Cases

The question in this case was whether a settlement reached at mediation was enforceable.  Whether a settlement agreement reached at mediation is ambiguous or not is a question of law subject to de novo review.

At the time of mediation, the parties agreed to the settlement of the workers' compensation case and agreed to sign a "release."  When the settlement documents were sent to the claimant for signature, the proposed release prepared by the employer/carrier included a comprehensive release covering not only workers' compensation claims but also a wide array of other potential claims under state and federal law.  The claimant refused to sign the release.  The employer/carrier filed a Motion to Enforce the Settlement Agreement.  The judge determined that the mediation agreement was "clear, unambiguous, and enforceable" and entered an order enforcing the agreement.  In doing so and in making determinations, the judge refused to consider the settlement paperwork based on the parol evidence rule determining that such rule precluded the consideration of such extrinsic evidence not contained in the settlement documents. 

On appeal, judge's decision reversed.  The term "release" referred to at the time of the mediation settlement agreement gave rise to a latent ambiguity, making consideration of extrinsic evidence appropriate.  A latent ambiguity (as distinct from a patent ambiguity) arises when the language employed in a settlement document is clear and intelligible and suggests but a single meaning but some extrinsic fact or extraneous evidence creates a necessity for interpretation or a choice among two or more possible meanings.  Release in this instance could have related only to a workers' compensation claim but also to all claims possible that the claimant might have against the employer.  Accordingly, extrinsic evidence was needed to make a determination as to the intent of the parties in entering into the settlement agreement.