COURT OF APPEALS OF VIRGINIA
Present: Chief Judge Moon, Judge Coleman and Senior Judge Cole
Argued at Richmond, Virginia
DAVID MICHAEL TOMLIN
v. Record No. 2475-95-2 OPINION BY
CHIEF JUDGE NORMAN K. MOON
VANCE INTERNATIONAL, INC. MAY 21, 1996
FROM THE VIRGINIA WORKERS' COMPENSATION COMMISSION
Gregory S. Hooe (Traylor & Morris; Joynes and
Bieber of Richmond, P.C., on briefs), for
appellant.
Lynne J. Fiscella (Cotter, Fiscella &
Carleton, on brief), for appellee.
David Michael Tomlin appeals from the order of the Workers'
Compensation Commission holding that Vance International, Inc.
and its insurer did not waive subrogation rights in a settlement
of his compensation claim. Because the employer unequivocally
waived its subrogation rights when it settled Tomlin's workers'
compensation claim, we reverse the commission's ruling.
Tomlin was employed as a security guard by Vance
International. On September 9, 1989, Tomlin was assaulted during
a riot and was severely injured. After the accident, the
employer paid certain workers' compensation benefits pursuant to
the Minnesota Workers' Compensation Act. Tomlin then elected to
file a claim in Virginia pursuant to Code § 65.2-508. Vance
International denied the claim initially but ultimately accepted
it as compensable. On September 5, 1991, Tomlin filed suit
against several third parties who were allegedly responsible for
his injuries.
On April 8, 1992, Vance International and Tomlin forwarded
to the commission a petition, order, and affidavit setting forth
the terms of a settlement of Tomlin's workers' compensation
claim. The commission approved the petition on April 15, 1992.
At various times after that date, Tomlin settled his claims
against the third parties. Vance International asserts that it
is subrogated to Tomlin's claim against the third parties and is
entitled to reimbursement from the third-party settlement funds.
Tomlin maintains that Vance waived its subrogation rights when
it settled the workers' compensation claim. Tomlin's counsel is
holding the proceeds from the third-party settlements pending
resolution of the subrogation issue.
The above facts were stipulated by the parties before the
commission. The record also contains parol evidence in the form
of correspondence exchanged by the parties during negotiations to
settle the workers' compensation claim. The correspondence
indicates that Vance International knew about the personal injury
case in Minnesota and provided videos of the riot in order to
assist Tomlin in that case. The correspondence also indicates
that Tomlin was aware of "a potential worker's compensation lien
being filed in Minnesota" and that Vance's assistance with the
third-party claim was related to that lien in some manner.
The parties' petition to the commission provides, in
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pertinent part:
This compromise settlement shall be
binding upon the Claimant, the employer
and/or its insurer and is intended to be a
full and final settlement of any claims,
demands and obligations, between the Claimant
and/or the employer, or its insurance carrier
which might be asserted by the Claimant
and/or employer, or its insurance carrier,
pursuant to the Virginia Workers'
Compensation Act, Virginia Code Section
65.2-100 et seq.
* * * * * * *
The Claimant, employer and its carrier
further represent that they understand and
agree that this compromise agreement, upon
approval, constitutes a full and final
settlement of this claim and that the
Claimant, employer and insurance carrier
shall thereupon be forever released and
discharged from any and all liabilities,
past, present and future in connection with
this case including but not limited to,
benefits for work incapacity, vocational
rehabilitation services, placement services,
benefits for permanent disability, and any
rights which might be alleged to arise under
Virginia Code Section 65.2-100 et seq., . . . .
The commission's order approving the petition provides, in
pertinent part:
it is hereby
ORDERED that the employer and insurance
carrier shall pay the sum of $86,000 to the
Claimant in a lump sum and thereafter the
parties shall be forever released and
discharged from any and all past, present and
future claims, demands and obligation [sic]
in connection with this claim, including
benefits for permanent disability, and rights
which might be alleged to arise under
Virginia Code Section 65.2-100 et seq., . . . .
We construe the evidence in the light most favorable to the
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party prevailing below. States Roofing Corp. v. Bush
Construction Corp., 15 Va. App. 613, 616, 426 S.E.2d 124, 126
(1993). The commission's factual findings will not be disturbed
on appeal if supported by credible evidence. Bullion Hollow
Enterprises, Inc. v. Lane, 14 Va. App. 725, 730, 418 S.E.2d 904,
907 (1992). When the facts are undisputed, their interpretation
is a matter of law. Wells v. Commonwealth, Department of
Transportation, 15 Va. App. 561, 563, 425 S.E.2d 536, 537 (1993).
We are not bound by the commission's determination of legal
questions. Cibula v. Allied Fibers & Plastics, 14 Va. App. 319,
324, 416 S.E.2d 708, 711 (1992), aff'd, 245 Va. 337, 428 S.E.2d
905 (1993).
Under the Workers' Compensation Act, the employer/insurer is
subrogated to an employee's rights against a third party
responsible for the injuries giving rise to the payment of
compensation. Code § 65.2-309(A). The purpose of the statute is
to reimburse an employer who is compelled to pay compensation as
a result of the negligence of a third party and to prevent an
employee from obtaining a double recovery of funds. See Gartman
v. Allied Towing Corp., 467 F. Supp. 439, 440 (E.D. Va. 1979).
The employer's subrogation rights are triggered automatically
when the injured employee files a claim against the employer and
thereby assigns to the employer any claims against third parties.
Code § 65.2-309(A); Wood v. Caudle Hyatt, Inc., 18 Va. App. 391,
395-96, 444 S.E.2d 3, 6-7 (1994).
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The commission agreed that the employer can waive its
subrogation rights as part of a settlement but held that such a
waiver must be in "clear and unequivocal language." The
commission found that the petition contained no language that
could be construed as a waiver. The commission also stated that
"[t]he parties were well aware of the pending third-party claim
when the workers' compensation claim was settled," and to that
extent took parol evidence into account when making its decision.
It is well established that the employer/carrier can waive
subrogation rights as part of a settlement. See Connell v. Aetna
Life & Casualty, 436 A.2d 408, 410-11 (Me. 1981); Stephenson v.
Martin, 259 N.W.2d 467, 470-71 (Minn. 1977); Welch v. Arthur A.
Fogarty, Inc., 255 A.2d 627, 630-31 (Conn. 1969); 2A Arthur
Larson, The Law of Workmen's Compensation, § 74.31(e), at 14-517
(1983). There is also substantial authority to the effect that
the waiver need not be express, but can be inferred from the
language of the settlement agreement. 2A Larson, supra,
§ 74.17(a), at 14-428; see also Stephenson, 259 N.W.2d at 470.
However, accepting the commission's standard of a "clear and
unequivocal" waiver, we hold that Vance International waived its
subrogation rights when it settled the workers' compensation
claim.
The settlement provides that the parties are released from
all claims, demands, and obligations in connection with Tomlin's
workers' compensation claim, and "any rights which might be
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alleged to arise under Virginia Code Section 65.2-100," the
Workers' Compensation Act. Subrogation rights "arise" under the
Workers' Compensation Act, and arose here "in connection with"
Tomlin's claim. This language clearly and unequivocally waives
Vance International's subrogation rights. See Welch, 255 A.2d at
631 (court interpreted similar language as unambiguously waiving
the employer's right to recoup compensation from settlement
funds; court also noted that the settlement did not reserve the
right to recoupment nor did the parties inform the commissioner
who approved the settlement of any intent to reserve that right).
Where a written instrument is clear and explicit and can be
interpreted based on the ordinary meaning of the language used,
the parties' intent is clear and cannot be altered through parol
evidence. Nelson v. Commonwealth, 235 Va. 228, 246, 368 S.E.2d
239, 249 (1988); Amos v. Coffey, 228 Va. 88, 92, 320 S.E.2d 335,
337 (1984). Because the language of the settlement was clear, it
was error for the commission to use parol evidence to interpret
the parties' intent. For these reasons, we reverse the
commission's decision.
Reversed and dismissed.
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