We previously highlighted the Benefits Review Board’s (BRB) decision in Marcus Schulmeister v. Blackwater USA et al, BRB No. 23-0255 (September 25, 2024) — a matter arising under the Defense Base Act — and how this decision casts doubt over the finality of an approved Section 8(i) settlement application. Link: https://gallowaylawfirm.com/longshore-defense-base-act-benefits-review-board-apple/
Recently, Chief ALJ Henley encountered a factual situation similar to Schulmeister and examined the rationale in Schulmeister in granting summary decision in favor of the employer and carrier in Manuela Atanasov v. Fluor Conops, Ltd., et al, 2024-LDA-03103 (Dec. 4, 2024). https://www.oalj.dol.gov/DECISIONS/ALJ/LDA/2024/Arsova_v_FLUOR_Corporation_2024LDA03103_(DEC_04_2024)_102639_CADEC_PD.PDF
In Atanasov, the claimant filed a second subsequent claim on December 20, 2023, alleging entitlement to benefits due to a respiratory condition allegedly sustained while working for the employer in Afghanistan, with a date of injury as August 2013. The claimant had filed a claim against the same employer alleging psychological injuries while working in Afghanistan, with a date of injury as August 2013. On May 15, 2023, the District Director issued a compensation order approving the parties’ Section 8(i) settlement application. The 2023 Section 8(i) application included chest pains and difficulty breathing in the summary of the claimant’s alleged injuries and complaints and allocated $250.00 for any physical manifestations of psychological conditions. The Section 8(i) application also released the claimant’s entitlement to “all past and future compensation, be it temporary, permanent, total, or partial disability, as well as all medical expenses [as] a result of the claimed injury.”
Following the approval of the May 2023 Section 8(i) application, the claimant sought treatment for bronchial asthma, rhinitis, bronchitis, sleep apnea, and cardiomyopathia, which her treating physician directly related to claimant’s work in Afghanistan. The claimant thereafter filed a new LS-203 for these injuries sustained in Afghanistan for which treatment was necessary. In response to the claimant’s LS-203 seeking benefits for her respiratory condition, the employer and carrier moved for summary decision on the basis that the May 2023 8(i) application encompassed her subsequent claim for benefits. The claimant argued summary decision was not proper as she was unaware of her respiratory injury or its existence until November 2023. She also alleged that her psychological and respiratory injuries were separate and independent from one another and that the settlement of her psychological claim did not preclude her from pursuing compensation for a new, unrelated injury.
In granting summary decision in favor of the employer and carrier, Chief ALJ Henley analyzed the May 2023 Section 8(i) application under the BRB’s reasoning in Schulmeitser and distinguished it from the application at issue. Chief ALJ Henley found that the language of the May 2023 Section 8(i) application was unambiguous regarding whether the parties intended to include the claimant’s respiratory illness and discharge the employer and carrier for liability for compensation and medical expenses as a result of that claimed injury. Chief ALJ Henley noted that unlike the settlement agreement in Schulmeister, the parties allocated funds to settle the claimant’s identical physical symptoms, which included chest pains and difficulty breathing, i.e respiratory injury.
Additionally, Chief ALJ Henley found that the claimant’s respiratory injury was in existence at the time of the May 2023 settlement based on her reporting of her physical symptoms and inclusion of these symptoms in the May 2023 Section 8(i) application. While the identical month and year for the date of injury for the two claims was not dispositive, the inclusion of the breathing problems and chest pains, as well as the designation of funds for the physical symptoms, was sufficient to discharge the employer’s and carrier’s liability and preclude a subsequent claim for these same respiratory injuries. In addition to the respiratory claim being in existence at the time of the May 2023 settlement agreement, the settlement documents cleared stated that the parties intended to include the respiratory claim in their agreement and the claimant received compensation for these injuries. As a result, the claimant is precluded from seeking additional compensation for those same injuries.
Chief ALJ Henley agreed with other ALJs who have concluded that, when a claimant settles a claim for compensation and medical benefits, they accept the risk that the injuries may become more or less symptomatic over time. See Osmani v. SEII, 2021-LDA-02641 (Aug. 10, 2022). Similar to the claimant in Atanasov, the claimant in Osmani was precluded for seeking additional compensation based on the language of his prior settlement agreement. The ALJ found that the Osmani agreement discharged the employer’s liability for psychological injuries related to his employment based on both the language of the settlement application and the descriptions and references to the injuries and symptoms in the application.
In light of the decisions in Schulmeister, Atanasov, and Osmani, employers and carriers should consider clear and unambiguous language releasing all claims for alleged injuries arising out of the date of accident in the settlement application and advising of the parties’ intent to discharge the employer’s and carrier’s liability for payment of all past and future compensation (be it temporary, permanent, total, or partial disability), as well as all medical expenses as a result of the claimed injury. Interpretation of settlements under the Act must give full effect to the parties’ agreement. Schulmeister, BRB No. 23-0255, slip op. at 6 (Sept. 25, 2024). Such language provides for the mutual intent to discharge liability for those claims for alleged injuries arising out of the date of accident.
Additionally, employers and carriers should consider delineating a thorough summary of the claimant’s medical treatment, including a list of symptoms and complaints, whether related to the claimed injury or not, within the factual background of the settlement application. Comprehensive copies of the claimant’s medical records may also be included and referenced. While the BRB’s decision in Schulmeister rejected the ALJ’s examination of “extrinsic evidence” in determining whether a prior settlement agreement precluded a subsequent claim for benefits, the Act requires necessary information to comply with the self-sufficiency requirement of 20 CFR § 702.242(b) for review of a Section 8(i) settlement application.
Finally, as express terms of settlement, employers and carriers may wish to allocate portions of the lump sum settlement for (1) past compensation benefits; (2) future compensation benefits; (3) any scheduled benefits should an injured body part be identified on the Schedule; and (4) any physical manifestations of psychological conditions. An allocation for medical treatment in connection with any physical manifestations of psychological conditions should also be considered.
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