Mediation Agreements as “Res Judicata”: Solid as Rock

By: Donald L. Swanson

“mediated agreements are accorded the same res judicata effect and enforceability as a . . . judicial decree.”

—Hoglund v. Aaskov Plumbing & Heating, No. WCB-05-280, slip op. (Maine S.Ct. Apr. 26, 2006)

The foregoing quotation is the strongest articulation by a court I’ve seen on the strength and effectiveness and unassailability of a mediated settlement agreement.  The quotation rests on a specialized statutory scheme, so it has limited reach.  Nonetheless, the quotation highlights the significance and effectiveness of a mediated settlement agreement.

Hoglund v. Aaskov Plumbing is a workers compensation case, operating under a specialized set of state statutes. And mediation is an important element of statutory requirements in the case.

Here is a summary of the Hoglund v. Aaskov Plumbing issues and ruling on appeal:

“Aaskov Plumbing & Heating appeals from a decision . . . denying its petition for review of incapacity,” which denial is based on a “prior mediated agreement.” The decision below says Aaskov must “prove a change in the employee’s circumstances in order to reduce or discontinue benefits,” because of the prior mediated agreement. Aaskov contends that it should be permitted “to prove the facts related to level of incapacity without reference” to the mediated agreement. “We disagree and affirm the judgment.”

Facts and Initial Case

Peter Hoglund works as a union plumber. While employed by Aaskov, he steps into a hole obscured by floodwater and injures his knee. Hoglund files a workers compensation claim. He and Aaskov participate in mediation, and the parties reach a written agreement in mediation for Aaskov to pay workers compensation benefits to Hoglund.

Subsequent Proceedings

Nineteen months after execution of the mediated agreement, Aaskov Plumbing files a petition for review of Hoglund’s incapacity. The workers compensation court determines that the mediated agreement is “a final order having res judicata effect on factual issues” and that Aaskov must “demonstrate a change in Hoglund’s economic or medical circumstances since the mediation” to warrant a reduction in benefits. The court determines that Aaskov fails to meet this burden and denies the petition. Aaskov appeals, which brings the case to the Maine Supreme Judicial Court.

Aaskov’s Argument on Appeal

Aaskov Plumbing argues that the mediated agreement in this case, (i) is not the equivalent of a court finding on extent of incapacity, and (ii) is only an agreement for benefits at a certain level. Consequently, Aaskov argues, it is entitled to a new hearing on the the extent of Hoglund’s incapacity, without reference to the mediated agreement.

The Supreme Judicial Court’s Analysis

In reaching its decision to affirm, the Maine Supreme Judicial Court offers the following analysis:

• “We have previously recognized a legislative intent . . . to encourage mediation. Indeed, we have stated that mediation pursuant to the new Act was intended to ‘replace litigation whenever possible.’”
• Our statutes provide for mandatory mediation upon the filing of a workers compensation controversy.
• In a prior case, we affirmed a workers compensation determination that “a mediation report, signed by the parties, is binding on factual issues.” In the prior case, the parties’ mediated agreement says the employee “suffered short-term total and continuing partial incapacity as a result of his work-injury.” After the employer stops paying benefits, we rule that the mediation agreement is “binding on the issue of whether a work-related injury occurred,” (i) citing legislative history that “the Legislature intended mediation to replace litigation whenever possible,” and (ii) rejecting the idea that a mediating party could “enter into a signed agreement and then refuse to comply with its terms.”
• In another prior case, one party suggests that two of our workers compensation opinions are “distinguishable” because, in one case, the parties enter into a mediated agreement, instead of a consent decree, and that the statutory term “award” cannot “include an agreement reached at mediation.” We confirmed in the prior case that “mediated agreements are accorded the same res judicata effect and enforceability . . . as a judicial decree.”

Conclusion

The workers compensation statutes, including their mandatory mediation component, are undoubtedly specialized in nature and distinguishable from most other litigation contexts. Yet, the mediation agreement analysis and conclusions in Hoglund v. Aaskov Plumbing are emblematic of the respect and authority that should be afforded all mediated agreements.

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