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Florida Bar Journal

Enforcement of Workers’ Compensation Settlements

Workers' Compensation

Most lawyers are aware that the majority of lawsuits settle at mediation.1 Interestingly, in Florida, the workers’ compensation judge of compensation claims (JCC) may consider only workers’ compensation cases that have been mediated.2 Consequently, a large number of workers’ compensation matters settle rather than proceed to trial.3 This article explores the law governing enforcement of workers’ compensation settlements, as well as methods to maintain an enforceable agreement that will not be vacated.

Upon reaching an agreement in a workers’ compensation matter, it is common for a preliminary summary of settlement terms to be approved by the parties. It is tempting to consider the mediation a success at this point. However, a successful mediation and settlement agreement is one which ends all disputes. Unfortunately, once a case has “settled” at mediation or through other informal negotiations, disputes often arise as the parties attempt to formalize and finalize their preliminary agreement with documents containing lengthier and more specific terminology.

Disputes over settlements are increasingly frequent in workers’ compensation cases. They may occur when an injured worker attempts to withdraw from a settlement because the parties cannot reach agreement as to specific terms, the injured worker develops “buyer’s remorse,” or for a myriad of other reasons.

The psychological issues involved in obtaining a successful workers’ compensation settlement can be quite complex.4 These issues include anger directed against a former employer, disputes over the handling of claims by the workers’ compensation insurance carrier, the lack of an ongoing relationship between the injured worker and the other parties, and fear upon reconsideration by the claimant of the extent of their injuries.5 Successful mediator interventions often enable the parties to move beyond these impediments to settlement during the mediation process.6 After the mediation concludes, however, the psychological dynamics outlined above may disrupt the exchange and execution of documents necessary to achieve a successful, completed settlement. Further, these issues become more problematic for the lawyers involved as workers’ compensation settlements are governed by both Florida contract law and specific statutory provisions for global settlements under the Florida workers’ compensation law.7

Application of Contract Law
In Florida, the interpretation of workers’ compensation settlement agreements is governed by contract law.8 The elements which compose every contract (namely offer, acceptance, and agreement on essential terms) are necessary in order to have a binding workers’ compensation settlement.9 Such agreements “are highly favored and will be enforced whenever possible.”10 The construction of a workers’ compensation settlement agreement, like any other contract, is generally a question of law, unless its terms are susceptible to more than one construction. In that case, a factual issue is presented regarding the intended effect of the settlement, which is then to be determined by the JCC.11

The Florida workers’ compensation law confines the application of contract law as it may be applied to workers’ compensation cases. F.S. §440.20(11)(a) governs settlement of denied claims in which a claimant is not represented by counsel. This statute provides for settlement upon joint petition of the parties for a lump-sum payment in exchange for the employer’s or carrier’s release from liability for future medical expenses, future payments of compensation, and any other benefits provided under the statute. Settlements shall be allowed at any time in any case in which the employer or carrier has filed a written notice of denial within 120 days after the employer receives notice of the injury. The JCC must give consideration to the matters of all interested parties, and the JCC may or may not enter a compensation order approving the parties’ proposed settlement agreement.

Alternatively, F.S. §440.20(11)(b) governs accepted workers’ compensation claims, that is, claims in which a claimant has been receiving benefits and the accident has not been contested. This section also addresses claimants who are not represented by counsel. Upon joint petition to the JCC, the parties may enter into a lump-sum payment in exchange for the employer’s or carrier’s release from liability for future medical expenses, future payments of compensation, and any other benefits allowable under the statute at any time after the claimant has reached maximum medical improvement (MMI). The JCC must determine if settlement will definitely aid the rehabilitation of the injured worker or is otherwise clearly in the best interests of the person entitled to compensation. The JCC retains the discretion to enter an order approving the settlement. In contrast, F.S. §440.20(11)(c) provides for settlements involving represented claimants and does not require JCC consideration, except for the approval of an attorneys’ fee.12

The statutory amendments of October 1, 2001, removed the JCC’s obligation and authority to consider the best interests of the parties and either approve or disapprove settlements involving represented claimants. Following that amendment, it was thought by some that a JCC no longer had jurisdiction over a represented workers’ compensation settlement under F.S. §440.20(11)(c).13 Indeed, in Marchenko v. Sunshine Cos., 894 So. 2d 311 (Fla. 1st DCA 2005), the First District Court of Appeal affirmed the conclusion that the JCC did not have jurisdiction to vacate an agreement reached between the parties as the claimant was represented, and the case was settled privately under F.S. §440.20(11)(c).14 There is merit to the argument that JCCs lack jurisdiction to consider represented settlements. In Pace v. Miami-Dade County Sch. Bd., 868 So. 2d 1286 (Fla. 1st DCA 2004), the First DCA had held that a JCC had no authority other than that conferred by the statute. In that case, the court reversed the imposition of sanctions upon an attorney as the JCC had no authority under the statute to do so. Similarly, in Farhangi v. Dunkin Donuts, 728 So. 2d 772 (Fla. 1st DCA 1999), the court affirmed the JCC’s refusal to award certain medical benefits. There, the court noted that a JCC has no authority or jurisdiction beyond what is specifically conferred by statute.15 However, the JCC did have jurisdiction to construe the enforceability of a settlement agreement in Jacobsen v. Ross Stores, 882 So. 2d 431, 433 (Fla. 1st DCA 2004).16 In Jacobsen, the First DCA affirmed the JCC’s order denying a motion to enforce a mediated settlement as it was contingent on the approval by both parties of a Medicare set aside trust for the claimant’s future medical care. The court held that the mediation settlement agreement was, therefore, expressly a contingent, nonfinal agreement.

Historically, JCCs have held jurisdiction over all workers’ compensation matters. Moreover, construction of a settlement agreement is a matter that has been clearly within the province of the JCC.17 In Chubb Group Ins. Co. v. Easthagen, 889 So. 2d 112, 112 (Fla. 1st DCA 2004), the employer/carrier took an appeal of a nonfinal order denying a motion to compel execution of settlement documents or, alternatively, a motion to dismiss claims. The JCC’s order found a lack of jurisdiction to determine whether an enforceable settlement agreement was reached. The First DCA reversed, citing to the Jacobson case.18

The Florida Supreme Court has now spoken on the issue of jurisdiction. In Sanders v. City of Orlando, 33 Fla. L. Weekly S 999 (December 18, 2008) (revised opinion), the Florida Supreme Court held that the JCC retains jurisdiction to consider enforcement of settlements into which a claimant may enter irrespective of the statutory amendments of 2001. The employee, Robert Flamily, (Flamily was deceased, so Sanders, his personal representative, brought the appeal) settled his workers’ compensation case in 1996, and that settlement agreement was approved by the JCC at the time and as required by statute in 1996.19 In 2004, a JCC vacated the 1996 settlement agreement because it contained material misinformation upon which Flamily had relied when he agreed to the settlement. The First DCA reversed the JCC’s order, citing to Marchenko and holding that the JCC had no jurisdiction to set aside the 1996 settlement. The court found that the 2001 amendments to F.S. §440.20(11)(c), which allowed represented claimants to settle without JCC approval, divested the JCC of jurisdiction over represented settlements.

In reversing, the Florida Supreme Court explained, in a historical comparison of the relationship between art. V courts and JCC’s, that all art. V courts have placed exclusive jurisdiction for such disputes within workers’ compensation proceedings.20 The majority further explained that had the legislature intended for the JCCs to be divested of jurisdiction over workers’ compensation settlements, it would have so stated in adopting the changes to the law. Instead, the plain meaning of the statutory language does not address whether JCCs are divested of jurisdiction over workers’ compensation settlements. The court noted that JCCs retain the right to set aside or vacate settlement agreements.21 According to the court, the more likely reason for F.S. §440.20(11)(c) is “the greater likelihood that a represented claimant will not be the victim of fraud or misrepresentation during the claims process;” thus, judicial oversight is not necessary.22

The JCC cannot enforce a settlement agreement into which the unrepresented claimant entered under F.S. §440.20(11)(c). In Vallecillo v. Bachiller Ironworks, 982 So. 2d 734 (Fla.1st DCA 2008), the court reversed and remanded a summary final order dismissing the claimant’s petition for benefits based upon a prior settlement. On appeal, the First DCA reversed and remanded, holding that the parties’ alleged settlement was invalid since the claimant was unrepresented at the time of the alleged settlement, and the alleged settlement was never approved by the JCC. The court explained that any settlement involving an unrepresented claimant does not fall within the parameters of F.S. §440.20(11)(c) and, consequently, is invalid if not approved by the JCC.

In Calderon v. J.B. Nurseries, Inc., 933 So. 2d 553 (Fla. 1st DCA 2006), the claimant refused to execute global settlement documents after agreeing to do so at mediation and after accepting a cash advance on the settlement. The trial court enforced the agreement and the First DCA affirmed. In a dissent, Justice Ervin wrote that the agreement was not enforceable as the mediation agreement was not sufficiently specific and mutually agreeable as to every essential element. The agreement was undeniably nonspecific. The majority explained, however, that the agreement was voidable at the other party’s election, but not void.

In Gunderson v. School District of Hillsborough County, 937 So. 2d 777 (Fla. 1st DCA 2006), an agreement was enforced and upheld on appeal even though the claimant died shortly after agreeing to settle, but before specific documents could be executed. In that case, the First DCA, relying on contract law, held that the agreement became binding upon the trial court’s order approving attorneys’ fees. The personal representative of the deceased must show the court that the agreement was binding for it to remain valid.

Contrarily, in Quinlan v. Ross Stores, 932 So. 2d 428 (Fla. 1st DCA 2006), the appellate court held that a mediation agreement was not enforceable as it contained language demonstrating that the parties did not intend for the agreement to be full, final, and enforceable and that subsequent documents needed to be prepared and signed. It is important, then, to express the finality of the agreement in any preliminary agreement.

A JCC may enforce verbal settlement agreements. In Bonagura v. Home Depot, 991 So. 2d 902 (Fla. 1st DCA 2008), the parties entered into an oral settlement agreement under F.S. §440.20(11)(c) after engaging in settlement discussions by phone and through correspondence over the course of about 30 days. The claimant further requested and received an advancement on the settlement proceeds. The claimant thereafter attempted to rescind the agreement after reflecting further about the seriousness of his back injury. The parties were both represented by counsel, and testimony established that both attorneys were fully authorized to enter and conclude settlement negotiations. A valid, binding oral settlement agreement was reached which included an advancement on the settlement proceeds which the claimant deposited into his bank account. The DCA found that the oral agreement was without contingencies.23 The parties did nevertheless dispute some terms, specifically, whether they had agreed to have the claimant execute a general release.

The First DCA held that the attorneys did not orally discuss a general release of all other claims. The court found that there was no meeting of the minds on that subject, but upheld the settlement of the workers’ compensation claim and directed the JCC to order the parties to redraft a written settlement agreement according to the limited scope of their oral agreement.24 Binding the parties with consideration, such as an advancement, can be key to enforcement.

Contingent agreements are not enforceable. According to the Quinlan court, if a settlement agreement is contingent upon other actions, the agreement is not enforceable. The agreement was contingent upon both parties’ agreement on a Medicare set aside trust (MSA) amount and resolution of a Medicare lien, contingencies that were not satisfied. The Federal Medicare Secondary Payer (MSP) Statute provides that Medicare is a secondary payer of future medical payments as compared to other sources of medical payments, including workers’ compensation.25 The Centers for Medicare and Medicaid Services (CMS) require that proceeds from workers’ compensation settlements be set aside in the form of an MSA in order to cover future medical expenses during years of Medicare eligibility.26 creating an MSA, CMS is assured that future medical payments will be made out of workers’ compensation proceeds instead of by Medicare.27 Additionally, failure to protect the interests of CMS can result in damages against parties to a workers’ compensation settlement.28 Accordingly, an MSA can be a critical element to many workers’ compensation settlements and must be specifically addressed and resolved in order to have a binding agreement.29 In the Quinlan case, the specifics of the MSA were not resolved. Therefore, the parties’ alleged settlement agreement was not enforceable.

In Munroe v. ACE American Insurance, 985 So. 2d 654 (Fla. 1st DCA 2008), the mediation report provided:

Contingent upon employer/carrier approval, the parties agree to a total settlement of $30,000, out of which claimant will pay attorney fees + costs of $5,000. Claimant will net $25,000. E/C has 20 days for the contingency. If e/c does not approve of $30,000, claimant has option of accepting $25,000 total with $5,000 to attorney + therefore [$]20,000 to claimant net. Claimant agrees to sign a General Release + Voluntary Resignation. E/C agrees to authorize physical therapy until Judge signs order.

The court reversed enforcement of the settlement agreement and explained that because counsel for the employer/carrier attended mediation without full authority to settle, the agreement in the case at bar was an offer by Munroe to settle for $30,000, to which counsel for the employer/carrier provisionally agreed, pending actual acceptance of the offer. Munroe was permitted to revoke the offer before it was accepted.

According to Fivecoat v. Publix Super Markets, Inc., 928 So. 2d 402 (Fla. 1st DCA 2006), the parties must have clear and unequivocal authority from their clients to settle and enforce an agreement. The courts are very stringent in making this determination. Thus, one should explicitly confirm with the client that he or she wishes to enter into the agreement.

Collateral Settlements
In Brewer v. Laborfinders of Tampa, 944 So. 2d 1102 (Fla. 1st DCA 2006), the claimant settled an unrelated claim against an employer executing a very broad general release. A motion to dismiss the workers’ compensation claim against the employer was filed and the JCC dismissed the workers’ compensation claim based on the language of the general release. The record demonstrated that at the time Brewer executed this release, he was represented by workers’ compensation counsel, but failed to inform counsel of the release before it was executed. The fact that Brewer did not inform his counsel, and counsel did not advise him in regard to the release, was irrelevant. “The JCC need inquire no further than to determine whether a claimant was represented by counsel when he entered the settlement agreement, not whether he chose to take advantage of counsel’s representation.” All-inclusive language generally bars claims that are ripe prior to execution of the release, even those claims unrelated to the litigation that resulted in the release. The language in Brewer was broad enough to cover petitions for workers’ compensation benefits.30 The Brewer court held that because the release language was unambiguous, the JCC properly excluded parol evidence.31 Lawyers must be extremely careful when settling claims unrelated to workers’ compensation matters because of the all-inclusive nature of most releases, which could easily serve to extinguish other pending claims. Conversely, workers’ compensation practitioners must use caution in allowing their clients to execute a general release as part of a workers’ compensation settlement due to the unknown and unintended consequences that may arise.

Workers’ compensation settlements can be complex due to the statutory prescriptions and case law governing the complete resolution of workers’ compensation matters. For lawyers and mediators, it is critical to try and remove the obstacles to a successful settlement as discussed within this article. It is the responsibility of the lawyers and mediator to draft preliminary agreements that contain specific language on all agreements, to leave no contingencies open, to include consideration where practical that will permit enforcement, and to otherwise bind the parties in furtherance of the goal to obtain a successful settlement. Litigation counsel and mediators need to have a solid understanding of both workers’ compensation law and contract law in order to be better equipped to secure successful workers’ compensation settlements.32

1 See Russell B. Korobkin, Psychological Impediments to Mediation Success: Theory and Practice, UCLA School of Law, Law-Econ Research Paper No. 05-9, p. 12 (March 2005 draft) (also published in 21 Ohio State J. on Dispute Resolution 281-338 (2006), available at

2 See Fla. Stat. §440.192(9) and Fla. Stat. §440.25 (procedures for conducting mediations); Fla. Stat. §440.25(3)(b) (results of the private mediation conference shall be binding and neither party shall have a right to appeal the results).

3 See Florida Workers Compensation Executive Summary (2000),; see also Ch. IV Florida Workers Compensation Executive Summary (2000),; see The Florida Workers’ Compensation Claims Database, statistics for 2000 and 2008,

4 See Korobkin, Psychological Impediments to Mediation Success: Theory and Practice, UCLA School of Law, Law-Econ Research Paper No. 05-9, p. 12 (March 2005 draft); see also Of Potted Plants and Personal Injury: A Contrarian View of Mediation, 29 New Hampshire Trial Bar News 169 (Fall 2007); I’m Too Mad to Settle! Working with Angry Plaintiffs in a Mediation, 81 Wisconsin Lawyer (May 2008).

5 Id.

6 See Korobkin, Psychological Impediments to Mediation Success: Theory and Practice, UCLA School of Law, Law-Econ Research Paper No. 05-9, p. 12 (March 2005 draft).

7 See Fla. Stat. §440.20(11)(a-c).

8 See Bonagura v. Sedgwick & Home Depot., 991 So. 2d 902, n. 3 (Fla. 1st D.C.A. 2008); Nicholas v. Hartford Ins. Co. of the Midwest, 985 So. 2d 217, 219 (Fla. 1st D.C.A. 2002).

9 Id. (see n. 2 citing, Gibson v. Courtois, 539 So. 2d 459, 460 (Fla. 1989).

10 See Robbie v. City of Miami, 469 So. 2d 1384, 1385 (Fla. 1985).

11 See Brunswick Corp. v. Cummings, 648 So. 2d 787, n. 2 (Fla. 1st D.C.A. 1994) (citing Wood & Wood v. Dort, 625 So. 2d 42 (Fla. 1st D.C.A. 1993).

12 Fla. Stat. §440.20(11)(c) (effective October 1, 2001).

13 See McConnaughhay and Moniz, Workers’ Compensation Settlements: The Next Generation, 76 Fla. B. J. 71 (July/August, 2002) (referring to Fla. Stat. §440.20(12)(c)(2001)).

14 See also Flamily v. City of Orlando, 924 So. 2d 78 (Fla. 1st D.C.A. 2006) (citing Marchenko in reversing the order of the JCC vacating a 1996 settlement agreement for lack of jurisdiction) (modified 33 Fla. L. Weekly S999a, Dec. 18, 2008).

15 See also City of West Palm Beach v. Burbaum, 632 So. 2d 145 (Fla. 1st D.C.A. 1994).

16 See Gerow v. Yesterday’s, 881 So. 2d 94 (Fla. 1st D.C.A. 2004) (JCC has jurisdiction to determine whether an agreement was reached and the terms thereof); Divosta Bldg. Corp. v. Rienzi, 892 So. 2d 1212 (Fla. 1st D.C.A. 2005).

17 See Brunswick, 648 So. 2d at 788.

18 See also Frix v. Allstate Ins. & ITT, 854 So. 2d 258 (Fla. 1st D.C.A. 2003) (holding JCC has authority and jurisdiction to impose sanctions for late payment of a settlement between the parties reached under Fla. Stat. §440.20(11)(c)); Dominguez v. Cruise Holdings, 814 So. 2d 505 (Fla. 1st D.C.A. 2002) (JCC erred by failing to enforce a settlement agreement which included language concerning the payment of attorneys’ fees and remanded to the JCC to reconcile the parties’ contrary interpretations of settlement language).

19 Sanders, 33 Fla. L. Weekly S 999 (December 18, 2008) (revised opinion).

20 Id.

21 Id. at n. 4.

22 Id.

23 Bonagura, 991 So. 2d at 904.

24 Id. at 905.

25 See ABA, Health Care Law: Medicare Set-aside Process in Workers’ Compensation Cases, January 13, 2009, See also 42 U.S.C. §1395y.

26 Id.

27 Id.; see also Congressional Research Service Report to Congress, Medicare Secondary Payer: Coordination of Benefits (March 6, 2008).

28 Id.; see also Medicare Reimbursement Problems, Defense Research Institute J. 9 (February 2008).

29 See Shaw v. Harbourside Healthcare, Case No. 1D07-6298 (Fla. 1st D.C.A., February 8, 2008) OJCC #: 03-003875DBB, which involved an MSA issue wherein the parties agreed to settle under Fla. Stat. §440.20(11)(c) at a private mediation. The employer/carrier agreed it would fund the estimated MSA allocation and would and did fund additional amounts as CMS determined that a higher allocation was necessary. The claimant tried to rescind the agreement due to her declining health but JCC Diane Beck found that the agreement was binding, not contingent, and that the claimant had “buyers remorse” and could not withdraw from the settlement.

30 See Patco Transport, Inc. v. Estupinan, 917 So. 2d 922, 923 (Fla. 1st D.C.A. 2005).

31 See also Churchville v. GACS, Inc., 973 So. 2d 1212, 1215 (Fla. 1st D.C.A. 2008) (a court may look beyond the language of a contract only when the document’s terms are ambiguous); Plumpton v. Cont’l Acreage Dev. Co., 830 So. 2d 208 (Fla. 5th D.C.A. 2002); Sottile v. Gaines Constr. Co., 281 So. 2d 558, 561 (Fla. 3d D.C.A. 1973), rev. denied, 289 So. 2d 737 (Fla. 1974) (a general release which is not restricted by its terms to particular claims or demand will ordinarily be regarded as embracing all claims or demands which had matured at the time of its execution).

32 This article addresses global settlements and does not specifically discuss enforcement of partial agreements to resolve workers’ compensation issues. Additionally, this article does not discuss reasons to vacate settlement agreements for fraud, duress, overreaching, deceit, and coercion although some of the same principles discussed herein also apply to those instances. See East v. Pensacola Tractor & Equip. Co., 384 So. 2d 156 (Fla. 1st D.C.A. 1980) (mutual mistake and over-reaching); Sponga v. Warro, 698 So. 2d 621 (Fla. 5th D.C.A., 1997) (unilateral mistake); Circle Mortgage Corp. v. Kline, 645 So. 2d 75 (Fla. 4th D.C.A. 1994) (mutual mistake).

Brian Bolton, a board certified workers’ compensation specialist, has practiced law in Florida since 1985. He practices primarily workers’ compensation defense. Mr. Bolton is a circuit certified mediator and a partner in the firm of Fishback, Dominick, Bennett, Stepter, Ardaman, Ahlers, Bolton and Langley, LLP, Orlando. He is a graduate of the University of Florida Levin College of Law and is currently special advisor and past chair to The Florida Bar Workers’ Compensation Board Certification Committee.

This column is submitted on behalf of the Workers’ Compensation Section, Tuwana J. McMillan, chair, and Pamela L. Foels, editor.

Workers' Compensation