I 

The Attorney General of Texas 

JIM MATTOX 

Attorney General 

Oc,tober 18. 1985 

Supreme Cart Building 

P. 0. Box 12548 

Aus!in. TX. 78711. 2548 

51214752501 

Telex 9101874-1367 

Telecopier 51214750286 

714 Jackson, Suite 700 

Dallas, TX. 752024506 

21417428944 

4824 Alberta Ave.. Suite 160 

El Paso. TX. 799052793 

915/533-3484 

1001 Texas. Suite 700 

HOUS,O~, TX. 77002-3111 

713/223-5886 

806 Broadway. Suite 312 

Lubbock, TX. 79401.3479 

0OW747.5238 

4309 N. Tenth, Bulla B 

McAllen, TX. 78501-1885 

5121602.4547 

ZOO ~sin Plaza, Suite 400 

San Antonio, TX. 782052797 

512f225-4191 

An Equal OppOrlWoit,‘l 

Affirmative Action Employer 

Its. Msrgsret M. Uaiael Opinion No. JM-361 

chsirmsn 

Texas Industrial Accident Board Be: Whether the Industrial AcciFirst Floor dent Board may approve a Cow200 E. Riverside Drive promise Settlement Agreement which 

Austin, Texas 78704 covers OalY future medical 

expenses after liability for coupensation benefits is admitted 

Dear Ms. Haisel: 

You ask two questions about the settlement of workers coepensation claims: 

1. If an injury is one enumerated in article 

8306, section lla, and if the carrier admits 

liability while the case is peuding before the 

Industrial Accident Board and wakes payments, way 

the board japprove a Compromise Settlement Agreement which settles only the future medical 

expenses of such claimant? 

2. If the board has the authority to approve a 

Compromise! Settlement Agreement in such a case, 

may it apIlrove an attorney's fee? 

The Texas Workers' Compensation Law, articles 8306 through 83091, 

V.T.C.S., creates a system which pays compensation and other benefits 

to a worker or a worker's beneficiaries for incapacity or death 

resulting from a work-related injury. Section lla of article 8306. 

V.T.C.S.. sets forth several specific injuries for which "incapacity 

shall conclusively be held to be total and permanent," thus qualifying 

the claimant for lifetime benefits under section 10(b) of article 

8306. 

As will be shown in the discussion to follow, the workers' 

compensation statute13 reflect different treatment for swards of the 

board and for approval by the hoard of Compromise Settlement Agreements . With regsrd, to awards, compensation benefits and medical 

benefits are covered by different atstutes. This is not necessarily 

the csse with regsrcl to Compromise Settlement Agreements; a Compromise 

p. 1654 
Us. Msrgaret M. Maisel - Page 2 (JM-361) 

Settlement Agreement usually attempts to settle liability for both 

compensation benefits and medical benefits. Your question presents an 

anomalous situation where I:be parties wish to settle only medical 

benefits in a Compromise Settlement Agreement. 

Under article 8306, section 7. when an injured worker notifies 

the carrier of a work-relatrd injury, the carrier is obligated to pay 

for such medical expenses 

as may reasonably be required at the time of the 

injury and at an; time thereafter to cure and 

relieve fromFiG%fects naturally resulting from 

the injury. (Empha:sis added). 

See Texas Employers' InsurfEce Association v. Chappell. 494 S.U.2d 

159. 160 (Tex. 1973); Peeples v. Home Indemnity Cornpane, 617 S.W.2d 

274 (Tex. Civ. AppP. - San Antl>nio 1981, no writ). The addition of "at 

any time thereafter" was to provide for medical expenses unlimited as 

to the date at which they become necessary. See Pearce v. Texas 

anployers Insurance Association, 403 S.W.2d 493.496, 498 (Tex. 

-B1966),aff'duriam, 412 S.W.2d 647 (Tex. 1967). 

Civ. 

APPNevertheless, section 5 Iof article 8307 provides, in part: 

Notwithstanding any other provision of this 

law, as amended, no award of the Board, and no 

judgment of the court, having jurisdiction of a 

claim against thr, association for the cost or 

expense of items of medical aid, hospital services, nursing, c'h:lropractic services, medicines 

or prosthetic appliances furnished to an employee 

under circumstances cresting a liability therefor 

on the part of the association under the provisions of this 1~. shall include in such award 

or judgment any cc’st or expense of any such items 

not actually furc.ished to and received by the 

employee prior to Ihe date of said award or judgment. . . . (Emphslsis added). 

Notwithstandina section 5. the Industrial Accident Board and the 

courts have approved Comprtmdse Settlement Agreements which settle 

liability for future medical expenses. 

Indemnity Company, 648 S.U.2i 283, 284 (k%?%&~ kyy z: E:iE$ 

Insurance Company of New Yo$, 577 S.U.2d 35.3. 354 (Tex. civ. App. - 

Houston [14th Dist.] 1979. writ ref'd n.r.e.). These cases. however. 

settlement of all future &dical expenses. Liability for future 

medical expenses is a diiferent question from whether specific 

p. 1655 
ns. Margaret M. Maiael - Page 3 (JM-361) 

expenses are necessary and ressonable. The court in Pearce v. Texas 

Employers Insurance Associst~~on, 403 S.W.2d 493. dealt with the effect 

of section 5 of article 8YF on a Compromise Settlement Agreement 

which settled both liability for and the amount of future ~medical 

expenses with a sum certain. The court held that section 5 did not 

affect the board's authority under section 12 of article 8307 to 

compronise claims for future medical services because section 5 

applies only to "awards" of the board and to judgments of the court. 

403 S.W.2d at 498. In Attorney General Opinion UW-333 (1957), this 

office reached the same conclusion. The Pearce case was affirmed by 

the Texas Suprane Court. !;ee Pearce v. Texas Employers Insurance 

Association, 412 S.W.2d 647 'FEx. 1967). Thus, Compromise Settlceent 

Agreewents serve a different purpose from final awards of the board 

and are therefore subject to different statutes. See 403 S.W.2d at 

498; see also Kinsey v. NortJem Insurance Company3 Nw York. 577 

S.W.2d at 354-55. 

Accordingly, section l:! of article 8307 provides the bosrd's 

basic authority to approve Cmpromise Settlement Agreements. Section 

12 provides in part: 

Where the liabi$ty of the association or the 

extent of the injury of the employee is uncertain, 

indefinite or incltpable of being satisfactorily 

established, the bclard may approve any compromise, 

adjustment, settlenlent or commutation thereof wade 

between the partier;. (Emphasis added). 

Severe and immediate fiasncial need way tempt an injured worker 

to settle a right to lifetimr: benefits for iramediate cash in an awount 

which is inadequate to compensate or to provide medical care for the 

claimant for life. See Walden v. Royal Globe Insurance Company, 577 

S.W.2d 296. 298-99 xxT%v. ,APP. - Beaumont 1978, writ ref'd 

n.r.e.). Clearly, when a c:laimaniV has an uncertain claim, he may 

validly settle for any amount which would be less than the amount of 

lifetime benefits he might receive in an award; this is the nature of 

a Compromise Settlement Agreewent. Some compromises. however, can be 

grossly inadequate, As indicated in Attorney General Opinion WW-333, 

the board has discretion under section 12 in discharging its duty to 

protect injured workers. Consequently, under section 12 the board x 

refuse to approve any settlnwnt which does not adequately protect the 

rights of an injured workaz - See Attorney General Opinion UW-333 

(1957). 

In the instant case, however. we believe that the language of 

section 12 of article 8307. %tself prevents the bosrd from approving a 

Compromise Settlement Agreem'cnt which finally settles only future 

lnedical expenses after thl6 carrier admits liability and nakes 

compensation payments for ML injury enumerated in section lla of 

p. 1656 
Ms. Margaret n. Liaise1 - Page 4 (JR-361) 

I . 

article 8306. Section 12. by its terms. requires uncertainty either 

to (1) liability, or (2) tie extent of the injury. If the carrier 

admits liability for lifetime compensation benefits for au injury 

enumerated in section Lla in:tle the case is pending before the Board 

aud makes payments, It is difficult to conceive how uncertainty can 

still exist as to liabili.ty for necessary and reasonable future 

medical expenses for the iuj~ury. The only question remaining can be 

over the amount of future stadical expenses. i.e., whether specific 

expenses are in fact necessary and reasonable. This question will 

always be "uncertain." Comequently, if we interpreted "uncertainty" 

in section 12 of article 83C7 to cover uncertainty as to the amount of 

specific medical sxpenses, the provision would not limit any 

settlements and would thus bave no purpose. Section lla of article 

8306 establishes that certsLn emmerated injuries are conclusively 

held to be total and pernanra,t; thus it is unlikely that the extent of 

the specific injury, either as to degree or duration, will be 

uncertain. We believe tha.t a disagreement about whether specific 

medical expenses are reag,anable and necessary will not justify 

settlement of all future uel:lcal expenses under section 12 of article 

8307. In light of this result. we do not address your suggestion that 

the prerequisite to settlement of a "disputed" case in section 10(d) 

of article 8306 also applier, to the situation at band. 

Your second question is conditioned upon an affirmative response 

to your first question. Iecause of our negative response to this 

question, we do not reach your second question. 

SUMMARY 

The Industrial A.ccident Board nay not approve a 

Compromise Settleiaent Agreenent when the carrier 

admits liability ‘blefore the board and makes conpensation paynents for an injury enunarated in 

section lla of article 8306. V.T.C.S.. and seeks 

to finally settle only future medical expenses in 

the Compromise Set.tlenent Agreenent. 

Very truly yours J-/h . 

JIn HATTOX 

Attorney General of Texas 

TOMGREEN 

First Assistant Attorney Gereral 

DAVID R. RICHABDS 

Executive Assistant Attorney General 

p. 1657 
r -. 

. a 

Ms. Margaret n. Maisel - Page: 5 (~~-361) 

ROBERT GRAY 

Special Assistant Attorney Gtrueral 

RICK GILPIN 

Chairman, Opinion Comnittee 

Prepared by Jennifer Riggs 

Assistant Attorney General 

APPROVED: 

OPINION COMMITTEE 

Rick Gilpin. ChaiColin Carl 

Susan Garrison 

Tony Gulllory 

Jim Noellinger 

Jennifer Riggs 

Nancy Sutton 

Sarah Woelk 

p. 1658