Court Opinion

ID: 9561295
Source: CourtListenerOpinion
Date Created: 2023-08-21 18:06:39.594746+00
Date Added: 2024-06-11T09:13:42.820175
License: Public Domain

BENTON, Judge,
dissenting.
I agree with the commission’s statement that it “clearly has authority to amend an average weekly wage which results from fraud, imposition or mutual mistake.” I disagree with the majority’s holding that “[i]t is immaterial whether the mistake of fact is classified as mutual or unilateral.” In holding that the commission had implied authority to protect itself and its awards by setting aside an award based upon evidence of fraud, mistake, or imposition, the Supreme Court in Harris v. Diamond Construction Co., 184 Va. 711, 720-21, 36 S.E.2d 573, 577 (1946), had no reason to elaborate upon the *682type of mistake required to invoke that remedy. That decision turned upon an analysis of whether imposition existed. See id. at 722, 36 S.E.2d at 578. However, in several later cases, the Court has discussed the type of mistakes necessary to obtain relief.
Specifically referring to its decision in Harris, the Supreme Court stated as follows:
The decision in Harris v. Diamond Const. Co., ... is a holding to the effect that the Industrial Commission is clothed with the same power to annul and vacate an award formerly entered that a court of equity has to annul and vacate a judgment or to annul and cancel a deed when the attack is based on fraud, imposition or mistake. The rules of pleading in the two forums are different but are appropriate to the historical background of each. The dominant purpose of all pleading is to inform the other parties to the cause of the precise nature of the charge in order that they may prepare and present their defense. However, when questions of fraud or mistake are involved in either forum, the burden of proof and the character of evidence required to establish the charge should be, and are, the same in each forum, except that hearsay testimony may be admitted and considered by the Industrial Commission.
Ashby v. Red Jacket Coal Corp., 185 Va. 202, 206-07, 38 S.E.2d 436, 438 (1946). Any doubt that this rule requires the mistake be a mutual mistake of fact is dispelled by J & D Masonry v. Komegay, 224 Va. 292, 295 S.E.2d 887 (1982). The Court ruled in that case as follows:
In the exercise of its power to set aside a final award upon the ground of fraud or mistake, the Commission applies the same rules applicable to a proceeding in equity to annul a final judgment at law. In order to prevail, the moving party must prove the allegations upon which he seeks relief by positive and direct evidence which is clear and convincing.
The central question here is whether the Commission erred in finding that the carrier failed to carry the requisite *683burden and to prove fraud or mutual mistake of fact. We think the Commission was correct.
At the most, the evidence proves merely a unilateral mistake of fact by the carrier unaccompanied by any fraud attributable to the claimant. Under such circumstances, relief will not be granted.
Id. at 295, 295 S.E.2d at 889 (emphasis added) (citations omitted). See also Foreman v. Clement, 139 Va. 70, 80-81, 123 S.E. 336, 339 (1924)(in the absence of fraud, to obtain relief in equity the evidence must establish that the mistake of fact was mutual); Hartford Fire Ins. Co. v. Tucker, 3 Va.App. 116, 121, 348 S.E.2d 416, 419 (1986)(citing Harris for the proposition that a mutual mistake of fact is required to vacate an award). Thus, the commission correctly determined that its power to amend the award for mistake required a showing of a mutual mistake of fact.
As stated in the majority opinion, the material facts in this case are not in dispute. However, this appeal comes to this Court for review of the commission’s finding that a mutual mistake occurred. That finding is not supported by the record. Indeed, the employer does not argue on this appeal that the facts support the commission’s finding of a mutual mistake. The employer asserts on brief that “the focus [of this appeal] is more appropriately directed to the imposition involved as noted by the deputy commissioner” and that “the analysis should center on the actual imposition.” In view of the employer’s tacit concession and the undisputed material facts, an exhaustive analysis is not necessary to demonstrate that the evidence failed to establish that a mutual mistake of fact occurred.
The record establishes that the employer’s insurance adjuster requested that Collins provide his pay stubs and made the calculation without relying on any representation by Collins. The adjuster admitted that her miscalculation formed the basis of the award. She testified as follows:
I asked [Collins] if he saved his pay stubs, and requested copies of such. In order to issue payment for Mr. Collins, I *684then took the hours from each of the 8 weeks and averaged them to get a basis from which to issue his checks. In order to provide Mr. Collins with money as quickly as possible, I determined his average weekly wage to be $534.24, with a compensation rate of $356.17____ In hindsight, I realize that I should not have turned in that original Memorandum of Agreement as the compensation rate was based on incomplete information.
The facts do not prove, and the employer does not allege, that Collins committed fraud. In computing Collins’ average weekly wage, the adjuster did not use the employer’s data and made a unilateral mistake.
The principle is well established that whenever “ ‘there is mistake on the part of [only] one party’ ... the mistake is unilateral.” Ward v. Ward, 239 Va. 1, 5, 387 S.E.2d 460, 462 (1990) (citation omitted). The record is clear that the mistake was made by the employer’s adjuster, not by Collins. Thus, the mistake was unilateral. Id. See also Fox-Sadler Co. v. Earl E. Norris Roofing Co., 229 Va. 106, 110, 327 S.E.2d 95, 97 (1985). Collins did nothing to aid or induce that mistake. “This is simply a case of inadequate, incomplete, and deficient investigation by the carrier.” Komegay, 224 Va. at 296, 295 S.E.2d at 889.
A mutual mistake is one that is common to both parties to a transaction. Seaboard Ice Co. v. Lee, 199 Va. 243, 252, 99 S.E.2d 721, 727 (1957). “A mistake by one party coupled with ignorance thereof by the other party does not constitute a mutual mistake.” 76 C.J.S. Reformation of Instruments § 29, at 382 (1994). Because the record does not prove a mutual mistake of fact, I would reverse the commission’s decision.
The commission failed to address the deputy commissioner’s ruling “that the significant difference between the average weekly wage reflected on the Memorandum of Agreement and the actual weekly wage constitutes imposition.” However, the evidence does not prove that Collins’ actions caused an imposition upon the employer or the commission. Although our equity case law has long addressed the concept of “imposi*685tion,” see, e.g., Fitzgerald v. Frankel, 109 Va. 603, 610, 64 S.E. 941, 943-44 (1909), the Virginia cases do not explicitly define this term. The dictionary defines “imposition” as “an excessive, unwarranted, or uncalled-for requirement or burden.” Webster’s Third New International Dictionary 1136 (1981). Accord Frankini v. Bank of America Nat. Trust & Savings Ass’n, 31 Cal.App.2d 666, 88 P.2d 790, 795 (1939).
The Supreme Court acknowledged the lack of an explicit definition when it observed as follows:
Heretofore, we have said very little about the meaning of the word “imposition” as a basis for setting aside or amending an award or agreement. Nevertheless, in Harris we acknowledged the existence of this concept. In considering the meaning of “imposition,” we must do so against the backdrop of Harris, where the term was used, and where we also stated that the Act grants the Commission “jurisdiction to do full and complete justice in each case.”
John Driggs Co. v. Somers, 228 Va. 729, 734, 324 S.E.2d 694, 697 (1985) (citation omitted). Without giving the term a definition, the Somers Court held that impositions occurred under the following particular facts:
In our view, the carrier’s deviation from the requirements of Code § 65.1-6 worked an imposition upon Somers. The carrier, which works frequently with claims under the Act, undoubtedly had knowledge of the Act superior to that possessed by Somers. At the time the agreement was handed to him, Somers was injured, out of work, and receiving no compensation. The agreement presented him with an apparently simple means of getting a flow of money at a time he needed it. The carrier had the upper hand. It had superior knowledge, and it had the power either to turn over money immediately to an injured man or to “fight” with him about the proper amount and thereby delay the first compensation check. The carrier did not tell Somers how the average weekly wage figure was to be computed nor did it consult with him about the possible methods of calculation. Finally, of the several possible methods of *686calculation, the carrier settled upon one which resulted in a lower compensation award to Somers than he would have received had other methods been used. Under these facts, we conclude that the carrier’s conduct constituted an imposition upon the claimant.
Moreover, we also conclude that the carrier’s failure to abide by Code § 65.1-6 constituted an imposition upon the Commission. The Workers’ Compensation Act is in the nature of a compromise between employers and employees; each surrenders certain rights to gain certain rights. An essential element of this compromise is the employer’s obligation to pay for compensable injuries at a rate contemplated by the Act. When the average weekly wage embodied in a memorandum of agreement substantially deviates from the statutory guidelines, the balance struck by the Act’s compromises is disrupted. The Commission has the power and authority to right this imbalance and thereby protect itself and its award from such imposition.
Id. at 734-35, 324 S.E.2d at 697-98 (citations omitted).
Although the deputy commissioner found that an imposition occurred in this case, the commission did not affirm that finding. Instead, it found, erroneously, that a mutual mistake of fact occurred.. In light of the Court’s discussion of imposition in Somers, the adjuster’s unilateral mistake does not constitute an imposition. The mistake did not harm Collins or the commission; it worked a detriment only upon the entity that made the mistake—the insurer.
Moreover, even if this unilateral mistake is deemed to be an imposition on the commission, the commission’s implied power to set aside an award does not necessarily include the power to order the recoupment of any overpayment by the employer. The Court in Somers held that the commission had the power to amend the award; however, nothing in Somers suggests that the employer has the right to recoup overpayments. Likewise, the holding in Harris does not suggest that the *687commission has the power to award a recoupment. Indeed, several statutes suggest that the power to order recoupment must be specifically granted. See, e.g., Code §§ 65.2-712 and 65.2-1105.6
Under the Act, an employer’s obligation to pay compensation benefits may be suspended or terminated by the commission upon a proper application. See, e.g., Code § 65.2-708. However, unless otherwise provided by statute, the employer’s relief is prospective only. See Specialty Auto Body v. Cook, 14 Va.App. 327, 416 S.E.2d 233 (1992).
For these reasons, I would reverse the commission’s award.

. Code § 65.2-712 provides: "So long as an employee receives payment of compensation under this title, such employee shall have a duty immediately to disclose to the employer, when the employer is self-insured, or insurer in all other cases, any incarceration, return to employment or increase in his earnings. Any payment to a claimant by an employer or insurer which is later determined by the Commission to have been procured by the employee by fraud, misrepresentation, or failure to report any incarceration, return to employment or increase in earnings may be recovered from the claimant by the employer or insurer either by way of credit against future compensation payments due the claimant, or by action at law against the claimant."
Code § 65.2-1105 provides: "Any payment to the employer or carrier pursuant to this chapter which is later determined by the Commission to have been procured through fraud, mistake or the improper processing of the claim by the carrier shall be recovered from the employer or carrier and credited to the Second Injury Fund. Any subrogation recoveries or other recoveries from a third party or other source shall be shared by the employer or carrier and the Second Injury Fund on a pro rata basis after deducting all reasonable expenses in obtaining the recovery."