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13-P-1982 Appeals Court

LUMBERMENS MUTUAL CASUALTY COMPANY vs. WORKERS' COMPENSATION 

TRUST FUND.

No. 13-P-1982

Suffolk. June 2, 2015. - September 3, 2015.

Present: Vuono, Grainger, & Blake, JJ.

Workers' Compensation Act, Reimbursement of insurer. Insurance,

Insolvency of insurer. Administrative Law, Primary

jurisdiction, Exhaustion of remedies, Agency's 

interpretation of statute.

Civil action commenced in the Superior Court Department on 

May 21, 2013. 

The case was heard by Heidi E. Brieger, J. 

W. Frederick Uehlein for the plaintiff.

Douglas S. Martland, Assistant Attorney General, for the 

defendant.

GRAINGER, J. Lumbermens Mutual Casualty Company in 

liquidation (Lumbermens) appeals from the Superior Court

judgment dismissing its claim against the Workers' Compensation 

Trust Fund (trust fund). Lumbermens sought partial 

reimbursement from the fund for workers' compensation payments 
2

made pursuant to G. L. c. 152, §§ 37 and 65. A Superior Court

judge dismissed the claim under the doctrine of primary 

jurisdiction. We affirm. 

Background. We summarize the undisputed facts. 

Lumbermens, an Illinois Corporation, was licensed to issue 

workers' compensation insurance policies in Massachusetts.

Payments under these policies included so-called "second injury" 

benefits awarded pursuant to G. L. c. 152, § 37.

1 The trust fund 

is authorized by that statute to provide partial reimbursement 

to insurers for second injury payments. Between 2000 and 2008 

Lumbermens and the trust fund entered into agreements in six 

separate cases, referred to as Form 123 agreements,

2 establishing 

the reimbursement percentage to be applied to "second injury" 

payments made by Lumbermens in each case. 

In July, 2012, Lumbermens was placed into rehabilitation, 

also referred to as a "run-off" period, whereby it could not 

issue new policies but continued to administer existing 

policies. The trust fund, which had made reimbursement payments 

pursuant to the Form 123 agreements until Lumbermens entered the 

run-off period, thereafter refused further payment. The trust 

 

1 These may be generally described as injuries resulting 

from aggravation of preexisting conditions. See Oakes's Case, 

67 Mass. App. Ct. 81, 82-83 (2006), S.C., 451 Mass. 190 (2008).

2 The nomenclature refers to the form used by the Department 

of Industrial Accidents to memorialize the § 37 reimbursement 

agreements between the trust fund and the insurer. 
3

fund asserted that Lumbermens was no longer entitled to 

reimbursement once the run-off period commenced because it was 

no longer an "insurer" able to issue policies, as that term is 

defined in G. L. c. 152, § 1(7). Ten months later, in May,

2013, Lumbermens was placed in liquidation. 

Approximately one year thereafter Lumbermens filed a 

complaint for enforcement of the six Form 123 agreements in 

Superior Court. A Superior Court judge dismissed the complaint, 

finding that Lumbermen's claims were more properly heard before 

the reviewing board (board) of the Department of Industrial 

Accidents (DIA) under the primary jurisdiction doctrine.

Lumbermens filed a timely appeal.

During the pendency of the appeal the trust fund modified 

the application of its § 37 reimbursement policy to insurers in 

liquidation and reimbursed Lumbermens pursuant to the Form 123 

agreements. In August, 2014, Lumbermens filed claims before the 

board for interest and attorney's fees generated by the trust

fund's initial refusal, and ultimate delay, in providing

reimbursement.

3

 

3 After the trust fund changed its § 37 reimbursement 

policy, it secured a stay of Lumbermens's appeal to assess 

whether Lumbermens's claims would be paid voluntarily. During 

the stay, the trust fund reimbursed Lumbermens in full. The 

trust fund requested that the stay continue until the parties

could resolve Lumbermens's related claims for interest and 

attorney's fees then pending before the DIA. The stay initially 

was continued for that purpose but subsequently was vacated when 
4

Discussion. Mootness. The trust fund asserts that payment 

of the amounts specified by the Form 123 agreements renders 

Lumbermens's appeal moot, as the parties' remaining dispute over 

interest and fees was voluntarily presented to the board by 

Lumbermens itself. We are persuaded by Lumbermens's rejoinder 

that this case presents a recognized exception to the mootness

doctrine, because the jurisdictional issue, fully briefed and 

argued, can be rendered "capable of repetition, yet evading 

review" by the simple expedient of payment in a case whenever 

denial of reimbursement is challenged. Lockhart v. Attorney 

Gen., 390 Mass. 780, 783 (1984), quoting from Wolf v. 

Commissioner of Pub. Welfare, 367 Mass. 293, 298 (1975); Souza

v. Registry of Motor Vehicles, 462 Mass. 227, 228 n.3 (2012).

We consider Lumbermens's submission of its remaining claims to 

the board simply to be recognition that further efforts in the 

Superior Court would have been a futile expenditure of time and 

resources. We note as well that the jurisdictional interplay 

between the board and the Superior Court has been discussed by 

the Supreme Judicial Court, see Weitzel v. Travelers Ins. Cos.,

 

the parties could not reach an agreement on reimbursement of 

interest and fees. The parties thereafter filed their briefs in 

this case. 
5

417 Mass. 149 (1994),4 but that the specific provision here in 

dispute has been addressed to date only by the Superior Court.

5

Primary jurisdiction. We turn first to the language of 

G. L. c. 152, § 19(1), inserted by St. 1987, c. 691, § 9:

"Except as otherwise provided by section seven, any 

payment of compensation shall be by written agreement by 

the parties and subject to the approval of the department. 

Any other questions arising under this chapter may be so 

settled by agreement. Said agreements shall for all 

purposes be enforceable in the same manner as an order 

under section twelve."

The general import of this paragraph is easily discerned.

Because the purpose of the workers' compensation scheme is to 

protect injured workers, agreements that determine the 

compensation to be paid to injured workers are subject to DIA

review and approval. Weitzel, supra at 153. However, "[a]ny 

other questions," which would include the reimbursement 

agreements underlying the dispute in this case, may be settled 

by agreement without DIA approval. Moreover, these 

noncompensation related agreements may be enforced under the 

provisions of G. L. c. 152, § 12, which provide for submission 

"to the superior court department of the trial court for the 

county in which the injury occurred or for the county of 

 

4 Weitzel, unlike this case, concerned a compensation 

agreement; those are made explicitly subject to DIA approval by 

the first sentence of G. L. c. 152, § 19(1).

5 Arrowood Indem. Co. vs. Workers' Compensation Trust Fund, 

Suffolk Superior Court, No. SUCV-2015-00585 (March 24, 2015).
6

Suffolk." G. L. c. 152, § 12(1), inserted by St. 1985, c. 572, 

§ 26. Otherwise stated, they are enforceable just as though 

they had been the subject of an administrative order.6

It is thus made explicit by statute that the Superior Court 

has jurisdiction to enforce a noncompensation related agreement 

that was not subject to prior DIA approval. This determination 

does not, however, end our inquiry. Specifically, we must 

consider whether the judge erred in determining in this case 

that the doctrine of primary jurisdiction justified requiring 

the parties to submit this question to the board.

"The doctrine of primary jurisdiction . . . 'is concerned 

with promoting proper relationships between the courts and 

administrative agencies charged with particular regulatory 

duties.'" Murphy v. Administrator of the Div. of Personnel 

Admin., 377 Mass 217, 221 (1979), quoting from Nader v.

Allegheny Airlines, Inc., 426 U.S. 290, 303 (1976). The 

doctrine applies to promote "'[u]niformity and consistency in 

the regulation of business entrusted to a particular agency' or

'when the issue involves technical questions of fact uniquely 

within the expertise and experience of an agency.'" Casey v.

 

6 We are unpersuaded by the trust fund's assertion, contrary 

to the clear language of G. L. c. 152, § 19(1), that the DIA 

must convert a noncompensation related agreement into an 

administrative order or decision as a prerequisite for 

enforcement in the Superior Court pursuant to G. L. c. 152, 

§ 12(1). 
7

Massachusetts Elec. Co., 392 Mass. 876, 879 (1984), quoting from

Nader, supra at 303-304.

7

Comparison with the closely related doctrine of exhaustion 

of administrative remedies is instructive. While both doctrines 

are rooted in the principle of administrative expertise, they 

differ in two respects. First, the exhaustion doctrine applies 

to the failure to obtain final resolution at the agency level of 

a dispute or an issue already committed to the administrative 

process. Murphy, supra at 220. By contrast, as in this case, 

"primary jurisdiction situations arise in cases where a 

plaintiff, in the absence of pending administrative proceedings, 

invokes the original jurisdiction of a court to decide the 

merits of a controversy." Ibid.

The second distinction is found in the more definitive 

nature of the exhaustion doctrine -- a court is without 

jurisdiction to entertain an appeal from administrative 

proceedings that are incomplete. This "preserve[s] the 

integrity of the administrative process while sparing the 

judiciary the burden of reviewing administrative proceedings in 

 

7 We do not suggest that every noncompensation related 

agreement will be appropriately remanded to the board to satisfy 

the doctrine of primary jurisdiction. To the contrary, there 

are circumstances involving "questions of law which have not 

been committed to agency discretion," where such agreements are 

properly resolved by a court in the first instance. Murphy, 

supra at 221. Any other result would vitiate the difference in 

wording between the first two sentences of § 19(1).
8

a piecemeal fashion." Id. at 220, citing Assuncao's Case, 372 

Mass. 6, 8-9 (1977). Where, however, a plaintiff invokes the 

jurisdiction of a court in the absence of administrative 

proceedings, it becomes necessary to make a determination 

(generally unnecessary to a matter already before an agency) 

whether the nature of the controversy is "uniquely within the 

expertise and experience of [the] agency" in question. Casey, 

supra at 879, quoting from Nader, supra at 304. 

We conclude that the dispute in this case satisfies that

test enunciated by Nader and found in Massachusetts cases such 

as Murphy and Casey. The fund's determination that Lumbermens 

no longer qualified as an insurer eligible for reimbursement 

under the form 123 agreements was based on its interpretation of 

G. L. c. 152, § 37. The DIA was established to apply its 

"expertise to the statutory scheme which . . . it has the 

primary responsibility of enforcing." Assuncao's Case, supra at

9. We accord "substantial deference to a reasonable 

interpretation of a statute by the administrative agency charged 

with its administration." Molly A. v. Commissioner of the Dept.

of Mental Retardation, 69 Mass. App. Ct. 267, 280 (2007), 

quoting from Commerce Ins. Co. v. Commissioner of Ins., 447 

Mass. 478, 481 (2006).

In this case the requirement of deference, hence the 

invocation of primary jurisdiction, is reinforced by the 
9

particulars of the interpretive dispute, involving reasonably 

plausible arguments on each side. The trust fund relies on the 

words "authorized so to do" in the definition of an "insurer" as 

these words modify "any insurance company . . . which has 

contracted with an employer to pay [workers'] compensation." 

G. L. c. 152, § 1(7). The trust fund points out that, once the 

run-off period commenced, Lumbermens was not "authorized" to 

enter into any contracts with employers; hence it can no longer 

be considered an insurer. Lumbermens, by contrast, relies on 

the past tense of the phrase "which has contracted with an 

employer" and argues that its previous contracts, made with 

then-existing authority, serve to define it as an insurer 

entitled to reimbursement under § 37 on a continuing basis.

Ibid. "Given . . . two equally plausible readings of the 

statutory language [courts are required to] defer to [an 

agency's] reasonable interpretation." Falmouth v. Civil Serv.

Commn., 447 Mass. 814, 821 (2006). 

Conclusion. The Legislature has directed that, unlike 

agreements related to the compensation paid to injured workers, 

noncompensation agreements may be enforced in the Superior Court 

without the mandatory prerequisite of DIA approval. G. L. 

c. 152, § 19(1). The legislative direction, however, does not 

relieve a court of its obligation to determine whether a 

specific noncompensation issue is subject to the doctrine of 
10

primary jurisdiction and the underlying policies that weigh in 

favor of "[u]niformity and consistency in the regulation of 

business entrusted to a particular agency." Casey, 392 Mass. at 

879, quoting from Nader, 426 U.S. at 303-304. The judge 

determined correctly that this case falls into that category.

Judgment affirmed.