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Su Hoang v. Workers' Compensation Appeal Board (Howmet Aluminum Casting

August 20, 2012

SU HOANG, PETITIONER
v.
WORKERS' COMPENSATION APPEAL BOARD (HOWMET ALUMINUM CASTING, INC.), RESPONDENT



The opinion of the court was delivered by: Patricia A. McCULLOUGH, Judge

Submitted: June 15, 2012

BEFORE: HONORABLE RENEE COHN JUBELIRER, Judge HONORABLE PATRICIA A. McCULLOUGH, Judge HONORABLE ROCHELLE S. FRIEDMAN, Senior Judge

OPINION BY JUDGE McCULLOUGH

Su Hoang (Claimant) petitions for review of the November 7, 2011 order of the Workers' Compensation Appeal Board (Board) that affirmed the decision of a workers' compensation judge (WCJ) denying Claimant's review and penalty petitions. For the reasons that follow, we affirm.

Claimant sustained a work-related injury in the nature of right carpal tunnel syndrome on October 5, 2007, while in the course and scope of his employment with Howmet Aluminum Casting, Inc. (Employer). Employer accepted the injury through a notice of compensation payable, and Claimant received benefits in the amount of $557.08 per week based on an average weekly wage of $835.62.

On May 7, 2009, the parties entered into a Compromise and Release (C&R) agreement, (Form LIBC-755, Reproduced Record (R.R.) at 4A-8A), pursuant to which Claimant settled his workers' compensation claim for a lump sum payment of $9,900.*fn1 *fn2 Of this sum, Claimant was to pay $1,900 to Robert Pandeleon, Esquire, in legal fees.

The parties sought approval of the C&R agreement at a hearing before WCJ Beverly Doneker.*fn3 During this hearing, WCJ Doneker, Attorney Pandeleon, and Employer's attorney examined Claimant regarding his understanding of the agreement. With Claimant's son, Lu Hoang, acting as translator, Claimant testified that he understood the C&R agreement. (R.R. at 6A-8A.) Specifically, Claimant stated that he understood that he was giving up his right to any claim for workers' compensation benefits and that "if the Judge approves the settlement that [he] won't be able to come back to [Employer] or the insurance company at a later date for any reason." (R.R. at 7A.) In response to WCJ Doneker's questions, Claimant stated that his son acted as translator when Claimant reviewed the C&R agreement with his attorney and that he was satisfied that all his questions were answered. (R.R. at 9A-10A.) Accordingly, WCJ Doneker found that Claimant understood the legal significance of the agreement and issued a decision on May 8, 2009 approving the C&R agreement. (R.R. at 3A.)

Thereafter, on June 19, 2009, Attorney Pandeleon sent Claimant a letter informing him that a Dr. Nickischer was having trouble receiving payment for a medical bill. (R.R. at 9A.) However, Attorney Pandeleon assured Claimant that, under the terms of the settlement, all past medical bills should have been paid. (Id.) On April 30, 2010, Attorney Pandeleon sent Employer's counsel a medical bill from the offices of Dr. William O'Brien, showing a total balance due of $37,674, along with a cover letter stating that Claimant believed Employer had paid all the medical bills at the time of the settlement. (R.R. at 10A-19A.) On May 6, 2010, Attorney Pandeleon sent Employer's counsel another letter claiming to restate a telephone conversation in which Employer's counsel admitted to being unaware of the outstanding bill at the time of the settlement and stated that he was told that the treatment at issue was not related to the work injury. (R.R. at 20A.)

On March 23, 2010, Claimant filed review and penalty petitions, which were assigned to WCJ Bruce K. Doman and decided on documents. In support of his petitions, Claimant argued that the WCJ should rescind the C&R agreement based on a mutual mistake of fact, since, Claimant alleged, both parties were mistaken as to the fact that medical bills remained unpaid as of May 7, 2009. However, the WCJ rejected Claimant's mutual mistake argument, noting that there was no direct evidence that Employer was mistaken at the time the C&R agreement was executed. The WCJ also observed that there had been no discussion of medical expenses at the hearing before WCJ Doneker. Moreover, the WCJ pointed out that the C&R agreement did not contain language acknowledging that all reasonable and necessary medical bills had been paid. Noting that most C&R agreements contain such language, the WCJ found its absence in this agreement "telling."*fn4 (WCJ's op. at 5.) Further, the WCJ found that Claimant offered no evidence that Employer violated the Act. Concluding that the C&R agreement resolved all issues related to Claimant's claim, the WCJ denied Claimant's review and penalty petitions.

Claimant appealed the WCJ's decision to the Board. Specifically, Claimant asserted that the WCJ's Findings of Fact Nos. 7, 8, and 9 (that the C&R agreement did not require Employer to pay the medical bill, that Claimant offered no evidence that Employer violated the Act, and that Claimant offered no credible evidence to demonstrate a mutual mistake of fact), and the WCJ's Conclusion of Law No. 2 (that all issues related to Claimant's claim were resolved by the C&R agreement), were "in error." (R.R. at 12A.) Claimant also contended that the WCJ failed to address Claimant's arguments concerning unilateral mistake and inconsistent contractual terms. Claimant argued that, for these reasons, the WCJ's decision was deficient and the case should be remanded.

However, the Board agreed with the WCJ that Claimant failed to produce clear evidence that Employer was mistaken as to the unpaid bills or that Employer knew of a unilateral mistake on Claimant's part. The Board also rejected Claimant's argument that Paragraphs 13 and 18 of the C&R agreement were contradictory and noted that the language in Paragraph 18 of the C&R agreement explicitly states that it "resolves all indemnity and medical." Like the WCJ, the Board found it significant that the C&R agreement did not ensure the payment of medical bills. Accordingly, the Board affirmed the WCJ's decision.

On appeal,*fn5 Claimant argues that this Court should rescind the C&R agreement based on a mutual mistake of fact regarding the unpaid medical bills. Alternatively, Claimant argues that the C&R agreement should be rescinded based on a unilateral mistake of fact, asserting that Employer had good reason to know of Claimant's mistake and that enforcement of the C&R agreement would be unconscionable. Claimant also argues that there are inconsistent terms in the C&R agreement requiring this Court to construe the agreement in his favor.

According to Claimant, credible evidence established that both parties were mistaken regarding the fact that medical bills remained unpaid as of May 7, 2009. Claimant argues that this fact is material and has a material effect on the parties' bargain because the medical bills are substantial and Employer was obligated to pay them under the Act. Based on these assertions of mutual mistake, Claimant argues that this Court should rescind the C&R agreement.

Courts may rescind a compromise and release agreement based on a clear showing of fraud, deception, duress, or mutual mistake. North Penn Sanitation, Inc. v. Workers' Compensation Appeal Board (Dillard), 850 A.2d 795, 799 (Pa. Cmwlth. 2004).*fn6 However, the party seeking to set aside the agreement has the burden of proof, and the test to set aside a compromise and release on the basis of mistake is more stringent than for fraud or duress. Id. Indeed, evidence demonstrating a mutual mistake must be clear, precise and indubitable. Thrasher v. Rothrock, 377 Pa. 562, 105 A.2d ...


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