Case Name: George Enquist v. General Datacom et al.
Court: Connecticut Supreme Court
Jurisdiction: Connecticut
Decision Date: 1991-03-19
Citations: 218 Conn. 19
Docket Number: 13971
Parties: George Enquist v. General Datacom et al.
Judges: 
Reporter: Connecticut Reports
Volume: 218
Pages: 19–46

Head Matter:
George Enquist v. General Datacom et al.
(13971)
Peters, C. J., Glass, Covello, Hull and Borden, Js.
Argued December 11, 1990
decision released March 19, 1991
Jason M. Dodge, for the appellant (named defendant).
T. Stevens Bliss, for the appellee (plaintiff).
Robert G. Monstream, Andrew J. Hem and William P. Horan, Jr., legal intern, filed a brief for Peerless Insurance Company et al. as amici curiae.

Opinion:
Covello, J.
This is an appeal from a decision of the compensation review division of the workers' compensation commission. The sole issue presented is whether an employer, who has properly intervened in an action by an injured employee against a third party, may set off future compensation claims against the net proceeds that the employee thereafter recovers from the third party tortfeasor. We conclude that such a set off is permitted and therefore reverse the decision of the Appellate Court.
Examination of the record discloses the following: On February 27,1979, the plaintiff crushed the thumb of his left hand while working on a machine at his place of employment. On June 11, 1980, the plaintiff began a third party action against Burndy Corporation, the manufacturer of the machine. On July 7, 1980, the defendant, General Datacom, the plaintiffs employer, filed an intervening complaint in the third party action. On October 23, 1981, the plaintiff and General Data-com signed a voluntary workers' compensation agreement awarding the plaintiff 20.3 weeks as a specific injury award resulting from a 25 percent loss of use of the nonmaster thumb. In September, 1984, the plaintiff and Burndy Corporation settled the third party action for $30,000, of which $2500 was paid to satisfy General Datacom's lien. The plaintiff realized $16,556.50 from the settlement after payment of attorney's fees and expenses.
Thereafter, the plaintiff filed for additional compensation from General Datacom based upon a subsequent increase in the percentage of disability to his thumb. The compensation commissioner, with whom the compensation review division thereafter agreed, concluded that General Datacom, as employer, had a continuing, offsetting lien against the $16,250 net proceeds paid to the plaintiff from the settlement of the third party action. The plaintiff appealed to the Appellate Court, which reversed the decision of the compensation review division. Enquist v. General Datacom, 21 Conn. App. 270, 572 A.2d 1048 (1990). We thereafter granted certification limited to the issue of whether an employer is entitled to a credit against future workers' compensation benefits in an amount equal to the employee's net recovery from a personal injury claim made against a third party tortfeasor.
Although the workers' compensation statute does not specifically address reimbursement for as yet unknown future benefits, an employer's future liability to pay compensation benefits following recovery from a third party tortfeasor has historically been linked to General Statutes § 31-293 (a) and its predecessors. "[This stat ute] provides, in substance, that an employee who sustains an injury arising out of and in the course of his employment, by reason of the fault and neglect of a third party, may claim compensation under the [Workers' Compensation] Act without prejudice to his common-law right to sue the tort-feasor; that an employer who has paid, or by award become obligated to pay, compensation, may sue the tort-feasor in his own name, with a view to reimbursement; and that, if either sue, the other is entitled to notice and an opportunity to join in the action." Rosenbaum v. Hartford News Co., 92 Conn. 398, 400-401, 103 A. 120 (1918).
Section 31-293 (a) farther provides for the apportionment between the injured employee and the employer of any recovery from a third party. The "claim of the employer . [to the net proceeds from the recovery] shall take precedence over that of the injured employee . . . ." The statute further provides: "If the damages . . . are more than sufficient to reimburse the employer . . . the excess shall be assessed in favor of the injured employee."
In 1951, the General Assembly amended § 31-293 (a), then General Statutes (Sup. 1951) § 1311b, to add the following language: "The rendition of a judgment in favor of the employee or the employer against such party shall not terminate the employer's obligation to make further compensation, including medical expenses, which the compensation commissioner shall thereafter deem payable to such injured employee." (Emphasis added.) This new provision was a response to our earlier holdings to the effect that a recovery against a third party that exceeded the compensation benefits paid, terminated absolutely an employer's obligation to make further compensation payments. See Stavola v. Palmer, 136 Conn. 670, 73 A.2d 831 (1950); Mickel v. New England Coal & Coke Co., 132 Conn. 671, 47 A.2d 187 (1946); Rosenbaum v. Hartford News Co., supra. As a further addendum, however, the legislature provided that "the employer's claim 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 such injury." (Emphasis added.) It is noteworthy that under the amended statute, it is th e" claim of the employer . . . [that] shall take precedence over that of the injured employee in the proceeds of such recovery." (Emphasis added.) Further, the reenactment provided that "[i]f the damages, after deducting the employee's expenses as provided above, shall be more than sufficient to reimburse the employer, damages shall be assessed in his favor in a sum sufficient to reimburse [the employer] for his claim, and the excess shall be assessed in favor of the injured employee." (Emphasis added.) Thus, the 1951 amendment of § 31-293 (a), in an apparent tradeoff, made the employer liable for future compensation benefits, but gave the employer the right to immediate reimbursement for the present worth of future compensation payments to the extent that the future payments were known and formalized by a commissioner's "award" prior to the disposition of the third party action.
What § 31-293 (a) does not address is the employer's right to obtain reimbursement for compensation obligations unknown at the disposition of the third party action. While the 1951 amendment of § 31-293 (a) establishes that the employer is liable to pay future compensation payments and is entitled to the immediate reimbursement of future payments known at the disposition of the third party action, it is silent as to the employer's right to a credit for unknown future benefits against the net proceeds of the third party action.
Prior to its 1951 amendment, this court held that the predecessor of § 31-293 (a) required that "if the employer has become obligated to pay compensation, but has not paid it, and the damages recovered [from a third party action] are greater than the amount of compensation the employer has become obligated to pay . . . the entire excess is directed to be assessed in favor of the injured employee, with the consequence of discharging the employer from his ascertained liability under the award. . . . [Section 31-293] either reimburses or discharges the employer out of the first moneys available for the payment of damages." Rosenbaum v. Hartford News Co., supra, 401-402.
In its 1951 amendment, the legislature provided that an employer had a continuing obligation to provide compensation. The General Assembly, however, made no attempt to alter our earlier construction of the statute, as set forth in Rosenbaum, that an employer was discharged from his obligations to the extent of the excess moneys available from a third party recovery. In the absence of any express statutory language or legislative history suggesting that our precedent was to be overruled, we decline to read the 1951 amendment of this statute as eliminating an employer's right to a credit to the extent that there are excess proceeds from a third party recovery.
We note that other states have enacted workers' compensation statutes establishing precise mechanisms that address an employer's right to reimbursement for unknown future benefits from the proceeds of third party actions. The General Assembly could have adopted one of these statutory mechanisms but elected not to do so despite our existing precedent that implicates a continuing credit against any excess proceeds from the third party action.
Finally, our conclusion that an employer is entitled to a credit for unknown future benefits against the net proceeds of a third party recovery comports with other well established principles of workers' compensation law. One of the purposes of the workers' compensation statute is "the avoidance of two independent compensations for the injury"; Uva v. Alonzy, 116 Conn. 91, 98, 163 A. 612 (1933); a proposition that we have recently reaffirmed. See Paternostro v. Edward Coon Co., 217 Conn. 42, 47-49, 583 A.2d 1293 (1991). If the plaintiff's argument were to prevail, a claim made subsequent to the disposition of a third party action would result in the employee receiving compensation from both the third party wrongdoer and the employer. In the absence of explicit statutory language mandating such a result, we decline to adopt such a construction.
The judgment of the Appellate Court is reversed and the matter is remanded to that court with direction to render judgment affirming the decision of the compensation review division.
In this opinion Peters, C. J., and Borden, J., concurred.
At the time of the commissioner's award General Statutes § 31-308 (b) provided in relevant part: "With respect to the following-described injuries the compensation, in addition to the usual compensation for total incapacity but in lieu of all other payments for compensation, shall be sixty-six and two-thirds per cent of the average weekly earnings of the injured employee, but in no case more than the maximum weekly benefit rate set forth in section 31-309, or less than twenty dollars weekly . (8) for the complete and permanent loss of, or loss of the use of the thumb on the master hand, ninety-five weeks, for the thumb on the other hand, eighty-one weeks . If the injury consists of the loss of a substantial part of a member resulting in a permanent partial loss of the use of a member, or if the injury results in a permanent partial loss of function, the commissioner may, in his discretion, in lieu of other compensation, award to the injured person such a proportion of the sum herein provided for the total loss of, or the loss of the use of, such member or for incapacity or both as represents the proportion of total loss or loss of use found to exist, and any voluntary agreement submitted in which the basis of settlement is such proportionate payment may, if otherwise conformable to the provisions of this chapter, be approved by the commissioner in his discretion."
General Statutes § 31-293 (a) provides in relevant part: "When any injury for which compensation is payable under . . . this chapter has been sustained under circumstances creating in some other person than the employer a legal liability to pay damages . . . the injured employee may proceed at law against such person to recover damages for such injury . If . . . any damages are recovered, such damages shall be so apportioned that the claim of the employer . . . shall take precedence over that of the injured employee in the proceeds of such recovery, after the deduction of reasonable and necessary expenditures, including attorneys' fees, incurred by the employee in effecting such recovery. The rendition of a judgment in favor of the employee or the employer against such party shall not terminate the employer's obligation to make further compensation, including medical expenses, which the compensation commissioner thereafter deems payable to such injured employee. If the damages, after deducting the employee's expenses . . . 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. For the purposes of this section the employer's claim 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 such injury. ."
The legislative history indicates that the General Assembly specifically addressed the effect of Supreme Court precedent on other areas of the Workers' Compensation Act but nowhere indicates an intent to alter the employer's right to a credit against the proceeds of third party recoveries.
See, e.g., New York Worker's Compensation Law § 29 (1990).
"If the statute does not take pains to deal explicitly with the problem of future benefits, but merely credits the carrier for compensation paid, or compensation for which the carrier is liable, the correct holding is still that the excess of third party recovery over past compensation actually paid stands as a credit against future liability of the carrier." 2A A. Larson, Workmen's Compensation Law § 74.31 (e), p. 14-471.
"The policy of avoiding a double recovery is a strong one, and has on occasion been invoked to override a result that might be thought required by a literal or technical interpretation of statutes . . . ." 2A A. Larson, Workmen's Compensation Law § 71.21, p. 14-16.
The practical construction placed on General Statutes § 31-293 since the 1951 amendment lends further support to our .conclusion. We recognize that workers' compensation law is practiced to a large extent by a specialized bar—both claimants' and insurers'. Legislative changes are often made at the behest of the principal economic constituencies which are the principal participants in the system—labor unions and the business and insurance community. Moreover, the commissioners, both at the hearing and appellate levels, who adjudicate workers' compensation disputes have, by virtue of their day-to-day experience, a large measure of legal expertise in the area.
It does not appear to be disputed that, until now, none of these actors understood the 1951 amendment to have altered the long-standing meaning of § 31-293 in the way suggested by the plaintiff. That understanding is reflected in the published commentary by a practitioner in the field: "If the employer is already obligated to make future payments and the present worth of those payments were used to calculate the employer's reimbursement claim, such payments must continue. If there is not a present obligation to make future payments, the employer is generally held to be released, pro tanto up to the amount that the injured employee actually recovered. Once the employee's claim for compensation benefits amounts to a sum greater than the amount recovered by the employee in the third party suit, the employer's liability for compensation payments and medical benefits commences again. This is generally referred to as a 'moratorium' on the collection of workers' compensation benefits." J. Asselin, Connecticut Workers' Compensation Practice Manual (1985) p. 277.
If the 1951 amendment had been intended to change the preexisting credit system in the way claimed by the plaintiff, we would not have expected forty years of acquiescence to it by those parties and interests most affected and most familiar with that system. Yet the practical construction of forty years has been fully consistent with such acquiescence.