Newlon v. Teck American, Inc. – Workers’ Compensation Settlement Agreements

Many North Carolina workers’ compensation claims will ultimately settle by way of a “clincher agreement.” This is a compromised agreement or settlement between an employer, the insurance company and the injured worker. mineelevator

In most cases, this involves a lump sum cash settlement and coverage of certain medical expenses in exchange for release of all future reliability against both the employer and the insurer. It’s imperative in these negotiations to ensure your attorney is actively involved in the process. These agreements are essentially contracts, and there could be lifelong implications. Workers have to be sure that not only are immediate and outstanding medical expenses will be covered, but future claims as well. That may require extensive medical analysis and an in-depth look at future costs.

It was  a “clincher agreement” that was at the center of Newlon v. Teck American, Inc., a case recently before the Montana Supreme Court.

Here, plaintiff worked at a mining and resource extraction company for more than two decades. He was originally hired in 1972 and continued his employment there until 1993. During this time, he suffered several on-the-job injuries. Included in these were injuries to his left knee. The first happened in 1974. A second happened in 1978 and a third in 1991.

Following the third injury, plaintiff’s knee continued to get worse and worse. Eventually, he needed to have corrective surgeries in his knee, and he did so in 1993 and again in 1996. However, this didn’t completely relieve him of problems, as many symptoms still persisted. He also continued to have problems with his back and other issues, which were also deemed work-related.

Following the second knee surgery, plaintiff approached a supervisor at the mine to talk about settling his existing workers’ compensation claims. His goal was to ensure he received health care coverage for his ongoing knee and back problems, as his doctors had informed him he would almost certainly need additional treatment down the road.

Plaintiff ultimately agreed to settle all claims for $25,000, plus the caveat that he would receive a lifetime of medical care for his back and knee. The company drafted the agreement and plaintiff signed it.

It wasn’t until four years later plaintiff sought additional treatment for his knee. He sought treatment again after that in 2007 and again in 2010. Then in 2012, doctors recommended he undergo a total knee replacement.

However, a letter in 2011 sent from defendant employer’s lawyer indicated the company was no longer liable for further medical care due to the statute of limitations on work injury claims. However, it agreed to continue paying the bills under a reservation of rights while working to resolve the issue.

Trial court decided – and Montana Supreme Court ultimately agreed – that the statute of limitations and statue of repose defenses were moot, and the claims weren’t barred by estoppel, as employer had claimed.

The state high court noted that while parties argued extensively about the conclusions reached by the workers’ compensation commission on the so-called “60-month rule” and equitable estoppel, the fact was these issues could be resolved under contract law. This was a promise between two parties, and, the court held, it was “a promise this Court will uphold.”

If you have been injured at work, contact the Lee Law Offices at 800-887-1965.

Additional Resources:

Newlon v. Teck American, Inc., Nov. 10, 2015, Montana Supreme Court

More Blog Entries:

Goff v. W. Va. Office of Ins. Comm’r – Worker Compensation for Loss of Eye, Nov. 25, 2015, Greensboro Workers’ Compensation Attorney Blog

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