In re Collins

IN THE MATTER OF BERNARD L. COLLINS

No. 49

COURT OF APPEALS OF MARYLAND

Argued: February 10, 2020

September Term, 2019

May 26, 2020

MARYLAND WORKERS' COMPENSATION ACT - SETTLEMENT AND RELEASE - DEPENDENT'S CLAIM FOR DEATH BENEFITS - The Court of Appeals held that, under the Maryland Workers' Compensation Act (the "Act"), Md. Code Ann., Lab. & Empl. ("LE") § 9-722(a) (LexisNexis 1991, 2016 Repl. Vol.), a dependent of a covered employee may settle the dependent's future claim for death benefits under the Act while the employee is still living. An employee does not have the power to release his or her dependents' independent claims for death benefits. Rather, a dependent must be a party to any settlement agreement that purports to release the dependent's claim for death benefits in order for the release to be enforceable against the dependent. Id. § 9-722(d)(1). The State Workers' Compensation Commission's approval of a settlement agreement that purports to release dependents' future claims for death benefits does not render the release enforceable against a dependent who is not a party to the agreement.

The Court of Appeals also held that an employee's settlement of the employee's claims for benefits related to an accidental personal injury or occupational disease does not extinguish his or her surviving dependents' claims for death benefits. A dependent's claim for death benefits under the Act, although based on an employee's compensable injury or disease, is independent of the employee's claim for benefits. The Act does not include any language suggesting that the employee must not have settled his or her claim for benefits relating to a compensable injury or disease in order for a dependent to retain a viable claim for death benefits based on the same injury or disease. Reading such a requirement into the Act would be inconsistent with the requirement that the Act be construed as liberally as possible in favor of employees and their families to effectuate the Act's benevolent purposes. Circuit Court for Calvert County

Case No. C-04-CV-17-000175

Barbera, C.J. McDonald Watts Hotten Getty Booth Biran, JJ.

Opinion by Biran, J.

A fundamental premise of the law of contracts is that a person who is not a party to a contract is not bound to its terms. See, e.g., EEOC v. Waffle House, Inc., 534 U.S. 279, 294 (2002) ("It goes without saying that a contract cannot bind a nonparty."). This case tests that proposition in the context of an employee's settlement of claims under the Maryland Workers' Compensation Act (the "Act"), Md. Code Ann., Lab. & Empl. ("LE"), Title 9 (LexisNexis 1991, 2016 Repl. Vol.).

Respondent Peggy Collins, the widow of firefighter Bernard Collins, filed a dependent's claim for death benefits under the Act against her late husband's former employer, the Huntingtown Volunteer Fire Department (the "Department"), and its insurers, Chesapeake Employers' Insurance Company ("Chesapeake") and Selective Insurance Company of America ("Selective"), who collectively are the Petitioners in this case. Mrs. Collins claimed that her husband's death was due to heart disease he had developed while working as a firefighter for the Department.

Two years before he died, Mr. Collins settled claims he had brought under the Act against Petitioners for disability benefits related to his heart disease. In the parties' settlement agreement, Mr. Collins purported to release Petitioners from any and all claims that Mr. Collins, his personal representative, dependents, spouse, children, and other potential beneficiaries might then or could later have "of whatsoever kind" which might arise under the Act from Mr. Collins's disability. In exchange for Mr. Collins's release, Petitioners agreed to make various payments to Mr. Collins upon approval of the settlement agreement by the State Workers' Compensation Commission (the "Commission").

Mr. Collins and Petitioners submitted their signed settlement agreement to the Commission for its review and approval. The Commission subsequently issued an order approving the parties' settlement, and Petitioners made the agreed-upon payments to Mr. Collins. Mrs. Collins was not a party to Mr. Collins's settlement with Petitioners.

After Mrs. Collins filed her claim for benefits based on Mr. Collins's death from heart disease, Petitioners contested Mrs. Collins's claim before the Commission, contending that Mr. Collins's prior release of claims bars Mrs. Collins from recovering death benefits. The Commission agreed with Petitioners and denied Mrs. Collins's claim. On Mrs. Collins's petition for judicial review, the Circuit Court for Calvert County granted summary judgment in favor of Petitioners based on release, thereby upholding the denial of Mrs. Collins's claim.

Mrs. Collins then appealed to the Court of Special Appeals, which reversed the circuit court's judgment and remanded the case to the Commission for further proceedings on Mrs. Collins's claim. The intermediate appellate court held that Mr. Collins's release does not bar Mrs. Collins's claim for death benefits because: (1) Mrs. Collins was not a party to the settlement; and (2) an employee's settlement of claims for disability benefits relating to an accidental injury or occupational disease does not extinguish the independent claim for death benefits that a surviving dependent may bring if the employee dies of the same compensable injury or disease.

For the reasons discussed below, we agree with the Court of Special Appeals that the release Mr. Collins provided in settlement of his workers' compensation claims does not bar Mrs. Collins from asserting her independent claim for death benefits under the Act.

IBackground

A. Mr. Collins's Workers' Compensation Claim

Bernard Collins was born in October 1944. Peggy and Bernard Collins married in 1965. They remained married for the rest of Mr. Collins's life.

Mr. Collins worked for many years as a firefighter for the Department. At some point during his employment, Mr. Collins developed heart disease and hypertension. Under the Act, a paid firefighter's death or disability resulting from heart disease or hypertension is presumed to be compensable. LE § 9-503(a).

On February 13, 2012, Mr. Collins filed a workers' compensation claim with the Commission, alleging that he had developed heart disease and hypertension caused by his work for the Department. Mr. Collins's claim was assigned claim number B760589. In his claim, Mr. Collins listed his date of disablement as May 6, 2011 and his gross wages per week as $1,800.

Chesapeake was the Department's insurer as of May 6, 2011. Chesapeake successfully impleaded Selective into the case, based on Chesapeake's contention that Mr. Collins's actual date of disablement was December 12, 1998, when Mr. Collins underwent surgery for an aortic aneurysm. Selective was the Department's insurer as of December 12, 1998.

Petitioners contested Mr. Collins's claim, contending, among other things, that Mr. Collins's heart disease and hypertension did not arise from his employment. On February 25, 2014, Mr. Collins, his counsel, and counsel for Petitioners appeared before theCommission for an evidentiary hearing. On March 19, 2014, the Commission found that Mr. Collins had sustained an occupational disease (heart disease and hypertension), arising out of and in the course of his employment as a firefighter. The Commission also found that Mr. Collins's first date of disablement was May 6, 2011, and that as a result of his occupational disease, Mr. Collins was temporarily totally disabled on May 6, 2011, and from July 7, 2011 to July 24, 2011. The Commission subsequently determined that Mr. Collins's average weekly wage at the time of disablement was $152.50.

The parties filed cross-petitions for judicial review of the Commission's decision in the Circuit Court for Calvert County. On February 19, 2015, the circuit court granted Mr. Collins's motion for partial summary judgment on the issue of average weekly wage, concluding that the correct average weekly wage was $526.87.

Before the remaining issues in the petitions for judicial review were resolved, Mr. Collins and Petitioners decided to settle Mr. Collins's claims, and the parties filed a stipulation of dismissal in the circuit court. As a result, on March 13, 2015, the circuit court dismissed the case and remanded it to the Commission.

On May 14, 2015, Mr. Collins and Petitioners entered into an "Agreement of Final Compromise and Settlement" (the "Agreement"), which Petitioners had drafted. After reciting that Mr. Collins claimed to be disabled as a result of work-related heart disease/hypertension, the parties agreed that: (1) Mr. Collins's average weekly wage as of his date of disablement was $526.87; and (2) upon approval of the Agreement by the Commission, Selective would pay Mr. Collins a lump sum of $100,000; Chesapeake would pay Mr. Collins a lump sum of $50,000; and Chesapeake also would fund a "Medicare SetAside" annuity in the amount of $47,192, by way of an initial payment of $9,438.08, followed by annual payments of $4,194.88 for nine years during Mr. Collins's lifetime.

For his part, Mr. Collins (as the "Claimant") agreed to release Petitioners from further liability and claims in paragraph 11 of the Agreement (the "Release"):

The Claimant hereby accepts this Agreement and the aforesaid payment(s) in final compromise and settlement of any and all Claims which the Claimant, his personal representative, dependents, spouse and children or any other parties who might become beneficiaries under the Workers' Compensation Law, might now or could hereafter have under the provision of the said Law, arising out of the aforesaid injury or disablement or the disability resulting therefrom, and does hereby, on behalf of himself and all of said other parties, release and forever discharge the Employer, Chesapeake and Selective, their personal representative, heirs, successors and assigns, from all other claims of

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