DENNIS PRICE,			)
				)
Employee,			)	DECISION AND ORDER
Applicant,			)	AWCB Case No. 8328622
v .				)	AWCB Decision No. 90-0107
				)
SALCHA SERVICE ELECTRIC and	)	Filed with AWCB Fairbanks
PROVIDENCE WASHINGTON		)	May 15, 1990
INSURANCE,			)
				)
Employer/			)
Insurer,			)
				)
v.				)
				)
SALCHA SERVICE ELECTRIC and	)
ROYAL/CRAWFORD & CO.,		)
				)
Employer/			)
Insurer,			)
				)
v.				)
				)
SALCHA SERVICE ELECTRIC and	)
ARGONAUT/CRAWFORD INSURANCE,	)
				)
Employer/			)
Insurer,			)
				)
v.				)
				)
SALCHA SERVICE ELECTRIC and	)
PACIFIC MARINE,			)
				)
Employer/			)
Insurer,			)
Defendants.			)
				)

We heard this proposed Compromise and Release (C&R) in Fairbanks, Alaska on May 8, 1990. Attorney Julian Rice represented the applicant employee, attorney Meredith Ahearn represented the defendant Royal Insurance Company, attorney Robert McLaughlin represented defendant Pacific Marine Insurance Company, attorney Robert Groseclose represented defendant Argonaut Insurance Company, and attorney Michael McConahy represented defendant Providence Washington Insurance Company. Labor representative Board member Joe Thomas was unable to attend the hearing, so our Board panel heard the case with a two-member quorum under AS 23.30.005(f). We closed the record at the conclusion of the hearing. At the request of the parties we are issuing a written decision on this matter.

Shall we approve the proposed C&R settlement under AS 23.30.012 as being in the employee's best interest?

The employee injured his back on March of 1983 and in December of 1983 while working as an electrician for the employer. He was eventually diagnosed to have an L4-5 disc herniation, and underwent decompression laminectomy surgery on December 21, 1987. The employee suffered intermittent, short spates of time loss.

The employer, through one of its insurers, Pacific Marine, paid some temporary total disability (TTD) benefits and some medical benefits, but a last injurious exposure liability dispute arose between four insurance companies which provided workers' compensation coverage for the employer at one time or another. Pacific Marine controverted the employee's benefits on several grounds effective December 31, 1987. The procedural history of the case following that is a tangled morass, The parties eventually raised various statutes of limitation, laches, TTD benefits, medical benefits, attorney fees, legal costs, and the last injurious exposure rule as issues. Later, Providence Washington Insurance argued that the injury might not be in the course and scope of his employment because he eventually became a partner in the employer's business, and therefore should have his employee status at the time of the injuries re-examined.

The parties submitted a proposed C&R settlement to the Board panel in Juneau on March 15, 1990. In that settlement Royal Insurance proposed paying the employee $11,167.47 in past-due medical expenses and providing continuing medical benefits related to his injury. Pacific Marine agreed not to claim reimbursement for benefits paid before its controversion. All the insurance companies agreed to waive all claims against one another. The employee agreed to waive all benefits except medical care. After a documentary review, the Juneau panel rejected the proposed C&R for failing to explain the basis of dispute between the employee and employer, and for failing to submit a C&R summary.

The parties requested a hearing before us in the venue of the employees injury. The parties still failed to submit a C&R summary, and the employee failed to appear at the hearing. The employee's attorney represented that the employee is no longer under a doctor's care and that he has returned to work as an independent contractor. In response to our questions concerning the basis of the dispute between the employee and employer, the employee's attorney alleged that the employee had been forced to borrow money to pay for his medical care following the controversion, and that he is unable to repay the loan. The attorney had no knowledge of the employee's medical condition, his recent earnings, or of other outstanding debts.

We note that the last physician's report in our file is dated August 21, 1989 and prepared by the employee's treating physician, George Brown, M.D. This report showed him still suffering low back pain and right leg radiculopathy, but released him to return to his work. The employee has not undergone vocational rehabilitation evaluation.

AS 23.30.012 provides, in part;

8 AAC 45.160(a), (b), (d), and (e) provide.

Regarding settlements, Professor Larson recommends:

3 A. Larson, Workmen's Compensation Law, Section 82.41, pp. 15-1204 to 15-1205 (1983).

We have four areas of concern with this proposed C&R. First, AS 23.30.012 requires us to find that a lump-sum settlement of the employee's claim is in his best interest. Periodic payments of compensation benefits and payment of medical benefits when due, give some continuing support and stability to an injured worker at a time when he may be most besieged by creditors and least able to keep them at bay. We must determine that the employee will not be compelled to use a lump-sum settlement for purposes other than what he intends. His attorney's representation that he was required to borrow money for medical treatment which he now finds himself unable to repay raises the specter of other debts and creditors. Without additional information concerning his financial state and financial plans, we cannot find this lump-sum in his best interest.

Our second concern arises from 8 AAC 45.160(a). This subsection requires the parties to demonstrate that a dispute exists concerning the rights of the parties, and requires us to find by clear and convincing evidence that the proposed settlement is in the best interest of the employee. Although we have not had a hearing an the merits of the claim, this subsection requires us to perform a tentative analysis and weighing of the evidence. It is clear to us that a last injurious exposure dispute between the insurers is at the heart of this case. It is not clear at first blush that there is a genuine dispute concerning the compensability of the claim. Even if we should find clear and convincing evidence of a dispute between the employee and employer concerning the compensability of the claim, we would be hard-pressed to find that the complete waiver of his time loss benefits and vocational rehabilitation benefits in order to protect his medical care would be in his best interest.

Third, 8 AAC 45.160(b) specifically requires the parties to file a completed C&R summary form 07-6117, which they have failed to do for either consideration of this proposed settlement. Although this subsection is largely a technical requirement, the prescribed form requires the parties to analyze their own case a bit, and it specifically raises the issues which have caused us concern in this settlement.

Fourth, 8 AAC 45.160(e) requires that we presume that any waiver of vocational rehabilitation is unreasonable. Although the employee has returned to work at least part-time, what little evidence we have shows him to be not earning enough to prevent financial difficulties. The latest medical report available to us shows him still suffering symptoms from the injury. We cannot find sufficient evidence to overcome the presumption that the waiver is unreasonable. For each of the four reasons cited above we cannot find the settlement in the employee's best interest. We conclude that we must reject the C&R.

The Compromise and Release between the parties proposed under AS 23.30.012 is denied and dismissed.

DATED at Fairbanks, Alaska, this 15th day of May 1990.

ALASKA WORKERS' COMPENSATION BOARD

/s/ William S.L. Walters
William S.L. Walters, Designated Chairman

/s/ Steve M. Thompson
Steve M. Thompson, Member

WSLW/ml

If compensation is payable under terms of this decision, it is due on the date of issue and penalty of 20 percent will accrue if not paid within 14 days of the due date unless interlocutory order staying payment is obtained in Superior Court.

APPEAL PROCEDURES

A compensation order may be appealed through proceedings in the Superior Court brought by a party in interest against the Board and all other parties to the proceedings before the Board, as provided in the Rules of Appellate Procedure of the State of Alaska.

A compensation order becomes effective when filed in the office of the Board, and unless proceedings to appeal it are instituted, it becomes final on the 31st day after it is filed.

CERTIFICATION

I hereby certify that the foregoing is a full, true and correct copy of the Decision and Order in the matter of Dennis Price, employee/applicant; v. Salcha Service Electric and Providence Washington Insurance, employer/insurer; v. Salcha Service Electric and Royal/Crawford & Co., employer/insurer; v. Salcha Service Electric and Argonaut/Crawford Insurance, employer/insurer; v. Salcha Service Electric and Pacific Marine, employer/insurer/defendants; Case No. 8328622; dated and filed in the office of the Alaska Workers' Compensation Board at Fairbanks, Alaska this 15th day of May, 1990.

Clerk

SNO