Settlements

1. Joint Petitions

85 O.S. §84A sets out the procedure for court-approved settlement (joint petition) of injured worker claims. The §84A settlement process cuts off not only a claimant's demands created by changed conditions before or after approval, but also an employer's claim to overpayments of temporary disability.

Because the norms that govern compensation of workers for an on-the-job injury or death constitute public law, agreements between employers and employees can never attain legally binding force without the trial tribunal's on-the-record approval. Section 84 settlement approval is not merely a ministerial function. It is a judicial act that is absolutely indispensable to the agreement's legal viability.
Jobe v. American Legion #7, 2001 OK 75, 32 P.3d 860 (thorough discussion of settlement process)

Grace Hospice of Oklahoma, LLC v. Bradley, 2007 OK CIV APP 36, 159 P.3d 297 (vacating joint petition settlement)

An order of the Workers' Compensation Court approving a joint petition is final only as to those who are parties to the agreement. It is final as to medical providers only after twenty days has expired from the date they receive notice of the settlement order. Baptist Medical Center of Oklahoma, Inc. v. Transcon Lines, 1993 OK 38, 852 P.2d 139.

When a worker settles his claim by joint petition and later dies as a result of his injuries, the death benefit beneficiaries are not barred from asserting their separate and distinct claims for death benefits. Viersen & Cochran Drilling Company v. Ford, 1967 OK 12, 425 P.2d 965.

2. Agreed Denials

Thornton v. Mott Roofing and Sheet Metal, 1989 OK CIV APP 79, 787 P.2d 877.

See also, Baptist Medical Center of Oklahoma, Inc. v. Transcon Lines, supra (joint petition settlement was not final as to medical care provider, because it was not a party to the proceedings and did not receive notice of the court's order).

3. Subrogation and Deficiency

An injured worker may not receive a double recovery by collecting workers' compensation benefits and a recovery against a third party. The employer has an equitable subrogation lien against the proceeds of a third party settlement or award. Prettyman v. Halliburton Co., 1992 OK 63, 841 P.2d 573 (discussing the calculation of the subrogation lien amount for settlements with and without compromise).

85 O.S. §44(a), relieves the employer of paying further comp benefits until the claimant can show a deficiency between the net amount he received in the settlement and the amount to which he is statutorily entitled on his compensation claim. Caffey v. Soloray, 2002 OK 82, 57 P.3d 870. This means that the settlement of the subrogation lien of a workers' compensation insurance company does not settle its deficiency claim unless the deficiency specifically addressed in a third party settlement.

Milliser v. Mercury Drilling Co., 1987 OK CIV APP 22, 738 P.2d 962.

Keeney v. TTC Illinois, Inc., 2002 OK CIV APP 48, 46 P.3d 192.

We find it to be the intent of section 44 that only the direct/actual recovery by the worker is considered in determinating the "deficiency." In this case, that amount was specifically delineated by the federal court, and was the amount specified in the three-judge panel's order. Thus, the three-judge panel order did not err in excluding attorney fees and the loss of consortium recovery when determining the section 44 deficiency.
Nichols RV World v. Crandell, 2003 OK CIV APP 96, ¶17, 79 P.3d 1131.

Only the District Court has jurisdiction to apportion the proceeds of an injured workers settlement of a third party claim. City of Tulsa v. Carr, 2008 OK CIV APP 24, 178 P.3d 879.


When a claimant settles a third party case, in the absence of agreement with the insurance carrier, the federal or district court with jurisdiction should issue an order apportioning the proceeds. If the carrier fails to satisfy its subrogation interest, including future liability for benefits, it may apply to the workers' compensation court for suspension of benefits until claimant can show that a deficiency exists "between what Injured Worker is entitled to under the Workers' Compensation Act and what he actually collected from negligent third party." Milliser v. Mercury Drilling Co., 1987 OK CIV APP 22, 738 P.2d 962. This procedure insures that injured worker will receive the total amount he is entitled to under the Act; however, it guards against a double recovery. Coker-Mitchell Company v. State Industrial Court, 1969 OK 30, 450 P.2d 894.

4. Commute to Lump Sum

Whenever an injured person receives an award for permanent partial disability, . . . the injured employee or claimant, for good cause shown, may have the award commuted to a lump-sum payment by permission of the Court. . . . The lump-sum payment shall not exceed Four Thousand Dollars ($4,000.00) or twenty-five percent (25%) of the total award, whichever is the larger sum.
85 O.S. §41(A).

Unaccrued death benefits, permanent total benefits and temporary total benefits may not be accelerated and commuted to lump sum upon employer's or carrier's ten-day default in paying award. Pepsico v. Tate, 1991 OK 13, 806 P.2d 644; 85 O.S. §41(C).

Court has wide discretion in commuting award to lump sum, and where it does not affirmatively appear that the court abused its discretion and such commutation tends to promote substantial justice to all parties, such commutation will not be disturbed on appeal. Lee Way Motor Freight, Inc. v. Wilson, 1980 OK 48, 609 P.2d 777.

Order entered on a trial judge's own motion, without notice to parties or hearing on need, violates due process. Department of Public Safety v. Jones, 1978 OK 64, 578 P.2d 1197.

4.1. Cases Approving Lump Sum

Fox-Smythe Transportation Co. v. McCartney, 1973 OK 55, 510 P.2d 686. The court held that the commutation of a portion of the award to a lump sum was supported by competent evidence and did not constitute an abuse of discretion. The commutation could not be said to have been made in face of impending death, for although the claimant was dying of an incurable malady, there was no prediction or speculation concerning how long he might survive. Moreover, evidence showed that his total monthly income was insufficient to defray his living expenses and at the same time pay current obligations and allow contemplated home repairs. Treatise cited.

City of Frederick v. Elmore, 1978 OK 160, 587 P.2d 1365. The worker suffered a heart attack on the job and underwent open heart surgery. The carrier argued that a commutation of the award to a lump sum was an abuse of discretion because the worker was unlikely to live out the term of the award. The court disagreed because the employer and carrier presented no evidence as to a specific probable time of death.

Petroleum Maintenance Co. v. Herron, 1949 OK 76, 206 P.2d 182. With lump sum claimant could start a small business of his own which would afford him a living for himself and his family.

Barnett Petroleum Co. v. Holder, 1939 OK 372, 94 P.2d 827. Where claimant had wife and seven children, was heavily in debt, and could liquidate debts and purchase a small farm, lump sum was not abuse of discretion.

4.2. Cases Denying Lump Sum

Kerr's, Inc. v. Smith, 1961 OK 27, 359 P.2d 330. The Commission abused its discretion in commuting a total disability award to a lump-sum payment, on the ground that the employee would not survive the otherwise applicable payment period of 200 weeks. However, see City of Frederick v. Elmore, supra; Fox-Smythe Transportation Co. v. McCartney, supra.


Special Indemnity Fund v. Hull, 1962 OK 42, 369 P.2d 162. Lump sum denied on the ground that the purpose was not relief of extreme hardship but an increase in claimant's standard of living. Claimant had run up installment debts for repairs on his home and the purchase of new furniture, a new refrigerator, and a new piano.

Special Indemnity Fund v. Litterell, 1963 OK 86, 380 P.2d 946. Partial lump-sum payment denied where the payment was to raise the claimant's standard of living and not to meet expected future medical expenses for his wife.

Note: For actions in which the subsequent injury occurred on or after November 1, 2005, lump sum provisions have been removed, and awards must be paid periodically. 85 O.S. §172(B)(3).


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