Court Opinion

ID: 9701007
Source: CourtListenerOpinion
Date Created: 2023-08-25 21:58:40.188235+00
Date Added: 2024-06-11T14:59:58.393711
License: Public Domain

DISSENTING OPINION BY
Judge FRIEDMAN.
I respectfully dissent. Unlike the majority, I do not believe that the doctrine of collateral estoppel applies to bar Rita Far-ner’s (Claimant) petition to set aside the Compromise and Release Agreement by Stipulation (C & R Agreement) between Claimant and Rockwell International (Employer). In addition, I agree with Workers’ Compensation Judge Anne Colohan (WCJ Colohan) that Claimant provided a sufficient basis to set aside the C & R Agreement on grounds of mistake. Most important, I believe that, in reversing WCJ Colohan’s decision, the Workers’ Compensation Appeal Board (WCAB) im-permissibly reweighed the evidence and ignored WCJ Colohan’s findings of fact, which are supported by substantial evidence in the record and, thus, binding on the WCAB and this court on appeal.
From the date of her August 1988 work-related injury through the settlement of her workers’ compensation case in February 1999, Claimant was receiving health care coverage provided by Employer through United Health Care. At a February 9, 1999, hearing, the parties and their attorneys presented the C & R Agreement to WCJ Irving Bloom (WCJ Bloom) for approval pursuant to section 449 of the Workers’ Compensation Act (Act).1 At the approval hearing, Claimant responded to questions from her attorney as to her understanding of the C & R Agreement. Claimant testified that, in exchange for a lump sum payment of $45,000, she was waiving all future workers’ compensation benefits and would resign her employment. Claimant also testified that she understood that she would continue to receive her social security, her pension benefits and the health care benefits provided by Employer through United Health Care. (Hearing of 2/4/99, N.T. at 10, R.R. at 30A.)
Following her testimony, WCJ Bloom questioned Claimant briefly, affirming that Claimant could read the C & R Agreement and that she went over it thoroughly with her attorney. Given the opportunity to cross-examine Claimant, Employer’s counsel asked Claimant only two questions: whether she understood that she would receive no further workers’ compensation benefits after signing the C & R Agreement; and whether she was under the influence of anything that would impair her ability to review the documents or testify. (Hearing of 2/4/99, N.T. at 11-12, R.R. at 31A-32A.)
Crediting Claimant’s testimony, WCJ Bloom found that Claimant understood the full legal significance of the C & R Agreement which she signed, and he approved the C & R Agreement by order dated February 22, 1999. Neither party appealed.
Although Claimant’s settlement occurred in February 1999, her United Health Care benefits were not cancelled until October 1999, and claims were paid *1081after that date.2 (Hearing of 10/29/01, N.T. at 11-12, RR at 44A-45A; WCJ Colo-han’s Findings of Fact, No. 11.) In July 2001, Claimant’s new lawyer filed a review petition seeking to set aside the C & R Agreement, alleging that Employer had breached the C & R Agreement by failing to continue the agreed upon health care insurance. (R.R. at 1A-3A.) Employer filed a timely and responsive answer, and hearings on the matter were held before WCJ Colohan.
At the October 29, 2001, hearing before WCJ Colohan, Claimant verified the testimony she provided before WCJ Bloom concerning her understanding of the C & R Agreement, stating that before she settled her case, her former attorney assured her she would continue to receive health care benefits through United Health Care. Claimant also said that United Health Care had paid one of her medical claims as late as December 1999. (WCJ Colohan’s Findings of Fact, No. 7.) Claimant offered copies of the C & R Agreement into evidence.3 (R.R. at 7A-11A.) At the end of the hearing, Employer also submitted into evidence a resignation statement signed by Claimant, which stated “I fully realize that with this resignation, I am no longer entitled to any of the privileges or benefits to which employees of [Employer] may be entitled except those benefits and rights which are vested at the time of my resignation.” (R.R. at 20a.) The resignation statement was dated the same day as the approval hearing before WCJ Bloom but was not received by WCJ Bloom during those proceedings.
Crediting Claimant’s testimony and considering the evidence, WCJ Colohan set aside the C & R Agreement, specifically finding that: (a) neither the C & R Agreement nor the resignation statement expressly state whether Claimant would or would not be entitled to ongoing medical health insurance coverage through United Health Care; (b) Claimant believed her health care coverage would continue after the C & R Agreement took effect; (c) the silence of Employer’s attorney and the temporary continuation of coverage contributed to this understanding; and (d) Claimant would not have entered into the C & R Agreement if she understood that it meant her health care benefits would be discontinued.4 (WCJ Colohan’s Findings *1082of Fact, Nos. 8-12.) However, on appeal by Employer, the WCAB reversed. In doing so, the WCAB accepted that Claimant genuinely understood that she would continue to receive health insurance benefits under the C & R Agreement. Nevertheless, the WCAB concluded that “Claimant’s voluntary resignation indicates that Claimant understood that she was no longer entitled to benefits from her employment unless they- were vested.”5 (WCAB op. at 5-6, R.R. at 89A-90A.) On this basis, the WCAB determined that Claimant’s misunderstanding was a unilateral mistake insufficient to set aside the C & R Agreement. -
In affirming the WCAB,6 the majority employs two different analyses set forth in *1083recent case law: the common law standard for setting aside a C & R agreement based upon a clear showing of fraud, deception, duress or mutual mistake, North Penn Sanitation Inc. v. Workers’ Compensation Appeal Board (Dillard), 850 A.2d 795 (Pa.Cmwlth.2004); and the application of the doctrine of collateral estoppel to preclude re-litigation of the unappealed approval of a C & R agreement based upon a challenge of the required finding that the claimant understood the full legal significance of the agreement, Stiles v. Workers’ Compensation Appeal Board (Department of Public Welfare), 858 A.2d 1119 (Pa. Cmwlth.2004) (en banc), appeal denied, — Pa. -, 870 A.2d 325, 2005 WL 562498 (426 WAL 2004, filed December 16, 2004). I disagree with the majority in each case.
Collateral Estoppel
Relying on Stiles, the majority first applies a collateral estoppel analysis to dispose of Claimant’s appeal, determining that Claimant could not re-litigate the issue of her understanding of the C & R Agreement because “there is no question that all necessary elements for preclusion are present.”7 (Op. at 1078.)
In Stiles, this court held that a claimant seeking to review a C & R agreement on grounds that she did not fully understand its ramifications was precluded from doing so because the doctrine of collateral estop-pel forecloses this relief to any such claimant as a matter of law by virtue of the very finding she seeks to have reviewed. As I stated in my dissent in Stiles, such a result is both absurd and unjust.
As in Stiles, Claimant’s petition here actually is in the nature of a petition to set aside the C & R Agreement pursuant to section 413(a) of the Act, 77 P.S. § 771, which gives the WCJ authority to set aside an agreement of the parties “if it be proved that such ... agreement was in any material respect incomct.” 77 P.S. § 771 (emphasis added). As in Stiles, the majority invokes the doctrine of collateral estoppel to deny Claimant the opportunity to prove that she did not understand the full legal significance of the C & R Agreement based solely on WCJ Bloom’s finding that Claimant did understand that Agreement.8
*1084By so holding, I believe that the majority eliminates the possibility of relief which the legislature intended to provide through this section of the Act. Indeed, because a claimant seeking relief under section 413(a) of the Act, 77 P.S. § 771(a), is required to prove the existence of a material mistake of fact or law, it makes no sense to hold that a claimant is prevented from offering such proof by the very “fact” she has challenged.
Stiles, 853 A.2d at 1127, (Friedman, J., dissenting) (emphasis in original).
Moreover, I believe that the doctrine of collateral estoppel cannot be applied in this case because Claimant did not have a full and fair opportunity to litigate the issue of her understanding at the C & R Agreement approval hearing. In order to have effect, a C & R agreement must be approved by a WCJ after the WCJ considers the proposed agreement in open hearing. Before deciding whether to approve any C & R agreement, the WCJ must first determine that the claimant understands the full legal significance of that agreement. 77 P.S. § 1000.5(b). Thus, in the proceeding to approve the C & R Agreement here, WCJ Bloom had to determine, based on the evidence presented at the C & R approval hearing, whether Claimant understood the legal significance of the C & R Agreement she signed.
Significantly, the C & R Agreement itself did not expressly state whether Claimant would or would not remain entitled to ongoing medical insurance coverage. However, Claimant testified that she understood the terms of the C & R Agreement to include continuation of health care insurance, and WCJ Bloom made his finding that Claimant understood the full legal ramifications of the C & R Agreement based upon Claimant’s credible, unrefuted testimony. Clearly, because WCJ Bloom was unaware of how the C & R Agreement actually was meant to deal with continuing medical insurance coverage for Claimant, it was impossible for him to know whether Claimant was mistaken in her belief. See Dillard.9
In the proceeding to determine whether the C & R Agreement should be set aside under section 413(a) of the Act, WCJ Colo-han had to determine based upon evidence presented at the set aside hearing, whether Claimant’s understanding at the time the C & R Agreement was executed constituted a material mistake of fact or law. Russo v. Workers’ Compensation Appeal Board (Mon/Val Resources, Inc.), 755 A.2d 94 (Pa.Cmwlth.2000), appeal denied, 565 Pa. 658, 771 A.2d 1292 (2001); Hartner v. Workmen’s Compensation Appeal Board (Phillips Mine & Mill, Inc.), 146 Pa. Cmwlth. 167, 604 A.2d 1204 (1992), appeal denied, 531 Pa. 662, 613 A.2d 1210 (1992). Because WCJ Colohan now had all the *1085necessary information regarding continuation of Claimant’s medical insurance under the C & R Agreement, this would be the first time that issue would be fully and fairly litigated. For these reasons, I believe that the majority errs in affirming the WCAB based on collateral estoppel.10
Evidence of Mistake
Relying on Dillard, the majority further concludes that, even if Claimant were allowed to re-litigate her understanding of the C & R Agreement, she would not prevail under the doctrine of mutual mistake. I strongly disagree.
Mutual mistake is found where both parties to an agreement are mistaken as to a present, material fact that existed at the time the agreement was executed. OH-lard. Alternatively, where one party charged with knowledge of the terms of an agreement11 knows or has reason to know of a unilateral mistake by the other party, and the mistake, as well as the actual intent of the parties, is clearly shown, relief will be granted to the same extent as if a mutual mistake existed. Welsh v. State Employees’ Retirement Board, 808 A.2d 261 (Pa.Cmwlth.2002); see also Growth Horizons, Inc., v. Workers’ Compensation Appeal Board (Hall), 767 A.2d 619 (Pa. Cmwlth.2001). Here, it is perfectly clear to me, and the findings of WCJ Colohan reflect, that one of these scenarios must be true; that is precisely why WCJ Colohan set aside the C & R Agreement in this case.12
*1086As the majority concedes, Claimant proved that she signed the C & R Agreement under the belief that Employer would continue to pay her medical insurance premiums. In light of this fact, the silence of Employer’s counsel at the approval hearing establishes that, at the critical time, either: (1) Claimant and Employer both were mistaken as to their understanding of the C & R Agreement; or (2) only Claimant was mistaken, and Employer knew or had very good reason to know of Claimant’s mistake but did nothing to correct it. I cannot conceive of any other possibility, and, whichever is true, it amounts to mutual mistake under the case law.
Given the foregoing discussion, I would reverse and reinstate WCJ Colohan’s order setting aside the C & R Agreement between Claimant and Employer.

. Act of June 2, 1915, P.L. 736, as amended, added by, Act of June 24, 1996, P.L. 350, 77 P.S. § 1000.5. Section 449, which governs the compromise and release of workers’ compensation claims, provides that settlement agreements are not valid or binding until approved by a WCJ and, further, that the WCJ shall not approve any C & R agreement unless he first determines that the claimant understands the agreement’s full legal significance. 77 P.S. § 1000.5(b).

. Thus, Claimant first became aware of her misunderstanding of the C & R Agreement well after the appeal period expired.

. In paragraph 13 of the C & R Agreement, Claimant was asked to list any benefits being received by her or available to her. Claimant lists: social security disability of $940 per month; retirement pension of $377.20 per month; and private health insurance from United Health Care. (R.R. at 10A.)

. In her September 4, 2003, decision, WCJ Colohan made the following relevant findings:
8.The claimant submitted into the record a copy of the Compromise and Release Agreement and Stipulation the parties executed on February 4, 1999.
The undersigned has carefully reviewed these documents and has found that neither of these documents expressly state [sic] that the claimant would or would not be entitled to ongoing medical insurance coverage through United Health Care if the Compromise and Release were approved.
9. The Employer, Rockwell International, submitted a copy of the claimant’s resignation statement of February 4, 1999 into the record.
The undersigned has also thoroughly reviewed this document and has found that the resignation statement does not expressly state whether the claimant would or would not be entitled to ongoing medical insurance coverage through United Health Care.
10. Although none of the documents the parties executed on February 4, 1999 expressly address [sic] the issue of whether or not the claimant’s medical health care coverage was to continue through United Health Care, the claimant was asked specific questions concerning her understanding pertaining to the continuation of her medi*1082cal health care coverage at the hearing conducted by Judge Bloom on February 4, 1999.
Specifically, during the hearing of February 4, 1999, the following exchange took place between the claimant and the attorney who was representing her in connection with the Compromise and Release Agreement.
Q. You understand that even though you’ve resigned and even though you’ve resolved your Workers’ Compensation claim, you’re still entitled to receive your pension from Rockwell and get your health benefits under United Health Care?
A. Uh-huh (yes).
Q. But you understand that if you go to any medical appointments for your arm or anything related to your Workers’ Comp injury, that Workers’ Comp is no longer responsible for paying those medical bills?
A. Right.
Q. Those will have to be filed under your United Health Care or Medicare; okay?
A. Uh-huh (yes.).
11. Based upon my review and consideration of the claimant’s testimony at the February 4, 1999 hearing, and her testimony at the October 29, 2001 hearing, I find that at the time she executed the Compromise and Release Agreement and requested approval of that agreement in February, 1999, it was the understanding of the claimant, Rita Far-ner, that her medical insurance coverage through United Health Care was going to continue.
I further find the fact that none of the attorneys present at the February 4, 1999 hearing indicated on the record at the February 4, 1999 hearing that the claimant had an erroneous understanding concerning her entitlement to ongoing medical insurance coverage, contributed to the claimant’s belief that she was going to continue to receive ongoing medical insurance coverage through United Health Care.
In addition, I find that the fact that United Health Care actually continued to pay some of the claimant’s medical claims through December, 1999, further contributed to the claimant’s impression that she was entitled to ongoing medical coverage through United Health Care.
12. Based upon my review and consideration of all of the evidence and arguments presented in this matter, I find that the claimant, Rita Famer, had a mistaken understanding as to whether her medical insurance coverage with United Health Care was going to continue following the approval of the Compromise and Release Agreement the parties entered into on February 4, 1999. I further find, given the claimant’s testimony at the hearing of October 29, 2001 and given the filing of her Review Petition, that it was important to the claimant that her medical insurance continue, and that she would not have entered into the Compromise and Release Agreement if she knew that her medical coverage was going to cease. I thus find that there was a clear misunderstanding/mistake pertaining to a material issue at the time the parties executed the Compromise and Release Agreement of February 4, 1999 for it to be approved. As such, the Compromise and Release Agreement must be set aside.
(WCJ Colohan’s Findings of Fact, Nos. 8-12) (emphasis added).

. In response to questioning by Employer’s counsel, Claimant stated that her attorney told her that her health care benefits were vested. (Hearing of 10/29/01, N.T. at 23, R.R. at 56A.)

. Our scope of review is limited to determining whether constitutional rights were violated, whether the adjudication is in accordance with the law or whether necessary findings of fact are supported by substantial evidence. *1083Section 704 of the Administrative Agency Law, 2 Pa.C.S. § 704.

. Collateral estoppel forecloses relitigation of an issue of law or fact that has been finally decided when the following factors are demonstrated: (1) the legal or factual issues are identical; (2) they were actually litigated; (3) they were essential to the judgment; and (4) they were material to the adjudication. Yonkers v. Donora Borough, 702 A.2d 618 (Pa. Cmwlth.1997). The party against whom the plea is asserted must have been a party, or in privity to a party, in the prior action and must have had a full and fair opportunity to litigate the issue in question. Bortz v. Workmen's Compensation Appeal Board (Reznor Division of FL Industries), 546 Pa. 77, 683 A.2d 259 (1996).

. In Stiles, this court reviewed the WCJ's decision to apply the doctrine of collateral es-toppel to preclude the claimant from presenting evidence to prove that she did not understand the C & R agreement. In the present case, WCJ Colohan did consider the evidence presented by Claimant and found that Claimant successfully proved her lack of understanding of the C & R Agreement. In reviewing and reversing WCJ Colohan’s decision, the WCAB did not overturn this finding but, instead, concluded that WCJ Colohan committed legal error in setting aside the C & R Agreement based on unilateral mistake. Now, rather than confine its analysis to a review of WCJ Colohan’s findings and conclusions, the majority essentially rules that WCJ Colohan improperly allowed Claimant to present evidence of her understanding of the C & R Agreement in the first instance. I find this holding difficult to reconcile with Dillard (holding that, even after the appeal period has expired, a WCJ has the inherent power to set aside an approved C & R agree*1084ment under certain circumstances). As I stated in my dissent in Stiles, I believe that if the majority's collateral estoppel analysis had been applied in Dillard, the claimant there would have been precluded from challenging the WCJ's finding that he understood the terms of the C & R agreement, a result at odds with the humanitarian purpose of the Act.

. In Dillard, this court affirmed the decision to set aside a C & R agreement. We noted that the claimant's work-related blindness was not disclosed to the WCJ and that, in approving the parties' C & R agreement, the WCJ relied upon the representation that the claimant’s injuries were fully disclosed, when they were not. We concluded that, because the WCJ was unaware of the claimant’s condition, it was impossible for the WCJ to ascertain whether the claimant understood the full legal significance of the agreement. In rendering the decision, we stressed that the Act is remedial in nature and intended to be liberally construed in favor of an injured employee, i.e., to effectuate its humanitarian purpose.

.I note that Employer does not raise the issue of collateral estoppel in its answer to Claimant’s review petition, before WCJ Bloom or on appeal to the WCAB. Nevertheless, the majority uses the collateral estoppel analysis as the primary basis to affirm the WCAB's reversal of WCJ Colohan’s decision to re-visit WCJ Bloom’s finding of fact and set aside the C & R Agreement. However, if the majority indeed is correct that collateral es-toppel applies to preclude re-litigation of WCJ Bloom’s finding, then I believe that the finding adversely affects Employer, not Claimant.
Claimant's full understanding on the record before WCJ Bloom is that Claimant would continue to be covered under Employer’s health insurance plan, and when WCJ Bloom approved the C & R Agreement, he did so based on his finding that Claimant fully understood the legal significance of the C & R Agreement, as reflected by the record. Where, as here, the C & R Agreement itself does not provide differently, and where Employer did nothing on the record to disabuse Claimant or WCJ Bloom of Claimant's understanding, then, as a matter of law, Claimant’s statement regarding continuing health insurance benefits was an accurate interpretation of the C & R Agreement. Thus, the C & R Agreement now must be construed to provide for the continuation of Claimant’s medical insurance benefits, as reflected by WCJ Bloom’s unap-pealed finding of fact, Stiles, and Employer should be precluded from asserting that the C & R Agreement does not require continuing health care benefits for Claimant.

. It is beyond dispute that counsel for an employer at a C & R agreement approval hearing can fairly be charged with knowledge of the terms that the employer intended to include in or exclude from the C & R agreement.

. I am perplexed by the majority's statement rejecting WCJ Colohan’s position. The majority states, "Claimant raises several interesting arguments inviting a re-weighing of the circumstantial evidence so as to support an inference of Employer’s knowledge. However, arguments as to the weight of evidence are for the fact-finder, not this Court.” (Majority op. at 8, citation omitted). With this statement, the majority ignores the fact that WC7 Colohan, not the WCAB, is the fact-finder. As stated, WCJ Colohan found that: (a) neither the C & R Agreement nor the resignation statement expressly state whether Claimant would or would not be entitled to ongoing medical health insurance coverage through United Health Care; (b) Claimant believed her health care coverage would continue after the C & R Agreement took effect; (c) the silence of Employer’s attorney and the temporary continuation of coverage contributed to this understanding; and (d) Claimant would not have entered the C & R Agreement if she understood that it meant her health care ben*1086efits would be discontinued. (WCJ Colohan's Findings of Fact, Nos. 8-12.) What the majority does here is to condone the impermissible behavior of the WCAB in re-weighing the evidence and reaching its own conclusion that the resignation statement indicates Claimant's true understanding concerning continuing health care benefits.