Transportation Insurance Co. v. Franco
Guillermo Franco, an employee of Tri-State Feed Yards, was injured and filed a workers' compensation claim. His first attorney presented a settlement proposal from Transportation Insurance Company, Tri-State's carrier, which Franco verbally refused. However, the attorney had Franco, who is illiterate, sign papers that accepted the settlement and then forged Franco's endorsement on the settlement check. The Industrial Accident Board (IAB) approved the agreement despite being notified that Franco had hired a new attorney. Franco's present counsel filed a declaratory judgment action to cancel the agreement due to extrinsic fraud and the IAB's factual mistake. The appellate court affirmed the trial court's summary judgment voiding the settlement, rejecting Transportation's arguments regarding lack of cause of action, jurisdiction, and statute of limitations. The court also affirmed the award of attorneys' fees to Franco's counsel, deeming the error of awarding directly to counsel (instead of Franco) as harmless.