Henderson v. Saia Inc

• Decision Date: 08 September 2010
• Docket Number: No. M2009-01723-SC-R3-WC.,M2009-01723-SC-R3-WC.
• Parties: Patricia HENDERSONv.SAIA, INC. et al.
• Court: Tennessee Supreme Court

318 S.W.3d 328

Patricia HENDERSONv.SAIA, INC. et al.

No. M2009-01723-SC-R3-WC.

Supreme Court of Tennessee at Nashville.

May 4, 2010 Session at Knoxville.

Aug. 24, 2010.

Rehearing Denied Sept. 8, 2010.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

Jonathan R. Bunn, Tullahoma, Tennessee, for the appellant, Patricia Henderson.

Colin M. McCaffrey, Nashville, Tennessee, for the appellees, SAIA, Inc. and Discover RE.

OPINION

CORNELIA A. CLARK, J., delivered the opinion of the Court, in which JANICE M. HOLDER, C.J., and GARY R. WADE, WILLIAM C. KOCH, JR., and SHARON G. LEE, JJ., joined.

CORNELIA A. CLARK, J.

This workers' compensation appeal was initially referred to the Special Workers' Compensation Appeals Panel for a hearing and a report of findings of fact and conclusions of law in accordance with Tennessee Code Annotated section 50-6-225(e)(3). After oral argument was conducted before the Panel, but before the Panel filed its opinion, the case was transferred to the full Court in order to consider a request under Tennessee Rule of Civil Procedure 60.02 to set aside a judgment approving a settlement. The trial court found no basis for setting aside the settlement under Rule 60.02. Neither do we. The judgment of the trial court upholding the parties' settlement is affirmed.

Facts ¹

The employee, Patricia Henderson, worked as an over-the-road truck driver for the employer, SAIA, Inc. On May 17, 2007, she fell attempting to exit the cab of her truck, resulting in an injury to her right hip, specifically a femoral neck fracture. The injury was accepted as compensable, and the employer provided medical treatment and temporary disability benefits.

The employee's femoral neck fracture was surgically repaired by Dr. Gary Stevens on May 29, 2007. However, this procedure apparently did not have a satisfactory result and the employee was referred to Dr. Andrew Shinar, who performed a total hip replacement surgery on January 9, 2008. The record does not contain any notes or other medical records of either Dr. Stevens or Dr. Shinar that shed light on the employee's treatment or progress while under their care. The employee alleges, however, that Dr. Shinar told her that it might take up to two years for her to reach maximum medical improvement.

At the employer's request, the employee was examined by Dr. W. Blake Garside on August 26, 2008. Dr. Garside concluded that the employee had reached maximum medical improvement and that she retained an anatomical impairment of 15% to the body as a whole. Based upon a functional capacity evaluation which Dr. Shinar ordered, Dr. Garside placed permanent restrictions upon the employee's activities, including a forty-pound lifting limit, limited stair climbing, and a prohibition against ladder climbing. According to Dr. Garside's report, those limitations precluded her return to work driving a truck for the employer. She did not return to work.

The employee, who was not represented by counsel, was contacted by Discover RE, the employer's insurer, in an attempt to settle her workers' compensation claim. An agreement was reached to settle the matter for 26% permanent partial disability to the body as a whole. By letter dated November 24, 2008, the employee was contacted by a law firm representing the employer confirming the terms of the settlement. Transmitted with that letter were an affidavit for the employee to sign indicating her desire to settle the case, a petition seeking court approval of the settlement, a proposed order approving the settlement, and a statistical data form, along with directions concerning their execution and return. The law firm's letter stated in relevant part:

In order to settle your claim, the workers' compensation law of Tennessee requires that your settlement be approved by a judge before it can become final. This rule requires the parties to make an appearance before a judge, explain to the judge the nature of the worker's injury and the settlement the parties have agreed upon, and ask for the judge's approval. The judge then asks the injured worker if he understands the terms of the agreement, and if he agrees to accept it. If the judge is satisfied that the worker understands the terms of the agreement, and he finds it to be acceptable, he will then approve the settlement.

Because you are living in Shelbyville, Tennessee, we are going to ask the judge if he will approve your settlement without meeting you personally, but rather by submitting to him a sworn statement made by you that tells the judge that you understand the terms of the agreement, and you agree with them. To save you the trouble of having to write this statement yourself, I have drafted a statement for you (called an “Affidavit”), which covers all the issues the judge would likely ask you if you appeared before him personally, and I am enclosing that statement for your signature.

Please read the enclosed Affidavit carefully and complete # 2. If everything contained in it is correct, sign it in the presence of a Notary Public and return it to me.... If there are any problems with the Affidavit, please call me as soon as possible at the above telephone number, so that we can make the necessary corrections and send you a revised Affidavit.

Once the Affidavit, Petition and Order, and Statistical Data Form are signed and returned to me, I will see if the judge can settle your case as soon as possible.

Neither the letter nor any other correspondence in the record indicates the date or place that the settlement would be presented to a judge for approval.

The employee executed and returned the documents in the manner set out in the law firm's letter. Thereafter, the proposed settlement was presented to a judge of the Circuit Court of Davidson County, who approved it on December 8, 2008. The court's order, which was signed by the employee, recited that she retained a 15% permanent physical impairment, her medical bills totaling $43,029.45 had been paid in full, and that she was entitled to a lump sum payment of $71,451.40, which represented a vocational impairment of 26% to the whole body. Future medical benefits were held open. There is no dispute that these terms accurately reflected the parties' agreement.

Some six months later, on June 4, 2009, the employee filed a motion seeking to set aside the trial court's order approving the parties' settlement. Relying upon Tennessee Rule of Civil Procedure 60.02, the employee's motion alleged that the order approving the settlement was obtained “as a result of mistake, fraud, misrepresentation, and other misconduct of the employer and insurer....” The facts asserted to support this allegation were that (1) the employee was unrepresented by counsel, (2) the employee did not appear in person before the court prior to entry of the order approving the settlement, and (3) the employee was not given notice of the date and place where the settlement would be presented to the court for approval. The motion further alleged that the terms of the settlement were unfair and that the settlement did not substantially secure to the employee the benefits to which she was entitled under the workers' compensation statutes.

The motion to set aside the settlement was supported by the affidavits of both the employee and her husband, Jerry Henderson. The employee's affidavit states that Dr. Shinar had advised her on an unspecified date that “it would take approximately two years for me to reach my best recovery from the total hip replacement surgery he performed.” ² Further, the employee “disavowed” several statements contained in her prior affidavit executed in December 2008, including affirmations that she understood that she had the right to litigate her claim and that she was giving up that right, that the settlement was in her best interest, and that she wanted the court to approve the settlement in her absence “for to attend this settlement in person would pose a significant burden.” ³ Her affidavit also stated that she had relied upon information which her husband had received from the Tennessee Department of Labor concerning the terms of her settlement.

Jerry Henderson's affidavit stated that he had contacted the Tennessee Department of Labor by telephone on several occasions concerning his wife's claim. According to Mr. Henderson, one of those contacts occurred shortly after the initial settlement offer was made by the employer's insurer. Mr. Henderson's affidavit states that he asked an unidentified person if his wife should consult an attorney, and was told that it was not necessary. He later spoke to someone he believed to be the same person and was told that the settlement offer was “the highest amount [his wife] could get by law.” ⁴ Mr. Henderson offered no explanation concerning the meaning of this statement, and his affidavit does not otherwise elaborate on this purported conversation.

The employer opposed the employee's effort to have the settlement set aside, arguing that her motion was untimely and that it did not otherwise meet the criteria for relief under Rule 60.02. Attached to the employer's response to the motion was Dr. Garside's report, the November 24, 2008 letter to the employee explaining the terms of the settlement and transmitting the settlement documents, and a letter dated December 12, 2008 from the employer's lawyer transmitting the settlement documents to the Department of Labor. The employer argued that there was no basis for setting aside the settlement under Rule 60.02, given that the employee understood the terms of the settlement and was aware that she had the right to litigate her claim but elected not to do so. The employer also argued that the employee had acknowledged that the settlement was in her best interest and that she wanted the court to approve it without having to physically appear. The employer's response also noted that as evidence of the employer's good faith, part of the settlement allowed the employee to retain...