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Secola v. State of Connecticut Comptrollers Office

CASE NO. 1703 CRB-5-93-4



JANUARY 31, 1995









The claimant was represented by John M. Walsh, Jr., Esq., Lynch, Traub, Keefe and Errante, P.O Box 1612, New Haven, CT 06506.

The respondent was represented by Taka Iwashita, Esq., Assistant Attorney General, 55 Elm St., P. O. Box 120, Hartford, CT 06141-0120.

This Petition for Review from the April 8, 1993 Finding and Award of Dismissal of the Commissioner for the Fifth District was heard April 8, 1994 before a Compensation Review Board panel consisting of the Commission Chairman Jesse M. Frankl and Commissioners Angelo L. dos Santos and Nancy A. Brouillet.


JESSE M. FRANKL, CHAIRMAN. The claimant has petitioned for review from the April 8, 1993 Finding and Award of Dismissal of the Fifth District commissioner, in which the trial commissioner dismissed the claimant’s request for approval of a stipulated agreement. The trial commissioner found that the stipulated agreement was executed by the insurance company without knowledge that the claimant suffered from a terminal illness unrelated to her workers’ compensation injury. In support of its appeal, the claimant contends that the commissioner was required by § 31-296 C.G.S. to approve the stipulation which had been executed by the parties.

The pertinent facts are as follows. On or about October 13, 1987, the claimant was injured in an accident which arose in and out of the course of her employment with the Comptrollers Office. The J. Neale MacDonald Company (hereinafter “claims adjuster”) was responsible for adjusting workers’ compensation claims for the employer, which was self-insured. On or about January 25, 1990, the claimant’s treating physician opined that the claimant had reached maximum medical improvement and rated the claimant’s partial disabilities. On February 16, 1990, the claimant’s counsel corresponded with the claims adjuster regarding a demand for settlement. On March 16, 1990, claimant’s counsel reiterated to Melissa Snyder, senior hearing representative for the claims adjuster, the demand for settlement and requested in the alternative the execution of a voluntary agreement. On March 21, 1990, the claimant signed a settlement agreement whereby the claimant agreed to settle her claim for $40,641.22. The claimant, who was in the hospital, signed the agreement by and through Fred J. Secola, who had the power of attorney. Subsequently, on or about March 21, 1990, Snyder signed the said settlement agreement. Subsequent to the signing of the settlement agreement by both parties, the claimant died on March 24, 1990. Snyder testified that she was not aware of the claimant’s terminal cancer when she signed the settlement agreement. Snyder further testified that if she had known that the claimant suffered from terminal cancer, she “probably” would not have settled the claimant’s claim for $40,641.22, but instead would have agreed to pay the voluntary agreement for the approximate amount of $25,000. [Transcript at page 28]

The issue in this appeal is whether the commissioner properly denied the claimant’s request for approval of the signed settlement agreement for $40,641.22.

Connecticut General Statutes § 31-296 states in relevant part:

“If an employer and an injured employee ... reach an agreement in regard to compensation, such agreement shall be submitted in writing to the commissioner by the employer with a statement of the time, place and nature of the injury upon which it is based; and, if such commissioner finds such agreement to conform to the provisions of this chapter in every regard, he shall so approve it.”

In Welch v. Arthur A. Fogarty, Inc., 157 Conn. 538, 545 (1969), our Supreme Court stated: “Approval of such a stipulation by the commissioner is not an automatic process. It is his function and duty to examine all the facts with care before entering an award, and this is particularly true when the stipulation presented provides for a complete release of all claims under the act ... ‘The provisions of the Compensation Act make clear that it is the underlying scheme and purpose of the law to protect the employee, even to the extent of rendering nugatory his own agreement when it fails to assure him of the compensation which the law intends he should have.’ ” Welch, supra, quoting Sugrue v. Champion, 128 Conn. 574, 579 (1942). When stipulations are submitted to the commissioners for approval, it is the practice of the commissioners to question the claimant regarding the effects of the stipulation and to thoroughly examine the underlying facts before approving it. See Mongillo v. Terminal Taxi Co., 1455 CRB-3-92-7 (Decided March 7, 1994).

In the instant case, the claimant had died prior to the submission of the stipulation to the commissioner. The claimant’s act of signing the agreement was witnessed by Fred J. Secola, his wife Ellen Secola, and the claimant’s attorney Carl Secola. [Transcript at p.36] At the hearing before the commissioner on November 23, 1992, the claimant’s counsel requested that an affidavit by Carl Secola, executor of the claimant’s estate, regarding the claimant’s state of mind, be entered into the record. The commissioner denied this request. However, the parties orally agreed to stipulate that Carl Secola was the executor of the estate, and that “in his position he would have found that the stipulation was understood and was acceptable to the Claimant.” [Transcript at p. 49] Neither party contends on appeal to this Board that the claimant was not mentally competent to enter into the stipulation.

The respondents rely on § 31-290c C.G.S. for the proposition that the claimant’s failure to disclose that she suffered from cancer constituted fraudulent nondisclosure such that it “would be an abuse of discretion” for the commissioner to approve it. [Respondent’s Brief at p. 3] The respondents specifically contend that § 31-290c C.G.S. “places the burden of full disclosure on the claimants seeking benefits ...(but) does not impose a corresponding duty to investigate upon the respondent.” [Respondents’ brief at p. 4] We find the respondents’ interpretation of this statute regarding nondisclosure to be overly broad.

Section 31-290c(a) provides in pertinent part: “Any person or his representative who makes or attempts to make any claim for benefits, ... in whole or in part upon ... (2) the intentional nondisclosure of any material fact affecting such claim or the collection of such benefits, shall be guilty of a class C felony....” Unfortunately, the nondisclosure provision of this statute has not been the subject of any reported court decisions. However, the respondents cite Pacelli Bros. Transportation, Inc. v. Pacelli, 189 Conn. 401 (1983) for the proposition that the intentional withholding of information for the purpose of inducing action is equivalent to fraud. The facts in Pacelli, however, are distinguishable in that they involved the fiduciary duty of an officer of a corporation to disclose his misappropriation of the corporate funds. In contrast, in the case at hand, the claimant and the respondents were negotiating a settlement in an adversarial atmosphere, and the subject matter of the alleged nondisclosure was the claimant’s cancer which was unrelated to her workers’ compensation injury. The Rules of Professional Conduct prohibit an attorney from unlawfully obstructing another party’s access to evidence, but do not impose a duty to provide the adverse party with all relevant evidence. See Rule 3.4. We would similarly not interpret § 31-290c C.G.S. to impose a duty on the claimant to voluntarily offer all potentially relevant evidence to the opposing party. In the absence of a specific inquiry by the respondents regarding the claimant’s health, we would not find the claimant’s silence regarding her cancer to constitute an “intentional nondisclosure of a material fact” pursuant to § 31-290c C.G.S.

Based on the commissioner’s April 8, 1993 ruling, we are unable to determine the legal basis on which he denied the claimant’s request for approval of the stipulation. Specifically, the findings of fact do not state that the claimant was guilty of an intentional nondisclosure of a material fact. Rather, the findings merely indicate that the respondents were not aware of the claimant’s cancer. In addition, the findings indicate that the claimant’s “terminal illness had a direct effect on the nature and extent of future benefits for which the (employer) may have liability to pay to the Claimant.”

We question whether the commissioner’s refusal to approve the stipulation was based on his determination that the employer made, in hindsight, an overly generous agreement. Specifically, we question whether the role of the commissioner pursuant to § 31-296 C.G.S. is to protect an employer from a “bad bargain.” Although we are not presently issuing a decision on this issue, we call attention to J&D Masonry, Inc. v. Kornegay, 295 S.E.2d 887, 224 Va. 292 (1982).1 In that decision, the Supreme Court of Virginia addressed an agreement for payment of workers’ compensation benefits between a claimant and a claims adjuster. The adjuster signed the agreement without knowledge that the claimant had been intoxicated at the time of his work-related injury. Subsequent to signing the stipulation, the adjuster discovered medical records regarding the claimant’s intoxication. The court, which denied the employer’s request to revoke the approval of the stipulation, stated the following:

At most, the evidence proves merely a unilateral mistake of fact by the carrier unaccompanied by any fraud attributable to the claimant....the evidence fails to show the claimant ever intentionally concealed such fact from the carrier. There is no evidence the adjuster even asked (the claimant) about his physical condition at the time of the accident, prior to execution of the memorandum of agreement....This is simply a case of inadequate, incomplete, and deficient investigation by the carrier; it is a failure promptly to discover facts that were available to the carrier, even though the attending physician apparently elected not to volunteer them. (footnote omitted)
Id. at 889-890.

As indicated above, we are unable to determine the reason for the commissioner’s denial of the claimant’s request for approval of the signed stipulation. We therefore remand this case to the commissioner for further proceedings in accordance with this opinion.

Commissioners Angelo L. dos Santos and Nancy A. Brouillet concur.

1 We note that in Korpinen v. George A. Tomasso Co., 1700 CRB-8-93-4 (March 14, 1994) this Board granted a claimant’s motion to submit additional evidence regarding the deceased claimant’s intoxication at the time of the work-related injury. In that case, however, we found that the claimant’s failure to produce the evidence at the formal hearing was due to procedural defects in the trial proceedings which denied the claimant due process. In contrast, in the case at hand, and in J&D Masonry, supra, the claims adjuster’s failure to discover available information was not caused by any defect in the agency’s administrative procedure. BACK TO TEXT

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