By: Ryan Knight, Associate, Miami

It’s everyone’s worst nightmare. You have a settlement agreement in place, you’re getting ready to close the file and then it all falls apart at the last minute. To prevent that from happening to you, let’s take a look at someone else’s unfortunate situation. The First DCA recently released Soto v. C-Worthy Corp., in which they forced the employer/carrier to execute settlement documents without the indemnification provisions of the release and resignation agreement. The Court ruled that a general release and resignation is separate and distinct from an indemnification clause. “Thus, an agreement to sign a release does not result in an agreement to indemnify the other party.”

Settlement agreements greatly lessen the strain on the workers’ compensation system and will be enforced by JCCs whenever possible. Robbie v. City of Miami, 469 So. 2d 1384, 1385 (Fla. 1985). When the terms of a contract are clear and unambiguous, the JCC must discern the parties’ intent from the four corners of the document. Crawford v. Barker, 64 So. 3d 1246, 1255 (Fla. 2011).  If it is unclear if the parties did, in fact, reach a “meeting of the minds,” the JCC will determine whether a settlement was reached, and if so, establish its terms. Chubb Group Ins. Co. v. Easthagen, 889 So. 2d 112 (Fla. 1st DCA 2004).

In Soto, when the settlement paperwork prepared by the Employer/Carrier was received by the claimant’s attorney, it included references to several circumstances whereby the claimant and his attorney would “indemnify and hold harmless” the employer/carrier. The claimant and his attorney struck those provisions, and returned the signed paperwork to the employer/carrier. The employer/carrier then refused to execute those settlement documents so the claimant proceeded to file a motion to enforce. While JCC Lewis ruled in favor of the employer/carrier, the First DCA determined that any indemnification clauses were not contemplated according to the mediation agreement and forced the employer/carrier to execute the settlement documents without them. The DCA ruled that the parties executed an unambiguous written agreement to settle the claim and made no mention of indemnification. Because indemnification had not been negotiated, its inclusion in the “necessary paperwork” exceeded the scope of the written agreement, such that it was in effect a new offer which the claimant declined to accept. See Bonagura v. Home Depot, 991 So. 2d 902 (Fla. 1st DCA 2008).

So how do we prevent this from happening to you in the future? At the very minimum, you should indicate in the mediation agreement that the claimant “agrees to execute a release, resignation and indemnification agreement in exchange for XXX consideration.” To be completely sure, however, you should bring a copy of the release to the mediation and attach it as part of the settlement agreement and state that the claimant “agrees to execute the attached release, resignation, and indemnification agreement as part of this settlement agreement in exchange for XXX consideration.” That ensures that this potential loophole is closed to the claimant and prevents problems with closing the file at settlement.