J. JONES, Justice.
Benjamin Morris, a workers' compensation claimant, appeals an order of the Idaho Industrial Commission denying his motion to set aside a lump sum settlement agreement he made with his employer's surety, Liberty Northwest Insurance. Morris initiated his workers' compensation action after he suffered injuries while working construction for his employer, Hap Taylor & Sons, Inc. We affirm the Industrial Commission's order.
Morris sustained a serious head injury on October 18, 2006, when a twenty-five pound rock thrown by a piece of heavy machinery struck him in the head. Morris filed a workers' compensation complaint on November 19, 2007, seeking medical and disability benefits. At that time he was represented by attorney James Hannon. Several months later, Hannon withdrew and attorney Michael Walker substituted as his counsel in the proceeding.
Morris filed a request for calendaring on May 15, 2009, seeking a hearing before the Commission to address his benefits claim. The request stated that settlement negotiations were "being undertaken but have not been successful to date." On June 1, 2009, the Commission granted Morris' request, and set a hearing for January 5, 2010. However, prior to the hearing, the parties settled and the Commission vacated the hearing.
Morris initiated settlement discussions in a fax to Liberty on December 17, 2009, indicating he was willing to "settle the indemnity side of this case for $68,000 in new money." The following day, Liberty responded with a counter-offer — a single lump sum payment of $54,381, which Morris accepted "with the clear understanding this is a partial settlement and does not resolve the medical side." On January 4, 2010, the parties executed a Stipulation and Agreement of Partial Lump Sum Discharge (LSSA) and submitted it to the Commission for approval. Finding that the LSSA was in the best interests of the parties, the Commission approved it by an order dated January 19, 2010.
Approximately eighteen months later, on July 8, 2011, a Notice of Appearance was filed with the Commission whereby Morris substituted Walker with his present counsel, attorney Starr Kelso.
On July 22, 2011, Respondents filed an objection to Morris' motion to review. Ultimately, the Commission denied Morris' motion to review the LSSA. Following the Commission's refusal to review the LSSA, Morris filed a Motion to Set Aside Lump Sum Settlement Agreement, seeking to void the LSSA on grounds of illegality and constructive fraud. With regard to the first ground, Morris contended the LSSA was invalid for failing to include his current medical and employment status, as required by a Commission rule. With regard to the second ground, Morris contended that Walker had induced him to sign the agreement based on fraudulent representations. Morris requested that the Commission grant a hearing on his motion.
While Morris' motion to set aside the LSSA was pending, Morris also moved the Commission to provide him with all of the documents that it considered when approving the LSSA. The Commission granted the motion and provided Morris with his entire "benefits file."
The Commission issued an order denying Morris' motion to set the LSSA aside on February 7, 2012. The order found that: (1) the LSSA was not critically flawed because the Commission was adequately informed of Morris' current medical and employment status prior to its approval; (2) Morris had not shown the type of fraud that would allow setting aside the LSSA; and (3) there was no need for a hearing. Morris filed a timely appeal to this Court.
Fowble v. Snoline Exp., Inc., 146 Idaho 70, 74, 190 P.3d 889, 893 (2008) (citations omitted). "The interpretation of a statute is a question of law over which this Court exercises free review." Williams v. Blue Cross of Idaho, 151 Idaho 515, 521, 260 P.3d 1186, 1192 (2011).
Morris urged the Commission to set the LSSA aside, claiming it to be void because the text of the agreement did not set out his current medical and employment status, as required by Rule 18(C)(1)(c) of the Commission's Judicial Rules of Practice and Procedure (J.R.P.). The Commission denied Morris' motion, stating:
Morris cites to I.C. § 72-508, which states: "Rules and regulations as promulgated and adopted, if not inconsistent with law, shall be binding in the administration of [the workers' compensation] law." Morris argues that the Commission is bound to strictly adhere to J.R.P. 18(C)(1)(c), and that its failure to do so was an act outside of the Commission's statutory power. Further, Morris contends that the LSSA is an illegal contract, subject to being voided by this Court, citing Wernecke v. St. Maries School Dist., 147 Idaho 277, 207 P.3d 1008 (2009) and Trees v. Kersey, 138 Idaho 3, 56 P.3d 765 (2002).
Respondents counter that the Commission's approval was proper because, although the text of the LSSA did not include Morris' current medical and employment status, the Commission considered Morris' medical and employment status prior to approval. Respondents also argue that "[t]raditionally, this Court has not required the Industrial Commission to adhere to strict rules of procedure and evidence in its hearings," and that failing to strictly adhere to the text of J.R.P. 18(C)(1)(c) does not establish that the Commission acted in excess of its power.
The Commission issued its order approving the LSSA on January 19, 2010. The order recited "the above-entitled proceedings are DISMISSED WITH PREJUDICE as to permanent indemnity benefits and WITHOUT PREJUDICE as to medical benefits and time loss benefits relating to any future medical that is causally related to the October 18, 2006 injury." With regard to indemnity benefits, this constituted a final order of the Commission. The Commission's decision to approve a lump sum agreement is a final "decision" of the Commission. Davidson v. H.H. Keim Co., Ltd., 110 Idaho 758, 760, 718 P.2d 1196, 1198 (1986). Thus, the order was appealable pursuant to Idaho Appellate Rule 11(d). No appeal was timely filed from the order.
Since there was no appeal of the order, Morris is clearly faced with an uphill task in seeking to void the LSSA to obtain additional indemnity benefits. According to I.C. § 72-718: "A decision of the commission, in the absence of fraud, shall be final and conclusive as to all matters adjudicated by the commission." This Court has set aside a lump sum agreement on grounds of illegality but in that case the agreement was violative of the provisions of a workers' compensation statute. See Wernecke, 147 Idaho at 286, 207 P.3d at 1017 (the Commission "erred by approving an agreement" that purported to waive an employee's right to compensation for future injuries because the Commission failed to make findings required by I.C. § 72-332). However, Morris does not contend that the LSSA violates the provisions of any statute and has not shown that it is afflicted by any other illegality. At most, the agreement fails to contain one item in a list of requirements in a procedural rule adopted by the Commission. Morris cites no authority for the proposition that a lump sum settlement agreement can be voided for illegality where the claimed defect is a failure by the Commission to observe a requirement of one of its rules of procedure.
It must be kept in mind that procedure before the Commission is less formal than in court proceedings. I.C. § 72-708 provides: "Process and procedure under [the workers' compensation] law shall be as summary and simple as reasonably may be and as far as possible in accordance with the rules of equity." With regard to the Commission's procedure, this Court has said:
Hagler v. Micron Tech., Inc., 118 Idaho 596, 599, 798 P.2d 55, 58 (1990) (citations omitted). We are presented with no grounds sufficient to declare the LSSA illegal or void for omitting one item of information required under a procedural rule.
Morris contends that the Commission erred in denying his request for a hearing. The thrust of his argument is that Walker induced him to sign the LSSA by making fraudulent representations. Morris asserts that where a lump sum settlement agreement is procured through fraud, the Commission's decision approving it is not final under I.C. § 72-718 and may be set aside.
The Commission declined to grant a hearing on the ground that Morris had failed to present an adequate showing of the type of fraud that would affect the finality of its order approving the LSSA. The Commission's order articulated three reasons why Morris' evidence of fraud was inadequate. First, the fraudulent statements attributed to Walker were all related second hand by Kelso and he could not certify that they were true or accurate. Second, the Commission found that, even if the statements Kelso claimed Walker to have made were accurate, they were not fraudulent because "the advice given by prior counsel are statements of opinion which are based on a wide spectrum of evidence and prior counsel's professional experience." Third, the Commission stated that an order approving a lump sum settlement agreement, like any other of its final decisions, can only be set aside upon a showing that the "employer's surety" committed fraud in procuring the agreement, citing Harmon v. Lute's Const. Co., Inc., 112 Idaho 291, 293-94, 732 P.2d 260, 262-63 (1986). Since the fraud was allegedly committed by Morris' attorney, rather than by the employer's surety, the type of fraud required under I.C. § 72-718 had not been shown. Based on its conclusion that the requisite fraud had not been shown, the Commission found no need to hold a hearing on the matter.
On appeal, Morris argues that the text of I.C. § 72-718 does not support the Commission's conclusion that only fraud on the part
The Commission accurately recited the Harmon Court's statement that, "[t]he only grounds sufficient to permit the commission to set aside claimant's award would be allegations and proof of fraud on the part of employer's surety in procuring the agreement." 112 Idaho at 293, 732 P.2d at 262. Although the statement was correct in the context of that case, where the claimant was alleging fraud against the surety, the statement should not be read as limiting the Commission's ability to set aside a lump sum settlement agreement only for fraud committed by a surety. For purposes of this case, the Commission should have cited Harmon for the more generally applicable statement that "once a lump sum compensation agreement is approved by the commission, that agreement becomes an award and is final and may not be reopened or set aside absent allegations and proof of fraud." Id. at 293, 732 P.2d at 262.
It is highly unlikely the Commission meant that an award fraudulently obtained by a workers' compensation claimant is final and immune from attack. If any "party" to a workers' compensation proceeding procures a decision through fraud, either personally or with the assistance of its attorney, its finality can be challenged by another party under I.C. § 72-718. That provision speaks of "the absence of fraud," and does not limit fraud to that introduced by the claimant, the surety, or the employer. It would be a strange result if a decision could only be challenged for fraud committed by the surety and not by the claimant or employer. However, that does not mean that fraud committed by an attorney for a party against his client would affect the finality of a Commission decision. A distinction must be made between fraud committed by an attorney on behalf of his client in obtaining a decision and fraud committed by an attorney against his client. In the former instance, the attorney is acting on behalf of a party to the proceeding. In the latter instance, the attorney is acting in his or her own interest. The Industrial Commission is not charged with entertaining and deciding peripheral disputes between a party and its counsel.
In this case, Walker was purportedly acting on behalf of his client, Morris, in obtaining the Commission's approval of the LSSA. If Walker gave bad advice to his client or fraudulently induced his signature on the LSSA, that is a matter for determination in separate proceedings, such as an action for legal malpractice. With regard to claims that professional negligence or unskillfulness provide grounds for setting aside a judgment, we have often stated:
Danti v. Danti, 146 Idaho 929, 941-42, 204 P.3d 1140, 1152-53 (2009) (citations and quotations omitted). Although this Court has not had occasion to apply this rule where a client alleges fraud by his or her attorney, we note the Georgia Supreme Court has had occasion to do so:
Ketchem v. Ketchem, 191 Ga. 140, 11 S.E.2d 788, 790 (1940).
We now turn to the question of whether the Commission erred by declining to grant Morris a hearing. It should first be observed that J.R.P. 18(D) does not require a hearing on a proposed lump sum settlement agreement in the first instance. The rule provides:
J.R.P. 18(D). While the latter sentence cannot restrict this Court's jurisdiction, the rule clearly does not grant a hearing, as a matter of right, when a proposed lump sum settlement agreement is initially submitted to the Commission for approval. And, even where a party makes a timely request for a new hearing or for reconsideration, the decision is at the Commission's discretion. See Hopkins v. Pneumotech, Inc., 152 Idaho 611, 614, 272 P.3d 1242, 1245 (2012); Curtis v. M.H. King Co., 142 Idaho 383, 388, 128 P.3d 920, 925 (2005). Where Morris has not alleged the type of fraud that would affect the finality of the Commission's decision, the Commission clearly acted within its discretion in denying a hearing.
On appeal, Morris argues that he is entitled to an award of attorney fees under I.C. § 72-804 because Liberty made misrepresentations to the Commission that ultimately led to this appeal. Respondents argue that attorney fees under I.C. § 72-804 are not warranted in this case because they had reasonable grounds for asking this Court to affirm the Commission's decision.
"Attorney fees are not granted to a claimant as a matter of right under worker's compensation law, but may only be affirmatively awarded under the circumstances set forth in I.C. § 72-804." Stevens-McAtee v. Potlatch Corp., 145 Idaho 325, 336, 179 P.3d 288, 299 (2008). Idaho Code § 72-804 provides:
This Court has repeatedly held that I.C. § 72-804 allows for an award of attorney fees on appeal where the employer or its surety unreasonably brought or contested a claim. Nelson v. City of Bonners Ferry, 149 Idaho 29, 35, 232 P.3d 807, 813 (2010); Anderson v.
In this case, Respondents are the prevailing party on appeal and have not unreasonably defended the case. Thus, Morris is not entitled to fees under I.C. § 72-804.
The Commission's decision to deny Morris' motion to set the LSSA aside is affirmed. Morris is not entitled to attorney fees on appeal. Costs to Respondents.
Chief Justice BURDICK, and Justices EISMANN, W. JONES and HORTON concur.
The record contains over 100 pages of medical reports from various doctors and clinicians offering opinions about the severity of Morris' injuries, his resulting disability, and his employability. Based on all of this information, the Commission concluded that the LSSA was in Morris' best interests. As a result, the inclusion of Morris' medical and employment status in the text of the LSSA was not a serious omission because Morris' benefits file, reviewed by the Commission, contained the requisite information.
At no point in Morris' argument on appeal has he argued that the benefits file reviewed by the Commission was incorrect. Rather, Morris complains that a report from one of his physicians, Dr. Stanek, which contained more current medical information, was not reviewed by the Commission. However, that report was made on January 18, one day prior to the Commission's approval of the LSSA, and there is no indication in the record that Morris' attorney notified the Commission of the report or provided a copy of the same to the Commission before it approved the LSSA.
