Settlements: Reopening: Mutuality of Mistake

MONTANA SUPREME COURT DECISIONS

Keller v. Liberty Northwest, Inc., 2010 MT 279 Statutory and case law confirm that mutual mistake may still exist when parties know about a theory of injury, if that theory is disregarded, forgotten, or not considered even though raised as a possibility.

Keller v. Liberty Northwest, Inc., 2010 MT 279 The Workers’ Compensation Court applied the wrong standard of proof for mutual mistake when it held that it must find the parties failed to know the correct diagnosis for the claimant’s injury when they entered the settlement agreement.  The test for mutual mistake is an inquiry into whether the parties considered or relied on a fact in making their bargain, not a mere chronological examination into whether parties knew of a fact prior to entering into the agreement.

Keller v. Liberty Northwest, Inc., 2010 MT 279 Mutual mistake may still exist when parties know about a theory of injury if that theory is disregarded, forgotten, or not considered even though raised as a possibility.  The statutory definition of “mutual mistake” contemplates that parties might be merely “forgetful” of a fact or “unconsciously ignorant.”  The WCC erroneously required the parties in this case to be entirely ignorant – not just unconsciously so.
 
WORKERS' COMPENSATION COURT DECISIONS

Bond v. Associated Loggers Exchange [06/06/13] 2013 MTWCC 13 Where Petitioner presented evidence that Respondent may have been mistaken as to which shoulder Petitioner injured in his industrial accident, Petitioner presented no evidence that he himself was ever mistaken as to which shoulder was injured.  There is therefore no evidence that a mutual mistake of fact occurred and the additional benefits Petitioner now seeks are barred by the settlement agreement.
Keller v. Liberty Northwest Ins. Corp. [02/16/10] 2010 MTWCC 4 Although the claimant testified that prior to entering into her settlement agreements, she had no knowledge that her medical condition included either scapular winging or long thoracic nerve damage, her medical records predating the settlement agreements contain multiple references to these conditions. The claimant submitted no evidence that the insurer had no knowledge of these conditions. To contend the insurer had no knowledge of these conditions is contrary to the evidence submitted to the Court. Therefore, no mutual mistake of fact occurred.
Stokes v. Liberty Mutual [12/17/09] 2009 MTWCC 39 Although Petitioner contended that he was mistaken in relying on the job analyses which were approved by his treating physician because he believed he could obtain one of the approved positions after he settled his claim and his job search has so far been fruitless, the Court concluded that Petitioner had not proven that similar jobs within his restrictions do not exist, nor had he proven that both he and the insurer were mistaken as to the existence of those jobs.
Harter v. Liberty Northwest Ins. Corp. [12/11/06] 2006 MTWCC 39 Even if the Court accepted Petitioner’s testimony that his physician informed him that his knee locking would cease at some point, Petitioner could not prevail. Respondent was neither aware of Petitioner’s locking knee on the date of settlement, nor knew of any statement by Petitioner’s physician that his knee would cease to lock in the future. Therefore, no mutual mistake of fact exists to justify setting aside the settlement.