Source: http://wcc.state.ct.us/crb/1996/2297crb.htm
Timestamp: 2016-02-11 06:31:16
Document Index: 530403584

Matched Legal Cases: ['§ 31', '§ 38', '§ 38', '§ 31', '§ 31', '§ 31', '§ 31', '§ 31', '§ 31', '§ 31', '§ 31', '§ 31', '§ 31', '§ 38', '§ 38', '§ 31', '§ 31', '§ 38', '§ 31', '§ 38', '§ 38', '§ 31', '§ 176', '§ 69', '§ 31']

Hunnihan v. Mattatuck Mfg. Co.
CASE NO. 2297 CRB-5-95-2
JEFFREY HUNNIHAN
MATTATUCK MFG. CO.
The claimant was not represented at oral argument. Notice sent to Mark Carrington, Esq., Palumbo, Plumbo & Carrington, P. O. Box 2518, 193 Grand St., Waterbury, CT 06723-2518.
The respondent-appellant was represented by Joseph C. Marrow, Esq., Hutchins, Wheeler & Dittmar, P.C., 101 Federal St., Boston, MA 02110 and Charles W. Pieterse, Esq. and Margaret A. Triolo, Esq., Whitman, Breed, Abbott & Morgan, 100 Field Point Road, Greenwich, CT 06836.
The respondent employer and Fireman’s Fund were represented by David C. Davis, Esq., McGann, Bartlett & Brown, 281 Hartford Tpke., Vernon, CT 06066.
The respondent employer and Travelers were represented by Robert Cullen, Esq., Law Offices of Robert S. Cullen, 1952 Whitney Ave., Hamden, CT 06517.
The respondent employer and Liberty Mutual were represented by Debra S. Dee, Esq., and Eric Roberts, Esq., Law Offices of Nancy S. Rosenbaum, 655 Winding Brook Drive, Glastonbury, CT 06033.
The Second Injury Fund was not represented at oral argument. Notice sent to Loida John-Nicholson, Esq., Assistant Attorney General, 55 Elm St., P. O. Box 120, Hartford, CT 06141-0120.
This Petition for Review from the January 25, 1995 Finding and Award of the Commissioner acting for the Fifth District was heard January 12, 1996 before a Compensation Review Board panel consisting of the Commission Chairman Jesse M. Frankl and Commissioners George A. Waldron and Robin L. Wilson.
JESSE M. FRANKL, CHAIRMAN. The respondent Connecticut Insurance Guaranty Association (CIGA) has petitioned for review from the January 25, 1995 Finding and Award of the Commissioner acting for the Fifth District. It argues on appeal that the commissioner erroneously ordered CIGA to reimburse the respondent insurer Fireman’s Fund for the portion of the claimant’s compensation corresponding to the period that the now-insolvent American Mutual Insurance Co. was on the risk as the employer’s workers’ compensation insurer. We affirm the trial commissioner’s decision.
The claimant sustained a compensable repetitive trauma injury to his back while employed by Mattatuck Manufacturing Company. The period of the repetitive trauma extended from 1970 to 1987, during which time four different insurers were on the risk as the employer’s workers’ compensation carrier. Fireman’s Fund was the last insurer on the risk, and paid benefits to the claimant for 104 weeks before liability was transferred to the Second Injury Fund. Fireman’s Fund then sought § 31-299b reimbursement from the other three insurers for the share of benefits proportional to each company’s relevant period of service as workers’ compensation insurer. Both Travelers and Liberty Mutual agreed to reimburse Fireman’s Fund for their shares of liability.
The 36 percent share attributable to American Mutual, however, created a separate problem. Sometime after the claimant’s date of injury, American Mutual was determined to be insolvent as defined in § 38a-838 C.G.S., and CIGA became obligated to the extent of its covered claims under § 38a-836 C.G.S. et seq. The commissioner concluded that, under § 31-355(e), payment for American Mutual’s share of the claimant’s benefits was now the liability of CIGA, and ordered it to pay $19,060 to Fireman’s Fund. He also concluded that the Workers’ Compensation Commission did not have jurisdiction to consider CIGA’s claims arising under the CIGA Act, which equated to constitutional and contractual interpretation defenses. CIGA has appealed that order.
CIGA first argues that the Workers’ Compensation Commission does not have jurisdiction to apply the CIGA statute. The appellant correctly notes that the Workers’ Compensation Act limits this Commission’s jurisdiction to the administration of claims and questions arising under that Act. Section 31-278 C.G.S.; Tufaro v. Pepperidge Farm, Inc., 24 Conn. App. 234, 236 (1991) (Trial commissioner and review division lack authority to decide constitutional issues). However, where the core issue in a commissioner’s decision is a question arising under Chapter 568, and an interpretation of the CIGA Act is incidentally necessary to that decision, we have held that this board has the power to render that interpretation. Versage v. Kurt Volk, Inc., 11 Conn. Workers’ Comp. Rev. Op. 253, 258 n. 7, 1313 CRD-3-91-10 (Nov. 17, 1993); see also Wonacott v. Bartlett Nuclear, Inc., 2237 CRB-4-94-12 (decided June 25, 1996) (CRB interpreted Internal Revenue Code in course of determining wages under § 31-310); Pascarelli v. Moliterno Stone Sales, 14 Conn. Workers’ Comp. Rev. Op. 328, 2115 CRB-4-94-8 (Sept. 15, 1995) (CRB interpreted Bankruptcy Code to determine whether claimant needed relief from stay to proceed against insurer).
In this case, the employer’s insurer was found to be insolvent by a court of the state of Massachusetts (Appellant’s brief, p. 3), which was cited by the commissioner in his findings. Section 31-355(e) states that “whenever the employer’s insurer has been determined to be insolvent, as defined in section 38a-838, payments required under this section shall be the obligation of the Connecticut Insurance Guaranty Association pursuant to the provisions of sections 38a-836 to 38a-853, inclusive.” This statute is part of the Workers’ Compensation Act, and its interpretation is clearly within the scope of this Commission’s authority. In determining whether that provision should apply here, or in any other case, it is manifest that the commissioner or this board must consider the meaning of at least some portions of the CIGA Act referenced in § 31-355(e). The legislature could not reasonably have intended otherwise when it included such language in the statute, as it clearly gave the commissioner the power to order CIGA to assume an insolvent insurer’s liability. Thus, we hold that this Commission has jurisdiction to interpret the CIGA Act when it is necessitated by the terms of our own Act.
CIGA’s second argument is that the CIGA Act does not allow reimbursement to an insurer pursuant to § 31-299b. It argues that CIGA is a fund of “last resort” patterned after a model insurer insolvency fund act that has been the basis of legislation in all fifty states except New York, and that the courts of these states have consistently held that an insurer insolvency fund cannot pay a claim if the ultimate beneficiary is an insurer. See, e.g., Maxwell Communications v. Webb Publishing Co., 518 N.W.2d 830 (Minn. 1994). Several cases were cited that favor placing a loss on a workers’ compensation insurer rather than on the state guaranty association. Ventulett v. Maine Ins. Guar. Assoc., 583 A.2d 1022 (Me. 1990); Ferrari v. Toto, 402 N.E.2d 107 (Mass. App. Ct. 1980), affirmed, 417 N.E.2d 427 (Mass. 1981). CIGA suggests that Connecticut law has long made an insurer liable to an employee for his entire injury as long as that insurer was on the risk during a period when the employment substantially contributed to the injury, and that CIGA should not be forced to absorb part of a solvent insurer’s liability. See, e.g., Plecity v. McLachlan Hat Co., 116 Conn. 216 (1933).
We agree with CIGA insofar as it states the general rule that an employer is liable to provide compensation for the full extent of an employee’s disability, regardless of whether the disability is in part due to a preexisting condition or impairment. Jolicoeur v. L.H. Duncklee Corp., 14 Conn. Workers’ Comp. Rev. Op. 24, 27, 1842 CRB-2-93-9 (May 3, 1995). However, this rule has led to hardships in the past, and the legislature has enacted statutes such as § 31-275(1)(d), § 31-349, and § 31-299b to combat its harshness. Id. Section 31-299b1 makes the claimant’s last employer liable for the initial payment of his benefits. The commissioner is then required to determine if prior employers and their insurers are liable for a portion of that compensation, and if so, to order reimbursement. This allows apportionment in occupational disease and repetitive trauma cases where there is one injury that occurs over a time continuum involving several employers or insurers. Id., 26; Thomen v. Turri Electric, 11 Conn. Workers’ Comp. Rev. Op. 299, 302, 1324 CRD-5-91-10 (Dec. 23, 1993).
The legislative history of § 31-299b reveals that the statute was enacted to ensure that injured workers would not remain uncompensated while several employers or insurers fought over who should be making payments. 24 H.R. Proc. pt. 12, pp. 3754-55 (remarks of Reps. Gelsi, Abercrombie) (April 30, 1981). However, there was also concern that the statute could impose liability for workers’ compensation benefits upon the most recent employer without regard to responsibility for the injuries, thus unfairly impugning the experience rating of those employers in the calculation of their workers’ compensation insurance premiums. 24 S. Proc. pt. 5, pp. 1416-17 (Sen. Matthews) (April 14, 1981). In response, Senator Skelley stated that the commissioner would make an award and determine actual responsibility for a claimant’s disability in order to prevent that from happening. Id., 1418.
In our view, the language of § 31-299b and the legislative record demonstrate that the last employer is made liable for payment of compensation as an administrative convenience to ensure that the claimant begins receiving compensation for his injuries immediately. The statute does not presume, however, that the last employer is jointly liable for those benefits in the true, common-law sense, where the claimant could choose which employer to pursue for full benefits. See Lowe v. General Dynamics Corp., 14 Conn. Workers’ Comp. Rev. Op. 118, 122, 1746 CRB-2-93-5 (June 5, 1995). Instead, the commissioner is required to order reimbursement if he finds that prior employers and/or insurers are liable for any portion of the claimant’s disability. See Id. Thus, the joint tortfeasor doctrine cited by CIGA has been somewhat modified by § 31-299b.
Pursuant to Chapter 704a, CIGA is a nonprofit unincorporated association whose membership consists of all persons who are licensed to transact insurance in Connecticut and who provide certain kinds of direct insurance. Sections 38a-837, -838(8), -839. The association is divided into three separate accounts, including one for workers’ compensation insurance. Section 38a-839. When a workers’ compensation insurer becomes insolvent as defined by § 38a-838(7), the association becomes obligated to pay the full amount of any covered claim that the insolvent insurer would have had to pay. Section 38a-841(1)(a). The association is deemed to be the insurer to the extent of all such obligations, and fiscal responsibility for covered compensation claims is allocated among all of the member workers’ compensation insurers by way of a yearly assessment. Section 38a-841(1)(b), (c).
CIGA contends that the definition of “covered claim” under § 38a-838(6) does not include any amount due to an insurer for any reason. The section defines “covered claim” to mean “an unpaid claim . . . which arises out of and is within the coverage and subject to the applicable limits of an insurance policy to which [the CIGA Act applies] . . . provided the term “covered claim” shall not include any amount due any reinsurer, insurer, insurance pool, or underwriting association, as subrogation recoveries or otherwise . . . .” The respondent Fireman’s Fund argues, however, that the term “as subrogation or otherwise” limits the scope of the exception barring insurer recoveries, and that its claim under § 31-299b is not on account of subrogation or otherwise.
As discussed above, the liability incurred by Fireman’s Fund under § 31-299b was imposed by the legislature to facilitate the prompt payment of claims. Apportionment under that statute is not based on contractual rights of subrogation or indemnity, but instead on a commissioner’s finding of actual liability for an injury or occupational disease. The ambiguous language of the “covered claim” exception regarding insurer recoveries is not clarified by the legislative history of the CIGA Act, which states only that the proposed bill was intended to avoid financial loss to Connecticut residents because of insurance company insolvency. 14 H. Proc. pt. 8, p. 3624 (Rep. Colucci) (May 24, 1971). The provision in § 38a-845(1) requiring persons with claims against insurers other than the insolvent insurer to exhaust their rights under such policies before making a claim against CIGA is also not controlling, as liability under § 31-299b does not imply an unconditional right to recover benefits from the last insurer on the risk.
We note that the definition of “claimant” in § 38a-838(4) excludes only persons who are affiliates of the insolvent insurer, rather than all insurers. (Under the definitions in § 38a-1, “person” and “affiliate” both include corporations). Thus, it would not seem impossible under the CIGA Act that an insurance company could make some type of claim. In Maxwell Communications, supra, Justice Coyne of the Minnesota Supreme Court wrote a concurring opinion noting that a Minnesota statute similar to § 31-299b was “intended only to provide prompt payment of benefits to the injured worker without reference to whether the payer has any liability for those benefits.” Id., 835; Minn. Stat. § 176.191, subd. 1 (1992). Once liability is determined, the Minnesota statute requires that the commissioner order the properly liable party to reimburse the employer who paid benefits, with interest. Justice Coyne stated that legislative intent to exclude insurers from recovering from the Minnesota Insurance Guaranty Association had to be expressed explicitly, “and not by a broad catch-all phrase of uncertain meaning” such as “subrogation recoveries or otherwise.” Id., 835-36; Minn. Stat. § 69C.09, subd. 2(2).
In our view, Justice Coyne’s concurrence in Maxwell Communications is directly on point in the instant case. Section 31-299b did not make Fireman’s Fund ultimately liable for the claimant’s compensation benefits, and § 31-355(e) specifically states that the CIGA shall make payments required under the Workers’ Compensation Act when the insurer has become insolvent under the CIGA Act. We do not believe that the purpose of the CIGA Act or the Workers’ Compensation Act would be furthered by interpreting this statutory scheme to prevent a workers’ compensation insurer such as Fireman’s Fund from being reimbursed for payment of benefits it is not legally liable for pursuant to the commissioner’s award. Thus, we affirm the trial commissioner’s decision ordering CIGA to reimburse Fireman’s Fund for the share of benefits properly attributable to the insolvent insurer American Mutual.
1 Section 31-299b provides, in relevant part: “If an employee suffers an injury or disease for which compensation is found by the commissioner to be payable according to the provisions of this chapter, the employer who last employed the claimant prior to the filing of the claim, or the employer’s insurer, shall be initially liable for the payment of such compensation. The commissioner shall, within a reasonable period of time after issuing an award, on the basis of the record of the hearing, determine whether prior employers, or their insurers, are liable for a portion of such compensation and the extent of their liability. If prior employers are found to be so liable, the commissioner shall order such employers or their insurers to reimburse the initially liable employer or insurer according to the proportion of their liability. Reimbursement shall be made within ten days of the commissioner’s order with interest, from the date of the initial payment, at twelve per cent per annum. . . .” BACK TO TEXT
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