By Miles B. Figg and Joshua K. Friel
The Supreme Court of Missouri affirmed the final award of the Labor and Industrial Relations Commission (“Commission”), in which it refused to approve a lump sum settlement of permanent total disability benefits after the award became final. Andrew Dickemann v. Costco Wholesale Corporation.[1] The Dickemann case clarified that future permanent total disability benefits may be settled before an award becomes final or commuted if certain prerequisites are met.
The holding in Dickemann has significant implications for employers seeking to close out obligations that may continue for decades and also for injured workers who would rather receive benefits now as opposed to future payments. Previously, there was a practice of approving settlements of permanent total disability (PTD) benefits if both the Claimant and the Employer/Insurer agreed on a lump sum amount pursuant to § 287.390, RSMo. If the parties could not agree on a lump sum, one party could petition for a commutation of PTD benefits if the applying party could show certain factors found in § 287.530, RSMo have been met.
In Dickemann, the Claimant received a final award granting permanent total disability (“PTD”) benefits to be paid out weekly over his lifetime. Over two years later, the parties agreed for the employer to pay $400,000 in a lump sum to satisfy the lifetime PTD benefits. This attempted commutation of benefits had to be approved by the Commission, which denied the attempt on two grounds.
First, the Commission declined to approve the settlement based on a careful reading of § 287.390, RSMo, which authorizes settlements of “claims.” The Court adopted the Commission’s reasoning that since the Award in Dickemann was final, the Claimant’s “claim” for PTD benefits had become a “right” to PTD benefits. The Court agreed with the Commission that the Commission lacked authority to compromise the rights of a Claimant. Second, the Commission ruled that it could not commute the PTD benefits under § 287.530, since neither party showed facts supporting a commutation.
As a result of the Supreme Court’s opinion in Dickemann, lump sum settlements after an Award must either (1) take place after the Award has been entered by the Commission but before the Award becomes final, which is a period of 30 days, or (2) meet the requirements of true commutation under the statute. This will hinder future efforts for interested parties to mutually agree to lump sum settlements after an Award.
For assistance or questions related to commutation of workers’ compensation benefits, please contact a member of our workers’ compensation practice group.
[1] Dickemann v. Costco Wholesale Corp., SC 96513, 2018 WL 2311231, at *1 (Mo. May 22, 2018).
