Case Title: Gibson v. Meadow Gold Dairy

Citation: 2000-Ohio-301

Docket Number: 19990429

State: ohio

Court: Ohio Supreme Court

Date: 2000-03-15T00:00:00Z

Document:
[Cite as Gibson v. Meadow Gold Dairy, 88 Ohio St.3d 201, 2000-Ohio-301.] 
 
 
 
 
 
GIBSON, APPELLEE, v. MEADOW GOLD DAIRY, APPELLANT;  ADMINISTRATOR OF 
WORKERS’ COMPENSATION ET AL., APPELLEES. 
[Cite as Gibson v. Meadow Gold Dairy (2000), 88 Ohio St.3d 201.] 
Workers’ compensation — R.C. 4123.65 requirement that settlements of workers’ 
compensation claims against self-insured employers be in writing and not 
be effective for thirty days after signing applies to claims on appeal to a 
common pleas court under R.C. 4123.512 as well as to claims still at the 
administrative level. 
The requirement of R.C. 4123.65 that settlements of workers’ compensation claims 
against self-insured employers be in writing and not be effective for thirty 
days after signing applies to claims on appeal to a common pleas court under 
R.C. 4123.512 as well as to claims still at the administrative level. 
(Nos. 99-122 and 99-429 — Submitted November 3, 1999 — Decided March 15, 
2000.) 
APPEAL from and CERTIFIED by the Court of Appeals for Franklin County, No. 
98AP-282. 
 
This case presents the question whether a common pleas court may enforce 
an oral settlement of an appeal under R.C. 4123.512 between a workers’ 
compensation claimant and a self-insured employer. The dispute arose in 1995 
 
 
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during the pendency of such an appeal filed by claimant Don Gibson in the 
Franklin County Court of Common Pleas, seeking allowance of additional 
conditions.  During the discovery phase of the case, Gibson reached an oral 
agreement with his former employer, appellant Meadow Gold Dairy, a self-insured 
employer, to settle the case for $5,000.  Approximately three weeks later, after 
Meadow Gold had sent Gibson a stipulation of settlement and release for him to 
execute, Meadow Gold learned that Gibson refused to sign the paperwork, thereby 
withdrawing his consent to the settlement agreement. 
 
Meadow Gold moved for an order directing Gibson to sign the settlement 
agreement, arguing that Gibson had agreed to its terms on the record and, 
therefore, the court could enforce the agreement under the authority of Mack v. 
Poulson Rubber Co. (1984), 14 Ohio St.3d 34, 14 OBR 335, 470 N.E.2d 902.  
Gibson countered that R.C. 4123.65(C) required a signed agreement followed by a 
thirty-day waiting period before the settlement could become binding.  The trial 
court granted the motion and ordered Gibson to execute the agreement and carry 
out its terms.  When Gibson failed to comply with the order, the trial court 
dismissed the case.  Gibson appealed the dismissal, arguing that there had not been 
a binding, enforceable settlement agreement between himself and Meadow Gold. 
 
The Franklin County Court of Appeals reversed the trial court’s decision.  In 
 
 
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its opinion, it stated that R.C. 4123.65 controls settlement of claims even when the 
common pleas court has jurisdiction of a pending claim pursuant to R.C. 4123.512.  
Meadow Gold appealed to this court, and the court of appeals certified a conflict 
between its decision and a decision by the Wayne County Court of Appeals in 
Johnson v. A.R.E., Inc. (Jan. 21, 1998), Wayne App. Nos. 97CA0005 and 
97CA0006, unreported, 1998 WL 46801.  The cause is now before this court upon 
the allowance of a discretionary appeal and upon our determination that a conflict 
exists. 
__________________ 
 
Hochman & Roach Co., L.P.A., Gary D. Plunkett and Cinamon S. Houston, 
for appellee Don Gibson. 
 
Earl, Warburton, Adams & Davis, Andrew S. Adams, Grier D. Schaffer and 
Christopher R. Walsh, for appellant. 
 
Betty D. Montgomery, Attorney General, and Gerald H. Waterman, 
Assistant Attorney General, for appellee Administrator of Workers’ Compensation. 
 
Lee M. Smith & Assoc., Co., L.P.A., Elizabeth P. Weeden and Lee M. Smith, 
for appellee Industrial Commission of Ohio. 
__________________ 
 
COOK, J.  R.C. 4123.651 regulates the settlement of workers’ compensation 
 
 
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claims by providing for administrative review to protect parties against settlements 
that are “clearly unfair” or that constitute “gross miscarriage[s] of justice.”  R.C. 
4123.65(D).  The statute provides that “[n]o settlement agreed to * * * by a self-
insuring employer and the self-insuring employer’s employee shall take effect until 
thirty days after * * * the self-insuring employer and employee sign the final 
settlement agreement,”  and further provides that “[d]uring the thirty-day period, * 
* * the employer or employee, for self-insuring settlements, may withdraw consent 
to the settlement.”  R.C. 4123.65(C). 
 
It also directs “every” self-insuring employer that enters into a final 
settlement agreement with an employee to mail a copy of it within seven days of 
execution to the administrator and the employee’s representative, and mandates 
that the administrator place the copy in the claimant’s file.  R.C. 4123.65(A).  The 
thirty-day waiting period in R.C. 4123.65(C) applies to every settlement agreed to 
by a self-insuring employer and its employee.  And during the thirty-day period, 
which runs from the time the agreement is signed, either party may withdraw 
consent to the settlement. There is no language in the statute excepting settlements 
reached during a .512 appeal. 
 
Though the general rule is that a trial court may enforce a settlement that 
was agreed to by the parties in the presence of the court, regardless of whether it 
 
 
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has been reduced to writing, Mack, supra, 14 Ohio St.3d 34, 14 OBR 335, 470 
N.E.2d 902;  Spercel v. Sterling Industries, Inc. (1972), 31 Ohio St.2d 36, 60 
O.O.2d 20, 285 N.E.2d 324, that general rule is directed at settlements that affect 
only the interests of the parties before the court.  But settlement of workers’ 
compensation cases necessarily affects the interests of the workers’ compensation 
system itself.  Thus, R.C. 4123.65 allows thirty days for administrative review to 
protect those interests. 
 
Gibson, therefore, properly exercised his right to withdraw his consent to the 
agreement as allowed by R.C. 4123.65. The oral settlement never legally bound 
Gibson and thus could not be enforced because Gibson had not signed the 
agreement and, moreover, would have had thirty days from signing to withdraw his 
written consent.  We agree with the court of appeals’ conclusion that the trial court 
incorrectly sanctioned Gibson with dismissal of his case for his failure to sign and 
comply with the oral settlement agreement. 
 
In reaching its decision, the court of appeals stated that R.C. 4123.65 applies 
to all settlements of workers’ compensation claims.  The administrator has asked 
us to rule that, as to employers insured by the State Insurance Fund, the statute 
applies only to settlements at the administrative level, not to settlements reached 
during an appeal under R.C. 4123.512.  We do not address this issue because it is 
 
 
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not properly before us in this case.  Settlements involving state-fund employers are 
referred to in the statute with different language.  For example, the statute applies 
to “every” self-insured settlement, but does not have corresponding language 
encompassing “every” state-fund settlement.  We will thus not render an advisory 
opinion, preferring instead to address the applicability of R.C. 4123.65 to 
settlements involving state-fund employers in a case where that issue is presented 
and briefed. 
 
The necessary holding of the court of appeals below, excluding dicta, was 
that, pursuant to R.C. 4123.65, settlements of claims against self-insured 
employers reached during the pendency of a .512 appeal are not binding until a 
final settlement agreement is signed by the parties and thirty days have passed 
thereafter.  Our decision today affirms that limited holding and does not address 
the enforceability of oral settlements involving state-fund employers. 
 
Finally, Meadow Gold argues that the statute is unconstitutional if it 
postpones the effective date of a settlement agreement reached during a .512 
appeal.  According to Meadow Gold, it violates the doctrine of separation of 
powers by prohibiting a trial court from enforcing a settlement made in a case 
pending before the court.  Further, it abrogates the freedom to contract by 
postponing the date a settlement becomes binding after the parties themselves sign 
 
 
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the agreement.  Meadow Gold failed to raise these constitutional arguments in the 
trial court, so those arguments are waived and we thus do not address them.  See, 
e.g., State v. Awan (1986), 22 Ohio St.3d 120, 22 OBR 199, 489 N.E.2d 277.  Even 
if they were not waived, they are without merit.  First, the statute does not restrict a 
trial court’s power to enforce a binding settlement;  rather, the statute identifies the 
point at which a .512 settlement becomes binding (and, thus, enforceable).  Second, 
because “ ‘ “existing laws [are] read into contracts in order to fix obligations 
between the parties,” ’ ” Middletown v. Ferguson (1986), 25 Ohio St.3d 71, 79, 25 
OBR 125, 132, 495 N.E.2d 380, 387, citing El Paso v. Simmons (1965), 379 U.S. 
497, 508, 85 S.Ct. 577, 583, 13 L.Ed.2d 446, 454, Gibson and Meadow Gold 
implicitly agreed to the conditions of finality set forth in R.C. 4123.65 when they 
initially agreed to settle their .512 appeal. 
 
We hold that the requirement of R.C. 4123.65 that settlements of workers’ 
compensation claims against self-insured employers be in writing and not be 
effective for thirty days after signing applies to claims on appeal to a common 
pleas court under R.C. 4123.512 as well as to claims still at the administrative 
level.  The judgment of the court of appeals is affirmed. 
Judgment affirmed. 
 
F.E. SWEENEY, J., concurs. 
 
 
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DOUGLAS and RESNICK, JJ., concur in the syllabus and judgment. 
 
MOYER, C.J., PFEIFER and LUNDBERG STRATTON, JJ., dissent. 
FOOTNOTE: 
 
1. 
See Appendix for the version of R.C. 4123.65 in effect at the time of 
the events in this case.  See Am.Sub.H.B. No. 107, 145 Ohio Laws, Part II, 3173-
3175.  R.C. 4123.65 was subsequently amended, but the amendments do not affect 
the continuing validity of this decision.  See Sub. H.B. No. 413, 146 Ohio Laws, 
Part III, 4656-4658. 
__________________ 
 
MOYER, C.J., dissenting.  The Industrial Commission denied appellee Don 
Gibson’s claims for allowance of additional conditions allegedly resulting from a 
1986 incident.  Gibson appealed that denial to the common pleas court pursuant to 
R.C. 4123.512. 
 
On November 14, 1995, the parties met for the purpose of taking Gibson’s 
deposition.  Before the deposition began the parties engaged in settlement 
negotiations and orally agreed to settle Gibson’s workers’ compensation claim for 
$5,000.  Gibson specifically authorized his counsel to settle for that amount.  
Thereafter, Gibson’s counsel confirmed the terms of the settlement in a letter to 
counsel for the employer dated November 27, 1995.  The parties made a written 
 
 
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stipulation of these facts and made that stipulation a part of the trial court’s record 
in the R.C. 4123.512 appeal. 
 
This appeal thus presents a single determinative issue: Did the trial court err 
in dismissing Gibson’s R.C. 4123.512 workers’ compensation appeal as a sanction 
for failing to comply with its order to execute documents implementing the oral 
settlement agreement made by the parties on November 14, 1995?  I believe that 
the trial court did not violate applicable law in ordering the plaintiff to implement 
the settlement and that its judgment should therefore be affirmed. 
 
In answer to the certified question, I would hold that settlements entered into 
between a self-insuring employer and an employee during the pendency of an R.C. 
4123.512 appeal in a common pleas court are not subject to the provisions of R.C. 
4123.65, including the thirty-day cooling-off period set forth in R.C. 4123.65(C).  
Accordingly, in my view, R.C. 4123.65 does not provide Gibson with justification 
for disregarding the trial court’s order. 
 
It is well established that trial courts possess power to enforce settlement 
agreements voluntarily entered into by the parties to a lawsuit.  Mack v. Polson 
Rubber Co. (1984), 14 Ohio St.3d 34, 14 OBR 335, 470 N.E.2d 902.  Where 
allegations are made of fraud, duress, or undue influence, or of any factual dispute 
concerning the existence of the terms of such an agreement, the court may conduct 
 
 
10
an evidentiary hearing to determine whether the agreement indeed constitutes a 
valid contract.  Id.  Gibson made no allegation of fraud, duress, or undue influence, 
or of any factual dispute as to the terms of the settlement to which he had 
previously agreed.  He simply changed his mind and decided he did not want to 
settle. 
 
R.C. 4123.65 is not a model of legislative draftsmanship.  Nevertheless, 
review of divisions (D) and (F) of R.C. 4123.65, read in pari materia with other 
workers’ compensation statutes, leads to the conclusion that the General Assembly 
did not intend to establish a thirty-day cooling-off period for settlement of claims 
made against self-insuring employers that have reached the common pleas court by 
a R.C. 4123.512 appeal. 
 
R.C. 4123.65(D) provided:  “At the time of agreement to any final 
settlement * * * agreement between a self-insuring employer and his employee, * * 
* the self-insuring employer, for self-insuring settlements, immediately shall send 
a copy of the agreement to the industrial commission who shall assign the matter to 
a staff hearing officer.  The staff hearing officer shall determine, within the time 
limitations specified in division (C) of this section [thirty days], whether the 
settlement agreement is or is not a gross miscarriage of justice.  If the staff hearing 
officer determines within that time period that the settlement agreement is clearly 
 
 
11
unfair, the settlement agreement is deemed not approved.” 
 
R.C. 4123.65(F) provides, “A settlement entered into under this section is 
not appealable under section 4123.511 or 4123.512 of the Revised Code.” 
 
Gibson argues that R.C. 4123.65 applies even where the workers’ 
compensation proceedings have concluded at the administrative level and are 
pending in the judicial branch.  If Gibson’s position is correct, and the procedural 
protections of R.C. 4123.65 apply to settlements implemented while an R.C. 
4123.512 appeal is pending, then a self-insuring employer has an obligation to 
“immediately * * * send a copy of the agreement to the industrial commission who 
shall assign the matter to a staff hearing officer.”  R.C. 4123.65(D).  Moreover, if 
the staff hearing officer thereafter determines that the settlement agreement is 
clearly unfair, the settlement agreement is deemed “not approved,” and that 
decision, not being appealable pursuant to R.C. 4123.65(F), is final.  Acceptance of 
Gibson’s argument would thus allow an administrative staff hearing officer to 
conclusively disaffirm a judgment of the common pleas court implementing a 
settlement of a workers’ compensation claim between a self-insuring employer and 
its employee. 
 
R.C. 4123.512 confers jurisdiction on courts of common pleas to be the final 
arbiters of disputes as to a worker’s right to participate in the workers’ 
 
 
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compensation system, subject to appeal to the courts of appeals.  Such an appeal to 
a common pleas court divests the Industrial Commission of continuing jurisdiction 
of a worker’s claim.  See State ex rel. Rodriguez v. Indus. Comm. (1993), 67 Ohio 
St.3d 210, 213, 616 N.E.2d 929, 931.  I cannot accept the proposition that the 
General Assembly intended a staff hearing officer of the Industrial Commission to 
have power, in effect, to veto a settlement of a workers’ compensation dispute 
reached while that dispute was subject to judicial supervision.  This conclusion is 
reinforced where, as here, both parties were represented by counsel at the time the 
agreement was reached and the agreement is between a self-insuring employer and 
its employee, so that the agreement likely will have little, if any, effect on the 
integrity of the state workers’ compensation insurance fund. 
 
Because I believe that R.C. 4123.65 contemplates only settlements executed 
during proceedings at the administrative level, I respectfully dissent. 
 
PFEIFER and LUNDBERG STRATTON, JJ., concur in the foregoing dissenting 
opinion. 
APPENDIX 
 
Former R.C. 4123.65 provides in its entirety: 
 
“(A) A state fund employer or the employee of such an employer may file an 
application with the administrator of workers’ compensation for approval of a final 
 
 
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settlement of a claim under this chapter.  The application shall include the 
settlement agreement, be signed by the claimant and employer, and clearly set 
forth the circumstances by reason of which the proposed settlement is deemed 
desirable and that the parties agree to the terms of the settlement agreement 
provided that the agreement need not be signed by the employer if the employer is 
no longer doing business in Ohio.  If a state fund employer or an employee of such 
an employer has not filed an application for a final settlement under this division, 
the administrator may file an application on behalf of the employer or the 
employee, provided that the administrator gives notice of the filing to the employer  
and the employee and to the representative of record of the employer and of the 
employee immediately upon the filing.  An application filed by the administrator 
shall contain all of the information and signatures required of an employer or an 
employee who files an application under this division.  Every self-insuring 
employer that enters into a final settlement agreement with an employee shall mail, 
within seven days of executing the agreement, a copy of the agreement to the 
administrator and the employee’s representative.  The administrator shall place the 
agreement into the claimant’s file. 
 
“(B) Except as provided in divisions (C) and (D) of this section, a settlement 
agreed to under this section is binding upon all parties thereto and as to items, 
 
 
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injuries, and occupational diseases to which the settlement applies. 
 
“(C) No settlement agreed to under division (A) of this section or agreed to 
by a self-insuring employer and his employee shall take effect until thirty days 
after the administrator approves the settlement for state fund employees and 
employers, or after the self-insuring employer and employee sign the final 
settlement agreement.  During the thirty-day period, the employer, employee, or 
administrator, for state fund settlements, and the employer or employee, for self-
insuring settlements, may withdraw his consent to the settlement by an employer 
providing written notice to his employee and the administrator or by an employee 
providing written notice to his employer and the administrator, or by the 
administrator providing written notice to the state fund employer and employee. 
 
“(D) At the time of agreement to any final settlement agreement under 
division (A) of this section or agreement between a self-insuring employer and his 
employee, the administrator, for state fund settlements, and the self-insuring 
employer, for self-insuring  settlements, immediately shall send a copy of the 
agreement to the industrial commission who shall assign the matter to a staff 
hearing officer.  The staff hearing officer shall determine, within the time 
limitations specified in division (C) of this section, whether the settlement 
agreement is or is not a gross miscarriage of justice.  If the staff hearing officer 
 
 
15
determines within that time period that the settlement agreement is clearly unfair, 
the settlement agreement is deemed not approved.  If the staff hearing officer 
determines that the settlement agreement is not clearly unfair or fails to act within 
those time limits, the settlement agreement is approved. 
 
“(E)  A settlement entered into under this section may pertain to one or more 
claims of a claimant, or one or more parts of a claim, or the compensation or 
benefits pertaining to either, or any combination thereof, provided that nothing in 
this section shall be interpreted to require a claimant to enter into a settlement 
agreement for every claim that has been filed with the bureau of workers’ 
compensation by that claimant under Chapter 4121., 4123., 4127., or 4131. of the 
Revised Code. 
 
“(F) A settlement entered into under this section is not appealable under 
section 4123.511 or 4123.512 of the Revised Code.”