Betts v. Tom Wade Gin

• Decision Date: 06 May 1991
• Docket Number: No. 1,1
• Citation: 810 S.W.2d 140
• Parties: James BETTS, Plaintiff-Appellant, v. TOM WADE GIN and CNA Insurance Company, Defendants-Appellees 810 S.W.2d 140
• Court: Tennessee Supreme Court

Page 140

810 S.W.2d 140

James BETTS, Plaintiff-Appellant, v. TOM WADE GIN and CNA Insurance Company Defendants-Appellees

No. 1.

810 S.W.2d 140

Supreme Court of Tennessee at Jackson.

May 6, 1991.

T. Robert Hill, Hill, Boren, Drew & Martindale, Jackson, for plaintiff-appellant.

Richard Glassman, Glassman, Jeter, Edwards & Wade, Memphis, for defendants-appellees.

OPINION

DAUGHTREY, Justice.

The sole issue in this workers' compensation case is whether the plaintiff-appellant should be required to tender to the court the money received pursuant to a settlement agreement as a condition precedent to an order setting aside that agreement. Because we now hold that tender is not required in cases such as this, we reverse the decision of the trial court and remand the matter for further proceedings.

This dispute arose as a result of severe injuries received by James Betts while working as a ginner at the Tom Wade Gin on November 26, 1988. Betts's hands became caught in a delinting machine at the gin and, after subsequent medical treatment in Jackson and Memphis, both of his arms were amputated slightly below the elbow.

Initially, Betts did not retain legal counsel to assist him in pursuing his worker's compensation claim. On September 5, 1989, the parties filed, and the trial court granted, a joint petition providing for a lump sum payment of $45,000 to Betts in full satisfaction of the claim. On September 20, 1989, however, after consulting a lawyer, Betts moved to have the settlement set aside, pursuant to the provisions of T.C.A. Sec. 50-6-206.

The trial judge ruled that, despite the fact that the applicable statute does not require tender, Tennessee case law provides that any attempt to set aside a valid, court-approved agreement must be preceded by a tender of proceeds already received pursuant to that agreement. The court thus required Betts to tender the $45,000 lump sum payment. No tender was forthcoming and, on April 14, 1990, the court overruled Betts's motion to set aside the agreement. ¹

As noted by the trial judge, T.C.A. Sec. 50-6-206 makes no mention of the concept of tender. In pertinent part, the statute provides

... that if it shall appear that any settlement approved by the court does not secure to the employee in a substantial manner the benefits of the Workers' Compensation Law, the same may, in the discretion of the trial judge, be set aside at any time within thirty (30) days after the receipt of such papers by the division of workers' compensation, upon the application of the employee or the director of the division of workers' compensation of the department of labor in his behalf, whether court has adjourned in the meantime or not....

Nevertheless, Tennessee courts have engrafted upon the law of workers' compensation a requirement of tender before setting aside a settlement agreement. In doing so, the courts have subscribed to the "general rule that a settlement may not be avoided without a prior return or tender of the consideration paid therefor...." 134 A.L.R. 6, 106; see also 82 Am.Jur.2d Workmen's Compensation, Sec. 467, p. 230; 1 C.J.S. Accord and Satisfaction, Sec. 70, p. 567; Glover v. Louisville & Nashville Railway Co., 163 Tenn. 85, 91, 40 S.W.2d 1031, 1032-33 (1931) (suit for damages for personal injuries).

The leading Tennessee workers' compensation decision discussing the tender requirement is the case of Lindsey v. Hunt, 215 Tenn. 406, 384 S.W.2d 441 (1964), petition to rehear denied 215 Tenn. 406, 387 S.W.2d 344 (1965). In denying a second petition to rehear in Lindsey, this Court explained its reasoning in requiring tender of agreement proceeds before attempting to set aside workers' compensation settlements. The Court recognized that tort statutes in Tennessee had been changed specifically to provide that tender was not required in order to challenge a prior settlement agreement. Id., 387 S.W.2d at 345-46. Because workers' compensation statutes contained no similar disavowal of the general tender requirement, however, the Court held that the rule established in Gibbons v. Mutual Ben. Health & Accident Ass'n, 195 Tenn. 339, 259 S.W.2d 653 (1953), an insurance case decided prior to the statutory amendment eliminating tender in tort cases, "is still applicable to Workmen's Compensation cases...." Lindsey v. Hunt, supra, 384 S.W.2d at 346.

After the Lindsey decisions, courts in Tennessee routinely required tender in workers' compensation cases as a prerequisite to challenging settlement agreements. See, e.g., Cordell v. Sky Rides of America, Inc., 218 Tenn. 485, 487-88, 404 S.W.2d 488, 489-90 (1966); Cockrell v. B & S Concrete Supply, 477 S.W.2d 9, 10 (Tenn.1972); Wooley v. Gould, Inc., 654 S.W.2d 669, 673 (Tenn.1983). ² Such subsequent cases, however, relied solely upon the precedent established in Lindsey. Thus, those cases, like Lindsey, stand for the proposition that a general rule of the law relevant to the rescission of contracts should be applied to workers' compensation cases because workers' compensation statutes do not specifically require a different result. ³

The later cases, however, do not undertake an independent examination of the validity of applying contract principles to workers' compensation law, despite sometimes expressing doubts as to the efficacy of such applications. In Cordell, for example, the Court, although requiring the petitioner to tender the settlement proceeds into the trial court, stated:

We must concede that the argument of counsel for petitioner is, morally speaking, a persuasive one. To sustain this argument, however, would require this Court to exceed its proper judicial function. The Workmen's Compensation Law of Tennessee is exclusively a creature of its legislature; and it is that body only which may bring about such change of the law as would be required to support the petitioner's insistence here.

Cordell v. Sky Rides of America, Inc., supra, 218 Tenn. at 488, 404 S.W.2d at 490. Similarly, in Cockrell, this Court noted:

We point out that what we have said implies no approval of the rule discussed. To the contrary, if it were our province to do so, we might well refuse to follow it. We may only repeat what was said in Lindsey v. Hunt, and Cordell v. Sky Rides of America, supra, that this is exclusively a matter for the attention of the legislature.

Cockrell v. B & S Concrete Supply, supra, 477 S.W.2d at 11.

We believe, however, that deference to the will and pronouncements of the legislature mandates not unjustified homage to principles of contract law but, rather, abandonment of the tender requirement in workers' compensation cases. Although Tennessee's workers' compensation laws were passed in derogation of the common law, those statutes are remedial in nature and are to be construed liberally in order to attain the purposes for which they were enacted. T.C.A. Sec. 50-6-116; Curtis v. Hamilton Block Co., 225 Tenn. 275, 279-80, 466 S.W.2d 220, 222 (1971); Matthews v. Hardaway Constr. Co., 179 Tenn. 98, 102-03, 163 S.W.2d 59, 60 (1942). As a result, this Court must interpret those statutes in a manner designed to protect workers and their families from the economic devastation that, in many instances, can follow on-the-job injuries. Furthermore, Tennessee's workers' compensation laws must be construed so as to ensure that injured employees are justly and appropriately reimbursed for debilitating injuries suffered in the course of service to the employer. ⁴

It is evident, as noted by the trial judge and in prior Tennessee Supreme Court decisions, that T.C.A. Sec. 50-6-206 does not specifically provide that tender is not required in workers' compensation cases. It is equally true, however, that T.C.A. Sec. 50-6-206 and other workers' compensation statutes do not require tender in such cases. We conclude that the requirement of tender should not, therefore, be written into the workers' compensation statutes by judicial decision. The courts should not "legislate into an Act a clear provision which [is not] in the Act." Liberty Mutual Insurance Co. v. Stevenson, 212 Tenn. 178, 185, 368 S.W.2d 760, 763 (1963) (court may not engraft punitive damages provision on workers' compensation statutes). Moreover, the purposes of the workers' compensation laws would be frustrated, not furthered, by continuing to provide an additional hurdle for injured employees seeking to recover the just amounts envisioned by the statutory scheme.

Case law from Tennessee and from other jurisdictions provides further support for the conclusion that tender should not be required in workers' compensation situations. In an early accidental injury case not implicating the workers' compensation statutes, for example, the Tennessee Supreme Court recognized that some exceptions to the general rules requiring tender to set aside a settlement agreement do exist. Conrad v. Interstate Life & Accident Ins. Co., 141 Tenn. 14, 18, 206 S.W. 34, 35 (1918). The Conrad decision quoted from the precursor to 1 C.J.S. Accord and Satisfaction, Sec. 70, in stating that the general rule of tender "does not apply where the defendant admits that what was paid was justly due under the contract sued on." Conrad, supra, 141 Tenn. at 18, 206 S.W. at 35. ⁵

In Gibbons, supra, the case upon which the Lindsey decision relied in establishing the tender rule in workers' compensation disputes, this Court again recognized the exception to the general rule. Nevertheless, the Court there required tender to set aside a prior settlement agreement "because the bill alleges that defendant denies liability for any amount." G...