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 IndustrialAcciFirst Floor dent Board may approve a Cow200 E. Riverside

Drive promiseSettlement Agreement

which Austin,Texas 78704 covers OalY future medical expensesafter liabilityfor coupensation

benefitsis admitted
Dear Ms. Haisel:
You ask two questions about the settlement of workers coepensation claims:
1. If an injury is one enumeratedin article

8306, section lla, and if the carrier admits liabilitywhile the case is peuding before the Industrial

AccidentBoard and wakes payments, way the board japprove

a CompromiseSettlementAgree

### ment which settles only the future medical expenses

of such claimant? 2. If the board has the authority to approvea Compromise!

Settlement

Agreement in such a case, may it apIlrove

an attorney's

fee? The Texas Workers'Compensation Law, articles

8306 through83091, V.T.C.S.,createsa systemwhich pays compensation and other benefits to a worker or a worker's beneficiariesfor 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 CompromiseSettlementAgreements
. With regsrd, **to** awards, compensation benefits and medical benefits are **covered** by differentatstutes. This is not necessarily the csse with regsrcl to Compromise

Settlement

Agreements;

a Compromise

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

Settlement

Agreement usually attempts to settle liability for both compensation

benefitsand medicalbenefits. Your question presents

an anomalous situationwhere I:be parties wish to settle only medical benefits in a Compromise Settlement

Agreement. Under article 8306, section 7. when an injuredworker notifies the carrierof a work-relatrd injury,the carrier is obligated to pay for suchmedical expenses

as may reasonably

be requiredat 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' InsurfEceAssociation v. Chappell. 494 S.U.2d 159. 160 (Tex. 1973); Peeplesv. 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 anployersInsurance Association,

403 S.W.2d 493.496, 498 (Tex. -B1966),aff'duriam, 412 S.W.2d 647 (Tex. 1967). Civ.APPNevertheless, section5 Iof

article8307 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 crestinga liability therefor on the part of the association under the provisions of this 1~. shall include in such award or judgmentany cc’st or expenseof 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 AccidentBoard and the courts have approved ComprtmdseSettlementAgreementswhich settle liabilityfor futuremedical **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 [14thDist.] 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. 1655ns. Margaret M. Maiael - Page 3 (JM-361)

expensesare **necessary** and ressonable. The court in Pearce v. Texas Employers

Insurance

**Associst~~on,** 403 S.W.2d493. dealtwith the effect of section 5 of article 8YF on a CompromiseSettlement 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 authorityunder 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 OpinionUW-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 Agreewentsserve a different purpose from final awards of the board and are thereforesubject to differentstatutes. See 403 S.W.2d at 498; see also Kinsey v. NortJem Insurance Company3 Nw York. 577 S.W.2dat 354-55. Accordingly,**section** l:!of article 8307 provides the bosrd's basic authorityto approveCmpromise Settlement Agreements. Section 12 providesin part:

Where the liabi$ty of **the** association or the extentof **the** injury of the employeeis uncertain, indefinite or incltpable of being satisfactorily established,

the bclard

may approveany compromise, adjustment,

settlenlent

or commutation

thereof

wade between the partier;. (Emphasis added).
Severe and immediatefiasncial need way tempt an injuredworker to settlea right to lifetimr: benefitsfor iramediate cash in an awount which is inadequate to compensate

or to providemedical care for the claimantfor 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

GeneralOpinion

WW-333, the board has discretion under section 12 in discharging its duty to protect injured

workers. Consequently, under section 12 the boardx refuse to approveany settlnwnt which does not adequately protectthe 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 article8307. %tselfprevents**the** bosrd from approving a Compromise SettlementAgreem'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. 1656Ms. Margaret 

### n. Liaise1

- Page 4 (JR-361) I

.

article 8306. Section 12. by its terms. requiresuncertainty 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 pendingbefore the Board aud makes payments, It is difficultto conceive how uncertainty

can still exist as to liabili.ty for necessary and reasonable future medical expensesfor the iuj~ury. The only questionremaining can be over the amount of future stadical expenses. i.e., whether specific expenses are in fact necessary and reasonable. This questionwill alwaysbe "uncertain." Comequently, if we interpreted "uncertainty" in section 12 of article83C7 to coveruncertainty 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 establishesthat certsLn emmerated injuries are conclusively held to be total and pernanra,t; thus it is unlikelythat the extent of the specific injury, either as to degree or duration, will be uncertain. We believe tha.ta disagreement about whether specific medical expenses are reag,anable and necessary will not justify settlement

of all futureuel: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 article8306 also applier, to the situation

at band.
Your second questionis conditioned upon an affirmative response to your first question. Iecause of our negative response to this question,

we do not reachyour secondquestion.
SUMMARY The Industrial

A.ccident

Boardnay not approvea CompromiseSettleiaent Agreenentwhen 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 futuremedical expensesin the Compromise

Set.tlenent

Agreenent. Very trulyyours 

# J-/h

. 

### JIn HATTOX Attorney

Generalof Texas
TOMGREEN FirstAssistant

Attorney

Gereral
DAVID R. RICHABDS Executive

Assistant

**Attorney** General

p. 1657r -.

. a Ms. Margaret 

### n. Maisel - Page:

5 (~~-361)

ROBERTGRAY Special

Assistant

Attorney

Gtrueral
RICK GILPIN Chairman,

OpinionComnittee Prepared

by Jennifer

Riggs Assistant

**Attorney** General
APPROVED: OPINIONCOMMITTEE Rick Gilpin.ChaiColin Carl Susan Garrison Tony Gulllory Jim Noellinger Jennifer

Riggs Nancy Sutton SarahWoelk

p. 1658