Damewood v. Lanford Brothers Co.

COURT OF APPEALS OF VIRGINIA

Present: Chief Judge Fitzpatrick, Judges Willis and Bumgardner
Argued at Salem, Virginia

PHIL DAMEWOOD, ADMINISTRATOR OF
THE ESTATE OF TEDDY D. DAMEWOOD
OPINION BY
v. Record No. 0901-98-3 JUDGE RUDOLPH BUMGARDNER, III
JANUARY 26, 1999
LANFORD BROTHERS COMPANY AND
THE MARYLAND INSURANCE GROUP

FROM THE VIRGINIA WORKERS' COMPENSATION COMMISSION
J. Christopher Clemens (Guynn & Clemens,
P.C., on brief), for appellant.

William S. Sands, Jr. (Duncan and Hopkins,
P.C., on brief), for appellees.

The claimant's estate appeals the decision of the Workers'

Compensation Commission that denied it the proceeds of a

settlement offer. The claimant entered into a settlement

agreement with his employer and its insurance carrier and

submitted it to the commission for approval. When it learned of

the claimant's death, the carrier notified the commission that it

was withdrawing its settlement offer. The commission held that

the carrier was entitled to withdraw the offer. Concluding that

Code § 65.2-701 permitted the withdrawal, we affirm the

commission's decision.

The claimant received an injury in September 1995. The

employer accepted his claim as compensable, and the commission

awarded benefits. During the fall of 1997, the claimant and the

carrier negotiated a settlement agreement. They submitted
settlement documents to the commission December 8, 1997, but

approximately two weeks later the claimant died of causes

unrelated to his compensable injury. The estate notified the

commission of the claimant's death and requested payment of the

settlement directly to the estate. The carrier then notified the

commission that it was withdrawing its settlement offer. The

deputy commissioner concluded that either party could withdraw

consent before commission approval of the settlement agreement,

and the full commission affirmed that decision.
Compromise settlement agreements are not binding until

approved by the commission. See Code § 65.2-701(A). 1 The code
1
Code § 65.2-701:

A. If after injury or death, the
employer and the injured employee or his
dependents reach an agreement in regard to
compensation or in compromise of a claim for
compensation under this title, a memorandum
of the agreement in the form prescribed by
the Commission shall be filed with the
Commission for approval. The agreement may
be prepared by the employee, the employer or
the compensation carrier. If approved, the
agreement shall be binding, and an award of
compensation entered upon such agreement
shall be for all purposes enforceable as
provided by § 65.2-710. If not approved, the
same agreement shall be void. Such agreement
may be approved only when the Commission, or
any member thereof, is clearly of the opinion
that the best interests of the employee or
his dependents will be served thereby. The
approval of such agreement shall bind infant
or incapacitated dependents affected thereby.
Any agreement entered into during the
pendency of an appeal to the Court of Appeals
shall be effective only with the approval of
the Commission as herein provided.

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provides that when a claimant and employer have reached a

settlement agreement and filed a memorandum of the agreement with

the commission for approval, the agreement is binding if the

commission approves it. The agreement is not binding until the

commission approves it, and either party may withdraw its offer

to settle before approval. See Brickell v. Virginia State Police

Dep't, No. 150-35-39 (Va. Workers' Comp. Comm'n Dec. 19, 1994)

(agreement is neither final nor enforceable until approved by the

commission). The code contains no exception to the basic

provision that an agreement becomes binding when the commission

approves it.
The estate contends the settlement agreement is binding on

the employer if the claimant dies before the commission approves

the agreement. It asserts that the commission in Lloyd v.

Halifax Cotton Mills, Inc., 64 O.I.C. 209 (1985), created an

exception to the general provision when the claimant dies of

unrelated causes. The estate argues the exception for death

created in Lloyd binds the commission unless Sovran Financial
Corp. v. Nanney, 12 Va. App. 1156, 408 S.E.2d 266 (1991),

overruled Lloyd.

In Lloyd, the claimant and the carrier filed their petition

to have the commission approve a compromise settlement. The

claimant died before the commission approved the settlement, and

the carrier argued that the death voided the settlement. The

deputy commissioner approved the settlement anyway. The full

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commission ruled that claimant's death did not void the agreement

and the employer was bound by the settlement. It reasoned that

the commission must approve an agreement if it was in a

claimant's best interest. Since this claimant was dead, the only

conclusion it could reach would be that a settlement was in the

best interest of the claimant. Because death did not void the

settlement, the employer was bound when the commission did

approve it.
In Nanney, the commission had approved a settlement between

the claimant and the carrier. Claimant's attorney petitioned for

review of the approval within twenty days of the approval. This

Court held that the commission could review an approved agreement

if a petition to review was filed within twenty days. The

petition did not require a claim of fraud or mistake. See id. at

1159, 408 S.E.2d at 268 (citing Harris v. Diamond Constr. Co.,

184 Va. 711, 721, 36 S.E.2d 573, 578 (1946)). That holding does

not affect the decision in Lloyd.

Both parties cite commission decisions that suggest Nanney
created a rule that either party could unilaterally withdraw a

settlement offer for up to twenty days after the commission has

approved a settlement. However, Nanney does not support such a

broad interpretation. It simply held that either party could

petition for review within the twenty-day period.

Code § 65.2-701(A) provides that when a claimant and the

employer have reached a settlement agreement and have filed a

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memorandum of the agreement with the commission for approval,

such agreement shall be binding if approved. Compromise

settlement agreements are not binding until approved by the

commission. Lloyd held that death did not void the agreement, so

when the commission approved the settlement after death, the

employer was bound. It did not create an exception to the

general rule fixing the point at which a settlement becomes

binding. Nanney applies after the commission has given approval.
In the present case, the carrier withdrew its settlement

offer before approval by the commission. Although the claimant

died, the carrier had every right to withdraw its consent before

approval made it a binding agreement. The plain wording of the

statute permitted this action, and it contemplates no exception

if the claimant should die in the interim between agreement and

approval.

For the reasons cited, we affirm the commission's decision.

Affirmed.

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