                                               RENDERED: AUGUST 24, 2017
                                                        TO BE PUBLISHED

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                             2016-SC-000406-WC


LARRY KIDD                                                          APPELLANT


                   ON APPEAL FROM COURT OF APPEALS
                      CASE NO. 2015-CA-001239-WC
v.                  WORKERS' COMPENSATION BOARD
                           NO. 13-WC-89060


CROSSROCK DRILLING, LLC;                                           APPELLEES
HON. STEVEN G. BOLTON,
ADMINISTRATIVE LAW JUDGE; AND
WORKERS' COMPENSATION BOARD



             OPINION OF THE COURT BY JUSTICE VANMETER

                                 AFFIRMING

      When an employer and employee reach a settlement agreement with

respect to a worker's compensation case, proof of settlement must be filed,

either by memorandum or by satisfactory proof of settlement. At issue.in this

case is whether the Administrative Law Judge ("AW") erred in failing to give

effect to a settlement agreement reached after the issuance of its Order and

Opinion, and raised 1n a.petition to reconsider. We hold that the AW did not

err and therefore affirm both the Workers' Compensation Board and the Court

of Appeals. Larry Kidd now appeals to determine whether the AW should have
considered the terms of the settlement.

                     . I. FACTUAL AND PROCEDURAL HISTORY.

       In late.2013, Kidd filed a claim alleging work-related injuries against his

employer, Crossrock Drilling, LLC. Following a December 2014 hearing on the

contested issues,! Kidd's attorney and Crossrock's insurance adjuster engaged

in settlement negotiations. The AW and Crossrock's attorney were unaware of

these negotiations. On February 24, 2015, the adjustor indicated agreement

that Crossrock would make· a $55,000 lump-sum payment with a waiver of

vocational rehabilitation benefits. Kidd's attorney was to prepare appropriate

settlement documents.

       Four days prior, however, on February 20, the AW issued its opinion and

award denying Kidd permanent partial disability, permanent total disability,

and future medical benefits. The effect of the award was that Kidd was entitled

to approximately $17,600 for temporary total disability. Kidd's attorney

received the opinion and award on February 25.

       Kidd timely filed a petition for reconsideration based on the settlement

reached prior to receipt of the opinion. The AW denied the petition, concluding

that Kidd failed to properly present the settlement by filing Form 1102 or by

presenting a verified motion to adopt the settlement agreement, thus the


        1 The contested issues were work-relatedness/ causation; injuxy within the
 meaning of KRS Chapter 342; retention of physical ability: to return to the same type of
 work performed at the time of injuxy; duration of temporary total disability; income
·benefits under KRS 342.730; unpaid or contested medical expenses; and extent and
 duration of benefit multipliers.
       2   The Department of Workers' Claims' standard form for settlement agreements.

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settlement was outside the scope of a petition for rehearing. Both .the Board

and the Court of Appeals affirmed. Kidd now appeals.

                                   II. ANALYSIS.

      The sole issue on appeal is whether Kidd properly preserved the issue of

the alleged settlement agreement. The AW, the Board, and the Court of

Appeals all held that Kidd did not properly raise this issue, and the AW did not

err in declining to review the agreement.

      The issue of correspondence constituting a settlement agreement in

worker's compensation is not a new one. Kidd argues that this case fits within

existing jurisprudence allowing correspondence to sufficiently memorialize a

settlement agreement without a formal filing. See Coaljie_ld Tel. Co. v.

Thompson, 113 S.W.3d 178, 181 (Ky. 2003) (holding that KRS 342.265(1) does

not require a form.al document that is signed by the parties or their

representative when correspondence between·the parties clearly indicates the

terms to which they have agreed, and the terms of the agreement are not

asserted to be incomplete; the AW should then address "the substance of the

agreement rather than its form[]"); Skaggs v. Wood Mosaic Corp., 428 S.W.2d

617, 619 (Ky. 1968) (holding that an agreement is not required to be in writing

"at least so long as there is written evidence (such as the letter and cancelled

checks in this case) for the 'memorandum' which the statute says shall be

filed(]"); see also Hudson v. Cave Hill Cemetery, 331 S.W.3d 267, 271 (Ky. 2011)

(holding the essential terms of an agreement must be settled by the written

evidence in order for the agreement to be complete: the agreement was

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incomplete because the lump sum proceeds to be allocated to a Medicare Sets

Aside Account had not been settled, and "[t]he allocation is an essential

element of a settlement that includes such an account[]").

      Kidd contends that the email correspondence between the parties is

sufficient to memorialize the essential terms and that the AW erred in not

considering the substance of the settlement. However, the issue is not whether

the terms of the alleged settlement between Kidd and Crossrock's insurance

adjustor were complete but rather whether this settlement was properly

introduced into the record for the AW to consider at all.

      By statute, in order for a settlement agreement to be enforced, it must be

filed with and approved by the AW. Specifically,

              If the employee and employer ... reach an agreement
              conforming to the provisions of this chapter in regard
              to compensation, a memorandum of the agreement
              signed by the parties or their representatives shall be
              filed with the commissioner, and, if approved by ... an
              administrative law judge, shall be enforceable
              pursuant to KRS 342.305.

KRS3 342.265(1). "An agreement to settle a workers' compensation claim

constitutes a contract between the parties. Once approved, an agreement to

settle a claim becomes an award._" Whittaker v. Pollard, 25 S.W.3d 466, 469

(Ky. 2000) (citing Steams Coal & Lumber Co. v. Whalen, 266 Ky. 227, 98

S.W.2d 499 (1936)).

      Although the omission of a Form 110 is not fatal to Kidd's claim, in its



      3   Kentucky Revised Statutes.

                                         4
absence, Kidd was required to file a verified motion with the correspondence

and sufficient documentation, which taken together, comprise a complete

memorandum of agreement. Skaggs, 428 S.W.2d at 619; KRS 342.265(1).

Kidd, however, never filed a verified motion; instead, he attempted to bring the

correspondence into the record via his petition for reconsideration. As a result,

the alleged terms of the settlement were never properly brought before the AW.

In a petition for reconsideration, the AW is "limited in the review to the

correction of errors patently appearing upon the face of the award, order, or

decision[.]" KRS 342.281. The AW could not have examined the terms of the

alleged settlement agreement when no verified motion or Form 11 O was_ filed

before him. We agree with the Court of Appeals that the AW and the Board

properly declined to address this issue.

                                III.   CONCLUSION.

      For the foregoing reasons, the· decision of the Court of Appeals is

affirmed.

      All sitting. Minton, C.J.; Hughes, Keller, VanMeter, and Venters, JJ.,

concur. Wright, J., dissents by separate opinion which Cunningham, J., joins.


 WRIGHT, J., DISSENTING: I respectfully dissent, as I believe the AW should

have treated Mr. Kidd's motion to reconsider as a motion to approve or enforce

a settlement agreement. While the motion was not verified as required by 803

KAR 25:010 § 6(2), as it contained no sworn statements, this defect could have

been easily rectified. I would also point out that this requirement is not found


                                           5
in the statute granting jurisdiction, but rather, merely in an administrative

regulation.

      Mr. Kidd submitted-the communications that formed the basis of the

settlement agreement with his motion. All that was absent was his notarized

signature. This is a classic case of form over substance, It serves neither the

administration of justice nor the purposes of the Workers' Compensation Act.

First, as a Court of Justice, it is better for us to resolve the issue on its merits

rather than tossing it out because the motion was not verified. Second, as this

Court has noted, we must be "mindful that the Workers' Compensation Act is

social legislation which is to be construed liberally and in a manner consistent

with accomplishing the legislative purpose." Apex Min. v. Blankenship, 918

S.W.2d 225, 229 (Ky. 1996). We have also acknowledged, "[a]lthough both the

employee and the employer have rights under the Act, the primary purpose of

the law is to aid injured or deceased workers." Zurich Am. Ins. Co. v. Brierly,

936 S.W.2d 561, 563 (Ky. 1996).

      In keeping with the administration of justice and the purposes of the Act,

I would reverse and remand to the AW. The AW should give Mr. Kidd an

opportunity to submit an affidavit demonstrating the facts he alleges. The

parties should then present evidence as to the existence of the alleged

settlement agreement and the AW should hold an evidentiary hearing to

determine whether the emails submitted by Mr. Kidd constituted a binding

settlement agreement.




                                          6
      In this case, there would be no prejudice to the opposing side and the

oversight is easily corrected. A missing signature should i;iot deprive Mr. Kidd

of $55,000 if, indeed, the settlement agreement is deemed valid. That result is

not only unjust, but it flies in the face of our stated purposes for the Workers'

Compensation Act: to aid injured workers. The legal arena should not be a

large-scale game of "gotcha" where people win or lose based on technicalities.

      Cunningham, J., joins.



COUNSEL FOR APPELLANT:

Glenn Martin Hammond
Matthew R. Hall
GLENN MARTIN HAMMOND LAW OFFICES, PLLC


COUNSEL FOR CROSSROCK DRILLING, LLC:

Timothy Joe Walker
Aziza Hanna Ashy
FOGLE KELLER PURDY, PLLC




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