INDUSTRIAL CLAIM APPEALS OFFICE, Southland Corporation, and Kemper National Insurance Companies, Petitioners, v. Lyndall K. ORTH, f/k/a Lyndall Moon, Respondent.
No. 97SC671
Supreme Court of Colorado.
Sept. 14, 1998.
Rehearing Denied Oct. 19, 1998.
965 P.2d 1246
Justice MARTINEZ delivered the Opinion of the Court.
Contrary to the majority, I would not adopt a per se rule that requires some type of wrongful conduct in order for R.A.S. to recover. As I stated in my dissent in DCB Construction, such a requirement unduly restricts a party‘s ability to recoup its costs and is inconsistent with Colorado case law. See DCB Constr., 965 P.2d at 125. Properly applying Hall and Duggan1 here, I would hold that ample evidence exists showing that Euclid took an active role in or encouraged the improvements which supports the trial court‘s ruling that Euclid was unjustly enriched. Cf. Dan B. Dobbs, Law of Remedies § 12.20(3), at 469-70 (2d ed.1993) (stating that while a subcontractor is not generally allowed restitution against a landowner, a subcontractor is entitled to enforce its claim against any funds still held by the landowner but which are owed to the general contractor).
II.
Even if we were to rely only on the Restatement of Restitution (1937), the facts here support a finding of unjust enrichment because there is evidence that Euclid requested that R.A.S. provide the tenant finish construction. See Restatement of Restitution § 112 (listing “request” as an exception supporting restitution). Euclid‘s request can be inferred from the lease provisions making the Tenant responsible for all tenant finish construction, which would eventually become the property of Euclid. Moreover, Euclid retained the right specifically to approve the improvements and had an agent monitoring the work. Most importantly, Euclid‘s agent specifically informed R.A.S. that it planned on contributing $60,000 to help pay for the construction under certain conditions.
III.
For the foregoing reasons, Euclid was an active participant with regard to the construction and, therefore, should pay for the improvements that it will keep. Based on my dissent in DCB Construction, I would follow the court of appeals’ holding in Hall and would allow the trial court‘s ruling to stand. See Hall, 747 P.2d at 691. There is sufficient evidence in the record supporting the trial court‘s ruling that Euclid was unjustly enriched and should pay R.A.S. for part of the construction. Accordingly, I respectfully dissent.
I am authorized to say that Justice SCOTT joins in this dissent.
Gale A. Norton, Attorney General, Martha Phillips Allbright, Chief Deputy Attorney General, Richard A. Westfall, Solicitor General, Paul Farley, Deputy Attorney General, David M. Kaye, First Assistant Attorney General, John D. Baird, Assistant Attorney General, State Services Section, Denver, for Petitioner Industrial Claim Appeals Office.
White & Steele, P.C., Robert H. Coate, Janice M. Greening, Ali J. Farhang, Denver, for Petitioners Southland Corp. and Kemper National Insurance Co.
Justice MARTINEZ delivered the Opinion of the Court.
This workers’ compensation action concerns the scope of authority granted to a Prehearing Administrative Law Judge (“PALJ“) by the Workers’ Compensation Act. See
I.
Lyndall Orth suffered a compensable injury to her right arm during the course of her employment with the Southland Corporation in January of 1991. A Final Admission of Liability was filed by Southland and its insurer, Kemper National Insurance Company (“Kemper“), on December 20, 1993. Orth petitioned to reopen her claim, in July of 1996, based upon a change in her physical condition. A conference was held in October of that year before a PALJ to discuss settlement of Orth‘s claim. Attorneys for Southland and Kemper were present in the PALJ‘s office. Orth, who was acting pro se, participated via telephone.
A settlement agreement was reached by the parties in which Orth agreed to accept $1500 in consideration for her waiver of all rights to further benefits. As part of this waiver, Orth agreed to relinquish forever the right to petition to reopen her claim, except on the grounds of fraud or mutual mistake of material fact. The settlement agreement also provided that “[t]he Claimant agrees that she will never be able to receive any additional money or benefits even ... if Claimant later feels she made a mistake or error in settling this claim,” and “Claimant is agreeing to this Final Settlement of her own free will, without force, pressure or coercion by anyone.”
The PALJ approved the settlement agreement on October 21, 1996. The PALJ found that Orth had read and signed the settlement agreement, and that she was aware of the benefits which may have been available to her under the Workers’ Compensation Act (the “Act“).
Orth subsequently claimed that the PALJ acted in excess of his authority when he approved the settlement agreement. These allegations were made in a Petition to Review the order of the PALJ, filed on November 12, 1996 through newly retained counsel. Specifically, Orth asserted that: (1) the settlement agreement was contrary to her interests and adverse to her medical rights; (2) she was not adequately advised of the rights she waived in the agreement; (3) the PALJ erred by failing to make a record of the settlement proceedings; (4) the PALJ erred by advocating the interests of the employers and by persuading Orth to enter into the agreement when he knew that she was not represented by counsel; and (5) therefore, the agreement may have been “unconscionable or premature.” By requesting that the PALJ‘s order be set aside, Orth sought to
The Industrial Claim Appeals Office (the “ICAO“) affirmed the PALJ‘s order. First, the ICAO assumed arguendo that an order approving a settlement is reviewable rather than interlocutory. Second, the ICAO determined that, because a PALJ has authority to approve a settlement under section
Orth appealed the ICAO‘s order to the court of appeals. Rather than reach the issues raised by Orth, however, the court of appeals held that the PALJ‘s order was not appealable. See Orth, 942 P.2d at 1369. The court noted that a party to a workers’ compensation case may not petition for administrative or judicial review of an interlocutory order, and found that section
Additionally, the court held that “insofar as claimant‘s assertion that the PALJ exceeded his authority may raise jurisdictional questions, as distinct from a claim of fraud or mutual mistake of fact, those issues may properly be determined in a hearing before an [administrative law judge] pursuant to
The ICAO, Southland and Kemper (collectively, the “Petitioners“) sought certiorari review in this court. The Petitioners contend: (1) a PALJ possesses jurisdiction to approve a settlement; (2) a PALJ‘s order approving a settlement is a final order subject to review; and (3) by allowing Orth to challenge a PALJ‘s jurisdiction to approve settlements in a hearing before an administrative law judge (“ALJ“), the court of appeals created a procedure for setting aside settlements which is not permitted by the Act.
II.
We first address the authority of a PALJ to approve a settlement agreement.
A.
The Act has permitted settlements of workers’ compensation claims since at least 1919. See Industrial Comm‘n v. London Guar. & Accident Co., 66 Colo. 575, 578-79, 185 P. 344, 345 (1919). Currently, the settlement provisions are codified at section
Whether a PALJ, in lieu of the director or an ALJ, may approve a settlement is not addressed in section
“Prehearing administrative law judge” means a qualified person appointed by the director pursuant to section
8-47-101 to preside over prehearing conferences pursuant to this section, to approve settlements pursuant to section8-43-204 , to conduct settlement conferences pursuant to section8-43-206 , and to conduct arbitrations pursuant to section8-43-206.5 .
(Emphasis added.)4 Thus, section
B.
Despite the explicit grant of authority to approve settlements found in section
The Workers’ Compensation Rules of Procedure specifically address approval of a settlement agreement involving a pro se claimant. Rule XI(D)(2) provides that “[w]henever a pro se claimant requests approval of a settlement agreement, ... a settlement proceeding shall be scheduled.” Rule XI(D)(3) states that “[a] settlement proceeding shall be scheduled in the Division of Administrative Hearings at least two days in advance.” Orth asserts that, through Rule XI(D), the director of the Division of Workers’ Compensation has delegated the authority to approve settlements involving pro se claimants to the Division of Administrative Hearings. According to Orth, because a PALJ is not an officer of the Division of Administrative Hearings, but of the Division of Workers’ Compensation, a PALJ has no authority to approve settlements involving pro se claimants.
We do not agree that Rule XI(D) currently has the effect of requiring that an officer of the Division of Administrative Hearings approve a settlement involving a pro se claimant. Rule XI(D) was promulgated before the 1994 adoption of section
Furthermore, we note that Rule XI(D) calls for a settlement proceeding before a hearing officer whenever a pro se claimant seeks to settle his or her claim. A claimant is afforded the opportunity to ask questions and be advised of his or her rights under the Act regardless of whether the proceeding is held before an ALJ or a PALJ. Moreover, neither the Division of Administrative Hearings nor the Division of Workers’ Compensation is a party to the settlement agreement; the officers of both divisions can be expected to afford an impartial settlement procedure. Hence, where a PALJ approves a settlement after reviewing the agreement with the claimant, the purposes of Rule XI(D) appear to be served. Accordingly, we hold Rule XI(D), as presently constituted, does not inhibit a PALJ‘s jurisdiction to approve a settlement agreement involving a pro se claimant.
Orth‘s second argument against the PALJ‘s authority to approve the settlement in this case is founded in the text of the agreement itself. Paragraph nine of the settlement agreement provides, in part, that “this Final Settlement is not binding unless signed by all the parties and approved by a representative of the Division of Administrative Hearings.” Orth maintains that, because the settlement was approved by the PALJ only, and because the PALJ is not a representative of the Division of Administrative Hearings, the settlement is not binding.
Paragraph nine of this agreement appears to conflict with the sections of the Act that allow the Division of Workers’ Compensation to approve a settlement agreement. See
For the foregoing reasons, we hold that a PALJ has jurisdiction to enter an order approving a settlement agreement in a workers’ compensation case.
III.
We now turn to the issue of whether the order of a PALJ approving a settlement is final for purposes of review.
A.
The court of appeals held that the PALJ‘s order approving the settlement agreement is not subject to review because the Act renders all orders entered by a PALJ interlocutory. See Orth, 942 P.2d at 1369. In support of this holding, the court relied exclusively upon the language of subsections (2) and (3) of section
After defining a PALJ as discussed in Part II.A of this opinion, subsection (2) provides for the authority of the PALJ to perform several prehearing functions:
Such prehearing administrative law judges shall have authority to: Order any party to participate in a prehearing conference; issue interlocutory orders; issue subpoenas in the name of the division for production of documentary evidence which shall be served in the same manner as subpoenas in the district court; make evidentiary rulings; permit parties to cause depositions to be taken; determine the competency of any party to claim to enter into a settlement agreement; and strike the application for hearing of a party for failure to comply with any provision of this section.
The court of appeals erred in construing section
B.
In interpreting a statute, a reviewing court must determine and effect the intent of the legislature. See Weld County Sch. Dist. RE-12 v. Bymer, 955 P.2d 550, 554 (Colo.1998). In doing so, a court should afford the language of the statute its plain and ordinary meaning. See Christie v. Coors Transp. Co., 933 P.2d 1330, 1332 (Colo.1997). Where the statutory language is ambiguous, a court may explore various sources of legislative intent, including “the object that the legislature sought to obtain by its enactment, the circumstances under which it was adopted, and the consequences of a particular construction.” Bymer, 955 P.2d at 554 (quoting State Eng‘r v. Castle Meadows, Inc., 856 P.2d 496, 504 (Colo.1993)). Furthermore, because it is presumed that the legislature intended the statute to have just and reasonable effects, a court must construe and apply the statute so as to ensure such results. See
The court of appeals implicitly held that the use of the term “interlocutory” in section
The meaning of “interlocutory” in section
Initially, it is important to recall the source of a PALJ‘s jurisdiction to enter an order approving a settlement. As discussed in Part II of this opinion, a PALJ is authorized to approve settlements by section
In general, an order approving the settlement of a claim is equivalent to an award. See Padilla, 696 P.2d at 279; Harlan v. Industrial Comm‘n, 167 Colo. 413, 418, 447 P.2d 1009, 1011-12 (1968); Brofman v. Industrial Comm‘n, 117 Colo. 248, 251, 186 P.2d 584, 586 (1947). An award is a final order subject to the review provisions of the Act. See
Accordingly, a PALJ‘s order approving a settlement is final unless we discern legislative intent to the contrary. And we discover none.
The General Assembly enacted section
Moreover, the legislative history of Senate Bill 94-193 reveals that the General Assembly provided for prehearing conferences and PALJs in order to reduce the case loads of the ALJs. See House Journal, 59th Gen. Assembly, 2nd Reg. Sess., Vol. 2 at 1723 (May 5, 1994).6 Thus, the primary purpose of section
It follows, therefore, that the great majority of section
In determining the General Assembly‘s intent in using the term “interlocutory” in section
We conclude that the General Assembly intended that the orders of a PALJ that relate to prehearing conferences are not final for purposes of appeal. This construction of the statute comports with the legislative history of section
Additionally, this construction is reasonable in the context of the Act as a whole, and harmonizes sections
Furthermore, treating a PALJ‘s order approving a settlement as final comports with the General Assembly‘s goal of reducing the work load of the ALJs. See also
Finally, we traditionally give deference to the interpretation of a statute adopted by the officer or agency charged with its administration. See Bymer, 955 P.2d at 557. In this regard, we note that the ICAO interprets section
Having determined that the PALJ‘s order approving the settlement in this case is a final order, we now consider the remaining questions in the proper procedural context.
A.
In the instant case, Orth petitioned the ICAO for review of the PALJ‘s order. When acting upon such a petition, the ICAO‘s review is conducted pursuant to the factors described in section
Our review of the ICAO‘s order is conducted pursuant to section
Where, as here, the ICAO adopts the findings of the PALJ, we will defer to the PALJ‘s resolution of conflicts in the evidence, credibility determinations, and plausible inferences drawn from the evidence. See Bymer, 955 P.2d at 558. Therefore, even where the record contains conflicting evidence that may support contrary findings, we will not disturb the ICAO‘s findings if supported by the record. See id.
The record in this case demonstrates, and Orth admits, that the PALJ reviewed the terms of the settlement agreement with Orth before she signed it. Thus, the ICAO‘s conclusion that Orth understood the consequences of the agreement finds adequate support in the record. In addition, we agree with the ICAO that the PALJ‘s order is supported by applicable law. See discussion supra Part II. As a consequence, we may not set aside the ICAO‘s order on appeal.
B.
We next address both the court of appeals’ holding that Orth may raise jurisdictional questions on remand and Orth‘s argument that the PALJ persuaded her to settle her claims and failed to discuss the agreement with her “in person.”
The court of appeals remanded this case for a determination of whether Orth may raise “jurisdictional questions, as distinct from a claim of fraud or mutual mistake of fact,” regarding the PALJ‘s authority to act in this case. Orth, 942 P.2d at 1369. The court held that Orth could raise these questions in a hearing before an ALJ pursuant to section
Furthermore, the ICAO‘s order approving the settlement agreement effectively closed Orth‘s case. See Padilla, 696 P.2d at 279 (stating that an order approving a settlement concludes the case). Thus, any further action in this case must conform to the reopening provisions of section
For similar reasons, we do not reach Orth‘s contention that the PALJ violated section
For the reasons set forth above, we affirm the ICAO‘s order approving the settlement agreement in this case.
V.
To summarize, we hold that a PALJ possesses the jurisdiction to approve a settlement agreement regardless of whether the claimant is acting pro se. We hold further that a PALJ‘s order approving a settlement agreement is final for purposes of review. Therefore, we reverse the judgment of the court of appeals, and remand the case with directions to reinstate the order of the ICAO.
Justice HOBBS dissents.
Justice HOBBS dissenting.
I respectfully dissent. I would affirm the judgment of the court of appeals that set aside the Industrial Claim Appeals Office (ICAO) order with directions for an Administrative Law Judge (ALJ) hearing, but my reasoning differs from that of the court of appeals.
I agree with the majority that the General Assembly has empowered Prehearing Administrative Law Judges (PALJ) to approve final settlement agreements, see
The parties agree that this Final Settlement is not binding unless signed by all the parties and approved by a representative of the Division of Administrative Hearings. The parties agree that should the Division of Administrative Hearings refuse to approve this Final Settlement, the parties shall stand in the same position as if this final settlement had never been prepared, signed or submitted for approval by the Division of Administrative Hearings. Neither the Claimant nor the Respondent shall be deemed to have waived or relinquished any of the rights, claims, privileges, or defenses by having entered into this final settlement unless approved by the Division of Administrative Hearings as is requested in the final Order attached hereto.
Paragraph 11 of the settlement agreement recites that
This Stipulation for Settlement and Final Release of All Claims contains the entire agreement between the parties, and the terms herein are contractual and not a mere recital.
(Emphasis added).
A settlement stipulation between parties is a contract, and we are bound to enforce the plain language of the agreement when its meaning is ascertainable. See USI Properties East, Inc. v. Simpson, 938 P.2d 168, 173 (Colo.1997). Stipulations to settle litigation are an important aspect of the administration of justice; they are enforceable according to their terms. See United States v. Northern Colorado Water Conservancy Dist., 608 F.2d 422, 427 (10th Cir.1979).
The facts of this case are straightforward. The language of the settlement agreement is plain. The attorney for the Southland Corporation (Southland) and Kemper National Insurance Companies (Kemper) prepared the language of the stipulation and chose to include paragraphs 9 and 11. Orth signed the agreement in her pro se capacity. The PALJ approved the settlement agreement on October 21, 1996.
The majority observes that the signature block of the settlement agreement calls for the approval of the Division of Workers’ Compensation, see maj. op. at 1251-1252, thereby creating “confusion or indifference” as to which division should approve it. The majority then holds that the signature of the PALJ is sufficient to make the settlement agreement final and binding, despite the clear language of paragraph 9 to the contrary.
I do not view either the signature block or the PALJ‘s execution of the settlement agreement as creating confusion or indifference. Paragraph 9 is a material term of the agreement between the three parties-Orth, Southland, and Kemper-that the PALJ approved along with all the other terms of the contract. The majority correctly interprets the applicable statutes as providing ALJs and PALJs with settlement authority. Surely, the PALJ‘s settlement authority included approving an agreement whose terms provided that it would not be final and binding on the parties unless approved by an ALJ.
The majority‘s jurisdictional discussion, though correct, misses the point that the PALJ‘s jurisdiction was utilized here to approve a settlement agreement that recited it would not be binding unless “signed by all the parties and approved by a representative of the Division of Administrative Hearings.” Apparently, the Division of Workers’ Compensation had a standing policy, expressed by rule, that pro se claimants in specific contradistinction to represented claimants would have a settlement agreement reviewed and approved by an ALJ.1 This salutary policy allowed pro se claimants to seek advice from counsel regarding the agreement after signing it but before it became binding. If the pro se claimant chose to proceed without counsel, or simply could not retain one, the ALJ would provide a review independent of the Division of Workers’ Compensation.
Here, the claimant chose to retain counsel to review the settlement agreement and, upon advice of counsel, chose to proceed with her claim as if the settlement agreement never existed. She was entitled by the contract‘s plain language to do so, in the absence of ALJ approval, as were the other two parties to the agreement, Southland and Kemper.
The majority suggests that (1) the parties may have intended to improperly alter the jurisdiction of the PALJ, and, (2) the rules of the Division of Workers’ Compensation regarding pro se agreements may be in conflict with the statute. However, the statute plainly directs the division to “adopt rules and regulations as may be necessary to implement the provisions of this section.”
Section
If such settlement provides by its terms that the employee‘s claim or award shall not be reopened, such settlement shall not be subject to being reopened under any provisions of articles 40 to 47 of this title other than on the ground of fraud or mutual mistake of material fact.
Paragraph 5.e.2 of the settlement agreement in this case is such a non-reopener provision. However, under paragraph 9 of the settlement agreement, this provision did not become effective until the entire agreement was approved by an ALJ. Orth sought an ALJ hearing, but the ICAO ruled that the settlement agreement was final and should be enforced. Instead, it should have allowed the ALJ hearing on the compensation claim to proceed.
Thus, while I agree with the majority‘s jurisdictional analysis, and with the proposition that PALJs now have the power to approve final settlement agreements, the agreement in this case simply was not binding because the contract required an additional step to make it final. This step, approval by the ALJ, never occurred. I would enforce paragraph 9 and hold that Orth is entitled to proceed with her compensation claim before an ALJ and that all parties to the agreement are restored to their rights and remedies as provided by the contract.
The court of appeals correctly reversed the ICAO order with directions for an ALJ hearing. I would affirm its judgment based on the foregoing reasons.
Accordingly, I respectfully dissent.
Justice HOBBS
Notes
[1] Whether orders of prehearing administrative law judges approving workers’ compensation settlement agreements pursuant to §§ 8-43-207.5, 3B C.R.S. (1996 Supp.), and 8-43-204, 3B C.R.S. (1986 & 1996 Supp.), are final orders subject only to standards governing the reopening of claims pursuant to § 8-43-303, 3B C.R.S. (1986 & 1996 Supp.).
[2] Whether the court of appeals erred by failing to decide whether Prehearing Administrative Law Judge James Klein had jurisdiction pursuant to § 8-43-207.5 to approve a pro se workers’ compensation settlement agreement.
[3] Whether the court of appeals erred in deciding that a Division of Administrative Hearings Judge had authority to determine at hearing pursuant to § 8-43-207, 3B C.R.S. (1986 & 1996 Supp.) whether a Division of Workers’ Compensation Prehearing Judge exceeded his jurisdiction.
[4] Whether the court of appeals erred by creating a new remedy to set aside workers’ compensation settlement agreements, despite the fact that the legislature has already enacted such a remedy in § 8-43-303. Rule XI(D)(2) of the Workers’ Compensation Rules of Procedure, Department of Labor and Employment, stated that “[w]henever a pro se claimant requests approval of a settlement agreement, ... a settlement proceeding shall be scheduled.” Rule XI(D)(3) states that “[a] settlement proceeding shall be scheduled in the Division of Administrative Hearings at least two days in advance.” Moreover, the Instructions for Filing Settlement Documents with the Division of Workers’ Compensation stated:
Claimant must be represented
The Division of Workers’ Compensation reviews and approves settlement documents only for claimants who are represented by an attorney. If the claimant is not represented, settlement documents must be filed with the Division of Administrative Hearings .... If you have any questions about filing documents with the Division of Administrative Hearings, you may call (303) 764-1401.
The Claimant stipulates and agrees that this claim will never be reopened under the provisions of Section 8-43-303, C.R.S., except on the grounds of fraud or mutual mistake of material fact.
[P]arties cannot by private contract abrogate statutory requirements or conditions affecting the public policy of the state. In the case at bar, as in every other agreement permitted under the Workmen‘s Compensation Statute, the applicable part of the law is an inherent part of any contract between employer and employee whether mentioned or known, and a fortiori modifies it where in conflict therewith.