Settlements: Contracts

MONTANA SUPREME COURT DECISIONS

Newlon v. Teck American, Inc. [11/10/15] 2015 MT 317, 381 Mont. 378, 360 P.3d 1134 Although the 60-month rule was in effect at the time the parties agreed to settle the claimant’s claim for $25,000 and lifetime medical benefits for his knee and back conditions, the court found no provision which prevented the employer from contracting around the statute or from promising more than is provided in the statute.  With no conflict with the relevant statutes, the court found that the promise of lifetime care is not an illegal objective.  Under a legal contract, a deal is a deal.

Newlon v. Teck American, Inc. [11/10/15] 2015 MT 317, 381 Mont. 378, 360 P.3d 1134 The court found a settlement in which the time-of-injury employer agreed to pay the claimant $25,000 and cover medical care for his knee and back “for life,” memorialized on a standard compromise and release form from the Department, was a valid and enforceable contract.

Gamble v. Sears, 2007 MT 131, 337 Mont. 354, 160 P.2d 537 A settlement agreement is a contract; therefore, the court applies contract law to determine whether an agreement is valid and enforceable.
Wiard v. Liberty Northwest Ins. Corp., 2003 MT 295 Noting that laws existing at the time a contract is formed become part of the contract, the Supreme Court held that a settlement reserving medical benefits to pro se claimant memorialized in DLI standardized petition form incorporated the 60-month limitation set forth in section 39-71-704(1)(d), MCA (1991).
 
MONTANA WORKERS' COMPENSATION COURT DECISIONS

Hartung v. Montana State Fund [03/15/16] 2016 MTWCC 3 While medical evidence demonstrated that the claimant had a learning disability and extremely low cognitive ability, the reports were equivocal as to whether he had a mere mental weakness, or was incapable of understanding the force and effect of his settlement agreement.  Without an expert’s testimony that the claimant was incapable of understanding the settlement agreement, the Court is not persuaded that he was unable to understand it.

Hartung v. Montana State Fund [03/15/16] 2016 MTWCC 3 Mental weakness which falls short of the claimant being incapable of understanding the force and effect of an agreement is insufficient to invalidate a contract.  Capacity to contract deals with the ability to understand the terms of the document, not a person’s actual understanding.

Baker v. Fireman's Fund Ins. Co. [03/22/12] 2012 MTWCC 9 Petitioner gave his attorney authority to negotiate and finalize a settlement agreement.  The contract became binding when the parties mutually agreed to its material terms, notwithstanding the absence of Department of Labor and Industry approval.  Petitioner never expressed or conditioned his acceptance upon his review and approval of a written agreement.  Petitioner later tried to repudiate the agreement based upon an unarticulated condition, but his latent intent not to be bound did not prevent the formation of a valid contract and Petitioner is bound by it.

Montana State Fund v. Simms [12/29/10] 2010 MTWCC 40 Settlement agreements are contracts and must be construed and enforced as such.  A settlement agreement is binding at the time the parties agree to settle the case and need not have Department approval before it is a legally binding settlement agreement.
Narum v. Liberty Northwest Ins. Corp. [06/04/08] 2008 MTWCC 30 The full and final settlement entered into by the parties is a contract and governed by contract law. Where the settlement agreement provides for medical benefits to be left open and acknowledges the parties’ awareness that a hip replacement may become necessary, Respondent is liable for further medical benefits related to Petitioner’s left hip.
Murer v. Montana State Fund [10/03/06] 2006 MTWCC 32 Although the contract was not enforceable until after Department of Labor and Industry approval, it was nevertheless binding on the parties prior to DLI’s determination. Therefore, the date on which the parties entered into the settlement agreement should be used to determine the party’s eligibility for benefits.
Fahrenbruck v. Montana Power [4/24/03] 2003 MTWCC 29 Where there is consideration for a full and final compromise settlement which releases the insurer from further liability for permanent partial disability benefits, that settlement bars any claim for such benefits absent proof of mutual mistake of fact or law, or some other legal ground which would permit the Court to set aside the agreement.
Crawford v. Liberty [2/05/02] 2002 MTWCC 7 Settlement agreements are contracts. Kienas v. Peterson, 191 Mont. 325, 328, 624 P.2d 1, 2 (1980). As a general proposition, upon rescission of a contract, each party is required to restore everything of value received from the other. 28-2-1713, MCA.