PR 02505.019 Kansas
A. PR 01-087 Request for Legal Opinion on the Effect of a "nunc pro tunc" order in a Kansas Case Involving Workers Compensation Offset; Your Fax dated October 12, 2000
DATE: October 18, 2000
This case concerned a "nunc pro tunc" order by a Kansas workers' compensation (WC) Administrative Law Judge. This order indicated that this was a correction of the prior settlement. Based upon our review of the information provided and Kansas cases and statutes, the opinion is that the order is not a proper "nunc pro tunc" order and the offset should be applied based upon the original settlement agreement. The beneficiary has provided no evidence that this provision was "part and parcel" of the original settlement. By settling all her claims under the WC law for a lump sum, there was no reason for the parties to determine what a future monthly benefit based upon her life expectancy would have been. In addition, the beneficiary's attorney states that the order reflects "a thing done now which has the same legal force and effect as if it was done then," indicating that the order does not reflect what was actually done originally. As is set out above, a nunc pro tunc order reflects what was previously actually done, not what should have been done. It appears this new provision was added to avoid the offset; consequently, it should be treated as an amendment or addendum to the settlement. See SSR 97-3.
The Wichita, Kansas Field Office provided information indicating that the beneficiary settled her workers compensation claim on March 12, 1998. The material received included a copy of a "nunc pro tunc" order, dated November 4, 1999, in which the Workers Compensation Administrative Law Judge (ALJ) indicated that the order was a correction of the prior settlement. The order indicated that the beneficiary's settlement after expenses amounted to $36,194.22 and represented monthly compensation of $58.45 per month based upon her life expectancy. In our opinion, based upon the information provided and review of Kansas statutes and regulations, the ALJ did not have authority under Kansas law to enter a "nunc pro tunc" order on this issue and the order should be given no effect.
Section 224 of the Social Security Act (the Act) provides for the reduction of disability insurance benefits (DIB) due to the worker's receipt of periodic workers compensation (WC) payments. Section 224(b) of the Act and section 404.408(g) of the regulations gives the Commissioner the authority to determine how to prorate and offset a WC lump-sum (LS) settlement. The Social Security Administration's (SSA) long-time policy and practice has been to prorate and offset a WCLS at the rate that most closely approximates State law. See 20 C.F.R. § 404.408(g) (2000); Social Security Ruling (SSR) 97-3.
Kansas statutes provide that the award, finding, decision or order of an ALJ is deemed to be the final award, finding, decision or order of the ALJ when filed in the office of the director. See K.S.A. §50 44-549. Any final order, award, modification of award, or preliminary award is subject to review by the workers compensation board upon written request of any interested party within 10 days of the order. See K.S.A. § 44-551(b)(1). K.S.A. § 44-527 provides that any agreement, finding, award, agreement modifying an award, or final receipt or release will be accepted, receipted for, filed, and indexed by the director and will be considered as approved by the director unless the director disapproves of same in writing within 20 days and notifies each party of his disapproval. K.S.A. § 44-528 provides for review of an award or modification of an award for good cause shown and under circumstances such as when the award was obtained by fraud or undue influence, the award was made without authority or as a result of serious misconduct, the award is excessive or inadequate, or the work disability of the employee has changed. However, the statute explicitly excludes lump-sum settlements approved by the director or an ALJ from the review and modification provided by section 44-528. The exclusion of lump-sum settlements from section 44-528 was held to be constitutional in Peterson v. G~ Elevators, Inc., 850 P.2d 893 (Kan. 1993). If review is sought of any action of the workers compensation board, any party may appeal from a final order of the board by filing an appeal with the Kansas Court of Appeals within 30 days of the date of the final order. K.S.A. § 44-556. See Jones v. Continental Can Company, et al., 920 P.2d 939 (Kan. 1996); University of Kansas, et al. v. Dept. of Human Resources, Division of Workers Compensation, 887 P.2d 1147 (Kan. 1995).
When the order approving the settlement was filed and not appealed it became final. In Fleming v. National Cash Register Co., et al., 363 P.2d 432, 436 (Kan. 1961), the court stated that when a final order has been filed and no appeal is taken, the compensation commissioner (now director) does not have authority to grant a rehearing on the claim, either on his own motion or at the request of one of the parties. The court also stated that there is no provision for modification of an award once made except as found in section 44-528, which provides for review, under certain conditions, "at any time before, but not after, final payment," and the commissioner does not have authority to grant a rehearing on the claim, either on his own motion or at the request of one of the parties. In Yehle v. Stamey-Tidd Const. Co., et al., 94 P.2d 328, 331 (Kan. 1939), the court held that where an award was settled, the compensation proceeding and its incidents had reached a finality and were not open to further review or modification at the instance of either party. Even when modification is applicable, issues previously determined may not be relitigated with the exception of changes in the claimant's disability at the present time. Nance v. Harvey County, et al., 952 P.2d 411 (Kan. 1997). The court stated that K.S.A. § 44-528 was intended to permit modification of awards when the condition of an injured employee either improves or worsens after the original hearing and award. Id. at 544, citing Brandt v. Kansas Workers Compensation Fund, 880 P.2d 796 (Kan. App.), rev. denied 256 Kan. 994 (1994). Even if section 44-528 applied, none of the reasons for review set out in that section is applicable to this case.
In this case, it appears the ALJ attempted to change the terms of the prior settlement order by utilizing the nunc pro tunc order to add a new provision. This is an improper use of a nunc pro tunc order. As the Appeals Board for the Kansas Division of Workers Compensation has pointed out, "[a]n order nunc pro tunc is not for the purpose of changing the substance of an order previously entered. It is intended to enter now in the order what was intended at the time originally entered. It corrects what by virtue of clerical error was incorrectly entered. In re Appeal of Angle, 11 Kan. App. 2d 62, 713 P.2d 962, rev. denied 239 Kan. 627 (1986)." Davis-Sweet v. Harrah's Prairie Band Casino, et al., 2000 WL 372266 (Kan. Work. Comp. App. Bd.). In Davis-Sweet, the board upheld the ALJ's refusal to enter a nunc pro tunc order changing the finding on average weekly wage. The board reviewed the record and found that it contained no evidence in the record of Davis-Sweet's overtime pay upon which the ALJ could have based a nunc pro tunc order to change the original finding.
In Norcross v. Pickrell Drilling Company, et al., 449 P.2d 569 (Kan. 1969), the court held that a nunc pro tunc order cannot be used to alter a judgment actually rendered. The function of such an order is to correct the record of a judgment by entering (now for then) an order previously made. Id. at 571. In other words, any nunc pro tunc order must reflect only what was settled or agreed upon at the time of settlement. In Angle, the court stated:
The purpose of a nunc pro tunc order is not to change or alter a judgment previously rendered, but to enter now for then an order previously made. Mathey v. Mathey, 175 Kan. 446, Syl.& 4, 264 P.2d 1058 (1953). See also 2 Am. Jur. 2d, Administrative Law ' 521, p. 330, where it is stated:
"The proper function of a nunc pro tunc order is not to correct some affirmative action of the court which ought to have been taken, but its true purpose is to correct the record which has been made, so that it will truly record the action really had, but which through some inadvertence or mistake has not been truly recorded; in other words, it is an order to make the record speak the truth."
713 P.2d at 965. In Gray v. Hercules Powder Co., et al., 165 P.2d 447 (Kan. 1946), a court reviewed an award under the workmen's (now workers) compensation act and entered an order on July 31, 1945. Over the employer's objections, two weeks later the court entered another order finding that it had erred in its original order and would adopt the March 31, 1945 award made by the workmen's compensation commissioner. The Kansas Court of Appeals rejected the argument that this new order was merely the correction of an error in the original award and should be regarded as a nunc pro tunc order. The court of appeals found that the district court's second order was void. 165 P.2d at 449, 451.
Based upon the information provided by the Wichita Field Office, it does not appear that a provision specifying that the WCLS was to be based upon her life expectancy was part of the settlement agreement or award. Furthermore, the beneficiary has provided neither a copy of the original settlement award nor a transcript of the proceedings to show that the original settlement included the stipulation that it was based upon her life expectancy. Kansas regulations set out that each shorthand reporter taking and transcribing hearings in workers compensation cases furnishes a copy to the ALJ, the employer, the insurance carrier, and the claimant or the claimant's attorney. K.A.R. 51-2-4(a). In settlement cases, the original transcript of the settlement hearing constitutes a written final award and is furnished to the director within two weeks. Copies are furnished to the parties upon request. K.A.R. 51-2-4(c). Thus, it appears the transcript of the settlement proceedings would be available to the beneficiary in this case.
Unless the beneficiary provides a transcript of the March 12, 1998 settlement hearing which reveals that her life expectancy was part of the 1998 proceeding, we believe the nunc pro tunc order is improper and is not entitled to consideration in determining the offset.
Based upon our review of the information provided and Kansas cases and statutes, it is our opinion that the order is not a proper nunc pro tunc order and the offset should be applied based upon the original settlement agreement. The beneficiary has provided no evidence that this provision was "part and parcel" of the original settlement. By settling all her claims under the workers compensation law for a lump sum, there was no reason for the parties to determine what a future monthly benefit based upon her life expectancy would have been. In addition, the beneficiary's attorney states that the order reflects "a thing done now which has the same legal force and effect as if it was done then," indicating that the order does not reflect what was actually done originally. As is set out above, a nunc pro tunc order reflects what was previously actually done, not what should have been done. It appears this new provision was added to avoid the offset; consequently, it should be treated as an amendment or addendum to the settlement. See SSR 97-3.
Based upon the information provided to this office, we do not understand why ODO removed the offset effective with the month of the nunc pro tunc order without further development. Form SSA-1709 reflects that the date of the settlement was November 4, 1999, but that is not the date of the settlement. It appears the beneficiary has been overpaid.