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Dutton v. Industrial Commission12/12/1989
omm'n, 152 Ariz. 42, 48, 730 P.2d 219, 224 (1986) (permitting post-compensability settlements if approved by Industrial Commission).
Fidelity also argues that the estimate of earning capacity contemplated by the settlement was reasonable. While that may be true, it is not determinative on the issue of whether there was a mutual mistake of fact.
In summary, we conclude that mutual mistake was a material question of fact in the present case. The administrative law judge failed to address this question in the award. This failure to make a material finding is reversible error. See, e.g., ASARCO, Inc. v. Industrial Comm'n, 122 Ariz. 241, 594 P.2d 107 (App.1979). If the administrative law judge concludes that the settlement agreement was based on a mutual mistake of fact, the petitioner will be entitled to rearrangement retroactive to the date of the original no loss award.
Since the administrative law judge may find that the stipulated settlement was based on a mutual mistake of fact, we need not address the petitioner's final argument to the effect that it was unnecessary to establish fraud, coercion or mutual mistake to negate the "res judicata effect of a stipulation where the initial decision lacked any meaningful basis as to constitute prior litigation." In rejecting this argument, the administrative law judge, as we have observed, relied on Gallegos, saying "as long as the prior award is final, whatever was decided is final and so is every fact necessary to that decision." In so holding, the administrative law judge took no account of the fact that the finality Gallegos accords unprotested awards merely prevents a retroactive modification of those awards. We leave open two questions that may yet
surface if the administrative law judge finds that the stipulation as to no lost earning capacity was not based on a mutual mistake of fact. The first question is whether a prospective rearrangement, by which we mean rearrangement to date from the reclosing of the reopened claim, is available under Gallegos, if it is found that the stipulation was based upon an informed compromise of an unknown loss of earning capacity.
The second is whether a lost earning capacity award that arises from a stipulation is entitled to res judicata effect if the stipulation was not presented for Industrial Commission approval and shown to the satisfaction of the Industrial Commission to have an adequate factual basis. Cf. Safeway Stores, 152 Ariz. at 48, 730 P.2d at 224 (settlements must be entered "in the open" to be reviewed by the Commission).
The award is set aside.
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