Evarts v. One Beacon Insurance Co., No. 237-11-04 Ancv (Reiss, J., Feb. 2, 2005)

[The text of this Vermont trial court opinion is unofficial. It has been reformatted from the 

original. The accuracy of the text and the accompanying data included in the Vermont trial court 

opinion database is not guaranteed.]

STATE OF VERMONT 

ADDISON COUNTY, SS. 

 ) 

LUCILLE EVARTS ) Addison Superior Court 

 ) 

v. ) Docket No. 237-11-04 Ancv 

 ) 

ONE BEACON INSURANCE ) 

COMPANY ) 

 ) 

OPINION AND ORDER 

 This matter comes before the Court on the parties’ cross motions for summary 

judgment. Plaintiff Lucille Evarts seeks enforcement of an arbitration award, awarding 

her $80,000 in damages from Defendant One Beacon Insurance Company under an 

uninsured motorist insurance policy (the “Policy”). Defendant claims that pursuant to the 

Policy, it is entitled to offset its payment of the arbitration award by the amount that 

Plaintiff has already received in workers’ compensation benefits. Plaintiff argues the 

offset is not authorized by Vermont law. 

 This case presents the following issue of law: May an insurance company offset 

workers’ compensation benefits received by a plaintiff under a policy provision which 

purports to allow such offsets to the extent the workers’ compensation benefits would 

afford the plaintiff a double recovery? The Court answers this question in the affirmative 

and grants Defendant’s summary judgment motion and denies Plaintiff’s summary 

judgment motion insofar as it seeks denial of an offset, thereby holding that Defendant 

may offset its payment by the amount Plaintiff received in workers’ compensation 

benefits to the extent there would be a double recovery. The Court finds that such a 
result satisfies the purpose of Vermont’s Uninsured Motorist Act, 23 V.S.A. § 941 (the 

“Act”), “to put a covered person in the same position as if the uninsured motorist had 

been insured.” Landry v. Dairyland Ins. Co., 166 Vt. 634, 635 (1977) (mem.). Any other 

result would place Plaintiff in a better position than she would be in had the accident 

involved an insured driver. 

 The following facts are undisputed. As a result of an automobile accident between 

Plaintiff and an uninsured motorist, Plaintiff received workers’ compensation benefits in 

the amount of $15,259.61. Plaintiff then sought coverage from Defendant under the 

Policy. The parties submitted the case to binding arbitration, and the arbitration board 

found that Plaintiff had incurred $80,000 in damages. Defendant claims it is liable for 

only $64,740.39 of those damages, because the Policy states that: 

[w]e will not pay for any element of loss if a person is entitled to receive a 

payment for the same element of loss under any of the following or similar 

law: 

1. Workers’ compensation law . . . . 

 Summary judgment is appropriate where there is no genuine issue as to any 

material fact and a party is entitled to judgment as a matter of law. V.R.C.P. 56(c)(3). 

Here, the dispositive issue is one of law only, and the parties do not dispute the essential 

facts of the case. 

 In general, “[u]nless prohibited by statute or public policy, an insurer’s liability is 

controlled by its policy provisions.” State Farm Mut. Auto. Ins. Co. v. Powers, 169 Vt. 

230, 236 (1999). Plaintiff, however, argues that the Act, which requires UM coverage in 

all Vermont automobile insurance policies, authorizes an offset only for an insured’s 

recovery from an uninsured motorist and does not permit a carrier to offset its obligations 

as a result of an insured’s recovery from sources such as workers’ compensation. Section 

941(e) of the Act provides that “the [UM] insurer is entitled to the proceeds of any 

settlement or recovery from any person legally responsible for the damage or personal 

injury” to the insured. 23 V.S.A. § 941(e). The Act is silent with respect to offsets of 

workers’ compensation benefits, and it does not state that “settlement or recovery” from 

the tortfeasor under § 941(e) is the exclusive offset or reimbursement permitted under the 

Act. 

 The Vermont Supreme Court has stated that any policy provision “which reduces 

the amount of coverage mandated by statute” is void. Sanders v. St. Paul Mercury Ins. 
3

Co., 148 Vt. 496, 499 (1987); see also 23 V.S.A. § 941 (“The coverages . . . for new or 

renewed policies shall be not less than $50,000.00 for one person and $100,000.00 for 

two or more persons killed or injured.”). Plaintiff, however, will not be deprived of full 

coverage under the Policy for her losses.1 The Supreme Court has described a UM 

carrier’s obligation under the Act as follows: 

 

1

 The Court does not address the question of whether a policy provision permitting an 

offset for workers’ compensation benefits would be void in circumstances where a plaintiff does 

not recover all of his or her damages, although it notes that the weight of authority holds a policy 

offset provision void in those circumstances. 
4

The obligation of a UM carrier is to provide UM coverage up to the limits 

of its policy, for the portion of the accident victim’s total judgment that is 

unsatisfied by recovery from other sources. A UM carrier is therefore 

entitled to reimbursement for payments it makes to an accident victim to 

the extent the victim’s total recovery from all sources exceeds his or her 

damages. 

Bradley v. H.A. Manosh Corp., 157 Vt. 477, 485 (1991) (emphasis supplied). The

Court’s language “other sources” and “all sources” would be meaningless if it was 

limited to recovery from the tortfeasor. See also Muir v. Hartford Accident & Indem. 

Co., 147 Vt. 590, 594 (1987) (holding that UM insurer’s responsibility was to provide 

“for the portion of the plaintiffs’ total judgment that remained unsatisfied by their 

recovery from other sources”). 

 The Court is aware of a split in authority on this issue. Two Vermont Superior 

Courts, as well as a number of courts in other jurisdictions, have concluded that an offset 

for workers’ compensation is not permissible under the Act or similar UM Acts in other 

jurisdictions, even where the insured receives a double recovery. See Feeley v. Allstate 

Ins. Co., No. S89-00 Fc, slip op. at 3–7 (Jan. 8, 2004) (VanBenthuysen, J.); Winn v. 

Becker, No. S0226-90 BcC, slip op. at 9 (Oct. 13, 1993) (Valente, J.); Annotation, 

Uninsured and Underinsured Motorist Coverage: Validity, Construction, and Effect of 

Policy Provision Purporting to Reduce Coverage By Amount Paid or Payable Under 

Workers’ Compensation Law, 31 A.L.R.5th 116, § 5[b] (1995) (collecting cases).2 The 

Court finds the reasoning of those cases unpersuasive where it allows an insured to 

recover more than he or she would have recovered had the uninsured motorist actually 

 

2

 Several of the courts denying an offset have done so only where an offset for workers’ 

compensation benefits would render the insured without full compensation for his or her 

damages. See, e.g., Luedke v. United Fire & Cas. Co., 561 N.W.2d 206, 207–09 (Neb. 1997) 

(disallowing offset where insured’s total recovery, even without offset, was less than insured’s 

overall damages from accident); Ferguson v. State Farm Mut. Auto. Ins. Co., 198 S.E.2d 522, 

523–24 (S.C. 1973) (same). Under those circumstances, an offset would be inconsistent with the 

underlying purpose of the Act because the offset would not place the insured in the same position 

she would be in had the uninsured motorist purchased insurance coverage. 
5

purchased insurance.3 This places a plaintiff in a better position than if his or her accident 

was caused by an uninsured driver. It also places an accident victim injured by an 

uninsured motorist in a better position than a work injury victim,4 and is contrary to the 

 

3

 Plaintiff also argues that because she had paid a premium for her uninsured motorist 

coverage, she is entitled to the full benefit of her policy despite any recovery from other forms of 

insurance. Plaintiff, however, paid Defendant to assume only the risk that she might not be able 

to fully recover in an accident with an uninsured motorist. Defendant is therefore obligated to 

pay Plaintiff the amount she failed to recover from other sources, up to the limits of its Policy. 

This provides Plaintiff the full benefit of the UM provision of the Policy and full compensation 

for her damages. 

4

 The Court notes that if the uninsured motorist had had coverage here, Vermont workers’ 

compensation law would allow a lien on an employee’s recovery from other sources where the 

lien prevents “double recovery.” 21 V.S.A. § 624(e). Hence, if Plaintiff had received an $80,000 

recovery from the uninsured motorist’s hypothetical liability policy, $15,259.61 of that recovery 

would have gone to her employer or workers’ compensation carrier, leaving her with a total 

recovery of $80,000. There is no indication that the Legislature intended individuals who 
6

general proposition that an injured party is allowed only one recovery. See W. Page 

Keeton, et al., The Law of Torts § 48, at 330–32 (1984). Therefore, the Court holds that 

§ 941(e) does not set forth the exclusive permissive offset under the Act and an offset of 

workers’ compensation benefits is appropriate to the extent Plaintiff’s workers’ 

compensation would permit a double recovery. The United States District Court for the 

District of Vermont has reached a similar conclusion, holding that: 

 

suffered damages in an accident with an uninsured motorist to receive a double recovery, while 

denying those individuals injured on the job this same opportunity. 

[i]t is axiomatic that plaintiff may not receive double recovery for his 

injuries. If plaintiff were to collect both worker’s compensation and UM 

benefits without comparing their total to plaintiff’s total damages, plaintiff 

might receive compensation for the same injury twice. Together both the 

UM and worker’s compensation payments may not add up to more than 

plaintiff’s total damages. 

Brunet v. Am. Ins. Co., 660 F. Supp. 843, 849 (D. Vt. 1987). The Arizona Court of 

Appeals decision in Geyer v. Reserve Insurance Company, 447 P.2d 556 (Ariz. Ct. App. 

1968), is also instructive. The Vermont Supreme Court cited Geyer in Muir for the 

proposition that a UM carrier must provide coverage for that portion of an insured’s total 

judgment which remains unsatisfied by the insured’s recovery from other sources. Muir, 

147 Vt. at 594 (citing Geyer, 447 P.2d at 559). The Geyer Court noted, however, that its 

opinion was not “to be construed as permitting or tending to permit a ‘double recovery’ 

or windfall to the insured under separate coverages in excess of [the insured’s] actual 

legal damages.” Geyer, 447 P.2d at 559. These holdings support the Court’s decision 

here to allow an offset and prevent a double recovery. 
7

 Finally, Plaintiff argues that she is entitled to interest on her uninsured motorist 

payment. With respect to the undisputed $64,740.39 to which Plaintiff is entitled, 

interest accrued over a period of 46 days after the arbitration board announced its award 

and before Defendant remitted payment. At a legal rate of 12 percent, 9 V.S.A. § 41a(a); 

V.R.C.P. 69, total interest amounts to $976.41.5 Defendant has not disputed Plaintiff’s 

claim to this amount of interest, and Plaintiff’s argument is consistent with Vermont law. 

Webb v. U.S. Fidelity & Guar. Co., 158 Vt. 137, 144 (1992). Therefore, the Court 

awards Plaintiff $976.41 in interest, in addition to the amount Defendant remitted on 

November 8, 2004. 

ORDER 

 For the foregoing reasons, Defendant’s summary judgment motion is GRANTED; 

Plaintiff’s summary judgment motion is GRANTED as to its interest claim and DENIED 

as to the remainder. Defendant is ORDERED to pay $976.41 in interest to Plaintiff. 

 SO ORDERED. 

 Dated at Middlebury, Vermont, Feb. 2nd, 2005. 

______/s/_________________ 

Hon. Christina Reiss 

 Addison Superior Court 

 

5

 The Court arrives at this figure by a simple interest calculation. Greenmoss Builders, 

Inc. v. Dun & Bradstreet, Inc., 149 Vt. 365, 369–70 (1988). The Court determined the per diem 

interest rate of a 12 percent annual interest (0.12/366 [2004 was a leap year]), multiplied this 

figure by the principal ($64,740.39), and then multiplied this result by the 46 days during which 

interest accrued.