Alvarez: The Settlement Left Care Open for the Right Knee. What About the Left?

You settled your workers’ compensation case years ago. The paperwork left your future medical care open for certain body parts, and the insurer now says the care you need is not on the list. The answer depends on what the settlement papers actually gave up.

Raul Alvarez’s right knee was on the list of body parts left open for future care. His left knee was not, although the list of body parts settled said “knees.” A doctor later said that favoring the right knee had increased the pain in his left. In Alvarez v. Super Center Concepts, Nos. ADJ9728181, ADJ9728179, ADJ9894259 (WCAB May 21, 2024), a panel of the Workers’ Compensation Appeals Board, Chair Zalewski, Commissioner Capurro and Deputy Commissioner Sussman, held that left knee treatment caused by the right knee injury had to be provided. The settlement papers defeated the insurer’s bar, because they said “Indemnity Only” and left the future-medical line uninitialed, and the treating doctor’s report supplied the causal link. The panel applied those features of this settlement to this record. A worker whose compromise and release has the same features can use its reasoning.

A 2018 settlement and two lists of body parts

Alvarez worked as an assistant manager or banker and a loader or unloader at Superior Grocers. He claimed cumulative injuries ending in October 2014. In August 2018, the parties signed and a judge approved a compromise and release, a settlement that ends part or all of a claim for a sum of money. “Indemnity Only” was handwritten under the title. Indemnity means money benefits such as disability payments, as distinct from medical care. The order approving the settlement carried the same notation.

The body parts listed as settled included lower extremities and knees, a word the Board emphasized. A handwritten comment then said: “Future medical care will include treatment to the lumbar spine, right arm + right knee + psyche only.” It added that future medical care would be subject to utilization review and independent medical review.

Paragraph 9 of the state form warned, in capital letters, that only issues initialed by both sides were included in the settlement. The parties initialed earnings, temporary disability, apportionment, permanent disability, self-procured treatment and several other items. The line for future medical treatment was left blank.

An addendum had Alvarez and the insurer stipulate that he had no injury to any body part not listed. Confusingly, as the Board put it, the addendum also said the defendant would be responsible only for unpaid medical expense through the date of signing, even though it was undisputed that some treatment was left open.

Three years later, the other knee

The Board quoted a November 2021 report from his primary treating physician, Dr. Tomas Saucedo: “as a result of favoring his right knee he has notably increased pain and discomfort to his left knee . . . .” In March 2024, a judge found the insurer was not responsible for left knee treatment. The insurer and the judge both pointed to paragraph 2, which settled any claim that “may hereafter arise or develop as a result of the above-referenced injury(ies).” Alvarez asked the Board to reconsider.

Why “only” did not end the claim

The word “only” looks decisive. The Board called the agreement “at best ambiguous.” The sentence could mean that only direct treatment to those four areas stayed open. It could also mean that any treatment made necessary by the then-existing conditions in those areas stayed open.

The Board did not resolve that in the abstract, because the settlement papers answered it. Two features made it clear that any limit on treatment caused by the accepted body parts could not be enforced: the repeated references to an “Indemnity Only” settlement, and the blank line for future medical treatment on a form that says only initialed issues are settled. The Board cited generally Tobar Industries v. Workers’ Compensation Appeals Board (Phan), 77 Cal.Comp.Cases 300 (2012), a writ-denied case saying ambiguities in a compromise and release are read in favor of the injured worker, and Dupard v. Washington Redskins, a panel decision saying the scope of such settlements is read narrowly.

What the parties had actually settled

The catch-all in paragraph 2 did not rescue the insurer. It reaches later-developing claims, the Board said, but “this only extends to the benefits that were settled.” Alvarez had settled disability money, including for compensable consequence injuries, meaning later injuries caused by the first. He had not properly settled further medical treatment.

Then came the medical link. Alvarez may have had a left knee condition that was alleged to be work-related but was not included as compensable in the 2018 settlement, the Board said. But Dr. Saucedo’s report said that years later, favoring the accepted right knee contributed to the need for left knee care. Treatment for the left knee was therefore care “reasonably required to cure or relieve the injured worker from the effects of the worker’s injury” under Labor Code section 4600(a). The judge erred in finding the settlement barred that care, the Board said, “under the circumstances of this case.”

The result and its limit

The Board granted reconsideration, though the caption on the first page of the decision says “denying,” set aside the judge’s decision and entered new findings. The right knee injuries caused a need for left knee treatment, and the 2018 settlement did not preclude an award of it. The award runs against the insurer for all medical treatment caused by the injury, including the left knee. The win was for medical care. His disability claims for a consequential injury stayed settled.

The Board did not rule on any specific treatment, because it was unclear whether that had been an issue for trial or whether the Board has jurisdiction over it. Any such dispute, it said, should be decided first at the trial level. In our explanation, this is why the Board cited State Compensation Insurance Fund v. Workers’ Compensation Appeals Board (Sandhagen) and section 4610, the utilization-review statute, and why the settlement’s own reference to utilization review matters. In general, utilization review is the insurer’s process for reviewing whether recommended treatment is medically necessary. Independent medical review reviews medical-necessity denials or modifications through the state-administered process.

Before you sign, and after

• Read every initial on paragraph 9. In our view this is the first thing to check. On the form used here, an issue was settled only if both sides initialed it.
• Do not rely on a list of body parts alone. In Alvarez, the “Indemnity Only” references and the blank line controlled over the “only” comment.
• If you are settling, say what you mean. We would avoid comments and addenda that pull in different directions. A party that means to close future medical should see that line initialed.
• Get the medical link in writing. A treating physician’s report tying the need for care to the accepted injury was the evidence the Board relied on.
• Keep the two questions apart. In our view, whether care for a body part is covered is one issue, and whether a specific treatment is approved is another.

For representation on a settled claim with open medical care, see our California workers’ compensation practice.