                                          NO.    84-554

                I N THE SUPREME COURT O THE STATE O MONTANA
                                       F           F

                                                1985




LEWIS L .   BOWEN,

                   Claimant,

         -vs-

THE ANACONDA COMPANY,

                   Employer, D e f e n d a n t and A p p e l l a n t .




APPEAL FROM:       The W o r k e r s ' Compensation C o u r t o f t h e S t a t e o f
                   Montana, The H o n o r a b l e Timothy R.eardon, J u d g e
                   presiding.


COUNSEL O RECORD:
         F


         For Appellant:

                   Andrew J . U t i c k a r g u e d , H e l e n a , Montana


         For Respondent:

                   R.   Lewis Brown a r g u e d , B u t t e , Montana


         F o r Amicus C u r i a e :

                   S t e v e S h a p i r o , H e l e n a , Montana




                                                Submitted:           October 2 3 , 1985

                                                  Decided:           February 1 3 , 1986



Filed:




                                                Clerk
Mr. Justice John Conway Harrison delivered the Opinion of the
Court.

        This is an appeal from a judgment of the Workers'
Compensation Court of the State of Kontana.            Respondent Lewis
Bowen     (hereinafter Bowen)         entered into a   full and    final
compromise settlement a-greement with the Anaconda Company,
appellant, which purported to settle his claim for injuries
sustained on October           25, 1974 and March      3, 1977, while
working     for    the    Anaconda     Company.     Bowen    subsequently
petitioned    the Workers'       Compensation Court to reopen his
compromise settlement with the Anaconda Company claiming that
the agreement only settled his claim for injuries sustained
in 1974, and did not cover his injuries sustained in 1977.
The Workers' Compensation Court agreed with Bowen and this
appeal followed.         We affirm.
        Rowen was employed by           the Anaconda   Company a-t its
copper smelter in Anaconda, Montana.               While so employed,
Bowen    suffered     two   industrial accidents to his back          on
October 25, 1974 and on March 3, 1977.             The Anaconda Company
accepted liability for Bowen's injuries and paid temporary
total disability benefits and medical benefits                  for both
accidents in accordance with Montana law.
        On July 23, 1981, Bowen, without the assistance of his
counsel of record, entered into a petition for full and final
compromise        settlement    with     Marilyn   Nelson,    Anaconda's
Workers'    Compensation adjuster, in which Bowen agreed to
accept $14,175 thereby alleged]-y settling both his claims
against the Ana.conda Company.            The body of the settlement
agreement provided in pertinent part as follows:
            The undersianed was accidentally injured
            on October i 5 , 1974 while employed by The
            Anaconda Company an employer enrolled
             under Compensation Plan No. I of               the
             Montana Workers1 Compensation Act.             The
             claim was filed and accepted by                the
             insurer    for   the  payment   of             any
             compensa.tion and medical benefits            due.
             The total compensation paid to date is
             $16,272.14.
             The total medical and hospital benefits
             paid to date are $7,025.61.
             A   controversy    exists   between    this
             claimant and insurer over the amount and
             duration    of    compensation.        This
             controversy has been resolved by an
             agreement between      the   claimant and
             insurer wherein the claimant agrees to
             accept the sum of fourteen thousand one
             hundred    seventy    five    and    no/100
             ($14,175.00) in a lump sum (unless such
             payments are otherwise directed to be
             paid biweekly by the Division) in a full
             and final compromise settlement, which
             represents compensation for 175 weeks.
             Further medical and hospital benefits are
             expressly    hereby    reserved   by    the
             claimant, unless otherwise indicated in
             this petition.
             The   claimant   hereby   petitions   the
             Division of Workers1 Compensation, with
             the concurrence of the above named
             insurer, for approval of this petition
             and that the case be fully and finally
             closed on the basis set forth above. The
             claimant   understands   that   if   this
             petition is approved, the claim is
             forever closed, and can never again be
             reopened.
       The    petition         for   compromise    settlement     was   then
forwarded     to    the    Division     of   Workers1 Compensation       for
approval as required by              law.    The Division reviewed the
document and discovered an ambiguity in the agreement in that
while the agreement only referred to the 1974 accident date,
it   also    stated      the   amounts of     compensation and      medical
benefits paid to date on both claims, and it also reflected
that the settlement was computed based upon the 1977 injury
compensation rate.          The record indicates the Division, after
discovering        the    ambiguity    in    the   settlement   agreement,
conducted an investigation into the matter and ascertained,
to its own satisfaction, that a mistake had been made in not
including both accident dates in the agreement.       The Division
subsequently revised the settlement agreement to also include
the 1977 accident date, and issued an order approving the
settlement agreement stating that both Bowen's 1974 and 1977
injury claims were      settled for $14,175.       Thereafter, the
Workers' Compensation Court approved the Division's order
closing both of Bowen's claims.
      On    December   13, 1982, Bowen     filed   a Petition   for
Hearing with the Workers' Compensation Court in which he
sought to set aside the settlement agreement described above.
Bowen asked the court to set aside the settlement agreement
upon the grounds that his treating physician had misled him
into believing that he had sustained no serious permanent
injuries as a result of the accidents, and also that he was
misled by representatives of the Anaconda Company who advised
him that he was not entitled to a larger settlement.             On
March 29, 1983, Rowen filed a second Petition for Hearing
with the Workers' Compensation Court in which he abandoned
his argument set out in the first Petition for Hearing.          In
the second Petition for Hearing Bowen ad.vanced a new theory
that the settlement agreement only settled his claim for
injuries sustained in 1974, and did not settle his claim for
injuries sustained in 1977.
      The case proceeded to trial and the parties filed a
stipu-lationthat the issues before the Workers ' Compensation
Court should be bifurcated as follows:         (1)    Whether the
court had    jurisdiction over this matter         in view of the
provisions    of   S 39-71-204(2)   and   S 39-71-2909, MCA;    and
(2) Whether the settlement agreement hetween the parties,
and   the   order of        the Division of Workers'         Compensation
approving the agreement, effectuated a compromise settlement
of Bowen's claim concerning his 1977 injury.                 The parties
also stipulated that the court should decide these issues
based upon the record made to date.
      During trial Bowen argued that he never intended to
settle both his claims in the settlement agreement and also,
that on its face, the settlement agreement only referred to
the 1974 accident date.             The Anaconda Company responded by
asserting        that    although    the   settlement     agreement   only
referred to the 1974 accident date, it also included the 1977
accident because the figures on the agreement corresponded to
both the 1974 and 1977 accidents.            Furthermore, the Anaconda
Company argued that Bowen fully intended to settle both his
claims in the settlement agreement because the extrinsic
evidence surrounding the settlement agreement overwhelmingly
pointed     to    this     conclusion.     The Anaconda     Company also
vigorously argued that the Workers' Compensation Court lacked
jurisdiction over this matter.
       In a detailed findings of fact, conclusions of law and
judgment         entered     September     28,    1984,    the   Workers'
Compensation Court found that it had jurisdiction over this
matter and that Bowen had only settled his claim for the 1974
injury in the settlement agreement.              In making its decision,
the lower court disregarded the order of the Division which
revised the settlement agreement and closed both of Bowen's
claims.     It refused to consider any of the investigation or
documentation contained in the Division file.               It considered
the settlement agreement to be unambiguous within its four
corners, thereby negating the need to consider any extrinsic
or par01 evidence to determine the meaning of the agreement.
        The Anaconda Company presents the following issues for
review:
         (1) Whether            the Workers '         Compensation Court lacked
jurisdiction to alter, rescind or amend the order of the
Division       of    Workers'         Compensation            which    revised     the
settlement agreement and closed both of Bowen's claims?
         (2)   Whether the Workers' Compensation Court erred in
not     upholding         the     Division's          order    which    revised    the
settlement agreement and closed both of Bowen's claims?
         (3)   Whether the Workers' Compensation Court erred in
not considering the parol evidence introduced by the Anaconda
Company    at       trial       to   help     explain         the   meaning   of   the
settlement agreement?
         (4) Whether the Workers' Compensation Court erred in
not considering parol evidence offered into evidence without
objection and by stipulation?
        We hold the first two issues presented by the Ananconda
Company to be dispositive of the instant case, and only these
two issues will be discussed.
        The thrust of the Anaconda Company's argument in the
instant case is that the Workers' Compensation Court, in
general, lacks jurisdiction under Montana law to rescind,
alter     or    amend       an    order      of       the   Division    of    Workers'
Compensation approving a                   compromise settlement agreement.
The Anaconda Company begins this argument by pointing out
that although a compromise settlement agreement is considered
a     contract      and     the      law    of        contracts     applies   in   the
construction and enforcement of a settlement agreement, the
agreement is not valid until it is approved by the Division
of Workers' Compensation.                  Kienas v. Peterson (Mont. 1980) ,
624 P.2d 1, 37 St.Rep. 1747 and                   §   39-71-741, MCA.
       Next, the Anaconda Company points out that after the
Division    has   issued    its   order   approving   a     settlement
agreement, the order is referred to the Workers' Compensa.tion
Court for review pursuant to 5 39-71-2908, MCA.           This statute
provides that the judge may disapprove the Division's order,
but does not require his approval; although as a matter of
practice, the judge has issued an order indicating approvals
as well as disapprovals.      The Anaconda Company points out, in
the case where the judge approves the Division's order, he
then loses jurisdiction to consider the agreement further, as
specifically indicated in S 39-71-204(2) and 5 39-71-2909,
MCA.     These statutes pr0vid.e in pertinent part as follows:
            Section   39-71-204 (2).     [ E l xcept as
            provided in 5 39-71-2908, the division or
            the workers' compensation judge shall not
            have the power to rescind, alter, or
            amend any order approving a full and
            final     compromise     settlement      of
            compensation.
            Section   39-71-2909.     [The Workers '
            Compensation]   judge may    not  change
            ...   any order approving a full and
            final     compromise   settlement     of
            compensation.
The Anaconda Company argues that according to these rules of
finality, a settlement agreement can only he reopened by the
Workers' Compensation Court upon a showing of fraud, mutual
mistake      fact,         personal incapacity of the claimant
make a binding contract.          Parrent v. Midway Toyota (Mont.
1981), 626 P.2d      848, 38 St.Rep.      559; Kienas v. Peterson,
supra;     Williams v. Industrial Accident Board          (1939), 109
Mont. 235, 97 P.2d 1115.
       The Anaconda Company argues the Workers' compensation
Court was totally without jurisdiction to rescind, alter or
amend the order of the Division which determined, a.fter a
thorough investigation, that both of Bowen's claims had been
closed by the settlement agreement.                     The Anaconda Company
argues the Workers' Compensation Court had every opportunity
to disapprove the order of the Division when the matter was
referred     to    the    court      pursuant      to    the    provisions       of
S 39-71-2908, MCA.           The Aria-conda Company stresses that the
actions of the Workers1 Compensation Court in the instant
case are exactly what S 39-71-204 (2) and S 39-71-2909, MCA,
are designed to prohibit.           We disagree.
       In theory, the argument of the Anaconda Company is
sound, but in application to the instant case the argument
does not hold water.                We agree that S 39-71-204 (2) and
5 39-71-2909       seem   to   state       quite   clearly       that    where   a
Workers1 Compensation judge approves or fails to disapprove a
Division order pursuant to S 39-71-2908, he then loses the
authority to consider the settlement agreement further except
upon   a   showing of        fraud, mutual mistake of fact, or a
personal     incapacity      of     the    claimant     to     ma.ke a   binding
contract.         However,     in    the    instant     case,     the    Workers1
Compensation Court did not violate the provisions of the
above statutes because it did not actually rescind, alter or
amend the order of the Division approving the settlement
agreement.        We base this conclusion on the fact that the
Division itself has               statutory authority             unilaterally
modify a settlement agreement, as it did in the instant case.
The function of the Division with respect to the disposition
of settlement aqreements is as follows:
            [Tlhe division is hereby vested with full
            power, authority, and jurisdiction to
            allow and approve compromises of claims
            under this chapter. All settlements and
            compromises of compensation provided in
            this chapter are void without the
            approval of the division.    Approval of
            the division must be in writing.      The
            division shall directly notify every
            claimant of any division order approving
            or denying a claimant's settlement or
            compromise of    a   claim.     (Section
            39-71-741, MCA)      .
Clearly, under this statute, the Division has no authority to
unilaterally       rescind,    alter    or    amend     the    terms   of    a
settlement agreement.            It can only allow and approve or
disallow a proffered settlement agreement.
       In    the    instant    case,    the    Division       discovered    an
ambiguity in the settlement agreement and concluded, after a
thorough investigation, that a mistake had been made in not
including both       the   1974 and     1977 accident dates in the
agreement.     The Division subsequently revised the settlement
agreement to also include the 1977 accident date, and issued
an order approving the agreement.               Under   $   39-71-741, MCA,
the Division clearly does not have the authority to modify or
revise a settlement agreement.               Therefore, that portion of
the   Division's      order    which    went     beyond       its   statutory
authority    in    expanding     the   settlement agreement to also
include the 1977 accident date is a nullity and of no force
or    effect       whatsoever.         Consequently,          the   Workers'
Compensation Court did not actually rescind, alter or amend
the order of the Division approving the settlement agreement
because the Division's order only validly approved Bowen's
1974 injury claim.
      Therefore, because there is no valid Division order
foreclosing Bowen's right to pursue his 1977 injury claim,
the remaining issues presented by the Anaconda Company become
moot and need not be discussed.
      The    judgment of the Workers' Compensation Court is
affirmed.
We concur:


C h i e f Justice
        Mr. Justice Fred J. Weber dissents as follows:
        I dissent from the majority opinion which affirms the
Workers' Compensation Court.       I conclude that the opinion
considers only a portion of the pertinent facts and law.
        Both the majority opinion and the Workers' Compensation
decision emphasize that the petition       for full and      final-
compromise settlement stated "The undersigned claimant was
accidentally injured on October 25, 1974     . . .."     From that
statement in the petition, the Workers' Compensation Court
concluded that the wording within the four corners of the
contract, was not ambiguous, and therefore no parole evidence
could be admitted to show that the settlement petition cov-
ered two injuries rather than only the injury of October 25,
1974.     The majority opinion then concluded that the Divi-
sion's revision of the settlement agreement to cover two
dates of injury was beyond the authority of the Division and
therefore that portion of the order expanding the settlement
to include the 1977 accident was a nullity and of no force
and effect.     The majority then concluded that the order of
the Division a.pproved only claimant's 1974 injury claim.
        In addition to the foregoing facts, it is important to
note that the order approving a full and final compromise
settlement stated as follows:
    Lewis L. Bowen was accidentally injured on October
    25, 1974 & March 3, 1977, while employed by the
    Anaconda Company     ...
That order was signed on September 28, 1981 by the adminis-
trator of the Division.     The order was approved by the work-
ers' compensation judge on September 29, 1981.           Under the
opinions of this Court, a full and final compromise settle-
ment can only be reopened upon a showing of fraud, mutual
mistake of fact, or personal in~~pacity. See Williams v.
Industrial Accident Board      (1939), 109 Mont.   235, 97 P. 2d
1115; Kienas v. Peterson (Mont. 1980), 624 P.2d 1, 37 St.Rep.
1747.     For a discussion of the distinction between rescission
of a final settlement agreement and rescission of a full and
final compromise settlement, see Hutchinson v. Intermountain
Insurance Company     (Mont. 1985), 710 P.2d    1810, 42 St.Rep.


     The majority opinion concluded that the Workers' Compen-
sation Court did not actually rescind, alter or amend the
previ-ous order because the Division's order only validly
approved the 1974 injury claim.         The majority ignores the
specific provisions in the Division's order which approved
the full and final compromise settlement for both the 1974
and 1977 injuries, as did the Workersf Compensation Court
itself.     Of particular significance at this point are the
provisions    of   5 39-71-743, MCA, which     in pertinent part
states:
     (4) The division ha.s full power, authority and
     jurisdiction to allow and approve compromises of
     claims under this chapter.    All settlements and
     compromises of compensation provided in this chap-
     ter are void without the approval of the division.
     Approval of the division must be in writing        ...
     (Emphasis supplied.)
The only settlement approved by the Division covered both the
October 25, 1974 and March 3, 1977 injuries.      There is no way
in which the Division and Workersf Compensation order could
be classed as an approval only of the 1974 injury.            The
Division has the full power and authority to a.pprove compro-
mises.     It approved a compromise of both the 1974 and 1977
injuries.     The settlement of $14,175 is specifically stated
to be a settlement of the claim for both injuries.         If the
Division did not have authority to revise the settlement
agreement as stated in the majority opinion, then there is no
longer an outstanding        settlement agreement.   Clearly the
settlement approved     by    both   the Division and   the court
covered both claims and cannot be restricted to the 1974
injury.   The majority is incorrect in finding that the Divi-
sion validly approved the 1974 injury claim.        That is not the
effect of the order.   Under the statute, any settlement not
approved by the Division is void.           The Division has not
approved the settlement of $14,175 for the 1974 injury only.
In the absence of such an approval, the settlement is void.
     At the very most, if an appropriate theory for reopening
the order of September 28, 1981 can be found, the compromise
settlement would ha.ve to be set aside in full.       It is totally
inappropriate to call it a settlement of the 1974 injury.        I
would reverse the Workers' Compensation Court.



                                   1   A


                              Justice

     Mr. Justice L. C. Gulbrandson joins in the dissent of




Mr. Chief Justice J. A. Turnage:
     I concur in the dissent of Mr. Justice Weber.



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