In re Collins

• Decision Date: 26 May 2020
• Docket Number: No. 49, Sept. Term, 2019,49, Sept. Term, 2019
• Citation: 468 Md. 672,228 A.3d 760
• Parties: In the MATTER OF Bernard L. COLLINS
• Court: Court of Special Appeals of Maryland

468 Md. 672

228 A.3d 760

In the MATTER OF Bernard L. COLLINS

No. 49, Sept. Term, 2019

Court of Appeals of Maryland.

May 26, 2020

Argued by Michael H. Daney (Erlandson, Vernon & Daney, LLC, Columbia, MD) and Robin E. Hauptmann (Downs Ward Bender Hauptmann & Herzog, P.A., Hunt Valley, MD), on brief for Petitioner.

AMICUS CURIAE MARYLAND DEFENSE COUNSEL IN SUPPORT OF PETITIONERS: Julie D. Murray, Esquire, Katherine E. Rodriguez, Esquire, Semmes, Bowen & Semmes, 25 S. Charles Street, Suite 1400, Baltimore, MD 21201, Amy T. Foster, Esquire, Maryland-National Capital Park & Planning Commission, 6611 Kenilworth Avenue, Suite 200, Riverdale, MD 20737.

Kenneth Berman (Allyson Bloom, Berman, Sobin, Gross, Feldman & Darby, LLP, Gaithersburg, MD), on brief for Respondent.

AMICUS MARYLAND ASSOCIATION FOR JUSTICE IN SUPPORT OF RESPONDENT: James K. MacAlister, Esquire, Matthew D. Trollinger, Esquire, Maryland Association for Justice, 347 N. Charles Street, Baltimore, MD 21201.

Argued before: Barbera, C.J.; McDonald, Watts, Hotten, Getty, Booth and Biran, JJ.

Biran, J.

A fundamental premise of the law of contracts is that a person who is not a party to a contract is not bound to its terms. See, e.g. , EEOC v. Waffle House, Inc. , 534 U.S. 279, 294, 122 S.Ct. 754, 151 L.Ed.2d 755 (2002) ("It goes without saying that a contract cannot bind a nonparty."). This case tests that proposition in the context of an employee's settlement of claims under the Maryland Workers’ Compensation Act (the "Act"), Md. Code Ann., Lab. & Empl. ("LE"), Title 9 (LexisNexis 1991, 2016 Repl. Vol.).

Respondent Peggy Collins, the widow of firefighter Bernard Collins, filed a dependent's claim for death benefits under the Act against her late husband's former employer, the Huntingtown Volunteer Fire Department (the "Department"), and its insurers, Chesapeake Employers’ Insurance Company ("Chesapeake") and Selective Insurance Company of America ("Selective"), who collectively are the Petitioners in this case. Mrs. Collins claimed that her husband's death was due to heart disease he had developed while working as a firefighter for the Department.

Two years before he died, Mr. Collins settled claims he had brought under the Act against Petitioners for disability benefits related to his heart disease. In the parties’ settlement agreement, Mr. Collins purported to release Petitioners from any and all claims that Mr. Collins, his personal representative, dependents, spouse, children, and other potential beneficiaries might then or could later have "of whatsoever kind" which might arise under the Act from Mr. Collins's disability. In exchange for Mr. Collins's release, Petitioners agreed to make various payments to Mr. Collins upon approval of the settlement agreement by the State Workers’ Compensation Commission (the "Commission").

Mr. Collins and Petitioners submitted their signed settlement agreement to the Commission for its review and approval. The Commission subsequently issued an order approving the parties’ settlement, and Petitioners made the agreed-upon payments to Mr. Collins. Mrs. Collins was not a party to Mr. Collins's settlement with Petitioners.

After Mrs. Collins filed her claim for benefits based on Mr. Collins's death from heart disease, Petitioners contested Mrs. Collins's claim before the Commission, contending that Mr. Collins's prior release of claims bars Mrs. Collins from recovering death benefits. The Commission agreed with Petitioners and denied Mrs. Collins's claim. On Mrs. Collins's petition for judicial review, the Circuit Court for Calvert County granted summary judgment in favor of Petitioners based on release, thereby upholding the denial of Mrs. Collins's claim.

Mrs. Collins then appealed to the Court of Special Appeals, which reversed the circuit court's judgment and remanded the case to the Commission for further proceedings on Mrs. Collins's claim. The intermediate appellate court held that Mr. Collins's release does not bar Mrs. Collins's claim for death benefits because: (1) Mrs. Collins was not a party to the settlement; and (2) an employee's settlement of claims for disability benefits relating to an accidental injury or occupational disease does not extinguish the independent claim for death benefits that a surviving dependent may bring if the employee dies of the same compensable injury or disease.

For the reasons discussed below, we agree with the Court of Special Appeals that the release Mr. Collins provided in settlement of his workers’ compensation claims does not bar Mrs. Collins from asserting her independent claim for death benefits under the Act.

IBackground

A. Mr. Collins's Workers’ Compensation Claim

Bernard Collins was born in October 1944. Peggy and Bernard Collins married in 1965. They remained married for the rest of Mr. Collins's life.

Mr. Collins worked for many years as a firefighter for the Department. At some point during his employment, Mr. Collins developed heart disease and hypertension. Under the Act, a paid firefighter's death or disability resulting from heart disease or hypertension is presumed to be compensable. LE § 9-503(a).

On February 13, 2012, Mr. Collins filed a workers’ compensation claim with the Commission, alleging that he had developed heart disease and hypertension caused by his work for the Department. Mr. Collins's claim was assigned claim number B760589. In his claim, Mr. Collins listed his date of disablement as May 6, 2011 and his gross wages per week as $1,800.

Chesapeake was the Department's insurer as of May 6, 2011. Chesapeake successfully impleaded Selective into the case, based on Chesapeake's contention that Mr. Collins's actual date of disablement was December 12, 1998, when Mr. Collins underwent surgery for an aortic aneurysm. Selective was the Department's insurer as of December 12, 1998.

Petitioners contested Mr. Collins's claim, contending, among other things, that Mr. Collins's heart disease and hypertension did not arise from his employment. On February 25, 2014, Mr. Collins, his counsel, and counsel for Petitioners appeared before the Commission for an evidentiary hearing. On March 19, 2014, the Commission found that Mr. Collins had sustained an occupational disease (heart disease and hypertension ), arising out of and in the course of his employment as a firefighter. The Commission also found that Mr. Collins's first date of disablement was May 6, 2011, and that as a result of his occupational disease, Mr. Collins was temporarily totally disabled on May 6, 2011, and from July 7, 2011 to July 24, 2011. The Commission subsequently determined that Mr. Collins's average weekly wage at the time of disablement was $152.50.

The parties filed cross-petitions for judicial review of the Commission's decision in the Circuit Court for Calvert County. On February 19, 2015, the circuit court granted Mr. Collins's motion for partial summary judgment on the issue of average weekly wage, concluding that the correct average weekly wage was $526.87.

Before the remaining issues in the petitions for judicial review were resolved, Mr. Collins and Petitioners decided to settle Mr. Collins's claims, and the parties filed a stipulation of dismissal in the circuit court. As a result, on March 13, 2015, the circuit court dismissed the case and remanded it to the Commission.

On May 14, 2015, Mr. Collins and Petitioners entered into an "Agreement of Final Compromise and Settlement" (the "Agreement"), which Petitioners had drafted. After reciting that Mr. Collins claimed to be disabled as a result of work-related heart disease /hypertension, the parties agreed that: (1) Mr. Collins's average weekly wage as of his date of disablement was $526.87; and (2) upon approval of the Agreement by the Commission, Selective would pay Mr. Collins a lump sum of $100,000; Chesapeake would pay Mr. Collins a lump sum of $50,000; and Chesapeake also would fund a "Medicare Set Aside" annuity in the amount of $47,192, by way of an initial payment of $9,438.08, followed by annual payments of $4,194.88 for nine years during Mr. Collins's lifetime.

For his part, Mr. Collins (as the "Claimant") agreed to release Petitioners from further liability and claims in paragraph 11 of the Agreement (the "Release"):

The Claimant hereby accepts this Agreement and the aforesaid payment(s) in final compromise and settlement of any and all Claims which the Claimant, his personal representative, dependents, spouse and children or any other parties who might become beneficiaries under the Workers’ Compensation Law, might now or could hereafter have under the provision of the said Law, arising out of the aforesaid injury or disablement or the disability resulting therefrom, and does hereby, on behalf of himself and all of said other parties, release and forever discharge the Employer, Chesapeake and Selective, their personal representative, heirs, successors and assigns, from all other claims of whatsoever kind which might or could hereafter arise under the Law from the said injury, disablement or disability.

The Agreement was signed by Mr. Collins, Mr. Collins's attorney, and attorneys for Petitioners. Mrs. Collins was not a party to the Agreement. Nor did the Agreement allocate or describe any portion of the payments to be provided by Petitioners as consideration for the release of a potential claim for death benefits under the Act.

The parties filed the Agreement with the Commission on May 19, 2015. At the same time, Mr. Collins also provided the Commission with a "Claimant's Affidavit in Support of Settlement" and other required documentation. In his Claimant's Affidavit, which Mr. Collins provided on the Commission's standard form, and which is required to be submitted for all settlements of claims under the Act, Mr. Collins recited: "I, Bernard Collins, am the claimant in claim # B760589. I ask the Workers’ Compensation Commission to approve the settlement of my claim...." Mr. Collins further stated, among other things: "I am voluntarily...