Title: Town of Southbury v. Gonyea

State: connecticut

Issuer: Connecticut Supreme Court

Document:

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TOWN OF SOUTHBURY v. PATRICIA
GONYEA ET AL.
(SC 18524)
Rogers, C. J., and Norcott, Palmer, Zarella, McLachlan, Eveleigh and
Harper, Js.
Argued April 26—officially released July 12, 2011
Maureen E. Driscoll, with whom was Maribeth M.
McGloin, for the appellant (plaintiff).
Keith S. McCabe, for the appellees (defendants).
Opinion
NORCOTT, J. The plaintiff, the town of Southbury,
appeals1 from the trial court’s grant of summary judg-
ment in favor of the defendants, Patricia Gonyea and
Joseph Gonyea, in this action filed by the plaintiff, pur-
suant to General Statutes § 31-293 (a),2 to recover work-
ers’ compensation benefits that, pursuant to the
Workers’ Compensation Act (act), General Statutes
§ 31-275 et seq., it has paid or will become obligated to
pay to Thomas Gugliotti, an employee of the plaintiff
who, during the course of his employment, was injured
in a car accident with the defendants. On appeal, the
plaintiff claims that the trial court improperly con-
cluded that the plaintiff had assented to a settlement
agreement between Gugliotti and the defendants (set-
tlement), thereby barring it from pursuing its claim
under § 31-293 (a) against the defendants. Because we
agree with the plaintiff that there is a genuine issue
of material fact as to whether it had assented to the
settlement, we reverse the judgment of the trial court.
The record, viewed in the light most favorable to the
nonmoving plaintiff for purposes of reviewing the trial
court’s grant of summary judgment, reveals the follow-
ing facts and procedural history. On January 16, 2006,
Gugliotti, a police officer employed by the plaintiff, was
involved in a car accident with Patricia Gonyea, who
was operating a car owned by Joseph Gonyea. As a
result of the accident, Gugliotti suffered multiple injur-
ies and underwent several medical procedures; he sub-
sequently
applied
for
and
received
workers’
compensation benefits from the plaintiff pursuant to the
act. Gugliotti also made a claim against the defendants,
which, on December 5, 2007, was settled for the defen-
dants’ insurance policy limit of $100,000. Before that
settlement was executed, the plaintiff perfected its stat-
utory lien rights, under § 31-293 (a), by filing lien letters
with the defendants. Subsequently, on February 12,
2008, Gugliotti forwarded to the plaintiff a check for
$66,624.28, which represented the net proceeds he
received from the settlement.
Thereafter, the plaintiff commenced the present
action, under § 31-293 (a), to recover past and future
workers’ compensation benefits it had paid, or would
become obligated to pay, as a result of Gugliotti’s injur-
ies. The defendants then moved to implead Gugliotti
as a third party defendant and, subsequently, filed a
third party complaint against Gugliotti. The trial court,
Roche, J., subsequently denied the cross motions for
summary judgment filed by the defendants and Gugliotti
in the third party action.3 Then, on February 2, 2009,
the defendants moved for summary judgment in this
action, contending that the plaintiff had assented to the
settlement between Gugliotti and the defendants and,
thus, was barred from pursuing this action. At a hearing
on June 1, 2009, the trial court, Sheedy, J., granted
the defendants’ motion over the plaintiff’s objection,
concluding that there was no genuine issue of material
fact because the defendants had demonstrated through
written correspondence between the plaintiff’s counsel
and Gugliotti’s counsel that the plaintiff had assented
to the settlement, and, therefore, the defendants were
entitled to judgment as a matter of law. This appeal
followed. Additional facts will be set forth as necessary.
On appeal, the plaintiff argues that the trial court
improperly concluded that it had assented to the settle-
ment between Gugliotti and the defendants. Specifi-
cally, the plaintiff contends that there is a genuine issue
of material fact as to whether it had assented to the
settlement because: (1) assent, in the context of § 31-
293, ‘‘is a waiver of future legal rights to bring an inde-
pendent civil action,’’ and there was no evidence that
the plaintiff had waived its statutory right to pursue
this action; and (2) the reimbursement received by the
plaintiff from the settlement was statutorily authorized
and did not operate as assent to the settlement. In
response, the defendants contend that the trial court
properly concluded that the plaintiff had assented to the
compromise, relying on the written communications
between the parties prior to the settlement’s execution.
We agree with the plaintiff and conclude that there is a
genuine issue of material fact as to whether the plaintiff
assented to the settlement.
We first note that it is well settled that we engage in
plenary review of a trial court’s grant of a motion for
summary judgment under Practice Book § 17-49. See,
e.g., Weiss v. Weiss, 297 Conn. 446, 458, 998 A.2d 766
(2010).
We next turn to the operative statute, § 31-293, which
we recently considered in Soracco v. Williams Scots-
man, Inc., 292 Conn. 86, 971 A.2d 1 (2009). In Soracco,
we concluded that an employer, who did not assent to
the settlement agreement between the aggrieved plain-
tiffs, a married couple, and the defendant tortfeasor,
nevertheless was barred from challenging the equal
apportionment of the settlement proceeds between the
plaintiff spouses. Id., 89–90, 96–97. Although there was
no dispute over the employer’s lack of assent in Soracco,
we examined that portion of the statute in depth: ‘‘Sec-
tion 31-293 is a detailed scheme governing the parties’
rights in third party workers’ compensation scenarios.
Its primary effect is to provide a mechanism for an
injured employee to assert a claim against the party
allegedly liable for his injury, notwithstanding the
employee’s statutory claim for workers’ compensation.
The statute also allows an employer who is obligated
to pay workers’ compensation benefits either to inter-
vene in the employee’s action or, in the event that the
employee fails to prosecute his claim, to bring an inde-
pendent action against the alleged tortfeasor. In either
case, the rights of each party with respect to the other
are set forth clearly, as is the proper disposition of any
damages awarded in an action governed by § 31-293. If
the employer chooses not to intervene in an action
brought by the employee, it still may recover a share
of any damages in its capacity as a lienor. In any event,
the employer’s recovery is limited to the amount of
workers’ compensation benefits that it has paid or has
become obligated to pay as a result of the tortfeasor’s
alleged negligence or malfeasance.
‘‘Finally, the rights of each party are protected by the
following critical provision: ‘No compromise with the
[alleged tortfeasor] by either the employer or the
employee shall be binding upon or affect the rights of
the other, unless assented to by him.’ General Statutes
§ 31-293 (a). This provision protects each party,
whether the intervening employer or the real party in
interest, i.e., the injured employee, by permitting the
nonsettling or nonassenting party to retain all of its
rights under the statute despite any unilateral settle-
ment by the other party with the alleged tortfeasor.4
In other words, if the employee chooses to settle his
personal injury claim against the tortfeasor without the
assent of the employer, the employer’s right to recover
on its lien and to pursue an independent action against
the tortfeasor to recover any deficiency on that lien
is unaffected. This means, of course, that when the
employee and the tortfeasor settle the matter for less
than the amount of the lien, the tortfeasor must weigh
the risk of further litigation and exposure to greater
liability that may result from a settlement reached with-
out the intervening employer’s assent. Significantly,
however, the statute does not provide a mechanism
for the nonassenting party to challenge a settlement
between the other party and the tortfeasor.’’ (Emphasis
added.) Soracco v. Williams Scotsman, Inc., supra, 292
Conn. 92–94.
Thus, resolution of the factual question of assent to
the settlement is critical to the determination of an
employer’s rights under § 31-293 (a), and, specifically
here, whether the plaintiff may pursue its own indepen-
dent action against the defendants. As we noted in Sora-
cco, assent to the settlement operates as a ‘‘voluntarily
relinquishment’’ of the employer’s rights, namely, ‘‘the
right to impose a lien on any judgment or settlement,
up to the amount of its workers’ compensation liability,
and the right to bring an independent cause of action
against the defendant through which it can recover
workers’ compensation payments that it has paid or has
become obligated to pay as a result of the defendant’s
alleged negligence.’’ Id., 97. In the present case, the
plaintiff maintains that there is no evidence demonstra-
ting that it had voluntarily relinquished these legal
rights. The defendants contend, however, that the writ-
ten correspondence between the plaintiff’s counsel,
Kevin J. Maher, and counsel for Gugliotti, Eric R.
Brown, establishes that the plaintiff assented to the
settlement. Accordingly, we examine those communica-
tions to determine if the trial court properly concluded
that there was no genuine issue of material fact as to
whether the plaintiff had assented to the settlement.
The following additional facts are relevant to the
resolution of this claim. In a letter dated August 28,
2007, Brown informed Maher that, inter alia, Patricia
Gonyea’s insurance carrier had offered to settle the
defendants’ claim for $100,000, the limit of her insur-
ance policy. Brown also requested the plaintiff’s coun-
sel to ‘‘provide [him] with the current lien amount, and
a breakdown of that amount.’’ Brown’s letter posed
several other questions relative to outstanding medical
bills and permanency payments, but did not address
further the proposed settlement between the defen-
dants and Gugliotti.
Maher responded to Brown in a letter dated Septem-
ber 10, 2007, advising him of the status of payments
made by the plaintiff’s insurer, and further informed
Brown that the plaintiff’s insurer anticipated the total
outlay of benefits to exceed $100,000. As such, Maher
requested that Gugliotti remit to the plaintiff’s insurer
all proceeds received from the settlement, after
deducting attorney’s fees and costs.5 Maher sent Brown
two more letters, dated October 8, 2007,6 and November
20, 2007,7 respectively, reasserting the plaintiff’s posi-
tion that the proceeds from the settlement, minus attor-
ney’s fees and costs, were due to the plaintiff’s insurer.
Thereafter, on February 12, 2008, Brown remitted to
Maher a check in the amount of $66,624.28, ‘‘as proceeds
to pay the lien pursuant to [§] 31-293 . . . as asserted
by you on behalf of your client in your correspondence
dated September 10, 2007.’’
From this series of communications, which was the
basis for the trial court’s ruling and the defendants’
arguments on appeal, we conclude that there is a genu-
ine issue of material fact as to whether the plaintiff
assented to the settlement.8 As an initial matter, we
note that Brown never directly asked Maher if the plain-
tiff was willing to assent to the proposed settlement;
indeed, we are hard pressed to find an implicit request
to assent to the settlement. Further, we note that Maher
never explicitly agreed to assent to be bound by the
settlement and, contrary to the defendants’ assertions;
see footnote 5 of this opinion; never instructed Brown
on the manner in which the plaintiff or the plaintiff’s
insurer wished Gugliotti to proceed with respect to
the settlement with the defendants, asserting only the
plaintiff’s rights to the funds obtained from the settle-
ment. Indeed, in two of Maher’s three letters, he explic-
itly noted
that the
plaintiff anticipated
workers’
compensation payments to exceed $100,000; in the third
letter, he stated the expectation that payments would
exceed $75,000. Thus, we further conclude that, viewing
the evidence in the light most favorable to the nonmov-
ing plaintiff, this evidence at a minimum demonstrates
the plaintiff’s awareness of an outstanding balance after
receiving the proceeds from the settlement between
the defendants and Gugliotti, which in the context of
this dispute, weighs against an absolute finding that the
plaintiff had assented to the settlement and voluntarily
relinquished its rights to recover that balance through
subsequent litigation.
The defendants nevertheless implicitly argue in their
brief, and explicitly asserted during oral argument, that
the plaintiff had assented to the settlement by directing
Gugliotti to forward to it the net proceeds received
from the settlement.9 We disagree. As we have noted,
in addition to the plaintiff’s right to intervene or initiate
its own independent cause of action, the plaintiff also
had perfected its lien right to the settlement proceeds;
see General Statutes § 31-293 (a); which statutorily enti-
tled it to any settlement received by Gugliotti from the
defendants. Gugliotti recognized this right in Brown’s
letter of August 28, 2007, asking, ‘‘[w]ould you please
provide me with the current lien amount, and a break-
down of that amount,’’ and the plaintiff’s direct refer-
ence to § 31-293 in Maher’s response letter of September
10, 2007, further implicates that statute’s lien provision.
Moreover, Gugliotti explicitly acknowledged that the
proceeds he forwarded to the plaintiff were ‘‘proceeds
to pay the lien pursuant to [§ 31-293] . . . .’’ Thus, we
conclude that whether the plaintiff voluntarily relin-
quished its legal rights by assenting to the settlement
remains a question of fact for the trial court to decide,
because the plaintiff’s proposed distribution of the set-
tlement proceeds received by Gugliotti does not decide
that issue by itself.
The judgment is reversed and the case is remanded
for further proceedings.
In this opinion the other justices concurred.
1 The plaintiff appealed from the judgment of the trial court to the Appellate
Court, and we transferred the appeal to this court pursuant to General
Statutes § 51-199 (c) and Practice Book § 65-1.
2 General Statutes § 31-293 (a) provides: ‘‘When any injury for which com-
pensation is payable under the provisions of this chapter has been sustained
under circumstances creating in a person other than an employer who has
complied with the requirements of subsection (b) of section 31-284, a legal
liability to pay damages for the injury, the injured employee may claim
compensation under the provisions of this chapter, but the payment or
award of compensation shall not affect the claim or right of action of the
injured employee against such person, but the injured employee may proceed
at law against such person to recover damages for the injury; and any
employer or the custodian of the Second Injury Fund, having paid, or having
become obligated to pay, compensation under the provisions of this chapter
may bring an action against such person to recover any amount that he has
paid or has become obligated to pay as compensation to the injured
employee. If the employee, the employer or the custodian of the Second
Injury Fund brings an action against such person, he shall immediately
notify the others, in writing, by personal presentation or by registered or
certified mail, of the action and of the name of the court to which the writ
is returnable, and the others may join as parties plaintiff in the action within
thirty days after such notification, and, if the others fail to join as parties
plaintiff, their right of action against such person shall abate. In any case
in which an employee brings an action against a party other than an employer
who failed to comply with the requirements of subsection (b) of section
31-284, in accordance with the provisions of this section, and the employer
is a party defendant in the action, the employer may join as a party plaintiff
in the action. The bringing of any action against an employer shall not
constitute notice to the employer within the meaning of this section. If the
employer and the employee join as parties plaintiff in the action and any
damages are recovered, the damages shall be so apportioned that the claim
of the employer, as defined in this section, shall take precedence over that
of the injured employee in the proceeds of the recovery, after the deduction
of reasonable and necessary expenditures, including attorneys’ fees,
incurred by the employee in effecting the recovery. The rendition of a
judgment in favor of the employee or the employer against the party shall
not terminate the employer’s obligation to make further compensation which
the commissioner thereafter deems payable to the injured employee. If
the damages, after deducting the employee’s expenses as provided in this
subsection, are more than sufficient to reimburse the employer, damages
shall be assessed in his favor in a sum sufficient to reimburse him for his
claim, and the excess shall be assessed in favor of the injured employee.
No compromise with the person by either the employer or the employee
shall be binding upon or affect the rights of the other, unless assented to
by him. For the purposes of this section, the claim of the employer shall
consist of (1) the amount of any compensation which he has paid on account
of the injury which is the subject of the suit and (2) an amount equal to
the present worth of any probable future payments which he has by award
become obligated to pay on account of the injury. The word ‘compensation’,
as used in this section, shall be construed to include incapacity payments
to an injured employee, payments to the dependents of a deceased employee,
sums paid out for surgical, medical and hospital services to an injured
employee, the burial fee provided by subdivision (1) of subsection (a) of
section 31-306, payments made under the provisions of sections 31-312 and
31-313, and payments made under the provisions of section 31-284b in the
case of an action brought under this section by the employer or an action
brought under this section by the employee in which the employee has
alleged and been awarded such payments as damages. Each employee who
brings an action against a party in accordance with the provisions of this
subsection shall include in his complaint (A) the amount of any compensa-
tion paid by the employer or the Second Injury Fund on account of the
injury which is the subject of the suit and (B) the amount equal to the
present worth of any probable future payments which the employer or the
Second Injury Fund has, by award, become obligated to pay on account of
the injury. Notwithstanding the provisions of this subsection, when any
injury for which compensation is payable under the provisions of this chapter
has been sustained under circumstances creating in a person other than an
employer who has complied with the requirements of subsection (b) of
section 31-284, a legal liability to pay damages for the injury and the injured
employee has received compensation for the injury from such employer,
its workers’ compensation insurance carrier or the Second Injury Fund
pursuant to the provisions of this chapter, the employer, insurance carrier
or Second Injury Fund shall have a lien upon any judgment received by the
employee against the party or any settlement received by the employee from
the party, provided the employer, insurance carrier or Second Injury Fund
shall give written notice of the lien to the party prior to such judgment
or settlement.’’
3 The defendants had argued in their third party summary judgment motion
that Gugliotti, in the settlement, had released the defendants from all future
liability. Gugliotti contended, inter alia, that he had complied with the provi-
sions of the settlement and denied liability on the plaintiff’s action. Finding
a question of fact relative to the parties’ intent in drafting the settlement,
the trial court, Roche, J., denied both motions for summary judgment in the
third party action. That decision is not at issue in this appeal.
4 ‘‘[O]ur interpretation of this language leads to the conclusion that it in
no way requires the assent of the other party before a valid settlement can
be reached. In fact, on its face, it would seem to allow either party to
settle without the acquiescence or even the knowledge of the other party.’’
(Emphasis in original.) Soracco v. Williams Scotsman, Inc., supra, 292 Conn.
94 n.14.
5 Maher’s September 10, 2007 letter provides in relevant part: ‘‘Relative to
third-party action, I am enclosing current payment records of [the plaintiff’s
insurer] which establish, through September 7, 2007, that payments equating
to $38,537.74 have been occasioned. Additionally, as attached to your com-
munication of August 28, 2007, we have received from Waterbury Hospital,
residual of surgical intervention performed on July 30, 2007, a medical bill
in excess of [$120,000] for confinement associated with surgery. Additionally,
representatives of [the plaintiff’s insurer] have suggested that they have
received bills from physicians who performed fusion surgery in excess of
[$40,000] for both the neurosurgeon and orthopedic surgeon who performed
this operation.
‘‘It is therefore quite obvious that, even before review and scheduling,
the bills associated with recent surgical intervention will exceed [$70,000]
after review, not taking into consideration reinstatement of your client’s
entitlement to temporary total benefits commencing on July 30, 2007 and
continuing for a significant period of time.
‘‘What I am therefore suggesting to you is that from the proceeds of the
third-party action as set forth in . . . your letter of August 28, 2007, [the
plaintiff’s insurer] will have paid and/or be obligated to make payments in
excess of [$100,000]. Therefore, concerning the third-party proceeds and
examination of the provisions of . . . § 31-293, we feel that you are entitled
to attorney’s fees and costs associated with the litigation and we believe
that [the plaintiff’s insurer] is entitled to all monies from the anticipated
third-party action. As such, as settlement is accomplished, please forward
to the undersigned [a] check made payable to [the plaintiff’s insurer] in the
net amount of recovery after payment of attorney’s fees and reasonable
[costs] associated with the litigation. . . .
‘‘[A]s I have indicated, I do believe that the entire net proceeds of the
anticipated third-party settlement should be remitted by your office to [the
plaintiff’s insurer] through this office. Obviously, no moratorium against
future liability will exist as . . . Gugliotti will not receive any proceeds
from the settlement.’’
The defendants assert that in this letter, Maher ‘‘instructs . . . Gugliotti’s
counsel to proceed with the proposed settlement . . . .’’ We disagree. From
the language quoted in the preceding paragraph, which is the only language
in that letter that directly addresses the proposed third party settlement,
we are entirely unable to discern any direction by Maher ‘‘to proceed with
the proposed settlement . . . .’’
6 Maher’s October 8, 2007 letter provides in relevant part: ‘‘[W]ould you
please advise concerning my letter dated September 10, 2007 with respect
to the third-party action. It is apparent that [the plaintiff’s insurer] will be
required to expend benefits in excess of [$100,000]. As such, it is our position
that reimbursement of the entire net proceeds of the third-party action,
after deduction of reasonable attorney’s fees and court costs, should be
made through this office to [the plaintiff’s insurer]. . . .’’
7 Maher’s November 20, 2007 letter provides in relevant part: ‘‘As I indi-
cated to you, payment by [the plaintiff’s insurer] would exceed [$75,000]
due to the recent hospitalization and surgical intervention performed relative
to [Gugliotti]. As such, please [advise] as to the status of the third-party
action and more particularly whether or not you have been able to secure
the policy limits from [the defendants’ insurance carrier] which I acknowl-
edge are [$100,000]. If so, it certainly is the position of [the plaintiff’s insurer]
that these monies should be reimbursed to them after deduction of reason-
able attorney’s fees and costs associated with prosecution of anticipated
third-party action. . . .’’
8 We note that the parties dispute the relevance and admissibility of an
affidavit submitted by the plaintiff in support of its supplemental memoran-
dum in opposition to the defendants’ motion for summary judgment. The
affidavit, executed by Maher, asserts, inter alia, that the plaintiff intended
to pursue its litigation rights against the defendants. Although the question
of this affidavit’s admissibility is not directly before us, we note that, to the
extent that it is admissible, it certainly raises additional questions as to the
plaintiff’s intent to assent to the settlement and voluntarily relinquish its
future litigation rights.
9 The trial court also explicitly relied on the plaintiff’s written directive:
‘‘The assent was by virtue of the letter written that said, we suggest that
as per the statute, you deduct the attorney’s fees, and you deduct the costs
from that, and you remit the remaining $66,000 to [the plaintiff’s insurer]
or to the [plaintiff]. That’s the assent to the compromise.’’