NO. 84-554 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1985 

LEWIS L. BOWEN, 

Claimant, 

-vsTHE ANACONDA COMPANY, 

Employer, Defendant and Appellant. 

APPEAL FROM: The Workers' Compensation Court of the State of 

Montana, The Honorable Timothy R.eardon, Judge 

presiding. 

COUNSEL OF RECORD: 

For Appellant: 

Andrew J. Utick argued, Helena, Montana 

For Respondent: 

R. Lewis Brown argued, Butte, Montana 

For Amicus Curiae: 

Steve Shapiro, Helena, Montana 

Filed: 

Submitted: October 23, 1985 

Decided: February 13, 1986 

Clerk 
Mr. Justice John Conway Harrison delivered the Opinion of the 

Court. 

This is an appeal from a judgment of the Workers' 

Compensation Court of the State of Kontana. Respondent Lewis 

Bowen (hereinafter Bowen) entered into a full and final 

compromise settlement a-greement with the Anaconda Company, 

appellant, which purported to settle his claim for injuries 

sustained on October 25, 1974 and March 3, 1977, while 

working for the Anaconda Company. Bowen subsequently 

petitioned the Workers' Compensation Court to reopen his 

compromise settlement with the Anaconda Company claiming that 

the agreement only settled his claim for injuries sustained 

in 1974, and did not cover his injuries sustained in 1977. 

The Workers' Compensation Court agreed with Bowen and this 

appeal followed. We affirm. 

Rowen was employed by the Anaconda Company a-t its 

copper smelter in Anaconda, Montana. While so employed, 

Bowen suffered two industrial accidents to his back on 

October 25, 1974 and on March 3, 1977. The Anaconda Company 

accepted liability for Bowen's injuries and paid temporary 

total disability benefits and medical benefits for both 

accidents in accordance with Montana law. 

On July 23, 1981, Bowen, without the assistance of his 

counsel of record, entered into a petition for full and final 

compromise settlement with Marilyn Nelson, Anaconda's 

Workers' Compensation adjuster, in which Bowen agreed to 

accept $14,175 thereby alleged]-y settling both his claims 

against the Ana.conda Company. The body of the settlement 

agreement provided in pertinent part as follows: 

The undersianed was accidentally injured 

on October i5, 1974 while employed by The 

Anaconda Company an employer enrolled 
under Compensation Plan No. I of the 

Montana Workers1 Compensation Act. The 

claim was filed and accepted by the 

insurer for the payment of any 

compensa.tion and medical benefits due. 

The total compensation paid to date is 

$16,272.14. 

The total medical and hospital benefits 

paid to date are $7,025.61. 

A controversy exists between this 

claimant and insurer over the amount and 

duration of compensation. This 

controversy has been resolved by an 

agreement between the claimant and 

insurer wherein the claimant agrees to 

accept the sum of fourteen thousand one 

hundred seventy five and no/100 

($14,175.00) in a lump sum (unless such 

payments are otherwise directed to be 

paid biweekly by the Division) in a full 

and final compromise settlement, which 

represents compensation for 175 weeks. 

Further medical and hospital benefits are 

expressly hereby reserved by the 

claimant, unless otherwise indicated in 

this petition. 

The claimant hereby petitions the 

Division of Workers1 Compensation, with 

the concurrence of the above named 

insurer, for approval of this petition 

and that the case be fully and finally 

closed on the basis set forth above. The 

claimant understands that if this 

petition is approved, the claim is 

forever closed, and can never again be 

reopened. 

The petition for compromise settlement was then 

forwarded to the Division of Workers1 Compensation for 

approval as required by law. The Division reviewed the 

document and discovered an ambiguity in the agreement in that 

while the agreement only referred to the 1974 accident date, 

it also stated the amounts of compensation and medical 

benefits paid to date on both claims, and it also reflected 

that the settlement was computed based upon the 1977 injury 

compensation rate. The record indicates the Division, after 

discovering the ambiguity in the settlement agreement, 
conducted an investigation into the matter and ascertained, 

to its own satisfaction, that a mistake had been made in not 

including both accident dates in the agreement. The Division 

subsequently revised the settlement agreement to also include 

the 1977 accident date, and issued an order approving the 

settlement agreement stating that both Bowen's 1974 and 1977 

injury claims were settled for $14,175. Thereafter, the 

Workers' Compensation Court approved the Division's order 

closing both of Bowen's claims. 

On December 13, 1982, Bowen filed a Petition for 

Hearing with the Workers' Compensation Court in which he 

sought to set aside the settlement agreement described above. 

Bowen asked the court to set aside the settlement agreement 

upon the grounds that his treating physician had misled him 

into believing that he had sustained no serious permanent 

injuries as a result of the accidents, and also that he was 

misled by representatives of the Anaconda Company who advised 

him that he was not entitled to a larger settlement. On 

March 29, 1983, Rowen filed a second Petition for Hearing 

with the Workers' Compensation Court in which he abandoned 

his argument set out in the first Petition for Hearing. In 

the second Petition for Hearing Bowen ad.vanced a new theory 

that the settlement agreement only settled his claim for 

injuries sustained in 1974, and did not settle his claim for 

injuries sustained in 1977. 

The case proceeded to trial and the parties filed a 

stipu-lation that the issues before the Workers ' Compensation 

Court should be bifurcated as follows: (1) Whether the 

court had jurisdiction over this matter in view of the 

provisions of S 39-71-204(2) and S 39-71-2909, MCA; and 

(2) Whether the settlement agreement hetween the parties, 
and the order of the Division of Workers' Compensation 

approving the agreement, effectuated a compromise settlement 

of Bowen's claim concerning his 1977 injury. The parties 

also stipulated that the court should decide these issues 

based upon the record made to date. 

During trial Bowen argued that he never intended to 

settle both his claims in the settlement agreement and also, 

that on its face, the settlement agreement only referred to 

the 1974 accident date. The Anaconda Company responded by 

asserting that although the settlement agreement only 

referred to the 1974 accident date, it also included the 1977 

accident because the figures on the agreement corresponded to 

both the 1974 and 1977 accidents. Furthermore, the Anaconda 

Company argued that Bowen fully intended to settle both his 

claims in the settlement agreement because the extrinsic 

evidence surrounding the settlement agreement overwhelmingly 

pointed to this conclusion. The Anaconda Company also 

vigorously argued that the Workers' Compensation Court lacked 

jurisdiction over this matter. 

In a detailed findings of fact, conclusions of law and 

judgment entered September 28, 1984, the Workers' 

Compensation Court found that it had jurisdiction over this 

matter and that Bowen had only settled his claim for the 1974 

injury in the settlement agreement. In making its decision, 

the lower court disregarded the order of the Division which 

revised the settlement agreement and closed both of Bowen's 

claims. It refused to consider any of the investigation or 

documentation contained in the Division file. It considered 

the settlement agreement to be unambiguous within its four 

corners, thereby negating the need to consider any extrinsic 

or par01 evidence to determine the meaning of the agreement. 
The Anaconda Company presents the following issues for 

review: 

(1) Whether the Workers ' Compensation Court lacked 

jurisdiction to alter, rescind or amend the order of the 

Division of Workers' Compensation which revised the 

settlement agreement and closed both of Bowen's claims? 

(2) Whether the Workers' Compensation Court erred in 

not upholding the Division's order which revised the 

settlement agreement and closed both of Bowen's claims? 

(3) Whether the Workers' Compensation Court erred in 

not considering the parol evidence introduced by the Anaconda 

Company at trial to help explain the meaning of the 

settlement agreement? 

(4) Whether the Workers' Compensation Court erred in 

not considering parol evidence offered into evidence without 

objection and by stipulation? 

We hold the first two issues presented by the Ananconda 

Company to be dispositive of the instant case, and only these 

two issues will be discussed. 

The thrust of the Anaconda Company's argument in the 

instant case is that the Workers' Compensation Court, in 

general, lacks jurisdiction under Montana law to rescind, 

alter or amend an order of the Division of Workers' 

Compensation approving a compromise settlement agreement. 

The Anaconda Company begins this argument by pointing out 

that although a compromise settlement agreement is considered 

a contract and the law of contracts applies in the 

construction and enforcement of a settlement agreement, the 

agreement is not valid until it is approved by the Division 

of Workers' Compensation. Kienas v. Peterson (Mont. 1980) , 

624 P.2d 1, 37 St.Rep. 1747 and § 39-71-741, MCA. 
Next, the Anaconda Company points out that after the 

Division has issued its order approving a settlement 

agreement, the order is referred to the Workers' Compensa.tion 

Court for review pursuant to 5 39-71-2908, MCA. This statute 

provides that the judge may disapprove the Division' s order, 

but does not require his approval; although as a matter of 

practice, the judge has issued an order indicating approvals 

as well as disapprovals. The Anaconda Company points out, in 

the case where the judge approves the Division's order, he 

then loses jurisdiction to consider the agreement further, as 

specifically indicated in S 39-71-204(2) and 5 39-71-2909, 

MCA. These statutes pr0vid.e in pertinent part as follows: 

Section 39-71-204 (2). [El xcept as 

provided in 5 39-71-2908, the division or 

the workers' compensation judge shall not 

have the power to rescind, alter, or 

amend any order approving a full and 

final compromise settlement of 

compensation. 

Section 39-71-2909. [The Workers ' 

Compensation] judge may not change . . . any order approving a full and 

final compromise settlement of 

compensation. 

The Anaconda Company argues that according to these rules of 

finality, a settlement agreement can only he reopened by the 

Workers' Compensation Court upon a showing of fraud, mutual 

mistake fact, personal incapacity of the claimant 

make a binding contract. Parrent v. Midway Toyota (Mont. 

1981), 626 P.2d 848, 38 St.Rep. 559; Kienas v. Peterson, 

supra; Williams v. Industrial Accident Board (1939), 109 

Mont. 235, 97 P.2d 1115. 

The Anaconda Company argues the Workers' compensation 

Court was totally without jurisdiction to rescind, alter or 

amend the order of the Division which determined, a.fter a 

thorough investigation, that both of Bowen's claims had been 
closed by the settlement agreement. The Anaconda Company 

argues the Workers' Compensation Court had every opportunity 

to disapprove the order of the Division when the matter was 

referred to the court pursuant to the provisions of 

S 39-71-2908, MCA. The Aria-conda Company stresses that the 

actions of the Workers1 Compensation Court in the instant 

case are exactly what S 39-71-204 (2) and S 39-71-2909, MCA, 

are designed to prohibit. We disagree. 

In theory, the argument of the Anaconda Company is 

sound, but in application to the instant case the argument 

does not hold water. We agree that S 39-71-204 (2) and 

5 39-71-2909 seem to state quite clearly that where a 

Workers1 Compensation judge approves or fails to disapprove a 

Division order pursuant to S 39-71-2908, he then loses the 

authority to consider the settlement agreement further except 

upon a showing of fraud, mutual mistake of fact, or a 

personal incapacity of the claimant to ma.ke a binding 

contract. However, in the instant case, the Workers1 

Compensation Court did not violate the provisions of the 

above statutes because it did not actually rescind, alter or 

amend the order of the Division approving the settlement 

agreement. We base this conclusion on the fact that the 

Division itself has statutory authority unilaterally 

modify a settlement agreement, as it did in the instant case. 

The function of the Division with respect to the disposition 

of settlement aqreements is as follows: 

[Tlhe division is hereby vested with full 

power, authority, and jurisdiction to 

allow and approve compromises of claims 

under this chapter. All settlements and 

compromises of compensation provided in 

this chapter are void without the 

approval of the division. Approval of 

the division must be in writing. The 

division shall directly notify every 
claimant of any division order approving 

or denying a claimant's settlement or 

compromise of a claim. (Section 

39-71-741, MCA) . 

Clearly, under this statute, the Division has no authority to 

unilaterally rescind, alter or amend the terms of a 

settlement agreement. It can only allow and approve or 

disallow a proffered settlement agreement. 

In the instant case, the Division discovered an 

ambiguity in the settlement agreement and concluded, after a 

thorough investigation, that a mistake had been made in not 

including both the 1974 and 1977 accident dates in the 

agreement. The Division subsequently revised the settlement 

agreement to also include the 1977 accident date, and issued 

an order approving the agreement. Under $ 39-71-741, MCA, 

the Division clearly does not have the authority to modify or 

revise a settlement agreement. Therefore, that portion of 

the Division's order which went beyond its statutory 

authority in expanding the settlement agreement to also 

include the 1977 accident date is a nullity and of no force 

or effect whatsoever. Consequently, the Workers' 

Compensation Court did not actually rescind, alter or amend 

the order of the Division approving the settlement agreement 

because the Division's order only validly approved Bowen's 

1974 injury claim. 

Therefore, because there is no valid Division order 

foreclosing Bowen's right to pursue his 1977 injury claim, 

the remaining issues presented by the Anaconda Company become 

moot and need not be discussed. 

The judgment of the Workers' Compensation Court is 

aff irmed. 
We concur: 

Chief Justice 
Mr. Justice Fred J. Weber dissents as follows: 

I dissent from the majority opinion which affirms the 

Workers' Compensation Court. I conclude that the opinion 

considers only a portion of the pertinent facts and law. 

Both the majority opinion and the Workers' Compensation 

decision emphasize that the petition for full and finalcompromise settlement stated "The undersigned claimant was 

accidentally injured on October 25, 1974 . . .. " From that 

statement in the petition, the Workers' Compensation Court 

concluded that the wording within the four corners of the 

contract, was not ambiguous, and therefore no parole evidence 

could be admitted to show that the settlement petition covered two injuries rather than only the injury of October 25, 

1974. The majority opinion then concluded that the Division's revision of the settlement agreement to cover two 

dates of injury was beyond the authority of the Division and 

therefore that portion of the order expanding the settlement 

to include the 1977 accident was a nullity and of no force 

and effect. The majority then concluded that the order of 

the Division a.pproved only claimant' s 1974 in jury claim. 

In addition to the foregoing facts, it is important to 

note that the order approving a full and final compromise 

settlement stated as follows: 

Lewis L. Bowen was accidentally injured on October 

25, 1974 & March 3, 1977, while employed by the 

Anaconda Company . . . 

That order was signed on September 28, 1981 by the administrator of the Division. The order was approved by the workers' compensation judge on September 29, 1981. Under the 

opinions of this Court, a full and final compromise settlement can only be reopened upon a showing of fraud, mutual 

mistake of fact, or personal in~~pacity. See Williams v. 

Industrial Accident Board (1939) , 109 Mont. 235, 97 P. 2d 
1115; Kienas v. Peterson (Mont. 1980), 624 P.2d 1, 37 St.Rep. 

1747. For a discussion of the distinction between rescission 

of a final settlement agreement and rescission of a full and 

final compromise settlement, see Hutchinson v. Intermountain 

Insurance Company (Mont. 1985), 710 P.2d 1810, 42 St.Rep. 

The majority opinion concluded that the Workers' Compensation Court did not actually rescind, alter or amend the 

previ-ous order because the Division's order only validly 

approved the 1974 injury claim. The majority ignores the 

specific provisions in the Division's order which approved 

the full and final compromise settlement for both the 1974 

and 1977 injuries, as did the Workersf Compensation Court 

itself. Of particular significance at this point are the 

provisions of 5 39-71-743, MCA, which in pertinent part 

states: 

(4) The division ha.s full power, authority and 

jurisdiction to allow and approve compromises of 

claims under this chapter. All settlements and 

compromises of compensation provided in this chapter are void without the approval of the division. 

Approval of the division must be in writing . . . (Emphasis supplied. ) 

The only settlement approved by the Division covered both the 

October 25, 1974 and March 3, 1977 injuries. There is no way 

in which the Division and Workersf Compensation order could 

be classed as an approval only of the 1974 injury. The 

Division has the full power and authority to a.pprove compromises. It approved a compromise of both the 1974 and 1977 

injuries. The settlement of $14,175 is specifically stated 

to be a settlement of the claim for both injuries. If the 

Division did not have authority to revise the settlement 

agreement as stated in the majority opinion, then there is no 

longer an outstanding settlement agreement. Clearly the 

settlement approved by both the Division and the court 
covered both claims and cannot be restricted to the 1974 

injury. The majority is incorrect in finding that the Division validly approved the 1974 injury claim. That is not the 

effect of the order. Under the statute, any settlement not 

approved by the Division is void. The Division has not 

approved the settlement of $14,175 for the 1974 injury only. 

In the absence of such an approval, the settlement is void. 

At the very most, if an appropriate theory for reopening 

the order of September 28, 1981 can be found, the compromise 

settlement would ha.ve to be set aside in full. It is totally 

inappropriate to call it a settlement of the 1974 injury. I 

would reverse the Workers' Compensation Court. 

1 A 

Justice 

Mr. Justice L. C. Gulbrandson joins in the dissent of 

Mr. Chief Justice J. A. Turnage: 

I concur in the dissent of Mr. Justice Weber. 

gCT Ch' f ustice