Patricia Henderson, an over-the-road truck driver for SAIA, Inc., sustained a femoral neck fracture on May 17, 2007, after falling from her truck. The injury was accepted as compensable, and she received medical treatment and temporary disability benefits. Initial surgery by Dr. Gary Stevens on May 29, 2007, was unsuccessful, leading to a total hip replacement by Dr. Andrew Shinar on January 9, 2008. Although Dr. Shinar indicated it could take up to two years for Henderson to achieve maximum medical improvement, the medical records from both doctors were not included in the case file.
An independent examination by Dr. W. Blake Garside on August 26, 2008, determined Henderson had reached maximum medical improvement with a 15% anatomical impairment and imposed restrictions that prevented her from returning to work as a truck driver. Subsequently, Henderson, without legal representation, negotiated a settlement with Discover RE, the employer's insurer, which included a 26% permanent partial disability agreement. A law firm representing the employer confirmed the settlement terms in a letter sent on November 24, 2008, alongside required documents for court approval.
The case was initially referred to the Special Workers' Compensation Appeals Panel, but it was later transferred to the Supreme Court of Tennessee to address a request to set aside the settlement based on Tennessee Rule of Civil Procedure 60.02. The trial court found no grounds to overturn the settlement, and the Supreme Court affirmed this judgment.
Settlement of a workers' compensation claim in Tennessee requires judicial approval, necessitating both parties to present the case to a judge, explain the worker's injury, and detail the agreed settlement. The judge must confirm the worker's understanding and acceptance of the terms before granting approval. In this case, the law firm proposed to seek approval from a judge in Shelbyville without the employee's personal appearance by submitting a sworn Affidavit asserting her understanding and agreement to the settlement terms.
The Affidavit was drafted by the law firm for the employee's signature, requiring notarization and return. After completing the necessary documents, the settlement was presented to a Davidson County Circuit Court judge, who approved it on December 8, 2008. The court's order noted the employee retained a 15% permanent impairment, her medical bills were fully paid, and she was awarded a lump sum of $71,451.40 for vocational impairment. Future medical benefits remained open, and the terms were acknowledged as reflective of the parties' agreement.
Six months later, on June 4, 2009, the employee filed a motion to set aside the court's order, citing Tennessee Rule of Civil Procedure 60.02. She alleged the settlement approval resulted from mistakes, fraud, misrepresentation, and misconduct by the employer and insurer. Key assertions included her lack of legal representation, absence from the court during the approval, and lack of notice regarding the approval proceedings. The motion claimed the settlement terms were unfair and inadequate under workers' compensation statutes. The employee's affidavit indicated she was misinformed about her recovery timeline from surgery and retracted previous affirmations regarding her understanding and acceptance of the settlement. Supporting affidavits from her husband also accompanied the motion.
The employee's affidavit indicated reliance on information from her husband, Jerry Henderson, who contacted the Tennessee Department of Labor regarding her settlement. Henderson claimed he was told by an unidentified representative that consulting an attorney was unnecessary and that the settlement offer was the maximum legally permissible amount. He did not clarify the context of this claim in his affidavit. The employer contested the employee's motion to set aside the settlement, asserting it was untimely and failed to meet the criteria under Rule 60.02. The employer provided supporting documents, including a report from Dr. Garside and letters detailing the settlement terms, arguing that the employee was aware of her rights and deemed the settlement beneficial. The trial court denied the motion on August 5, 2009, citing untimeliness and a lack of evidence for fraud or misconduct by the employer. The employee appealed, and the case was initially referred to the Special Workers’ Compensation Appeals Panel before being transferred to the full Court. The standard of review for decisions under Rule 60.02 is based on whether the trial court abused its discretion, which occurs if the court applies an incorrect legal standard or makes illogical decisions.
The abuse of discretion standard prevents appellate courts from substituting their judgment for that of the trial court, maintaining a presumption of correctness for discretionary decisions. An employee can seek relief under Tennessee Rule of Civil Procedure 60.02, which allows a court to relieve a party from a final judgment even after thirty days under certain conditions, including mistake, fraud, or other misconduct. However, motions under Rule 60.02 must be filed within a reasonable time, with specific grounds related to mistake or fraud needing to be filed within one year of the judgment. The purpose of Rule 60.02 is to alleviate oppressive judgments while balancing finality and justice, not to provide relief based solely on changing circumstances or dissatisfaction with an outcome. For workers’ compensation cases, a judgment approving a settlement must be entered by the court, with relevant documents sent to the Department of Labor within ten days. A party has thirty days from the receipt of these documents by the Division of Workers’ Compensation to request the judgment be set aside. In this case, the employee did not pursue options under Rules 59.04 or 50-6-206(a)(1) but chose to seek relief solely under Rule 60.02.
Rule 60.02 serves as a mechanism to prevent inequity arising from the strict principle of finality in legal proceedings. A party seeking relief under this rule must demonstrate entitlement by clear and convincing evidence, which means the evidence must strongly support the truth of the claims made. The employee’s motion to set aside a settlement order does not cite specific subsections of Rule 60.02 but is based on grounds of mistake, inadvertence, surprise, excusable neglect, and fraud or misconduct. Tennessee courts have occasionally allowed relief for mistakes under subsection (1), particularly in cases where incorrect impairment ratings were given, but not for future disability estimations.
The employee's motion asserts she misunderstood "maximum medical improvement" when she agreed to the settlement and relied on statements made to her husband by an unidentified individual from the Tennessee Department of Labor. However, the documentation signed by her indicates she was aware that pursuing litigation could yield a different outcome and that she understood the settlement was a complete resolution of her claim. Her acknowledgment of the settlement's finality and its purported benefit to her undermines her claims of misunderstanding.
The employee claimed ignorance of her legal rights due to lack of counsel, but it was established that she had the right to seek independent legal advice at all times. The court emphasized that ignorance of the law is not a valid basis for relief under Rule 60.02, referencing Food Lion, Inc. v. Washington County Beer Bd. and Spruce v. Spruce. Thus, the employee failed to demonstrate grounds for relief under Rule 60.02(1).
Additionally, the employee argued that misleading information received by her husband from the Tennessee Department of Labor constituted fraud or misconduct under Rule 60.02(2). However, the court found that the employer could not be held responsible for this information, as they did not direct the employee or her husband to the Department, nor were they aware of any inquiries made. The employer's documents did not mislead the employee and clearly outlined the settlement process. The court affirmed that the employee failed to provide sufficient evidence of fraud or misconduct by the employer, thereby upholding the trial court's denial of relief under Rule 60.02(2).
Rule 60.02(5) allows for relief under extraordinary circumstances, as noted in Federated Ins. Co. v. Lethcoe, but only a few cases, like Brown v. Consolidation Coal Co., have qualified under this standard. The court's review confirmed that no extraordinary circumstances existed in this case that would justify relief from the judgment.
The Court in Brown emphasized the importance of equity, justice, and the courts' role in workers’ compensation, asserting the need to correct errors in rulings. In Kirk v. St. Michael Motor Express, the court granted relief under Rule 60.02(5) due to ambiguities in the settlement regarding disability amounts and the unconscionable nature of future medical benefits. Generally, courts resist applying Rule 60.02(5) in workers’ compensation cases, particularly post-settlement, to uphold judicial economy and the finality of agreements. Parties settling claims usually cannot seek relief under this rule, even if there is a subsequent increase in disability. The employee's arguments for relief—lack of counsel, absence of notice for court approval, and no personal appearance at the approval hearing—were deemed insufficient. The court noted that the employee chose not to consult an attorney and requested approval in her absence through an affidavit, which did not constitute error. While personal appearance is not mandated for settlement approval, it is recommended. The employee cited a precedent requiring notice for court approval, but this was not upheld in her case.
The Court in Wilkinson emphasized the need for notice to be served to an employee when a settlement agreement is being presented for judgment, particularly when the employee is unrepresented and unaware of the implications of the agreement. However, the circumstances in the current case are markedly different; the employee was fully informed about the settlement process, had the option to appear before the judge, and no fraudulent behavior was present. The employee acknowledged her understanding of the settlement terms in her affidavit. While the Court acknowledges the importance of providing notice as highlighted in Wilkinson, it concludes that the lack of notice is not detrimental in this instance.
The employee's reference to Dennis v. Erin Truckways is deemed irrelevant since that case involved a settlement approved by a labor department, not a court. Additionally, the employee's claim for relief under Rule 60.02, based on not receiving the benefits entitled under Tennessee Code Annotated section 50-6-206(a)(1), is unconvincing. The employee failed to provide medical evidence contradicting the conclusions of Dr. Garside and has affirmed in her affidavit that she believed the settlement was in her best interest, suggesting she found the terms fair at the time of agreement.
The parties agreed to a settlement reflecting a 26% permanent partial disability to the body as a whole. The trial court's order acknowledged the employee's 15% permanent physical impairment, confirmed that her medical bills of $43,029.45 were fully paid, and awarded her a lump sum of $71,451.40, which equated to a vocational impairment of 26%—1.73 times the medical impairment rating. This settlement exceeded the 1.5 cap on benefits outlined in Tennessee Code Annotated section 50-6-241 (d)(1)(A) (2008), with future medical benefits remaining available. The court found no merit in the employee's claim that she did not receive substantial benefits under the workers’ compensation statutes, noting the absence of specific suggestions for alternative benefits or pertinent medical evidence. The employer requested a determination of a frivolous appeal; however, the court declined, stating that a frivolous appeal lacks merit and has no reasonable chance of success. While penalties for frivolous appeals are possible under Tennessee Code Annotated sections 50-6-225(i) and 27-1-122, they are reserved for clear cases of frivolity. The court concluded that the employee did not demonstrate an abuse of discretion by the trial court nor did she prove that the settlement was inadequate. Consequently, the trial court's decision is affirmed, with costs assigned to the employee.
