Nance v. Maxon Elec., Inc.

• Decision Date: 18 December 2012
• Docket Number: No. WD 74942.,WD 74942.
• Citation: 395 S.W.3d 527
• Parties: Larry NANCE, Deceased; Sherry Nance, Personal Representative, Appellant, v. MAXON ELECTRIC, INC., Respondent.
• Court: Missouri Court of Appeals

395 S.W.3d 527

Larry NANCE, Deceased; Sherry Nance, Personal Representative, Appellant,

v.MAXON ELECTRIC, INC., Respondent.

No. WD 74942.

Missouri Court of Appeals,

Western District.

Nov. 6, 2012.

Motion for Rehearing and/or Transfer to

Supreme Court Denied Dec. 18, 2012.

Application for Transfer to Supreme Court Denied April 30, 2013.

R. Edward Murphy, St. Louis, MO, for appellant.

Lisa A. Reynolds and Robert Kerr, St. Louis, MO, for respondent.

Before Division One: THOMAS H. NEWTON, Presiding Judge, JOSEPH M. ELLIS, Judge and GARY D. WITT, Judge.

GARY D. WITT, Judge.

Sherry Nance (“Sherry”) ¹ appeals from the Labor and Industrial Relations Commission's (“Commission”) order denying a joint agreement to commute her deceased husband's workers' compensation permanent total disability benefits into a lump sum. Larry Nance (“Larry”) died the day before a joint agreement to commute was re-filed with the Commission by the parties. The employer, Maxon Electric, Inc. (“Maxon”),² attempted to withdraw its support of the joint agreement based on Larry's subsequent death. The Commission determined that Larry's claim lost all of its value upon his death, such that nothing was left to commute into a lump sum, and therefore the Commission was legally prohibited from approving the agreement of the parties. Because the Commission erred in its legal conclusion that it had no authority under section 287.390 to approve the joint settlement agreement, and because the Commission incorrectly found that it had no legal authority to approve the joint settlement agreement under section 287.530 in that it determined the present value of the future payments to be zero, we reverse.

Factual Background ³

Larry worked for Maxon when he was injured on December 12, 1989. Larry operated a hand-held grinder to grind plastic telephone parts. After experiencing pain and discoloration of his hands, Larry was diagnosed with Raynaud's disease⁴ as well as Scleroderma.⁵ In 1993, an administrative law judge (“ALJ”) found that Larry's condition resulted from an occupational disease that rendered him permanently and totally disabled and awarded $145.38 per week in Permanent Total Disability (“PTD”) benefits and related medical care for the remainder of Larry's life. The Labor and Industrial Relations Commission (“Commission”) affirmed the award.

In 1994, the parties jointly filed with the Commission an “Application For Commutation of Future Benefits and Approval of Lump Sum Payment” of Larry's future weekly PTD benefits. The application requested approval of a lump-sum amount pursuant to 287.530 ⁶ and attached thereto was a “Stipulation for Compromise Lump–Sum Settlement.” This request was denied by the Commission. In the denial, the Commission noted that there was no evidence as to Larry's life expectancy and no evidence of the current value of the future PTD payments. The Commission further found that approval of the settlement was not in Larry's best interests and found that there were no compelling or unusual circumstances, as required by section 287.530. Neither party appealed this determination.

In 2010, Maxon twice approached Larry about settling his future PTD weekly benefit payments by payment of a lump sum. In August 2010, after a thorough review of his medical records and condition, an analysis by a physician hired by Maxon determined that Larry had a life expectancy of thirteen years. On February 24, 2011 and May 6, 2011, Maxon offered to settle Larry's claim for a lump sum of $181,434.24.⁷ Larry accepted Maxon's offer on May 19, 2011.

In June, 2011, Larry was diagnosed with cancer, which was unrelated to his work-related medical condition. On August 31, 2011, the parties filed a joint “Application for Modification of Award” requesting that the award be amended into a lump sum of $181,434.24 as settlement for future PTD benefits. This application was drafted and filed by Maxon, and it was signed and approved by all parties. On October 5, 2011, the Commission dismissed the joint application, citing a lack of jurisdiction to “modify” a final award. In its order, the Commission suggested that a request to commute the award of future PTD benefits under section 287.530 was the proper procedure to convert a final award of PTD benefits into a lump-sum settlement, as opposed to an application to modify an award based on a joint settlement agreement. While Nance argues that the prior filing did sufficiently state a request for commutation of the award under section 287.530, neither party timely appealed the October 5, 2011 dismissal of that filing by the Commission.

On October 27, 2011, a revised joint agreement entitled “Request to Commute Permanent Total Disability Payments into Lump Sum Award” was sent to the Commission by Maxon's counsel via overnight private delivery (FedEx).⁸ The amount of the agreed upon lump-sum settlement remained $181,434.24. Attached to the request was the physician's certification of life expectancy of thirteen years. Also attached was an “Affidavit of Present Value” of the PTD benefits, showing that the agreed-upon amount was the present value of the future benefits if Larry lived for an additional twenty-four years, which was longer than his thirteen-year life expectancy.⁹ The filing also indicated that Larry was undergoing chemotherapy for Stage Four lung cancer and that this was expected to further reduce his life expectancy. All parties signed and approved this agreement.

Later, on the afternoon that the revised settlement agreement was sent by Maxon to the Commission, Larry died. The morning after his death, the agreement was received by the Commission and filed. On November 14, 2011, upon learning of Larry's death, Maxon filed a request to “Withdraw Request to Commute Permanent Total Disability Payments into Lump Sum Payment.” In that request, Maxon notified the Commission of Larry's death and alleged that under the Workers' Compensation Law,¹⁰ no benefits were then due Larry or his survivors and alleged that the prior agreement was “moot.” Attached to that filing was a “Suggestion of Death” and Larry's obituary. The obituary noted that he was survived by his wife, Sherry. On December 8, 2011, Sherry, as surviving spouse and personal representative of Larry's estate, filed her response to Maxon's request to withdraw the request to commute the award.

On February 2, 2012, the Commission entered an order denying the request to commute and denying Sherry's request to approve the settlement agreement. The Commission found that (1) under section 287.530, PTD benefits are to be commuted to present value, and (2) because of Larry's death, no future payments were due and therefore the present value of the future PTD benefits was zero. In so finding, the Commission reached the legal conclusion that “We cannot commute the award for more than the present value of future installments” (emphasis added). This appeal follows.

Standard of Review

This Court must affirm the Commission's decision unless it is not authorized by law or supported by competent and substantial evidence on the whole record. Mo. Const. art. V, sec. 18. Section 287.495.1 provides that an appellate court reviews questions of law and that the Commission's decision should be modified, reversed, remanded, or set aside only if: (1) the Commission acted without or in excess of its powers; (2) the award was procured by fraud; (3) the facts found by the Commission do not support the award; or (4) there was not sufficient competent evidence in the record to warrant the making of the award. “Questions of law are reviewed de novo.” Pierce v. BSC, Inc., 207 S.W.3d 619, 621 (Mo. banc 2006). This Court is not bound by the Commission's interpretation or application of the law; therefore, no deference is afforded the Commission's interpretation of a statute. White v. Univ. of Missouri, Kansas City, 375 S.W.3d 908, 910 (Mo.App. W.D.2012) (citations omitted).

“Worker's compensation law is entirely statutory, and when interpreting the law, we ascertain the intent of the legislature by considering the plain and ordinary meaning of the terms and, if possible, give effect to that intent.” Honer v. Treasurer of State, 192 S.W.3d 526, 529 (Mo.App. E.D.2006) (citation omitted). Provisions of an entire legislative act should be construed together and, if reasonably possible, all of its provisions must be harmonized. Edwards v. Hyundai Motor Am., 163 S.W.3d 494, 497 (Mo.App. E.D.2005). The law favors a statutory interpretation that tends to avert an unreasonable result. Id.

Analysis

In Point One, the question is whether the Commission erred in denying the parties' joint request to commute because it found that it had no legal authority to consider the joint settlement under section 287.390. In Point Two, the question is whether the Commission had authority to approve the commutation under section 287.530, when it determined the settlement amount exceeded the present value of the future payments. Point Three is made moot by our holding in Points One and Two. Because Points One and Two rely on the interpretation of two statutes, for reference, we set out both sections at the outset.

Section 287.390.1,¹¹ relating to compromise settlements, states as follows:

Parties to claims hereunder may enter into voluntary agreements in settlement thereof, but no agreement by an employee or his or her dependents to waive his or her rights under this chapter shall be valid, nor shall any agreement of settlement or compromise of any dispute or claim for compensation under this chapter be valid until approved by an administrative law judge or the commission, nor shall an administrative law judge or the commission approve any settlement which is not in accordance with the rights of the parties as given in this chapter. No such agreement shall be valid unless made after seven days from the date of injury or death. An administrative law judge, or the commission, shall approve a settlement...