The opinion
I
The Attorney General of Texas
JIM MATTOX Oc,tober
18. 1985
Attorney General
Supreme Cart Building Its.MsrgsretM. Uaiael OpinionNo. JM-361
P. 0. Box 12548 chsirmsn
Aus!in. TX. 78711. 2548 Texas IndustrialAccidentBoard Be: Whether the IndustrialAcci-
51214752501 First Floor dent Board may approve a Cow-
Telex 9101874-1367
Telecopier 51214750286
200 E. RiversideDrive promiseSettlementAgreementwhich
Austin,Texas 78704 covers OalY future medical
expenses after liabilityfor cou-
714 Jackson, Suite 700 pensationbenefitsis admitted
Dallas, TX. 752024506
21417428944
Dear Ms. Haisel:
4824 Alberta Ave.. Suite 160 You ask two questionsabout the settlementof workers coepensa-
El Paso. TX. 799052793 tion claims:
915/533-3484
1. If an injury is one enumeratedin article
1001 Texas. Suite 700
8306, section lla, and if the carrier admits
HOUS,O~, TX. 77002-3111 liability while the case is peuding before the
713/223-5886 IndustrialAccidentBoard and wakes payments,way
the board japprovea CompromiseSettlementAgree-
ment which settles only the future medical
806 Broadway. Suite 312
Lubbock, TX. 79401.3479
expensesof such claimant?
0OW747.5238
2. If the board has the authorityto approvea
Compromise!SettlementAgreement in such a case,
4309 N. Tenth, Bulla B
McAllen, TX. 78501-1885
may it apIlrove
an attorney'sfee?
5121602.4547
The Texas Workers'CompensationLaw, articles8306 through83091,
V.T.C.S.,createsa systemwhich pays compensationand other benefits
ZOO ~sin Plaza, Suite 400 to a worker or a worker's beneficiariesfor incapacity or death
San Antonio, TX. 782052797
resulting from a work-relatedinjury. Section lla of article 8306.
512f225-4191
V.T.C.S.. sets forth several specificinjuries for which "incapacity
shall conclusivelybe held to be total and permanent,"thus qualifying
An Equal OppOrlWoit,‘l the claimant for lifetime benefits under section 10(b) of article
Affirmative Action Employer 8306.
As will be shown in the discussion to follow, the workers'
compensationstatute13reflect different treatment for swards of the
board and for approvalby the hoard of CompromiseSettlementAgree-
ments. With regsrd,to awards, compensationbenefits and medical
benefits are covered by differentatstutes. This is not necessarily
the csse with regsrclto CompromiseSettlementAgreements;a Compromise
p. 1654
Us. MsrgaretM. Maisel - Page 2 (JM-361)
SettlementAgreement usually attempts to settle liability for both
compensationbenefitsand medicalbenefits. Your questionpresentsan
anomalous situationwhere I:beparties wish to settle only medical
benefitsin a CompromiseSettlementAgreement.
Under article 8306, section 7. when an injured worker notifies
the carrierof a work-relatrdinjury,the carrieris obligatedto pay
for such medical expenses
as may reasonablybe requiredat the time of the
injury and at an; time thereafter to cure and
relieve fromFiG%fects naturallyresultingfrom
the injury. (Empha:sis
added).
See Texas Employers'InsurfEce Associationv. Chappell. 494 S.U.2d
159. 160 (Tex. 1973); Peeples v. Home IndemnityCornpane, 617 S.W.2d
274 (Tex.Civ. AppP.- San Antl>nio
1981, no writ). The additionof "at
any time thereafter"was to provide for medical expensesunlimitedas
to the date at which they become necessary. See Pearce v. Texas
anployersInsuranceAssociation,403 S.W.2d 493.496, 498 (Tex. Civ.
APP- -B1966),aff'duriam, 412 S.W.2d 647 (Tex. 1967).
Nevertheless,section5 Iofarticle8307 provides,in part:
Notwithstandingany other provision of this
law, as amended, no award of the Board, and no
judgment of the court, having jurisdictionof a
claim against thr, association for the cost or
expense of items of medical aid, hospital ser-
vices, nursing, c'h:lropractic
services,medicines
or prostheticappliancesfurnishedto an employee
under circumstancescrestinga liabilitytherefor
on the part of the associationunder the pro-
visions of this 1~. shall include in such award
or judgmentany cc’stor expenseof any such items
not actually furc.ishedto and received by the
employeeprior to Ihe date of said award or judg-
ment. . . . (Emphslsisadded).
Notwithstandinasection5. the IndustrialAccidentBoard and the
courts have approved Comprtmdse SettlementAgreements which settle
liabilityfor future medical expenses.
IndemnityCompany,648 S.U.2i 283, 284 (k%?%&~ kyy z: E:iE$
InsuranceCompany of New Yo$, 577 S.U.2d 35.3.354 (Tex. civ. App. -
Houston [14thDist.] 1979. writ ref'd n.r.e.). These cases.however.
settlement of all future &dical expenses. Liability for future
medical expenses is a diiferent question from whether specific
p. 1655
ns. MargaretM. Maiael - Page 3 (JM-361)
expensesare necessary and ressonable. The court in Pearce v. Texas
EmployersInsuranceAssocist~~on, 403 S.W.2d493. dealt with the effect
of section 5 of article 8YF on a Compromise SettlementAgreement
which settled both liability for and the amount of future~medical
expenseswith a sum certain. The court held that section 5 did not
affect the board's authority under section 12 of article 8307 to
compronise claims for future medical services because section 5
applies only to "awards"of the board and to judgmentsof the court.
403 S.W.2d at 498. In Attorney General Opinion UW-333 (1957), this
office reached the same conclusion. The Pearce case was affirmedby
the Texas Suprane Court. !;eePearce v. Texas Employers Insurance
Association,412 S.W.2d 647 'FEx. 1967). Thus, CompromiseSettlceent
Agreewentsserve a differentpurpose from final awards of the board
and are thereforesubject to differentstatutes. See 403 S.W.2d at
498; see also Kinsey v. NortJem InsuranceCompany3 Nw York. 577
S.W.2dat 354-55.
Accordingly,section l:! of article 8307 provides the bosrd's
basic authorityto approve Cmpromise SettlementAgreements. Section
12 providesin part:
Where the liabi$ty of the associationor the
extent of the injury of the employeeis uncertain,
indefinite or incltpableof being satisfactorily
established,the bclardmay approveany compromise,
adjustment,settlenlent or commutationthereofwade
between the partier;.(Emphasisadded).
Severe and immediatefiasncialneed way tempt an injuredworker
to settlea right to lifetimr:benefitsfor iramediate cash in an awount
which is inadequateto compensateor to provide medical care for the
claimantfor life. See Walden v. Royal Globe InsuranceCompany, 577
S.W.2d 296. 298-99xxT%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
lifetimebenefitshe might receive in an award; this is the nature of
a CompromiseSettlementAgreewent. Some compromises.however, can be
grossly inadequate, As indicatedin AttorneyGeneral OpinionWW-333,
the board has discretionunder section 12 in dischargingits duty to
protect injuredworkers. Consequently,under section12 the board x
refuse to approveany settlnwnt which does not adequatelyprotectthe
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. %tselfpreventsthe bosrd from approvinga
Compromise Settlement Agreem'cntwhich finally settles only future
lnedicalexpenses after thl6 carrier admits liability and nakes
compensationpayments for ML injury enumerated in section lla of
p. 1656
I .
Ms. Margaretn. Liaise1- Page 4 (JR-361)
article 8306. Section 12. by its terms. requiresuncertaintyeither
to (1) liability,or (2) tie extent of the injury. If the carrier
admits liability for lifetime compensationbenefits for au injury
enumeratedin section Lla in:tlethe case is pending before the Board
aud makes payments,It is difficultto conceivehow uncertaintycan
still exist as to liabili.tyfor necessary and reasonable future
medical expensesfor the iuj~ury.The only questionremainingcan be
over the amount of future stadicalexpenses. i.e., whether specific
expenses are in fact necessary and reasonable. This question will
always be "uncertain." Comequently, if we interpreted"uncertainty"
in section12 of article83C7 to cover uncertaintyas to the amount of
specific medical sxpenses, the provision would not limit any
settlementsand 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 disagreementabout whether specific
medical expenses are reag,anableand necessary will not justify
settlementof all futureuel:lcalexpensesunder section 12 of article
8307. In light of this result.we do not addressyour suggestionthat
the prerequisiteto settlementof a "disputed"case in section 10(d)
of article8306 also applier,to the situationat band.
Your second questionis conditionedupon an affirmativeresponse
to your first question. Iecause of our negative response to this
question,we do not reach your secondquestion.
SUMMARY
The IndustrialA.ccidentBoard nay not approvea
CompromiseSettleiaent Agreenentwhen the carrier
admits liability‘bleforethe board and makes con-
pensation paynents for an injury enunarated in
section lla of article 8306. V.T.C.S..and seeks
to finally settle only future medical expensesin
the CompromiseSet.tlenentAgreenent.
J-/h
Very truly yours
.
JIn HATTOX
AttorneyGeneralof Texas
TOMGREEN
First AssistantAttorneyGereral
DAVID R. RICHABDS
ExecutiveAssistantAttorney General
p. 1657
r -.
. a
Ms. Margaretn. Maisel - Page:5 (~~-361)
ROBERT GRAY
SpecialAssistantAttorneyGtrueral
RICK GILPIN
Chairman,OpinionComnittee
Preparedby JenniferRiggs
AssistantAttorney General
APPROVED:
OPINIONCOMMITTEE
Rick Gilpin.Chai-
Colin Carl
Susan Garrison
Tony Gulllory
Jim Noellinger
JenniferRiggs
Nancy Sutton
Sarah Woelk
p. 1658