TRIAL COURT CANNOT LIBERALLY CONSTRUE A SETTLEMENT AGREEMENT AGAINST THE EMPLOYER
Matthew’s Masonry Company v. Edward Aldridge, Jr.:
On June 5, 2009, the Alabama Court of Civil Appeals considered the trial court’s interpretation of certain settlement language for a second time. The first time, the Court reversed the trial court because it failed to consider the affect of settlement language that specifically settled future medical care for the right and left knees. On remand, the trial court heard oral arguments on the issue and issued an Order stating that the settlement agreement was ambiguous because it could possibly mean to only exclude future medical care for injuries to the knees in existence at the time of the settlement. The trial court went on to state that, since the knee injuries could have developed after the settlement agreement as a result of an altered gait created by the back injury for which medical benefits were still available, medical benefits remained available for the new post-settlement injuries. On appeal for the second time, the Court of Civil Appeals ruled that, in the absence of fraud, a workers’ compensation settlement supported by valuable consideration and unambiguous in meaning, will be given effect according to the intention of the parties. In this case, the fact that future medical care for both knees was specifically set forth in the settlement agreement made it unambiguous and, as such, outside evidence was not admissible to question the settlement terms. The settlement agreement stated that future medical benefits were closed for the knees and, therefore, no further benefits were available.
Practice Pointer: If you intend to leave medical benefits open for a specified body part, then it is important to state this intention in the settlement language. In Alabama, if it can be shown that an employee develops subsequent injuries that are the "direct and natural consequence" of the covered injury, then the new injury may also be covered. This is known as the Successive Compensable Injury Test. It may be possible to eliminate exposure for such future conditions by specifically excluding such future injuries or conditions in the settlement language even if you are leaving medical benefits open.