CASE NO. 3017 CRB-3-95-2
COMPENSATION REVIEW BOARD
WORKERS’ COMPENSATION COMMISSION
NOVEMBER 26, 1996
STAR GALLO DISTRIBUTORS
NATIONWIDE MUTUAL INSURANCE CO.
LIBERTY MUTUAL INSURANCE CO.
SECOND INJURY FUND
The claimant did not appear at oral argument.
The respondent employer and Nationwide Mutual Insurance Co. were represented by David D. Chapman, Esq., Law Offices of Larry H. Lewis, 639 Research Parkway, Meriden, CT 06450.
The respondent employer and Liberty Mutual were represented by Kevin J. Maher, Esq., Maher & Williams, 1300 Post Rd., Fairfield, CT 06430, who did not appear at oral argument.
The Second Injury Fund was represented by Richard Hine, Esq., Assistant Attorney General, 55 Elm St., P. O. Box 120, Hartford, CT 06141-0120, who did not appear at oral argument.
This Petition for Review from the February 14, 1995 Finding and Award of the Commissioner acting for the Third District was heard January 26, 1996 before a Compensation Review Board panel consisting of the Commission Chairman Jesse M. Frankl and Commissioners Michael S. Miles and Robin L. Wilson.
JESSE M. FRANKL, CHAIRMAN. The respondent Nationwide Mutual Insurance Co. (“Nationwide”) has petitioned for review from the February 14, 1995 Finding and Award of the Commissioner for the Third District. In that decision, the trial commissioner ordered the transfer of twenty-five percent of a claim to the Second Injury Fund pursuant to § 31-349. On appeal, Nationwide argues that the commissioner erred in ordering a transfer of less than the entire claim. We agree with Nationwide’s position and reverse the trial commissioner’s decision.
The trial commissioner found the following relevant facts. The claimant sustained an injury to his back on January 6, 1987 while employed by the respondent employer. The employer was insured at that time by Nationwide, which accepted liability for the injury by approving a voluntary agreement. Subsequently, on November 30, 1987 the claimant sustained another injury to his back while working for the employer. On November 30, 1987, the employer was insured by the respondent Liberty Mutual (“Liberty”), which accepted liability by issuing a voluntary agreement. The two insurers subsequently entered into a verbal agreement under which Nationwide agreed to pay seventy-five percent of the benefits and Liberty agreed to pay twenty-five percent of the benefits. The Fund agreed to accept the transfer of the November 30, 1987 injury pursuant to § 31-349 C.G.S. (7/12/1994 TR at p. 9). However, the Fund’s position is that it will only accept twenty-five percent of the claim “based on what they feel is Liberty Mutual’s liability.” (Finding No. 9). The Fund contends that the remaining seventy-five percent of liability should remain with Nationwide.
Initially, we note that § 31-299b is not applicable to the instant matter, as that statute does not apply where two separate traumatic incidents have occurred. Rather, it is intended for use in occupational disease and repetitive trauma cases where a single injury occurs over a time continuum spanning several different employers or insurance carriers. Thomen v. Turri Electric, 11 Conn. Workers’ Comp. Rev. Op. 299, 301-02, 1324 CRD-5-91-10 (Dec. 23, 1993). Section 31-349 applies to this case. At the time of the claimant’s second injury, § 31-349 provided in relevant part:
The fact that an employee has suffered previous disability, shall not preclude him from compensation for a later injury, nor preclude compensation for death resulting therefrom. If an employee who has . . . permanent physical impairment, incurs a second disability by accident or disease arising out of and in the course of his employment, resulting in a permanent disability caused by both conditions which is materially and substantially greater than that which would have resulted from the second injury alone, he shall receive compensation for the entire amount of disability, including total disability, less any compensation benefits payable or paid with respect to the previous disability, and necessary medical care, as elsewhere provided in this chapter, notwithstanding the fact that part of such disability was due to prior accidental injury, disease or congenital causes. The employer by whom the employee is employed at the time of the injury, or his insurance carrier, shall in the first instance pay all awards of compensation and all medical expenses provided by this chapter for the first one hundred four weeks of disability. . . . After the employer or its insurer has completed the payment for the one-hundred-four-week period, he shall file with the commissioner . . . a form . . . . Thereafter all responsibility for compensation and medical treatment shall be with the custodian of the second injury fund.
The issue before this board is whether an agreement between the insurers may limit the liability which transfers to the Fund pursuant to § 31-349. Section 31-349 “codifies the workers’ compensation analogue to an ancient doctrine in the common law of torts. That tort theory makes the last causation event in the chain of causation liable for the resultant damages.” Thomen v. Turri Electric, 11 Conn. Workers’ Comp. Rev. Op. 299, 301, 1324 CRD-5-91-10 (Dec. 23, 1993). “According to the general rule of workers’ compensation law, if an employee was injured during the course of his employment, an employer was liable to provide compensation for the full extent of the employee’s disability, regardless of whether the disability was due, in part, to a preexisting condition or impairment..... The legislature, cognizant of the hardships posed by the general rule... enacted § 31-349 to limit the employer’s liability to 104 weeks of compensation....” Levanti v. Dow Chemical Co., 218 Conn. 9, 18 (1991) (emphasis added).
Section 31-349 does not contain any provision for the apportionment of the liability for a second injury when it is transferred to the Second Injury Fund. Rather, it specifically provides that when the statutory criteria for transfer have been met, “(t)hereafter all responsibility for compensation and medical treatment shall be with the custodian of the second injury fund.” (emphasis added). The Connecticut Supreme Court “has consistently stated that ‘if the language of the statute is clear and unambiguous, it is assumed that the words themselves express the intention of the legislature and there is no room for judicial construction.’” Vaillancourt v. New Britain Machine/Litton, 224 Conn. 382, 395 (1993) (citations omitted).
We find the language of § 31-349 regarding the transfer of “all responsibility” to the Second Injury Fund to be clear and unambiguous. We agree with the statement that “(i)f the legislature had intended to include a provision for apportionment of the liability for a second injury which is transferred to the Fund, it certainly could have done so. In the absence of such a legislative provision, this tribunal should not ‘supply statutory language that the legislature may have chosen to omit.’” Lundquist v. Parkway Pavilion, 2044 CRB-1-94-5 (decided Nov. 1, 1995) (Commissioner Miles, dissenting) (citing Vaillancourt v. New Britain Machine/ Litton, 224 Conn. 382, 396 (1993)). Moreover, interpreting § 31-349 in the manner set forth by the majority in Lundquist would lead to different outcomes depending upon whether more than one insurer was involved on a claim. Specifically, if the employer in the instant case had only one insurer when the claimant’s injuries occurred then no verbal agreement of apportionment would have been made, and as the Fund agreed that the claim was transferable pursuant to § 31-349, the entire claim therefore would have transferred to the Fund.
Our decision that the agreement between Nationwide and Liberty is not enforceable by the Fund is supported by contract law. The Connecticut Supreme Court has stated: “It is well settled that ‘one who [is] neither a party to a contract nor a contemplated beneficiary thereof cannot sue to enforce the promises of the contract....’” Tomlinson v. Board of Education, 226 Conn. 704, 718 (1993). Furthermore, “(t)he proper test to determine whether a [contract] creates a third party beneficiary relationship is whether the parties to the [contract] intended to create a direct obligation from one party to the [contract] to the third party.” Rapaport & Benedict, P.C. v. Stamford, 39 Conn. App. 492, 498 (1995) (emphasis added). In the instant case, the Fund does not allege that the parties to the verbal agreement, Nationwide and Liberty, intended the Fund to be a beneficiary of the agreement.
We note that “(w)here the pre-existing condition is a ratable permanent partial impairment due to a prior workplace injury, however, § 31-349 provides that an award shall be made against the second employer or insurer for the entire amount of disability ‘less any compensation benefits payable or paid with respect to the previous disability.’” Prioleau v. Larosa Construction Co., 12 Conn. Workers’ Comp. Rev. Op. 140, 144, 1432 CRB-8-92-6 (April 7, 1994). Accordingly, Liberty may reduce its liability for specific indemnity benefits which were paid or payable by Nationwide for the January 6, 1987 injury. Id.
In accordance with the above and the dissent in Lundquist, supra, (Commissioner Miles, dissenting), the trial commissioner’s decision is reversed and remanded to the trial commissioner for the issuance of an order in accordance with the above.
Commissioner Michael S. Miles concurs.
ROBIN L. WILSON, COMMISSIONER, DISSENTING. I disagree with the analysis and result of the majority opinion, as I believe that this board’s recent decision in Lundquist v. Parkway Pavilion, 2044 CRB-1-94-5 (decided Nov. 1, 1995), should be upheld. In the instant case, the trial commissioner specifically found that the claimant’s first injury was a substantial factor in his disability, and that Nationwide was liable for seventy-five percent of the claimant’s benefits in accordance with its agreement with Liberty Mutual. The trial commissioner thus ordered Nationwide to reimburse the Second Injury Fund for seventy-five percent of the total benefits paid after transfer of liability for the claim.
Assuming that there was sufficient evidence to support the commissioner’s factual findings, liability for the claim should be apportioned pursuant to Lundquist. The majority’s contention that the phrase “all responsibility for compensation” in § 31-349 C.G.S. unambiguously includes liability for the full disability of a claimant was discussed and refuted in Lundquist. There is no reason to construe the Fund’s liability any differently than the initial liability of the employer at the time of the second injury. Furthermore, Jolicoeur v. L.H. Duncklee Refrigeration, Inc., 14 Conn. Workers’ Comp. Rev. Op. 24, 1842 CRB-2-93-9 (May 3, 1995), expressly allows a commissioner to apportion liability where two separate compensable injuries have contributed to cause disability. Id., 27, citing Mund v. Farmers’ Cooperative, Inc., 139 Conn. 338 (1952). The fact that § 31-349 does not specifically allow for such apportionment should not be read as a legislative endorsement of its forbiddance, especially considering that apportionment under Mund is based on common-law principles of causation, while the liability created by § 31-349 is statutorily prescribed and best interpreted narrowly. See McNulty v. Stamford, 37 Conn. App. 835, 838 (1995).
I do not accept the majority’s assertion that Lundquist unfairly results in different outcomes depending on whether or not more than one insurer was involved in a claim. The fact that no verbal agreement of apportionment would have been made if the same insurer had been on the risk at the time of both compensable injuries would not prevent, as a factual matter, a commissioner from concluding that causation for the disability could be apportioned between the two injuries, and apportioning the liability as such after 104 weeks. It just so happens that the cases involving more than one insurer are the ones in which the parties themselves enter into agreements which divide responsibility for payments, thus making the argument for apportionment much more obvious.
Assuming arguendo that the verbal agreement between Liberty and Nationwide cannot be used as evidence supporting the commissioner’s order of apportionment, and that there was no other evidence in the record to support the trial commissioner’s conclusion that Nationwide should be responsible for seventy-five percent of the claimant’s benefits, the proper remedy would be to remand the case to the commissioner for further findings on that issue. See Lundquist, supra. Instead, however, the majority has chosen to overrule Lundquist and order transfer of the entire claim to the Second Injury Fund. Because I believe that such a result is inconsistent with the law, I respectfully dissent. Moreover, although I do not disagree with the majority’s legal observations that a nonparty to a contract cannot sue to enforce the promises of that contract, I am troubled by the fact that the Second Injury Fund was not made a party to the agreement between Nationwide and Liberty Mutual, especially because it is clear that they were both contemplating the ultimate transfer of this claim to the Fund.1
Finally, the issue of stare decisis is relevant here. The Connecticut Supreme Court has stated:
Stare decisis gives stability and continuity to our case law. This court, however, has recognized many times that there are exceptions to the rule of stare decisis. . . . If, however, stare decisis is to continue to serve the cause of stability and certainty in the law- a condition indispensable to any well-ordered system of jurisprudence- a court should not overrule its earlier decisions unless the most cogent reasons and inescapable logic require it. . . . This is especially true when the precedent involved concerns the interpretation or construction of a statute.
Ross v. Giardi, 237 Conn. 550, 554-55 (1996).
The principle of stare decisis supports following the prior decision of Lundquist. Certainly, parties to workers’ compensation claims, including claimants, employers, and insurance companies, benefit by being able to rely upon this board’s decisions, without undue concern that they will be overturned in the near future. In my opinion, the majority’s decision to overturn Lundquist erodes this confidence.
For the above reasons, I dissent.
1 I would also like to observe that the Fund’s failure to file a brief or appear at oral argument in defense of the appeal has seriously jeopardized its chances of success. This is unfortunate, given the potential importance of this issue to the Fund. BACK TO TEXT