CASE NO. 5158 CRB-5-06-11
COMPENSATION REVIEW BOARD
WORKERS’ COMPENSATION COMMISSION
OCTOBER 19, 2007
ROBERT S. DROZD
STATE OF CONNECTICUT/DMR SOUTHBURY TRAINING SCHOOL
GAB ROBINS NORTH AMERICA
The claimant was represented by Laura Ondrush, Esq., Dodd, Lessack, Dalton & Dodd, LLC, 700 West Johnson Avenue, Cheshire, CT 06410.
The respondent was represented by Michael Belzer, Esq., Assistant Attorney General, 55 Elm Street, P.O. Box 120, Hartford, CT 06141-0120.
This Petition for Review from the October 19, 2006 Finding and Dismissal of the Commissioner Acting for the Fifth District was heard May 18, 2007 before a Compensation Review Board panel consisting of the Commission Chairman John A. Mastropietro and Commissioners Scott A. Barton and George Waldron.
JOHN A. MASTROPIETRO, CHAIRMAN. The present appeal deals with a regrettable blunder where a party to proceedings before this Commission made an error which caused both the adverse party and the trial commissioner to futilely waste their time. Counsel for the respondent State of Connecticut made representations to the claimant and the trial commissioner that the case had been settled and documents memorializing this settlement were to be prepared for execution. On the day of the hearing to approve the settlement counsel advised the parties his clients did not authorize settlement of the claim. The claimant moved to have the trial commissioner enforce the unexecuted agreement. The trial commissioner issued a Finding and Dismissal denying this relief and advising that a formal hearing on the claim would be required. The claimant has appealed this ruling. While we fully understand the claimant’s exasperation, we uphold the trial commissioner and dismiss this appeal.
The dispute centers around the claimant’s demand for benefits under § 31-307 C.G.S. for total disability as a result of various injuries sustained while in the respondent’s employ. The respondent has denied that the claimant is totally disabled. A number of hearings were held in an effort to resolve this dispute, commencing October 28, 2003 and continuing to March 1, 2004, September 30, 2004 and March 3, 2005. At the March 3, 2005 hearing an agreement was reached to settle the pending claims for a $38,000 cash payment to the claimant while leaving the medical issues open. The claimant traveled from Florida to Connecticut to be canvassed with respect to the settlement. The trial commissioner approved of the terms of the settlement subject to the agreement being memorialized in writing.
The settlement terms were again reported to the trial commissioner at a March 14, 2005 hearing. The trial commissioner anticipated the final agreement would be executed and returned for his signature. The respondent, however, rescinded its offer and counsel for the respondent advised the commissioner he did not have authority to settle.
The trial commissioner held further hearings on this issue of whether a binding agreement had been reached. He concluded it had not for the following reasons:
10) I find that a binding settlement was never entered into between the claimant and the respondent as the settlement was never reduced to writing and officially approved by the undersigned.
11) I do find however the respondent’s actions were not reasonable. The Commissioner’s time and resources, as well as that of the claimant and his attorney, were wasted. The claimant was put at a disadvantage as he traveled to Connecticut to get his day in Court and that never happened. He thought he settled his case.
12) In a case like this where the issues are hotly contested, where many hearings have taken place, where it is reported “on the record” a tentative settlement has been attained, and where the claimant is “canvassed on the record”, everyone, including the Commission, is of the expectation that the necessary authority has been sought and attained. The parties would have been better off going forward on the merits of total disability of the claim on 3-3-05. Now this matter will have to be rescheduled and given the Commissioner’s schedule, it is likely not to take place until 2007- nearly two years after the 3-3-05 formal hearing date.
The claimant appealed based on two grounds: 1) that the trial commissioner erred by not finding that a binding, enforceable agreement had been reached; and/or 2) erred by not finding that the concept of “apparent authority” acted to bind the respondents to their verbal offer. While we find the conduct of the respondents in this episode indefensible, we believe the trial commissioner reached a correct decision on the substance of this dispute.
The claimant asserts error based on two precedents where courts determined an agent had bound their principal under a theory of “apparent authority.” He cites Edart Truck Rental Corp. v. B. Swirsky & Co., 23 Conn. App. 137 (1990) and Hall-Brooke Foundation v. Norwalk, 58 Conn. App. 340 (2000) as authority for forcing the respondent to honor the verbal agreement reached between counsel and the trial commissioner. We note neither case involves Chapter 568. In addition, both cases are distinguishable on the facts from the present situation.
In Edart, supra, the leasing company sued the lessee under the terms of a written contract executed by the lessee’s employee. The court found the lessor had the right to rely on a contract executed under those circumstances, as the lessee’s principal knew of the contract’s existence and had chosen not to obtain a copy. The lessor had already performed the contract by providing a truck for lease which had been damaged while entrusted to the lessee. Id., 138-141. Similarly, in Hall-Brooke, supra, the plaintiff hospital had already rendered treatment to clients forwarded to them by agents of the city. Having received a benefit from a party who relied reasonably on the representations of its employees, the city was barred under a theory of equitable estoppel from refusing to pay for services rendered. Id., 349.
Since in the present case the agreement was renounced by the principal prior to being performed, we do not believe the Edart or Hall-Brooke cases are applicable. We believe a more congruent case is Norwalk v. Board of Labor Relations, 206 Conn. 449 (1988). In that case, an attorney for the city reached an agreement to settle a labor grievance which was subsequently voided by the decision of the city’s board of police commissioners. The Supreme Court pointed out “the rules that govern the determination of apparent authority require an examination of the acts of the principal, rather than that of the agent.” Id., 451. The court concluded that the attorney could not bind the city legally without the board’s approval, which he had not received. Nonetheless, “a municipality may become bound to an agreement, despite its agent’s lack of authority, by a subsequent ratification of the agreement.” Id., 453. In the Norwalk v. Board, supra, case, the agreement was neither ratified by a legal vote nor ratified by performance prior to its renunciation. The present case is a similar circumstance, where a settlement agreement reached between counsel was subsequently withdrawn by the government attorney’s superiors.
In addition, we find the claimant’s demand for relief inconsistent with our statute. The relevant statute, § 31-296 C.G.S., makes clear that this type of agreement is not enforceable until it has been reduced to writing and has been approved by the trial commissioner. The issues involved in Schiano v. Bliss Exterminating Co., 260 Conn. 21 (2002) are illustrative of the issues before us today. In Schiano, we concluded that since a binding agreement had not been executed between the parties that the trial commissioner retained jurisdiction to determine the claim. The Supreme Court upheld this conclusion for the following reasons:
The review board determined that the claim had not been rendered moot and, therefore, that the commissioner had jurisdiction to decide whether the fund was required to pay the penalty on the attorney’s fees pursuant to § 31-303. The review board reasoned: “Under the [act], an agreement between parties concerning the payment of disability benefits, medical expenses, or attorney’s fees is subject to the approval of the trial commissioner. . . . Once the parties have invoked the jurisdiction of this agency, any resolution of pending issues involving the payment of compensation must be ratified by the commissioner in order for it to constitute a binding judgment. A settlement is not self-actuating, and does not by its mere existence implicate the trier’s subject matter jurisdiction. . . . Instead, the parties must present their contractual compromise to judicial authority, so that he or she may review the agreement and consider entering judgment accordingly. . . . This requires that the parties successfully communicate their intent to settle the case before the commissioner releases his decision.” (Citations omitted.) Because there was “no demonstrable proof that the trial commissioner knew or should have known of the parties’ putative settlement before he issued his decision,” the review board concluded that the commissioner had jurisdiction to issue his decision.
We agree with the well reasoned analysis of the review board. See Muldoon v. Homestead Insulation Co., 231 Conn. 469, 480, 650 A.2d 1240 (1994) (“[a]s in the case of a voluntary agreement, no stipulation is binding until it has been approved by the commissioner”); see also General Statutes § 31-296 (requiring commissioner’s approval of voluntary agreements); General Statutes § 31-296a (requiring commissioner’s approval prior to employer’s discontinuance or reduction of payments under oral agreement if employee claims continuing disability). Id., 31-32.
Since there is no dispute that the agreement in the present case was not reduced to writing, we believe that the precedent in Schiano precludes us from attempting to enforce an oral agreement against one of the parties to the agreement. We are mindful that the claimant believes he has been poorly treated by the respondents as a result of their irresolute behavior. Our system does provide appropriate remedies to sanction a respondent who takes unreasonable or dilatory actions contesting a claim.
In Miller v. Hopkins School, 5084 CRB-3-06-4 (June 18, 2007) we dealt with a similar issue, as the respondents argued an oral agreement had been reached to reallocate weekly temporary disability payments against a permanency award, and sought to have this agreement enforced by the trial commissioner. We upheld the trial commissioner’s decision not to enforce the alleged oral agreement. We also upheld the imposition of sanctions against the respondent for an unreasonable contest of liability. “See, e.g., Collazo v. Microboard Processing, 4912 CRB-4-05-1 (January 19, 2006)(absence of memorialized agreement left respondents vulnerable to testimony concerning nature of said agreement, and to finding that their conduct following breach of agreement was unreasonable).” Id. In Collazo, supra, we upheld sanctions under § 31-300 C.G.S. when testimony deemed credible by the trial commissioner was presented “that an agreement was reached to accept the claim, it was breached by the respondents, and their subsequent conduct was unreasonable.”
Therefore, we affirm the trial commissioner’s Finding and Dismissal. Commissioners Scott A. Barton and George Waldron concur in this opinion.