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Tate v. Liberty Mutual Insurance Company

Alabama Court of Civil Appeals

June 26, 2015

Pat Tate, as administrator of the estate of Michael C. Traffanstedt, deceased
v.
Liberty Mutual Insurance Company and Dover Corporation d/b/a Heil Corporation

          Appeal from DeKalb Circuit Court. (CV-13-900322).

         THOMAS, Judge., Judge. Thompson, P.J., and Pittman, Moore, and Donaldson, JJ., concur.

          OPINION

Page 469

          THOMAS, Judge.

         In December 2006, Michael C. Traffanstedt entered into an agreement to settle a workers' compensation claim against his employer, Dover Corporation d/b/a Heil Corporation (" Heil" ) (" the 2006 settlement agreement" ). The 2006 settlement agreement provided that future medical benefits would be left open. In 2011, Traffanstedt and Heil entered into a settlement agreement as to his future medical benefits (" the 2011 settlement agreement" ), which was submitted to the trial court for approval, as required by Ala. Code 1975, § 25-5-56, a part of the Alabama Workers' Compensation Act (" the Act" ), Ala. Code 1975, § 25-5-1 et seq. The trial court did not approve the 2011 settlement agreement.

         Traffanstedt again sought approval of a settlement agreement as to his future medical benefits in early 2013 (" the 2013 settlement agreement" ). A hearing before the trial court for its approval of the 2013 settlement agreement had been set for February 6, 2013. Traffanstedt died on February 5, 2013, for reasons unrelated to his work-related injury. Thus, the hearing did not take place.

         Liberty Mutual Insurance Company (" Liberty Mutual" ), the workers' compensation insurance carrier for Heil, had issued a check for $70,000 in satisfaction of the 2013 settlement agreement. The check provided that it could not be negotiated before court approval of the 2013 settlement agreement. After Traffanstedt's death, Liberty Mutual refused to honor the check. Thus, on October 16, 2013, the administrator of Traffanstedt's estate, Pat Tate, sued Heil and Liberty Mutual, seeking a judgment declaring that Liberty Mutual and Heil were bound by the 2013 settlement agreement and alleging breach of contract.

         Tate moved for a summary judgment, and Liberty Mutual filed a cross-motion for a summary judgment; Heil adopted Liberty Mutual's arguments at the summary-judgment hearing. Liberty Mutual and Heil argued that Tate's claims were barred by the exclusivity provisions of the Act, see Ala. Code 1975, § § 25-5-52 and 25-5-53, and that they were not bound by the 2013 settlement agreement because that settlement agreement was not made valid by court approval before Traffanstedt's death. After the trial court considered the arguments of the parties, it entered a summary judgment in favor of Liberty Mutual and Heil. Tate appealed to our supreme court, which transferred the appeal to this court because, it determined,

Page 470

the appeal fell within this court's subject-matter jurisdiction. See Ala. Code 1975, § 12-3-10.

         On appeal, Tate argues that the trial court erred in concluding both that the action was barred by the exclusivity provisions of the Act and that the 2013 settlement agreement was not valid because it had not yet been approved by the trial court. Tate contends that a settlement agreement in a workers' compensation action is treated like any other contract, see Jones v. Ruth, 31 So.3d 115, 118 (Ala.Civ.App. 2009) (construing a settlement agreement " like any other contract" to determine what claims the agreement released); thus, he contends, the 2013 settlement agreement was binding on the parties even though it had not yet been approved by the trial court when Traffanstedt died. To support his contention that the trial court's approval of the settlement before Traffanstedt's death was not necessary to make the settlement valid, Tate chiefly relies on Nationwide Mutual Insurance Co. v. Wood, 121 So.3d 982 (Ala. 2013), in which our supreme court determined that two insurers could not unilaterally withdraw from a settlement of a minor's tort claims after the minor's death despite the fact that the trial court had yet to approve the settlement.

         Liberty Mutual and Heil argue that the trial court correctly determined that the 2013 settlement agreement was not enforceable. They contend that the Act does not permit recovery of medical benefits by a deceased employee's estate and that the exclusivity provisions of the Act prevent Tate from seeking to enforce the 2013 settlement agreement outside the provisions of the Act. Liberty Mutual and Heil also contend that a workers' compensation settlement agreement is not treated like other settlement agreements. Sager v. Royce Kershaw Co., 359 So.2d 398, 400 (Ala.Civ.App. 1978) (" Section 25-5-56 clearly removed settlement of work[ers'] compensation claims from the ambit of principles applicable to the settlement and release of ordinary personal injury claims." ).

          We review a summary judgment de novo; we apply the same standard as was applied in the trial court. A motion for a summary judgment is to be granted when no genuine issue of material fact exists and the moving party is entitled to a judgment as a matter of law. Rule 56(c)(3), Ala. R. Civ. P. A party moving for a summary judgment must make a prima facie showing " that there is no genuine issue as to any material fact and that [it] is entitled to a judgment as a matter of law." Rule 56(c)(3); see Lee v. City of Gadsden, 592 So.2d 1036, 1038 (Ala. 1992). If the movant meets this burden, " the burden then shifts to the nonmovant to rebut the movant's prima facie showing by 'substantial evidence.'" Lee, 592 So.2d at 1038. " [S]ubstantial evidence is evidence of such weight and quality that fair-minded persons in the exercise of impartial judgment can reasonably infer the existence of the fact sought to be proved." West v. Founders Life Assurance Co. of Florida, 547 So.2d 870, 871 (Ala. 1989); see Ala. Code 1975, § 12-21-12(d).

         The statutory provisions relevant to our discussion are all a part of the Act. Sections 25-5-52 and 25-5-53, commonly referred to as the exclusivity provisions of the Act, prohibit any action seeking workers' compensation ...


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