ArvinMeritor, Inc. v. Clifton Johnson

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REL: 02/25/2011 Notice: T h i s o p i n i o n i s s u b j e c t t o formal r e v i s i o n b e f o r e p u b l i c a t i o n i n t h e advance s h e e t s o f Southern R e p o r t e r . R e a d e r s a r e r e q u e s t e d t o n o t i f y t h e R e p o r t e r o f D e c i s i o n s , Alabama A p p e l l a t e C o u r t s , 300 D e x t e r A v e n u e , M o n t g o m e r y , A l a b a m a 3 6 1 0 4 - 3 7 4 1 ((334) 2 2 9 - 0 6 4 9 ) , o f a n y t y p o g r a p h i c a l o r o t h e r e r r o r s , i n o r d e r t h a t c o r r e c t i o n s may b e made b e f o r e t h e o p i n i o n i s p r i n t e d i n Southern R e p o r t e r . ALABAMA COURT OF CIVIL APPEALS OCTOBER TERM, 2010-2011 2090822 ArvinMeritor, Inc. v. Clifton Johnson Appeal MOORE, Johnson ("the employee") workers' compensation benefits e m p l o y e r " ) , o n J u l y 1 9, Fayette Court Judge. Clifton ("the from F a y e t t e C i r c u i t (CV-99-78) Circuit Court against 1 999. ("the t r i a l filed a claim f o r ArvinMeritor, Inc. On F e b r u a r y 2 1 , 2 0 0 3 , t h e court") entered a judgment i n w h i c h i t d e t e r m i n e d t h a t t h e e m p l o y e e was 1 0 0 % p e r m a n e n t l y 2090822 and t o t a l l y d i s a b l e d as had contracted e m p l o y e r ; the in a r e s u l t o f an the course judgment of required occupational his the necessary occupational paid the party The as employer medical to negotiated a pay disability Pursuant and the same o c c u p a t i o n a l past In November amounts medical to A l a . Code r i g h t to c r e d i t the So. the employee's parties. 1104 2d 896 See benefits 1975, employer of recovery parte Also Miller & Miller third parties compensation by the the employer to employer. Pet, subrogation expenses Constr. had a its liability D a v i d s o n v. i n November 2008, the 2 civil the paid medical of in a employee workers' a right third- the t h i r d - p a r t y proceeds against and (Ala. 1999). his 2008, § 25-5-11(a), (Ala. 1994), Ex to alleged disease with f o r w o r k e r s ' c o m p e n s a t i o n b e n e f i t s , see 644 employee's indicates that record CV-04-06. the workers' related c o n f i d e n t i a l settlement exceeded the expenses employee l a t e r pursued a c l a i m a g a i n s t numbered with required. t o r t f e a s o r s f o r the action that disease. benefits The future he employment c o m p e n s a t i o n d i s a b i l i t y b e n e f i t s as w e l l as a l l t h e reasonably disease from 736 as the Co., Inc., to third So. e m p l o y e r and 2d the 2090822 employee under negotiated a A l a . Code On jointly January 1975, 27, petitioned settlement. settlement In that settlement § the employer's rights 25-5-11. 2009, the of the trial petition, agreement, which, employer court the and to parties in pertinent the employee approve their set their part, out states: "a. [The e m p l o y e e ] and [ t h e e m p l o y e r ] have agreed to s e t t l e a l l of [ t h e employee's] c l a i m s f o r workers' compensation benefits, including a l l a c c r u e d b e n e f i t s o f any t y p e and a l l f u t u r e b e n e f i t s which might be owed for permanent and total disability, and f o r the closing of a l l future medical expenses, i n return for [the employer's] w a i v e r of i t s r i g h t to c r e d i t or reimbursement under A l a . Code [ 1 9 7 5 ] , § 2 5 - 5 - 1 1 ( a ) , and c o n t r i b u t i o n by [ t h e e m p l o y e r ] o f up t o $ 6 5 , 0 0 0 f o r e s t a b l i s h m e n t o f a Medicare set aside t r u s t . "b. This agreement closes a l l of [the employee's] r i g h t s to workers' compensation b e n e f i t s of any k i n d , i n c l u d i n g , w i t h o u t l i m i t a t i o n , m e d i c a l b e n e f i t s . A Medicare set a s i d e t r u s t f o r the f u t u r e compensable m e d i c a l expenses of [ t h e employee] w i l l be e s t a b l i s h e d . The c o s t o f s u c h M e d i c a r e s e t a s i d e t r u s t i s $ 8 3 , 9 3 6 . 1 7 . Upon e n t r y by t h i s C o u r t o f t h e order described in Paragraph a. above, [the e m p l o y e r ] w i l l c o n t r i b u t e up t o $ 6 5 , 0 0 0 t o f u n d t h e Medicare set a s i d e t r u s t , w i t h the b a l a n c e of the amount n e c e s s a r y t o f u n d s u c h M e d i c a r e s e t a s i d e t r u s t t o be p a i d b y [ t h e e m p l o y e e ] . The Parties a g r e e t h a t t h e e s t a b l i s h m e n t o f an a p p r o v e d M e d i c a r e s e t a s i d e t r u s t w i l l r e l i e v e [ t h e e m p l o y e r ] o f any f u t u r e m e d i c a l expense obligation concerning [the employee]. 3 2090822 "d. Upon e n t r y by t h i s Court o f an order r e l i e v i n g [ t h e e m p l o y e r ] o f a l l o b l i g a t i o n t o make any f u r t h e r p a y m e n t s t o [ t h e e m p l o y e e ] f o r w o r k e r ' s compensation b e n e f i t s , m e d i c a l , r e h a b i l i t a t i o n , and v o c a t i o n a l r e h a b i l i t a t i o n expenses, [ t h e employer] w i l l waive i t sr i g h t t o reimbursement under A l a . Code, § 25-5-11, f o r a l l s e t t l e m e n t s w i t h third p a r t y t o r t f e a s o r s i n CV 0 4 - 0 6 made t h r o u g h t h e d a t e of t h e a p p r o v a l o f such Order. "e. I f [theemployer] i s not r e l i e v e d o f a l l obligation t o make further payments to [the employee] f o r worker's compensation benefits, m e d i c a l and r e h a b i l i t a t i o n e x p e n s e s , [the employer] r e t a i n s i t s r i g h t t o reimbursement under A l a . Code, § 25-5-11. "f. [The employee] hereby declares and r e p r e s e n t s t o t h e C o u r t t h a t no r e p r e s e n t a t i o n s made by any a t t o r n e y o r a g e n t o f [ t h e e m p l o y e r ] , other than those s e t f o r t h i n t h i s P e t i t i o n , induced him to e n t e r i n t o t h i s s e t t l e m e n t " On F e b r u a r y 27, 2009, a f t e r a hearing, the t r i a l an a m e n d e d j u d g m e n t a p p r o v i n g parties' court ("MSAT") approving failure, entered as s e t o u t i n t h e petition. F i v e months l a t e r , trial the settlement court t h e employee f i l e d asserting had been that no settlement the employer had ceased The employee pay $18,936.17 Medicare e s t a b l i s h e d as the parties' claimed toward required and paying t h a t h e was r e a d y , the cost 4 a p e t i t i o n with the set-aside by that, the judgment despite his medical willing, of establishing trust that expenses. and able t o t h e MSAT b u t 2090822 that the employer inadequate cost the t o cover t h e employee's of which employee interplead pending The exceeded before the settlement. t h e $18,936,17 employee also requested that represented to The employee funds requested to of the t r i a l by t h e t r i a l the t r i a l court court court. order the t o pay h i s a c c r u i n g m e d i c a l expenses pursuant t o t h e J a n u a r y 6, 2 0 1 0 , t h e e m p l o y e r employee's petition. maintained that November maximum that vendor 2008 pursuant that had to which toward the employer that In the parties o f $65,000 $83,936,17. the cost had then reached obtained t h e MSAT w o u l d estimated. contended 5 would counsel, that t h e MSAT from would that a be following the cost higher i n pay a f o r Medicare be s u b s t a n t i a l l y The e m p l o y e r agreement t h e MSAT the Centers the parties employer an e s t i m a t e t o the employer's informed an of establishing According Services the the employer establishing Medicaid a response t ot h e response, of of the settlement, establishing filed the cost approval been figure to the clerk of those f o r t h e MSAT, t h e judgment. On and t h o s e f u n d s w o u l d be portion t h e $83,936.17 the disposition employer 2003 had informed him that and of than had i t was ready, 2090822 willing, pay, the and able b u t no m o r e . was asserted that party all "repudiating" essentially maintained the settlement. t h e employee had r e c e i v e d settlement that exceeded employee's medical obligation The The e m p l o y e r i t had agreed t o that e m p l o y e e was o b l i g a t e d t o p a y t h e d i f f e r e n c e a n d t h a t t h e employee the t o p a y t h e $ 6 5 , 000 t h a t expenses and t h a t t o pay t h e employee's necessary funds liability for i ttherefore accruing to order to establish employer from t h e t h i r d - the employer's employer p e t i t i o n e d the court amounts The medical h a d no expenses. t h e employee t o pay t h e MSAT that exceeded $65,000. On J a n u a r y on the matter. represented pay to was 7, 2 0 1 0 , t h e t r i a l At that hearing, to the t r i a l court court the attorney "the remainder," represented a hearing f o r t h e employee that the employer had agreed t o $ 6 5 , 0 0 0 t o f u n d t h e MSAT a n d t h a t fund conducted t h e employee had agreed which, i n the settlement petition, by t h e employer t o be $ 1 8 , 9 3 6 . 1 7 . After the parties learned that because of a "mistake" the cost of funding out a new s e t t l e m e n t the represented figure made b y t h e v e n d o r t h e MSAT, t h e p a r t i e s to fund that was inaccurate had attempted estimated t o work t h e MSAT, b u t t o no a v a i l . 6 The 2090822 employee had since expenses that incurred the employer the employee claimed the employer to obtain settlement medical was because to t h e employee remained with the employer to resolve agreed i n November $65,000 to remainder. the On finding April that obtained the the employer with employee's represented settlement issue. the p a r t i e s had would contribute t h e employee paying t o the employer's the cost o f t h e MSAT, court entered the p a r t i e s had agreed that toward the out a that the the counsel, which the from the vendor. funding t h e MSAT a judgment, t h e employer and that the would employee f o r a m o u n t s r e q u i r e d t o f u n d t h e [MSAT] they exceeded $65,000." parties maintained 20, 2010,the t r i a l " w o u l d be r e s p o n s i b l e if paying t o work according d i d n o t know later $65,000 t h e MSAT approving established, the t h e MSAT f u n d i n g that At that time, parties employer pay fund 2008 Counsel f o r f o rt h e employee willing attorney i n medical the time had e x p i r e d f o r continue The a t t o r n e y employer's t o pay. t h e MSAT h a d n o t b e e n that The $1,800 r e l i e f from t h e judgment required expenses. had refused that, and because employer approximately The t r i a l c o u r t had represented f u r t h e r found that to the court 7 i n their joint 2090822 petition that t h e amount which, the t r i a l employer The court and which trial court employee would "[e]quity had n o t been that described t h e MSAT. that $83, 963.17, obtained as an by the "estimate." had induced the by representing t o p a y $18,963.17 demands" was t h e employer t o the settlement have of funding t h e MSAT f o u n d , was a f i g u r e concluded employee t o agree cost t o fund that the as h i s p o r t i o n o f t h e The t r i a l court t h e employer concluded pay that the difference between what t h e e m p l o y e r r e p r e s e n t e d was t h e c o s t t o f u n d t h e MSAT t h e MSAT and t h e a c t u a l employee agreed, contribute which cost only employer t o continue employer The pay those November Whatever t o which medical 2008 cost the t h e terms until expenses e x p e n s e s as t h e MSAT was e s t a b l i s h e d , already t h a t judgment employer f i r s t the he h a d i n trust t o pay t h e employee's medical appealed the higher and that The t r i a l c o u r t f u r t h e r o r d e r e d t h e o u t i n t h e 2003 j u d g m e n t u n t i l including The t h e $18,963.17 amount t h e e m p l o y e e was t o h o l d t h e MSAT w a s e s t a b l i s h e d . set t o fund incurred on J u n e to date. 1, 2 0 1 0 . a r g u e s t h a t i t c o u l d n o t be o r d e r e d t o for funding employee t h e MSAT b e c a u s e , agreed of the p a r t i e s ' 8 to pay settlement i t says, i n those costs. agreement i n 2090822 November 2008, disposition settlement pursuant that and those of this any terms Shipbuilding ("[I]f 494 parties court to are In and settlement 28 order of parte So. not (holding that by the filed the parties $83,936.17 and t h a t amount and 9 the 808, 811 had the on the for its Haynes, the 816 rights of workers' evidence of other settlement, the trial settlement by 2d approving parol Ingalls judgment be judgment the approving a may parties establishes Ex 613, terms of the In t h a t p e t i t i o n , $65,000 t o w a r d approving 609, approving petition o f f u n d i n g t h e MSAT was pay judgment See effect by and i t s judgment joint approval, B i r m i n g h a m S t e e l E r e c t o r s v. controlled their its judgment, 2001) proper agreement of the enforcement i n c o r p o r a t e d the i t i n the 2009. an the submitted the and ( A l a . C i v . App. compensation terms). force to for The settlement. 32 A l a . A p p . the which satisfaction."); 2d other consent the court § 25-5-56. undisturbed[, has of of parties trial any other Corp., settlement] So. the superseded like enforceable basis to immaterial The t o A l a . Code 1975, now, are case. agreement settlement (1947) terms the as parties submitted represented in that January the t h a t the employer cost would employee w o u l d pay the 2090822 balance. only, The j u d g m e n t with approved the settlement requirement that $18,936,17. beyond no Hence, employee i s required preexisting we to pay agreement the employee r e j e c t any on t h o s e t e r m s pay any contention amount that a d i f f e r e n t amount b a s e d that was not approved by the on the any trial court. We do, however, require the judgment agree that employer to the judgment pay any additional of the parties' joint adopts the terms which explicitly and unambiguously shall pay no more than l i k e w i s e does $ 6 5 , 000 states amount. that not The petition, the employer t o e s t a b l i s h t h e MSAT. Any a t t e m p t t o a l t e r t h a t arrangement by r e q u i r i n g t h e employer t o pay more than the amount constitute a substantive that change i t agreed to pay to the terms of the s e t t l e m e n t agreement and t h e judgment approving the settlement and an enforcement of court unilaterally not contends. the A essential cannot terms agreement that has Matthew's Masonry C i v . App. 2009). of been Co. v. a would their terms as the modify agreement employee or supplement workers' compensation settlement incorporated into a Aldridge, So. 3d 25 N o t h i n g i n the Alabama 10 judgment. 464, Workers' See 469 ( A l a . Compensation 2090822 Act, Ala. take such approving The the Code an a trial Such evidence, unusual court justified had f a l s e l y a false would have the judgment approving Burger-Phillips (1937), action in authorizes relation to a court to a judgment settlement. employer MSAT. 1975, § 25-5-1 e t s e q . , i t s a c t i o n on i t s f i n d i n g represented representation, the settlement, basis by competent f o r vacating see § 25-5-56; see a l s o 234 A l a . not authorize of funding the i f proven c o n s t i t u t e d a sound Co. v . P h i l l i p s , but i t would the cost 5 6 3 , 17 6 the t r i a l court S o . 181 t o impose a new o b l i g a t i o n o n t h e e m p l o y e r t h a t was n o t c o n t a i n e d the e x i s t i n g judgment. the employer the trial of B y r e f e r r i n g t o " e q u i t y " when to pay the a d d i t i o n a l cost court may h a v e b e e n r e l y i n g reformation, which allows a court that of funding ordering t h e MSAT, on t h e e q u i t a b l e to modify within the remedy express terms o f a c o n t r a c t i n cases i n which t h e p a r t i e s a r e m u t u a l l y mistaken as t o a m a t e r i a l f a c t . However, "a c o u r t , i n reforming s u c h a way a s t o r e f l e c t not permitted Nichols to create v. Pate, See A l a . Code 1 9 7 5 , § 8-1-2. a c o n t r a c t , must r e f o r m the parties' a new i n t e n t i o n s ; the court i s contract f o r the [Ms. 2 0 9 0 2 3 2 , J u l y 1 6 , 2 0 1 0 ] 11 i tin parties." So. 3d , 2090822 (Ala. Co. Civ. the that portion of the t r i a l employer This realizes an i m p a s s e . Both Guar. t h e one $18,936.17 as r e q u i r e d , committed Each p a r t y imposing the additional could court issues court settle error f a i l e d to provide f o r the contingency could exceed not grant raised i n this to advise their appeal, dispute; we i ntheir settlement the Based the t r i a l i n c o r r e c t remedy. 12 The of funding request. hold impasse the other. the appropriate only hand, to pay. that i ti s not the province may a legally on The of the i tpromised and, a c c o r d i n g l y , on their on t h e o t h e r the cost either party's the parties f o r imposing that $83,936.17, payment to resolve obligation with the settlement. tendered court t h e MSAT. the parties complying t h e $65,000 the t r i a l p a r t i e s , however, s i m p l y MSAT leaves and t h e employer, to paying requested has we judgment r e q u i r i n g i t s holding hand, Life Ins. Hence, of funding under t h e judgment approving on agreement that parties are f u l l y employee, remains court's to pay the a d d i t i o n a l cost court obligations by Federated v . P a i n t e r , 360 S o . 2 d 3 0 9 , 3 1 1 ( A l a . 1 9 7 8 ) ) . reverse at App. 2010) ( c i t i n g the trial on t h e of this manner to court i n 2090822 The would parties agreed that r e l i e v e the employer future medical undisputed that reason, o f t h e payment expenses. that the establishment Because t h e MSAT h a s n o t b e e n t h e employee maintains continued medical benefits. that the parties of further o f t h e MSAT of t h e employee's the impasse, established, that i t and, i s for he h a s a r i g h t t o However, t h e employer p o i n t s o u t agreed that [i]f [ t h e employer] i s not relieved of a l l obligation t o make further payments to [the employee] f o r worker's compensation benefits, medical and r e h a b i l i t a t i o n expenses, [ t h e employer] r e t a i n s i t s r i g h t t o r e i m b u r s e m e n t u n d e r A l a . Code [1975], § 25-5-11." The of employer maintains payment rights of future under we medical agree § 25-5-11, i t s obligation to that to unilaterally as i t c l a i m s . based solely benefits because pay § 25-5-11(a). still future i t has t h e r i g h t , the future The e m p l o y e r m a i n t a i n s court's 13 retainsi t s i t has n o t y e t been t h e employee's cease paying on t h e t r i a l under the employer e x p e n s e s , we do n o t a g r e e t h a t 11, relieved t o e s t a b l i s h t h e MSAT, i t r e t a i n s t h e r i g h t t o s u s p e n d Although of even i f i t has n o t been i t s o b l i g a t i o n t o p a y f u t u r e m e d i c a l b e n e f i t s b a s e d on t h e failure the that, that relieved medical under § 25-5¬ medical expenses i t has such a r i g h t factual finding that the 2090822 employee the r e c o v e r e d more f r o m h i s t h i r d - p a r t y employer disability In on 624 remand, Bussen expenses employer has "reimbursement" employer only u n t i l third A s was v. BE only employer an party reject may our supreme or c a r r i e r been to prove party settlement that was future medical expenses. Co., I n c . , 736 Madewell, Miller Civ. 829 So. So. 2d 778, 2003); v. and 780 Skilstaf, 14 which 728 So. time the at 624. 2d an e m p l o y e r attributable 878 I n c . v. 2d must third- to h i s or her & Miller Constr. & Miller So. from cases, i n order to ( A l a . C i v . App. Madewell, received r e c o v e r e d from the Miller a medical See Ex p a r t e M i l l e r 2d a t 1105; C o n s t r . Co. App. fairly that, medical after of subsequent employee held So. of f u t u r e payment must resume payment. t h e a m o u n t an 728 future w i t h h o l d payment of f u t u r e m e d i c a l e x p e n s e s , first Co., court as exhausted, in a series 2 d 621 ( A l a . of " s u b r o g a t i o n , " not "credit," withhold argument. So. & K Construction a right or 728 than compensation this the f u t u r e m e d i c a l expenses have made c l e a r We workers' & K C o n s t r u c t i o n Co., an of in medical benefits. 1999), expenses, the paid ( A l a . C i v . App. because right and previously E x p a r t e BE 1998), 2d had settlement C o n s t r . Co. v. 2002); M i l l e r & 1171, Williams, 1174 895 (Ala. So. 2d 2090822 916, 920-21 2004). ( A l a . C i v . App. Thus, the mere 2002), fact aff'd, that an 8 95 So. employee 2d 924 has (Ala. recovered some u n s t a t e d a n d u n c a t e g o r i z e d a m o u n t f r o m a t h i r d p a r t y t h a t exceeds the alone employer for c o m p e n s a t i o n d i s a b i l i t y and m e d i c a l b e n e f i t s does workers' past not entitle amounts p a i d by the employer to the h i s or her withhold payment of medical make a n y finding expenses. In this case, the trial court d i d not as t o t h e t o t a l amount o f t h e e m p l o y e e ' s t h i r d - p a r t y which was kept third-party confidential, recovery that or was payment of h i s f u t u r e m e d i c a l t h a t t h e e m p l o y e r has as the r e q u i r e d by trial present future third the court any the amount o f fairly evidence January 7, The record At the the amount the employer medical expenses recovered by parties. Without producing evidence did attributable employee and from receiving d e t e r m i n a t i o n o f t h e amount o f t h e t h i r d - p a r t y r e c o v e r y attributable employer to cannot the employee's unilaterally future medical withhold 15 the indicates the h e a r i n g h e l d 2010, regarding to a hearing f o r that purpose foregoing caselaw. on employee's attributable expenses. not r e q u e s t e d the recovery, the not to the a fairly expenses, payment by of the the 2090822 employee's future medical expenses. To the contrary, the e m p l o y e r r e m a i n s o b l i g a t e d b y t h e 2003 j u d g m e n t t o c o n t i n u e t o pay of those expenses, unless that By was obligation reserving and u n t i l by t h e t r i a l i t s rights not relieved i t i sexpressly relieved court. under § 25-5-11 of i t s obligation i n the event i t to continue to pay the employee's m e d i c a l expenses, the employer d i d not thereby gain the to unilaterally right employee's future established. terminate expenses medical Therefore, i t s i f t h e MSAT we a f f i r m that right portion to pay the was n o t of the t r i a l c o u r t ' s judgment r e q u i r i n g t h e employer t o c o n t i n u e t o pay t h e employee's medical judgment. The continue not trial paying established. those court i n accordance also medical required expenses We n o t e , h o w e v e r , t h a t , established, employee's future following the Construction expenses the employer's m e d i c a l expenses procedure set out with the 2003 t h e employer until to t h e MSAT i s i n t h e e v e n t t h e MSAT i s obligation may a l s o in Ex to pay the be s u s p e n d e d parte B E & by K C o . , 728 S o . 2 d a t 6 2 4 , a n d i t s p r o g e n y . AFFIRMED Thompson, I N PART; R E V E R S E D I N PART; AND REMANDED. P . J . , and Pittman, concur. 16 Bryan, a n d Thomas, J J . ,

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