claimant is not going to receive $7,000 pursuant to the Joint Stipulation. Claimant exchanged $7,000 for weekly benefits beginning at anearlier date.

[18] The mutually agreed upon date on which payments will commence was derived by dividing $7,000 by $175 which equals 40. Thus, 40 weeks before July 15, 1997, Home is to start paying $175 per week in benefits. Forty weeks before July 15, 1997, is October 15, 1996.

[19] The parties now dispute for how long Home has to pay the $175.00 per week. Paragraph 10 answers this question. Paragraph 10 states:

The parties hereby agree that Home will begin payments at the rate of $175.00 per week for a total of 13.7 weeks on or about October 15, 1996, which is forty weeks earlier than July 15, 1997, assuming the credit is not reduced by related medical bills, until the $2,395.86 balance is paid and/or the $75,000.00 permanent total disability maximum under the Arkansas law has been reached.

[20] The agreement states that Home is only responsible for 13.7 weeks of benefits commencing on October 15, 1996 . At the end of 13.7 weeks, Home will have paid $2,395.86 which brings them to the $75,000 cap. After 13.7 weeks, no indemnity benefits will be owed by Home. The Permanent Total Disability Fund payment dates are not addressed or affected by this Joint Stipulation. Therefore, I respectfully dissent from the majority opinion.

[21] ALICE L. HOLCOMB, Commissioner