Title: State ex rel. Wise v. Ryan

State: ohio

Issuer: Ohio Supreme Court

Document:

[Cite as State ex rel. Wise v. Ryan, 118 Ohio St.3d 68, 2008-Ohio-1740.] 
 
 
 
 
THE STATE EX REL. WISE, APPELLANT, v. RYAN, ADMR., ET AL., APPELLEES. 
 [Cite as State ex rel. Wise v. Ryan, 118 Ohio St.3d 68, 2008-Ohio-1740.] 
Workers’ compensation — Continuing jurisdiction — Language of R.C. 
4123.65(A) is mandatory and requires strict compliance — Judgment 
reversed. 
(No. 2007-0660 – Submitted February 5, 2008 – Decided April 16, 2008.) 
APPEAL from the Court of Appeals for Franklin County,  
No. 05AP-872, 2007-Ohio-932. 
__________________ 
Per Curiam. 
{¶ 1} At issue is the validity of appellant Robert D. Wise’s 1997 
settlement of his workers’ compensation claim.  After Wise fractured his leg at 
work, his claim was allowed for “fracture left tibia — closed.”  In November 
1995, he  underwent surgery for that condition and was told that he was at risk for 
posttraumatic arthritis. 
{¶ 2} Wise received temporary total disability compensation and 
continued to be treated for the condition.  One year after the injury, his attending 
physician stated, “As far as long term, I think that his left knee will not be normal.  
He is going to have a slight amount of valgus instability in the left knee secondary 
to the depression of the fracture, as well as more than likely an earlier onset of 
arthritis secondary to the trauma, than he will on the other side.  The onset of this 
is unknown as far as time goes and he can follow this along through his life.” 
{¶ 3} In April 1997, Wise received a letter from his employer’s third-
party administrator:   
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{¶ 4} “Upon discussing this claim with the employer, it is our mutual 
opinion that a full and final settlement may be in your best interest.  Settlement 
takes into account the future costs and available awards.  We are prepared to offer 
$2,000 as a full and final settlement.  Please let us know if you are in agreement 
with this settlement amount by signing the enclosed application * * *.  The 
application will then be filed with the Bureau of Workers’ Compensation. 
{¶ 5} “When the Bureau has reviewed our agreement, an order will be 
issued and sent to all parties.  Approximately 30 days after the order is mailed, a 
check will be sent to you as a full and final settlement.  This will mean a final 
closure of this claim against [the employer].” 
{¶ 6} Wise was given a standard “Settlement Agreement and/or 
Application for Approval of Settlement Agreement” form used by appellee 
Bureau of Workers’ Compensation.  The form instructed the parties to “clearly set 
forth the circumstances by reason of which the proposed settlement is deemed 
desirable,” a requirement of R.C. 4123.65(A), which addresses applications for 
approval of final settlements.  In this instance, that section of the form was left 
blank. 
{¶ 7} Wise signed the form on June 2, 1997.  At the time of signing, 
Wise, who has an IQ of 72 and reads at a fourth-grade level, was not represented 
by counsel. 
{¶ 8} The bureau approved the settlement agreement the next month.  
Five years later, Wise, through newly retained counsel, moved to vacate the 
agreement based on Wise’s lack of representation and competency at the time of 
signing. 
{¶ 9} A district hearing officer for appellee Industrial Commission of 
Ohio denied the motion.  She found that Wise had not established any of the 
prerequisites necessary to invoke the commission’s continuing jurisdiction under 
R.C. 4123.52.  She also found that the third-party administrator’s letter to Wise 
January Term, 2008 
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satisfied the requirements of R.C. 4123.65(A) “to clearly set forth the 
circumstances by reason of which the proposed settlement is deemed desirable” 
and finally found that Wise was competent enough to understand the terms of the 
agreement at the time of signing and had also had guidance from his father. 
{¶ 10} Wise appealed and presented for the staff hearing officer’s review 
a mental-function-capacity evaluation prepared by Dr. Beal D. Lowe.  Dr. Lowe 
concluded that Wise was incapable of “understand[ing] the consequences and 
ramifications of his signature to the Settlement Agreement.” 
{¶ 11} The staff hearing officer affirmed the district hearing officer.  
While the staff hearing officer made no further finding on the questions of 
continuing jurisdiction or the adequacy of the agreement, he did find Wise 
competent to enter into the settlement agreement and gave reasons for that 
finding. 
{¶ 12} On November 14, 2002, the commission heard Wise’s appeal.  
Two commissioners voted to affirm the decision of the staff hearing officer, 
stating: 
{¶ 13} “[T]he * * * Commission * * * does not have authority to invoke 
continuing jurisdiction for the reason that the injured worker failed to meet his 
burden of proving that the Staff Hearing Officer order of 07/08/2002 contained a 
mistake of fact or law of such character that remedial action would clearly follow.  
The Staff Hearing Officer stated, ‘There is no evidence that any party, the Bureau 
of Workers’ Compensation or the employer tried to take advantage of the injured 
worker by settling the claim.’  More specifically, the Industrial Commission finds, 
pursuant to the provisions of R.C. 4123.65, that the injured worker failed to 
provide sufficient evidence that the settlement agreement was ‘clearly unfair’ or a 
‘gross miscarriage of justice.’  There is no basis, therefore, for the commission to 
invoke its continuing jurisdiction.” 
{¶ 14} A dissenting commissioner wrote: 
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{¶ 15} “The Ohio Supreme Court has recently and clearly stated that all 
the requirements specifically enumerated in R.C. 4123.65 must be strictly adhered 
to before a settlement of a workers’ compensation claim can legally be 
effectuated. * * *  In the instant case, one requirement has not been met.  
Therefore, no valid settlement has taken place in this claim. 
{¶ 16} “R.C. 4123.65 states that a settlement application ‘shall * * * 
clearly set forth the circumstances by reason of which the proposed settlement is 
deemed desirable(.)’ ([E]mphasis added.)  The wording of R.C. 4123.65 
unambiguously requires that the parties explain, in the settlement application, why 
they wish to settle the claim.  It is undisputed that this criterion has not been met 
in this case. * * *   
{¶ 17} “R.C. 4123.65 requires that the settlement agreement be sent to the 
Commission, who shall send such to a staff hearing officer, and that ‘The staff 
hearing officer shall determine * * * whether the settlement agreement is or is not 
a gross miscarriage of justice.’  It is impossible for a hearing officer to determine 
whether a settlement of a claim is unjust when no rationale is provided that 
justifies settling the claim. 
{¶ 18} “It could be argued that this is precisely the type of case the 
legislature had in mind when it mandated that the parties to a settlement 
application provide the reasons why the parties feel settling a workers’ 
compensation claim would be beneficial to them.  The claimant in the instant case 
is mentally retarded and went through school in the special education program.  
The claimant has a fourth grade comprehension level, but the settlement 
agreement at issue is obviously written in legal wording that is well beyond that 
which could be read and understood by a fourth-grader.  Therefore, for the minor 
sum of $2,000, the claimant assigned away his rights to his workers’ 
compensation claim despite the fact that the claimant has already received 
$14,000 in medical treatment and $3,500 in compensation in this claim and 
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despite the fact that the medical evidence shows that the claimant will likely 
suffer lifelong medical problems due to the serious injuries he sustained on 
account of this industrial accident.  The claimant was unrepresented at the time he 
signed the settlement agreement and the undisputed testimony and medical 
evidence produced at hearing shows that the claimant lacked the intellectual 
capacity to read, let alone understand, the settlement agreement he signed.” 
{¶ 19} In mandamus, the Court of Appeals of Franklin County upheld the 
commission’s order.  The court conceded that the agreement did not comply with 
R.C. 4123.65(A), but held that the noncompliance was irrelevant, given the staff 
hearing officer’s review of the settlement’s fairness pursuant to R.C. 4123.65(D).  
The court of appeals also found that the competency determination was supported 
by evidence. 
{¶ 20} This cause is now before this court on Wise’s appeal as of right. 
{¶ 21} To invoke the continuing jurisdiction necessary to revisit the staff 
hearing officer’s 1997 settlement approval, one of five prerequisites must be met:  
(1) new and changed circumstances, (2) fraud, (3) clear mistake of fact, (4) clear 
mistake of law, or (5) error by an inferior tribunal.  State ex rel. Nicholls v. Indus. 
Comm. (1998), 81 Ohio St.3d 454, 459, 692 N.E.2d 188.  In this case, the 
approval of a settlement application that did not comply with the mandates of 
R.C. 4123.65(A) satisfies the fourth and fifth prerequisites.  Accordingly, the 
commission not only had continuing jurisdiction to reexamine the settlement 
agreement, but was required upon review to set it aside. 
{¶ 22} R.C. 4123.65(A) states that a settlement application “shall * * * 
clearly set forth the circumstances by reason of which the proposed settlement is 
deemed desirable.”  It is undisputed that the settlement application did not do so.  
Both the commission and the court of appeals, however, disregarded this 
language, focusing instead on R.C. 4123.65(D): 
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{¶ 23} “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 determines that the settlement agreement is not clearly unfair or fails to act 
within those time limits, the settlement agreement is approved.” 
{¶ 24} The commission and court of appeals reasoned, in effect, that so 
long as the settlement agreement is “not clearly unfair” or a “gross miscarriage of 
justice,” the requirements of R.C. 4123.65(A) are irrelevant.  This view cannot be 
endorsed.  R.C. 4123.65(A)’s language is mandatory, not permissive.  We have, 
moreover, indicated that the requirements of R.C. 4123.65 demand strict 
compliance. 
{¶ 25} State ex rel. Jones v. Conrad (2001), 92 Ohio St.3d 389, 750 
N.E.2d 583, considered R.C. 4123.65(C)’s requirement that written notice of an 
employer’s intent to withdraw consent to settle be sent to the bureau administrator 
and the claimant.  The employer did not send written notice to the claimant, who 
eventually filed a mandamus petition to compel enforcement of the agreement.  
We held for the claimant, writing: 
{¶ 26} “The rule is that when the language of a statute is plain and 
unambiguous and conveys a clear and definite meaning, there is no need to apply 
the rules of statutory interpretation. * * *  ‘In such a case, we do not resort to rules 
of interpretation in an attempt to discern what the General Assembly could have 
conclusively meant or intended in * * * a particular statute – we rely only on what 
the General Assembly has actually said.’  Muenchenbach v. Preble Cty. (2001), 
91 Ohio St.3d 141, 149, 742 N.E.2d 1128, 1134 (Moyer, C.J., dissenting). 
{¶ 27} “R.C. 4123.65(C) unquestionably required the employer to notify 
Jones in writing of its intent to withdraw consent from this settlement agreement.  
Absent such notice, the settlement agreement became valid upon expiration of the 
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cooling-off period, and Jones was entitled to enforce it.”  Id. at 392, 750 N.E.2d 
583. 
{¶ 28} In the proceedings at bar, R.C. 4123.65(A) unquestionably 
mandates the written enumeration of the circumstances favoring settlement.  
Under Jones, noncompliance is not inconsequential, nor is it excused by a staff 
hearing officer’s review of the agreement.  It is indeed impossible for a hearing 
officer to evaluate whether settlement is just when there is no reasoning provided 
that justifies settlement. 
{¶ 29} Accordingly, we hold that the commission abused its discretion 
both in refusing to invoke continuing jurisdiction and in upholding the validity of 
a settlement agreement that did not satisfy R.C. 4123.65(A).  In so holding, we 
find it unnecessary to address the issue of Wise’s competency to settle his claim. 
{¶ 30} The judgment of the court of appeals is reversed. 
Judgment reversed. 
MOYER, 
C.J., 
and 
PFEIFER, 
LUNDBERG 
STRATTON, 
O’CONNOR, 
O’DONNELL, and LANZINGER, JJ., concur. 
CUPP, J., concurs in judgment only. 
__________________ 
Thompson, Meier & Dersom and Adam H. Leonatti, for appellant. 
Marc Dann, Attorney General, and Derrick L. Knapp, Assistant Attorney 
General, for appellees. 
______________________