Stipulations May be Binding on Parties

After suffering substantial injuries in a motor vehicle accident on April 7, 1995, the claimant filed a Form 18 notice of accident with the Commission. The denied claim proceeded to a hearing where the employer and carrier stipulated that an employee-employer relationship existed between the claimant and the employer and that the defendant carrier was on the risk at the time of the alleged accident. Based upon these stipulations and other evidence offered at the hearing, the claimant was awarded benefits. Thereafter, the defendants filed a motion to submit additional evidence, wherein they sought to set aside the Opinion and Award, after additional investigation revealed that claimant was not employed by the stipulated employer or insured by the stipulated carrier at the time of the accident. The Full Commission denied defendants' motion, stating that defendants had stipulated they were proper to the action and by law could not now present evidence contrary to that position.

On appeal, the Court of Appeals reversed the Full Commission and remanded the matter back to the Commission with an order that it determine whether there was sufficient evidence to set aside the stipulations and if the defendants' motion was seasonably made. Lowery v. Locklear Construction (citation omitted)

Risk Handling Hint: This case reiterates the limited circumstances under which parties will be permitted to withdraw stipulations into which they have entered and the dire consequences that may occur when defendants fail, or are otherwise unable, to properly investigate a claim. Risk managers are reminded to check claimant's employment status as a first line of defense and pass this information on to defense counsel so that the parties do not enter into stipulations which they may be unable to set aside at a later date.

This case also reiterates the high standards to which defendants are held when entering into agreements with claimants. Our courts have found that agreements to pay compensation are similarly binding upon defendants and may not later be set aside after further investigation or the disclosure of new information, unless there has been error due to fraud, misrepresentation, undue influence or mutual mistake. N.C.G.S. §97-17. See Buchanan v. Mitchell County (citation omitted)