Settlements: Reopening: Duress and Undue Influence

MONTANA SUPREME COURT DECISIONS

WORKERS' COMPENSATION COURT DECISIONS

Vandervalk v. Montana State Fund [11/05/09] 2009 MTWCC 35 An urgent need to pay debts does not constitute “duress.” While Petitioner may have been suffering from financial hardship at the time he settled his claim, he suffered no duress as defined under § 28-2-1711, MCA, and therefore he is not entitled to reopen his settlement.

Frazer v. Montana State Fund [07/20/05] 2005 MTWCC 41 Where a claim was denied for the claimant’s alleged failure to timely report his industrial injury to his employer and the claimant then settled with the insurer on a disputed liability basis, the claimant is not entitled to reopen his settlement based on allegations that he entered into the settlement agreement based on financial hardship since financial hardship does not constitute legal duress or undue influence.

Frazer v. Montana State Fund [07/20/05] 2005 MTWCC 41 Where a claim is disputed based on an employer’s report that it was not timely notified of an alleged industrial injury, the fact that the claimant agreed to settle his case on a disputed liability basis because of financial pressures is not a basis for a finding that the claimant was acting under economic duress which entitles him to rescind (reopen or set aside) the settlement agreement. To prove economic duress, the claimant must show “(1) a wrongful act that; (2) overcomes the will of a person; (3) who has no adequate legal remedy to protect his interests.” Somersille v. Columbia Falls Aluminum Co., 255 Mont. 101, 108, 841 P.2d 483, 487 (1992).

Frazer v. Montana State Fund [07/20/05] 2005 MTWCC 41 Where a claim is disputed based on an employer’s report that it was not timely notified of an alleged industrial injury, the fact that the claimant agreed to settle his claim on a disputed liability basis because of financial pressures is not a basis for finding undue influence on the part of the insurer.

Frazer v. Montana State Fund [07/20/05] 2005 MTWCC 41 To reopen a settlement based on undue influence, the claimant must prove “(1) the use by one in whom a confidence is reposed by another or who holds a real or apparent authority over him of such confidence or authority for the purpose of obtaining an unfair advantage over him; (2) taking an unfair advantage of another's weakness of mind; or (3) taking a grossly oppressive and unfair advantage of another's necessities or distress.” § 28-2-407, MCA (1999).

Frazer v. Montana State Fund [07/20/05] 2005 MTWCC 41 To reopen a settlement on grounds of duress, the claimant must prove “(1) unlawful confinement of the person of the party, of the husband or wife of such party, or of an ancestor, descendant, or adopted child of such party, husband, or wife; (2) unlawful detention of the property of any such person; or (3) confinement of such person, lawful in form but fraudulently obtained or fraudulently made unjustly harassing or oppressive.” § 28-2-402, MCA (1999).

Frazer v. Montana State Fund [07/20/05] 2005 MTWCC 41 Settlement agreements in workers’ compensation cases may be rescinded (reopened or set aside) upon proof of duress or undue influence. § 28-2-1711, MCA (1999).