Clayton v. J.C. Penney Corp.

• Decision Date: 22 September 2017
• Docket Number: No. 2016-335,2016-335
• Citation: 2017 VT 87
• Parties: Brandy Clayton v. J.C. Penney Corporation
• Court: Vermont Supreme Court

2017 VT 87

Brandy Clayton v. J.C. Penney Corporation

No. 2016-335

Supreme Court of Vermont

June Term, 2017

September 22, 2017

NOTICE: This opinion is subject to motions for reargument under V.R.A.P. 40 as well as formal revision before publication in the Vermont Reports. Readers are requested to notify the Reporter of Decisions by email at: JUD.Reporter@vermont.gov or by mail at: Vermont Supreme Court, 109 State Street, Montpelier, Vermont 05609-0801, of any errors in order that corrections may be made before this opinion goes to press.

On Appeal from Commissioner of Labor

Anne M. Noonan, Commissioner

David L. Grayck of Law Office of David L. Grayck, Montpelier, for Plaintiff-Appellee.

Wesley M. Lawrence of Theriault & Joslin, P.C., Montpelier, for Defendant-Appellant.

PRESENT: Reiber, C.J., Skoglund, Robinson, Eaton and Carroll, JJ.

¶ 1. CARROLL, J. J.C. Penney Corporation (employer) seeks interlocutory review of the Commissioner of the Department of Labor's denial of its motion for summary judgment in this workers' compensation matter. Specifically, employer argues that the Commissioner lacked authority to invalidate an approved settlement agreement that the parties entered into pursuant to a previous claim. We reverse and remand.

¶ 2. At the start, a brief overview of the relevant provisions of Vermont's Workers' Compensation Act, codified at 21 V.S.A. §§ 601-711, will place employer's arguments in context. A claim for compensation for a workplace injury is initiated by filing a notice of injury with the employer. Id. § 656(a). After a review of the claim, the employer may deny the claim with notice in writing to the claimant and the Commissioner, and the claimant may request a hearing. Id. § 662(b). When the employer does not deny the claim, but the claimant and the employer are unable to resolve it, either party may request that the Commissioner hold a hearing pursuant to 21 V.S.A. § 663.

¶ 3. If the claimant and the employer settle the claim without a hearing, the parties' settlement agreement must be filed with the Department of Labor for review as follows:

The Commissioner shall approve such an agreement only when the terms thereof conform to the provisions of this chapter. However, a compromise agreement may be approved by the Commissioner when he or she is clearly of the opinion that the best interests of such employee or such dependents will be served thereby.

Id. § 662(a). Once approved by the Commissioner, a settlement between a claimant and an employer is enforceable, though still subject to modification in two specific circumstances, neither of which is relevant here. See id. §§ 668, 675.

¶ 4. In addition to the authority described above, the version of Workers' Compensation and Occupational Disease Rule 17 effective at the time of the settlement agreement at issue here provides that, in reference to the forms used to satisfy the requirements of the settlement procedures found in § 662(a): "Once executed by the parties and approved by the Division, these forms shall become binding agreements and absent evidence of fraud or material mistake of fact the parties shall be deemed to have waived their right to contest the material portions thereof." Workers' Compensation and Occupational Disease Rules, Rule 17.0000 Compensation Agreements, Code of Vt. Rules 24 010 003 (Apr. 2007) [hereinafter Rule 17]. In addition, Rule 17.6000 addresses the form used for full and final settlement agreements and stipulates that "[o]nce executed by the parties and approved by the commissioner, this form shall relieve the employer of all further liability for compensation benefits related to the injury." Id. ¶ 5. We now turn to the facts. Brandy Clayton (claimant) has worked for employer for several years as a hair stylist. In February 2011, she filed a workers' compensation claim for heel and arch pain in her left foot after suffering a work-related injury in March 2010 described as a result of standing all day on the job. Employer accepted the claim as compensable.

¶ 6. While this February 2011 claim was pending, claimant sought medical attention from a podiatrist. In October 2013, claimant reported to the podiatrist that she was suffering from both left and right foot pain; the podiatrist diagnosed claimant with right foot plantar fasciitis in addition to his diagnoses pertaining to her left foot. On the same date, the podiatrist documented in claimant's medical record that claimant's "bilateral foot pain" likely resulted from standing all day at work and that this "work environment definitely plays a role" in the development of fasciitis. The podiatrist again noted the bilateral foot problems after two subsequent appointments with claimant in December 2013 and February 2014. In June 2014, claimant participated in an independent medical exam with a physician who noted that claimant had been having issues with both her left and right feet.

¶ 7. On September 14, 2014, the parties filed a "Modified Full and Final Form 16 Settlement Agreement with Addendum." The first page of the parties' agreement states that claimant

alleges a work injury occurred on or about March 26, 2010 and any other date while worker was employed by JC Penney Co. or as a result of any injury allegedly incurred while worker was employed by JC Penney Co. allegedly causing the following injuries: left foot; and any other injury or condition or symptom or body part and any and all sequelae resulting in alleged temporary and/or permanent disabilities and/or medical treatment beginning on March 26, 2010.

Under the terms of the agreement, claimant received a lump sum payment "in full and final settlement of all claims for any and all benefits, injuries, diseases, illnesses, conditions, and/orsymptoms and any and all sequelae allegedly sustained as a result of" her March workplace injury. The agreement included a clause stating that it was "intended to be a general release of all claims of the employee against the employer and the insurance carrier arising from employee's employment with employer." The addendum that accompanied the parties' agreement also included language releasing employer from "any and all actions . . . on account of any liability, matter, cause, transaction, occurrence, incident or thing having any connection whatsoever with [claimant's] alleged injuries of March 26, 2010, or any other date" as well as a statement that claimant intended "this provision to be all-encompassing and to act as a full and total release of any and all such claims [she] may have against . . . [e]mployer . . . whether or not specifically referred to herein, notwithstanding that the matter and damage may be continuing or undiscovered at [the] time." The addendum concluded with claimant's acknowledgement of her right to seek representation, her choice to remain unrepresented by counsel, and her understanding of the settlement agreement's terms.

¶ 8. Pursuant to the approval process, a Department hearing officer, appointed by the Commissioner, sent claimant a letter on September 16, 2014, advising her that approval of the settlement required a finding that it was in her best interests. The hearing officer noted claimant's "foot pain" resulting from her work activities, and advised claimant that:

[I]t is particularly important for you to understand what a full and final settlement really means. It means that if you get worse in the future and need to see a doctor, or if you can't work because of your injuries or even have to search for a less strenuous job, you will not be entitled to any workers' compensation assistance. I need to know that you completely understand this.

The hearing officer instructed claimant to sign and date the letter to indicate her understanding of the settlement agreement if, after reading the letter, she still wished to settle her claim. On September 17, 2014, claimant signed the letter, and by doing so, acknowledged, "I have read theabove explanation of the terms of my proposed settlement agreement. I understand that once the agreement is approved, I will relinquish my right to all future workers' compensation benefits causally related to my February 5, 2013 work injury."¹ On September 24, 2014, the hearing officer approved claimant and employer's settlement agreement in writing.

¶ 9. On March 17, 2015, approximately six months after the settlement was approved, claimant filed a new notice of injury, this time alleging a March 10, 2015 injury to her right foot. Employer filed a form denial on March 26, 2015, stating that claimant's new, right-foot claim was denied as a preexisting condition and unrelated to employment. Employer also filed a letter with the Department, arguing that the claim should be dismissed for two reasons: first, that it was barred by the prior settlement agreement; and second, because the right-foot claim was reasonably discoverable and apparent at the time the settlement agreement was executed. Claimant appealed employer's denial of her claim.

¶ 10. A workers' compensation specialist found employer's denial "reasonably supported," but also that the legal effect of the purported general release language in the settlement agreement needed to be addressed at a formal hearing. With the hearing officer's permission, employer filed a motion for summary judgment and claimant filed a cross-motion for summary judgment. The sole issue before the Commissioner was whether the parties' September 2014 settlement agreement barred claimant's second claim for workers' compensation benefits—that is, whether the settlement agreement barred claims related only to the 2010 injury to claimant's left foot and sequelae of that injury or whether the agreement also barred any other injury claims pre-dating or co-occurring with, though unrelated to, claimant's left-foot injury. On August 24, 2016, the Commissioner denied both motions. The Commissioner found that the settlement agreement "convey[ed] a clear and unambiguous message" and that the terms...