Court Opinion

ID: 7914596
Source: CourtListenerOpinion
Date Created: 2022-09-08 22:09:27.598073+00
Date Added: 2024-06-11T16:32:44.616734
License: Public Domain

Smith, J.
(dissenting): I find myself unable to agree with the opinion of the majority. The majority opinion attaches too much importance to the fact that the instrument by which the commission evinced its approval of the stipulation of the parties was called an award.
Let us examine the underlying reason for the holding by this court that awards entered into by agreement may be set aside on the. ground of mutual mistake or fraud. In making such an agreement there is more danger of one party overreaching the other or of both parties being honestly mistaken than if a hearing is had. Surely the law does not contemplate a workman being deprived of a right because on account of his mistake and that of his employer an approval of an agreement to accept a grossly inadequate amount was given by the commission and called an award without authority. That is what this court had in mind when it said:
“The statute contemplates that when parties agree concerning compensation they will do so intelligently, as the law directs, with knowledge of all the facts, neither taking any undue advantage of the other, and each undertaking to ascertain the amount of compensation that should be paid under the statute. Sections 23 and 28 of the act mention a release. A release, as contemplated in this statute, is a discharge of the defendant by the plaintiff from further liability under an agreement of the parties, under an award of arbitrators, or under a judgment of a court which has fixed the amount of compensation that should be paid. The release now in controversy is such an agreement as is contemplated by the statute; it is a receipt for the amount agreed to be paid, and is a release from all further liability for compensation. This instrument, being an agreement, may be set aside for either of the reasons named in the statute concerning agreements, and it may be set aside for any other reason known to the common law.” (Weathers v. Bridge Co., 99 Kan. 632, 638, 162 Pac. 957.)
It is worthy of note that final payment had been made in that case. The section 23 mentioned in the above quotation was chapter 218, section 23 of the Laws of 1911. It reads as follows:
“Compensation due under this act may be settled by agreement. Every such agreement, other than a release, shall be in the form hereinafter provided.”
This court in Weathers v. Bridge Co., supra, gave the release referred to in that section all the potency of a judgment of a court, yet held it could be set aside for any reason known to the common law for setting aside agreements — in that case as in this “mutual mistake.”
In Dotson v. Manufacturing Co., 102 Kan. 248, 169 Pac. 1136, the authority of the district court to set aside final releases for fraud or mutual mistake was recognized.
*301See, also, Wolf v. Packing Co., 105 Kan. 317, 182 Pac. 395.
In Walker v. Kansas Gasoline Co., 130 Kan. 576, 287 Pac. 235, compensation had been awarded claimant. An application to modify that award was filed by claimant. While this application to modify that award was filed and while it was pending, a stipulation was entered into providing for a lump-sum payment. This payment was made on November 20, 1938, and the claimant signed a receipt. This receipt and release were approved by the commission and the proceedings were dismissed. Within a year the claimant filed with the commission an application for a review and an order setting aside the receipt, in which he alleged that the final receipt and release had been obtained by fraud and mutual mistake, and stated that the settlement made was grossly inadequate and he was entitled to compensation for permanent total disability. The commission heard the application and set the receipt aside and allowed further compensation. In consideration of the appeal this court said:
“It has been held that a release from further liability under an agreement by the parties is such a release as was contemplated by the statute, and as the instrument was an agreement it was subject to be set aside for reasons named in the statute concerning agreements and for any other reason known to the common law. It was further held that if the compensation was grossly inadequate and there was mutual mistake of fact, as to the extent of the injuries, the agreement and release should be set aside.” (p. 580.)
In Crawn v. Packing Co., 111 Kan. 573, 207 Pac. 793, a final release had been given by the claimant. The release was set aside for mutual mistake. This court said:
“However that may have been, it is manifest from the evidence that all concerned were mistaken as to the nature of her injuries, and that plaintiff entertained the opinion given to her by the doctor of defendant that she had recovered and she rested in this opinion until an examination was made by three other doctors, which revealed the fact that her injury was permanent in character, and that she would be a cripple for life. There was not only mutual mistake of the parties, but the consideration for the release was grossly inadequate.” (p. 575.)
In Murphy v. Continental Casualty Co., 134 Kan. 455, 7 P. 2d 84, this court said:
“Appellant contends, in effect, that the petition states a common-law action for damages because of the alleged fraud of defendant’s physician and agent, as a result of which he was induced to execute a final receipt upon payment for the loss of one eye only. Perhaps, as argued by appellee, the petition does not allege facts sufficient for such an action. But we pass that thought. The statute (R. S. 1931 Supp., 44-527) provides a procedure which may be brought at any time within one year for setting aside a final receipt. Under this statute *302the compensation commissioner has jurisdiction to hear and determine an application to set aside an agreement, or final receipt, upon the grounds of mutual mistake, fraud, or misrepresentation. (Walker v. Kansas Gasoline Co., 130 Kan. 576, 287 Pac. 235.)” (p. 458.)
It is interesting to notice just what was in the document called “joint petition and stipulation” in this case. In the first place it stated that all parties were subject to the workmen’s compensation act; that claimant was injured; the nature of his injury; and that his disability would last three months; his rate of compensation; a statement of the amount due; and the amount paid; a waiver of notice and final hearing and an agreement that the commission might “make and enter an award.” What is there in the above stipulation to distinguish it from the release dealt with in the opinions that have just been cited? It is couched in different language than these releases, but it has the same effect 'and was designed to reach the same end: In a case such as this, where the parties both relied on the same doctor, who was mistaken, there is clearly a mutual mistake, as was found in the authorities cited.
There is no provision in the act for a proceeding such as we have here, only for settlement by agreement. G. S. 1935, 44-521, provides as follows:
“Compensation due under this act may be settled by agreement; subject to the 'provisions contained in section 27.”
The section 27 there referred to is G. S. 1935, 44-527. This is the authority in the act for settling claims for compensation by agreement. We have seen that what is called a joint stipulation and petition is nothing but an agreement. Indeed the commission had no authority to consider it at all if it was not an agreemfent. Being an agreement for the settlement of a claim for compensation it must, therefore, have been made subject to the provisions of G. S. 1935, 44-527, and can be set aside on the ground of mutual mistake, as has been held uniformly by this court since it first considered workmen’s compensation cases.
' What did the commission say in the instrument called an award? It simply recited the language of the stipulation and provided that $150 should be paid. Let us note that the joint petition and stipulation was filed October 30, 1937, and the award was made and filed November 2, 1937. What opportunity was there for the mistake to be discovered?
The matter was not closed, however, with the making of the *303award. On November 8, 1937, the receipt of claimant for the $150 was filed with the commission. This receipt was filed pursuant to the provisions' of G. S. 1935, 44-527. There is no provision for a final receipt in G. S. 1935, 44-528. This final receipt was filed pursuant to G. S. 1935, 44-527, and both actions speak of final payment — one of award and the other of final payment of compensation. The legislature must have intended that the final payment, pursuant to an award, referred to an award that was to run several weeks, as most of them do, and the final payment spoken of in G. S. 1935, 44-527, was any final payment pursuant to an award or made under any other circumstances. There are other provisions in the statute which give weight to this view. G. S. 1935, 44-525, provides in what form the award shall be. The provision with which we are interested is the one as follows:
“Every finding or award of compensation shall be in writing signed and acknowledged by the arbitrator or by the secretary of the committee herein-before referred to, or commission, and shall specify the amount due and unpaid by the employer to the workman up to the date of-the award, if any, and the amount of the payments thereafter to be paid by the employer to the workman, if any, and the length of time such payment shall continue. No award shall be or provide for payment of compensation in a lump sum. . . .”
Does this language mean anything at all? This section says the award shall .specify—
“the amount due and unpaid”;
“the amount of the payments [not payment] thereafter to be paid”;
“the length of time such payment shall continue.”
Not‘satisfied with this, the section then forbids an award for compensation in a lump sum. How do the advocates of strict constructiqn of the statute avoid the effect of this language? The section was evidently not inserted in the statute inadvertently. G. S. 1935, 44-529, provides that at any time before final payment of compensation has been made the workman may institute proceedings to have the compensation due him paid in a lump sum equal to ninety-five percent of the amount of payments due and unpaid. The commission cannot order the compensation paid in a lump sum, however, unless it is satisfied that the application is made because of doubt on the part of the workman as to the security of his compensation and unless there is competent evidence that the workman is not secure.
*304G. S. 1935, 44-531, provides as follows:
“Where payments under an award have been made for not less than six (6) months, the liability under such award may be redeemed by the employer at his option by the payment to the workman of a lump sum equal to ninety-five (95) percent of the amount of payments due and unpaid and prospectively due under the award, such amount to be determined by agreement, or, in default thereof, upon application of either party, upon notice to the other party by the co'mmission. Upon paying such amount, the employer shall be discharged of and from all further liability under said award.”
It will be noted that the lump sum cannot be paid under that section until payments have gone on for at least six months. These statutes have been referred to here because they are all a part of the workmen’s compensation act. This act is a comprehensive plan for dealing with the subject. All sections should be construed together, and an effort made as nearly as possible to give effect and meaning to each section. These sections lead me to the conclusion that the word “award” as used in the act means just what G. S. 1935, 44-525, says it means, and not a lump-sum payment. Any other conclusion will nullify the sections to which I have just referred.
By the enactment of these statutes the legislature sought to prevent a situation such as we have here, where a payment was made in a lump sum approved by the commission and accepted by the claimant through a mistake of fact. This becomes manifest when the provisions of the section are examined. The grounds upon which the commission may modify an award pursuant to G. S. 1935, 44-528, are much broader than are contemplated by the application here. They are that the award was obtained by fraud or undue influence. Also, that the committee acted without authority or was guilty of serious misconduct or that the award is excessive or inadequate, or the incapacity or disability of the workman has increased or diminished.
The section then provides that upon finding any of the above situations to exist the commission may modify the award by increasing or diminishing the compensation. Clearly none of these conditions could be discovered before final payment where final payment is made immediately after the filing of the stipulation, upon which it is made. The relief provided for is much broader than a court of equity would grant. Such a court would'not grant relief on the ground that the disability had increased or diminished or that the award was excessive or inadequate unless some other ground was established.
*305There are a number of authorities cited and relied on in the prevailing opinion, but they are all cases where the relief sought was a modification of an award on some of the grounds set out in G. S-1935, 44-528. I find no case where relief has been denied the claimant when the ground upon which it was sought was fraud or mutual mistake. This opinion does that for the first time.
Some reference is made by respondent to the addition of the words “but not after” to G. S. 1935, 44-528, at the session of 1927. It seems to me that this language might have been added to make doubly sure that the employer would not endeavor after final payment had been made to take advantage of the many provisions of the sections providing for reducing the compensation and attempt to collect these payments from the workman. Furthermore, this provision does not confer the right to set the release aside. It is only a limitation on it as to time. The right itself springs from equity principles that are far older than this statute.
The argument is made that the legislature intended greater weight should be given an award such as this because the facts were submitted to the commission and passed on by it. What facts? All the parties were mistaken as to the only fact in controversy here, that is, the extent of the disability of claimant. The commission was no better off than the parties. What sanctity is there about a commission which prevents its mistake from being corrected? What opportunity was afforded anyone to discover a mistake when the stipulation was filed on October 30, the award made November 2, and the final receipt filed eight days later?
Respondent argues that under the record in this case to hold that section 27 of the workmen’s compensation act is applicable absolutely destroys section 28. This contention is not well taken. Both sections have a legitimate place in the workmen’s compensation act. Section 28 provides a remedy before compensation allowed has been paid in full. Under this section, if the injury to the workman is found to be such that the amount allowed is grossly inadequate, before all the payments are made that question can be raised; or, if the employer finds that the award was excessive because of the fact that the injury proved not to be so great as it.was thought by the examiner to be at the time the award was made, he can move for a modification. Section 27 is not available in such a case. Obviously, the legislature thought there might arise situations involving no *306award in which after final payment had been made, it would be discovered that the payment was grossly inadequate, and that the amount previously determined upon had been reached through mutual mistake or fraud or ought in fairness to be set aside. The case before us seems to be an appropriate one for the application of this section because of the lump sum paid and the mutual mistake as to the extent of the claimant’s injury.
There is no serious contention that the awárd now appealed from is unjust, insofar as it applies to the injury now known to have been sustained by the claimant. If claimant is now defeated it is because only of an order entered earlier which was induced by the mutual mistake of the parties. G. S. 1935, 44-527, was intended to avoid such a result.
Harvey and Allen, JJ., concur in the foregoing dissenting opinion.