## Facts

- Michael LaFleur suffered a work-related injury in January 1975 when a forklift blade fell on his right foot.
- Employer-related physicians advised that the injury was superficial and diagnosed a toe sprain; LaFleur returned to work but continued to have pain.
- After LaFleur filed a claim, he entered a $4,000 lump-sum workers’ compensation settlement in August 1976 stating it was a complete and final redemption of liability for all weekly benefits due now or in the future and that he could not reopen his claim.
- The Industrial Accident Board approved the settlement in November 1976 under Massachusetts workers’ compensation law.
- LaFleur’s condition worsened; in January 1977 he was diagnosed with arterial occlusive (Buerger’s) disease, later resulting in bilateral above-knee amputations and permanent wheelchair confinement.
- LaFleur submitted medical evidence indicating he had a preexisting arterial disease and that the industrial accident injured his arterial system, aggravated the disease, and was causally related to the amputations.

## Issues

1. Whether a workers’ compensation lump-sum settlement may be rescinded for mutual mistake when both parties were unaware at settlement of an existing, serious condition causally related to the industrial accident.
2. Whether broad “final settlement” language, without specific reference to unknown injuries, bars rescission as a matter of law.
3. Whether the employee’s evidence created a genuine issue of material fact precluding summary judgment for the employer and insurer.

## Decision

- The Supreme Judicial Court reversed summary judgment for the employer and insurer and remanded for further proceedings.
- The court held that a settlement may be set aside for mutual mistake as to a material existing fact, including an unknown existing injury or condition and its causal relationship to the accident.
- The court ruled that the record evidence could support a finding that the parties’ mistake concerned an unknown existing condition, not merely an incorrect prediction about future consequences of a known injury.
- The court concluded that the settlement’s broad finality language did not, by itself, conclusively establish that the parties intended to release liability for unknown injuries.
- Because a fact dispute existed as to mutual mistake and intent, summary judgment was improper.

## Legal Principles

- Mutual mistake supports rescission when both parties are mistaken about a material existing fact that formed the basis of the agreement.
- A mistake about the future course or consequences of a known injury generally does not justify setting aside a release; a mistake about an existing but unknown injury or condition may.
- Whether a release covers unknown injuries turns on the parties’ intent; broad general release language may be insufficient absent clearer indication that unknown injuries were contemplated.
- On summary judgment, evidence supporting an unknown existing condition and causal connection to the industrial accident can create a triable issue on mutual mistake and intent.

## Conclusion

Massachusetts permits rescission of a workers’ compensation lump-sum settlement when both sides were mutually mistaken about a material, unknown existing injury or condition related to the accident and the agreement does not clearly show an intent to release unknown injuries; the case was remanded for an evidentiary determination on mutual mistake and intent.


LaFleur v. C.C. Pierce Co., 398 Mass. 254, 496 N.E.2d 827 (Mass. 1986)