You probably look at a compromise and release (“C&R”) form on a daily basis, whether you are drafting a new agreement or reviewing an old one, but have you actually read all the fine print? If you have, have you thought through all the ways you might need to protect your client given the preprinted language?

For example, take a closer look at paragraph 3:

“This agreement is limited to settlement of the body parts, conditions or systems and for the dates of injury set forth in Paragraph No. 1. and further explained in Paragraph No. 9 despite any language to the contrary elsewhere in this document or any addendum.”

Could this language present problems in your case down the road? Perhaps, if you attached an addendum but overlooked the language of paragraph 3 as was the case in Orellana v. United Care Services Inc., 2015 Cal. Wrk. Comp. P.D. Lexis 761 (Panel decision).

In Orellana, the applicant sustained a specific back injury on Sept. 22, 2014, and a cumulative trauma (“CT”) to her back and other body parts ending Oct. 1, 2014. On Nov. 4, 2014, the applicant filed a CT claim through Oct. 1, including injury to the back, but had not yet filed an application for the specific injury. The CT claim resolved via C&R on Dec. 10, 2014.

An attached addendum stated that any claims of injury not listed in the C&R were dismissed with prejudice. On April 6, 2015, the applicant filed a specific injury claim occurring Sept. 22, 2014, to the back against the same employer. This came as a surprise to the defendants, who thought all of the applicant’s claims were resolved in the C&R.

The defendants argued that the Sept. 22, 2014, specific injury claim was dismissed per the addendum language attached to the settlement documents that resolved the applicant’s cumulative trauma claim. The Workers' Compensation Appeals Board found that the C&R resolving the prior CT claim did not settle the specific injury claim because it did not explicitly list the specific injury claim in the compromise and release. The addendum was deemed overruled by the language in the C&R form stating that the agreement was limited to only the body parts and dates of injury specifically identified in the compromise and release.

In Rodriguez v. Air Serv Corporation, 2015 Cal. Wrk. Comp. P.D. Lexis 728 (Panel decision), the applicant settled a June 11, 2010, specific injury claim to various body parts including the right shoulder in a 2014 C&R. The defendant knew the applicant sustained a CT injury to her right shoulder ending on May 21, 2011, when the 2014 C&R was executed for the specific injury, but the CT was not specifically included in the C&R. The applicant was allowed to pursue the CT claim.

The defendant argued it intended to include the CT claim in the 2014 C&R, as well as the June 11, 2010, specific injury. The applicant, however, testified that she only intended to settle the specific injury. The WCAB considered the exclusion of the CT claim from the C&R a unilateral mistake, since the defendant was aware that the applicant had two separate claims at the time the settlement documents were executed.

To settle the CT claim, the defendant needed to specifically identify this claim in the C&R but failed to do so. The defendant tried to rely on an addendum to the C&R stating that the applicant released the defendant from all liability for injuries during the applicant’s employment. However, the WCAB found that the provision in the preprinted C&R form limiting settlement to body parts specifically identified in the C&R agreement superseded the addendum, once again.

Another example of a failed addendum comes from Mansville v. WCAB, 2016 Cal. Wrk. Comp. Lexis 2 (Writ denied). On July 5, 2007, the injured worker filed a CT claim through 1993 for injury to his lungs and respiratory system from asbestos exposure, which resolved via compromise and release. Attached to the C&R was an addendum releasing any other claims for injuries arising from asbestos exposure.

The injured worker died of cancer on April 11, 2012. The cancer was in the decedent’s abdomen, not his lungs. The WCAB affirmed the finding that the surviving spouse could pursue a claim for death benefits despite a 2008 C&R settling her husband’s claim for asbestos-related injury to his lungs and respiratory system incurred during the same period and with the same employer. The reasoning was that the body parts were not the same as those included in the first settlement.

The court also found the addendum was an attempt to include a general release into a compromise and release, which the WCAB declared null and void.

The following practice tips may help you escape the pitfalls of paragraph 3 in your own cases:

• Thoroughly investigate claims to ensure there are no unresolved dates of injury. Make sure to add any known dates of injury to paragraph 1. You may know of a few other dates of injury in addition to the main injury being litigated. The best practice would be to obtain ADJ numbers for any known dates of injury that are unassigned, and include them in your C&R.
• Since paragraph 3 allows us to further explain in paragraph 9, cover yourself with the language like the following that would pass scrutiny in your venue: “Applicant releases any and all claims that he may have for workers’ compensation benefits as a result of the injuries sustained herein and any injuries, whether specific or cumulative, to the body parts listed in paragraph 1 as the result of his employment.”
• If you have to use an addendum, consider deleting the last sentence of paragraph 3 and obtain the parties’ initials next to the change: “This agreement is limited to settlement of the body parts, conditions or systems and for the dates of injury set forth in paragraph No. 1 and further explained in paragraph No. 9 despite any language to the contrary elsewhere in this document or any addendum.”

If you follow these tips, you may save yourself from a compromising situation in the future by avoiding the pitfalls hiding in paragraph 3 of the mandated C&R forms.

Always ensure your settlement documents are drafted to reflect the intent of the parties, and never assume anything is being settled if it is not specifically included in the proper section of the agreement.

Jenna Kahl is an associate attorney with Grancell, Stander, Reubens, Thomas and Kinsey APC in San Jose. This column is reprinted with permission from the firm's quarterly newsletter.