State of Connecticut Workers' Compensation Commission, John A. Mastropietro, Chairman
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Bell v. Thomas Lombardo & Charles Holt d/b/a N&E Private Investigation & Security et al.

CASE NO. 4152 CRB-02-99-11

CASE NO. 4065 CRB-02-99-06

COMPENSATION REVIEW BOARD

WORKERS’ COMPENSATION COMMISSION

NOVEMBER 27, 2000

LELAND BELL

CLAIMANT-APPELLEE

CROSS-APPELLANT

v.

THOMAS LOMBARDO & CHARLES HOLT d/b/a N&E PRIVATE INVESTIGATION & SECURITY

EMPLOYER

RESPONDENT-APPELLANT

CROSS-APPELLEE

and

TRAVELERS PROPERTY & CASUALTY

INSURER

RESPONDENT-APPELLEE

and

CLIFFORD B. GREEN & SONS, INC.

EMPLOYER

and

NATIONWIDE MUTUAL INSURANCE CO.

INSURER

RESPONDENTS-APPELLANTS

CROSS-APPELLEES

and

SECOND INJURY FUND

RESPONDENT-APPELLANT

CROSS-APPELLEE

APPEARANCES:

The claimant was represented by Howard Schiller, Esq., 55 Church Street, P. O. Box 699, Willimantic, CT 06226.

The respondent employer N&E Private Investigation & Security was represented by Brian E. Prindle, Esq., 72 Bissell Street, Manchester, CT 06040-5304.

The respondent insurer Travelers Property & Casualty was represented by Nancy Berdon, Esq., Sizemore Law Offices, Crossroads Corporate Park, 6 Devine Street/First Floor, North Haven, CT 06473.

The respondents Clifford B. Green & Sons, Inc. and Nationwide Mutual Ins. Co. were represented by Frederick Monahan, Esq., Law Office of Larry Lewis, 639 Research Parkway, Meriden, CT 06450.

The Second Injury Fund was represented by Brewster Blackall, Esq., Assistant Attorney General, 55 Elm Street, P. O. Box 120, Hartford, CT 06141-0120.

These Petitions for Review from the June 17, 1999 granting of Travelers’ Motion to Dismiss for Lack of Subject Matter Jurisdiction and the November 16, 1999 Finding and Award of the Commissioner acting for the Second District were heard April 14, 2000 before a Compensation Review Board panel consisting of the Commission Chairman John A. Mastropietro and Commissioners Robin L. Wilson and Leonard S. Paoletta.

OPINION

JOHN A. MASTROPIETRO, CHAIRMAN. In this opinion, we shall address a pair of rulings of the Commissioner acting for the Second District, from which several parties have filed petitions for review. The claimant, the allegedly uninsured employer Thomas Lombardo & Charles Holt d/b/a N&E Private Investigation & Security (N&E), the insurer Nationwide Mutual Insurance Company, and the Second Injury Fund have each filed a petition for review from the trier’s June 17, 1999 granting of a Motion to Dismiss for Lack of Subject Matter Jurisdiction. Nationwide also filed a petition for review from the November 16, 1999 Finding and Award of the trial commissioner, which dispute the parties apparently resolved just prior to their appearance at oral argument before this board.1 The remaining issues before us concern the trier’s granting of the respondent insurer Travelers Property & Casualty’s motion to dismiss it from this action based on this Commission’s lack of jurisdiction over insurance coverage disputes. We find error, and thus reverse the trial commissioner’s dismissal order.

The claimant was injured on May 3, 1995, during the course of his employment with N&E. At the time of his injury, he was flagging traffic at a roadside construction site located at the junction of Routes 169 and 6 in Brooklyn, Connecticut. N&E contends that, on May 3, 1995, it was properly insured for its workers’ compensation liability by virtue of a policy it held with Aetna Casualty & Surety Company. This insurer, whose interest has been succeeded by Travelers, does not agree. On May 28, 1999, it filed a Motion to Dismiss all claims against it arising from the instant compensable injury, alleging a lack of subject matter jurisdiction.

According to Travelers’ motion, it had issued a policy to N&E with an effective date of November 9, 1994, but the insurance contract was cancelled on January 24, 1995 due to unpaid premiums. Attached to the motion was a printout of the computer records of this Commission, which indicate the same cancellation date. Travelers observed that N&E was alleging that it had paid premiums after that date, and characterized the resulting dispute as a contractual disagreement that was not subject to adjudication by this commission because it did not concern the employer-employee relationship. The trial commissioner granted Travelers’ motion to dismiss “all claims against it and all claims for coverage based on a breached insurance contract.” A total of four separate parties filed timely petitions for review from that ruling, which we now address here.

Being that this agency is an invention of statute, our jurisdiction is precisely commensurate with the authority that the legislature has vested in us. The Workers’ Compensation Act serves as our charter, and its specific terms both create and circumscribe all of our powers, including the license that a commissioner has to hear claims. Stickney v. Sunlight Construction, Inc., 248 Conn. 754, 760-61 (1999); Castro v. Viera, 207 Conn. 420 (1988). Although the humanitarian, remedial purpose of the Act is fundamentally important both as a legal justification for our authority and as an interpretive guide in defining the contours of our legislative mandate; Dubois v. General Dynamics Corp., 222 Conn. 62, 67 (1992); the influence that this philosophy exerts over our construction of the Act cannot transcend the language of the law itself. We are ultimately and firmly limited by the express jurisdictional grants of Chapter 568.

The raison d’être of this agency is to ensure that the workers of this state who incur injuries during their employment obtain compensation for their resultant medical bills, lost wages and physical impairments. Section 31-284(a) C.G.S. Of course, other issues concerning the administration of the workers’ compensation system and the process by which its claims are resolved also fall within the penumbra of the Act. The statute installs the various commissioners as arbiters of disagreements that arise regarding entitlement to benefits, and § 31-278 cedes to them “all powers necessary to enable [them] to perform the duties imposed upon [them] by the provisions of this chapter.” Each commissioner is then directed to hear “all claims and questions arising under this chapter.” This suggests that his subject matter jurisdiction is limited to adjudicating claims by an injured worker seeking compensation from his employer under the Act, along with those appurtenant matters that the statute has placed in the hands of this agency (e.g., fines against uninsured employers under § 31-288; claims for heart and hypertension benefits under § 7-433c). See Stickney, supra, 754.

In practice, however, a trier of fact may have to interpret statutes that are codified outside the Act, or consider legal issues unrelated to workers’ compensation, in order to satisfactorily resolve a claim for benefits that is properly before him. Sometimes, his authority to do so is directly contemplated by statutory language. See, e.g., Hunnihan v. Mattatuck Mfg. Co., 243 Conn. 438 (1997) (issue of insurer reimbursement by CIGA fell within jurisdiction of commissioner, as CIGA Act was explicitly mentioned in § 31-355; trier was thus entitled to interpret “covered claim” provision of § 38a-838 C.G.S.); Felia v. Westport, 214 Conn. 181, 184-85 (1990) (§ 7-433c refers to provisions of chapter 568 as procedural vehicle for administering benefits). In other instances, we may infer that the trier’s jurisdiction encompasses the interpretation of statutes codified outside chapter 568 “when such interpretations have been incidentally necessary to the resolution of a case arising under that act.” Stickney, supra, 764 n.5, quoting Hunnihan, supra, 443 n.5, and citing Wonacott v. Bartlett Nuclear, Inc., 15 Conn. Workers’ Comp. Rev. Op. 334, 2237 CRB-4-94-12 (June 25, 1996) (CRB construed provisions of Internal Revenue Code as part of wage calculation under § 31-310); Pascarelli v. Moliterno Stone Sales, 14 Conn. Workers’ Comp. Rev. Op. 328, 2115 CRB-4-94-8 (Sept. 15, 1995), aff’d., 44 Conn. App. 397 (1997) (CRB interpreted Bankruptcy Code in determining whether relief from automatic stay was required to enable compensation claim to proceed against insurer). Such inferences depend as much on the claimant’s continued stake in the ongoing dispute as they do on the precise nature of the auxiliary issue.

Our courts have also identified claims that this agency may not consider in some or all situations. For instance, it is well-settled that the CRB cannot determine the constitutional validity of statutes, regardless of the circumstances. Kuban v. Bridgeport Hospital, 3926 CRB-4-98-11 (Sept. 23, 1999). More pertinently, our Supreme Court recently decided that, where an employee’s claim for benefits has been settled, and an insurer seeks to reopen the voluntary agreement to litigate a derivative dispute against another insurer that involves only contractual principles of insurance coverage, this commission is not empowered to hear the case. Stickney, supra, 762, 768. Although a commissioner is authorized to determine whether an insurance contract is in effect at the time of an injury under § 31-343; Coley v. Camden Associates, 3432 CRB-2-96-9 (April 6, 1998); neither his general powers under § 31-278, § 31-298 and § 31-315 nor any specific provision gives him license to reopen a voluntary agreement in order to settle a question that sounds solely in contract law, and which does not directly implicate the rights of an injured employee. Stickney, supra, 768. Travelers argues that Stickney requires dismissal of the instant case as well. After careful review, we believe that both Travelers and the trial commissioner have read that decision a bit too broadly.

A review of the June 17, 1999 formal hearing transcript shows that the respondent N&E sought to establish via cancelled checks and other documents that Aetna/Travelers had been providing insurance coverage on the date of injury, despite the fact that this commission’s official records indicate that a notice of cancellation was received on January 24, 1995. Transcript, pp. 5-18. In Vernon v. V.J.R. Builders, 11 Conn. Workers’ Comp. Rev. Op. 237, 1360 CRD-7-91-12 (Nov. 8, 1993), we explained that, while an insurer may not resort to extraneous evidence in order to deny the existence of a policy that our official records (as maintained pursuant to § 31-348) show to be effective on the date of injury, an employer may attempt to establish insurance by resorting to such additional evidence. Id., 241-42. See also, Coley, supra; Bruce v. Bert Miller Associates, 15 Conn. Workers’ Comp. Rev. Op. 47, 1872 CRB-1-93-10 (Dec. 1, 1995). After all, workers’ compensation insurance is not just an independent contractual matter between the insurer and insured. Section 31-340 makes injured employees express beneficiaries of such contracts, to whom the insurer is directly and primarily liable. See Vernon, supra, 242, citing 4 A. Larson, Workmen’s Compensation Law § 92.41, pp. 17-44 to 17-54. In the present case, the claimant is still very much involved in these proceedings, as he is still attempting to obtain benefits. Thus, the core issue of this matter is not merely an issue of contract law between two insurers, as was the case in Stickney. It addresses the claimant’s right to recover compensation that is unpaid, as of yet.

Indeed, a comparable situation to the one now before us arose in the recent case of Dibello v. Barnes Page Wire Products, 3970 CRB-7-99-2 (March 2, 2000), where the named employer sought to prove that common-law principles required a particular insurer to provide coverage as a consequence of its agent’s fraudulent representations that a policy had been secured, despite the fact that no policy had ever been issued, and the records of this commission showed no insurance to be in effect. This board’s opinion included a detailed discussion of the Stickney holding, particularly the contents of footnote 6, where the Court addressed the question of whether this commission would have had jurisdiction over the coverage dispute then at bar if it had arisen at the time the claimant’s benefits were originally adjudicated. The Stickney justices had ruled that the pursuit of the Act’s humanitarian objective was not hindered in the case before them, because § 31-342 “provides for prompt payment to the eligible claimant when doubt arises as to the proper insurer, [thereby ensuring] that payment to the claimant should not be delayed by the secondary determination of which carrier is properly on the risk.” Id., 767 n.6. “Therefore, while we previously have stated that the commission’s interpretation of a statutory provision outside of the act is permissible when incidentally necessary; see footnote 5 of this opinion; we leave for another day the question of whether a common-law issue properly could be determined by the commission when incidentally necessary to the resolution of a claim arising under the act.” Id.

The panel in Dibello then reasoned that the time had come to answer that question. “This agency does not wish to tread cavalierly on foreign ground. However, our only alternative to adjudicating the agency issue would be to order that the employer accept full responsibility for the claim (which, depending on its financial stability, could conceivably render the company insolvent), with secondary liability falling upon the shoulders of the Second Injury Fund pursuant to § 31-355(b)—an entity that already faces substantial unfunded claims for payment, and whose future claims liability was sharply curtailed by a recent legislative enactment. By failing to identify a potentially responsible insurer, such an order would also increase the risk that the claimant would not receive the compensation due him in a timely manner. Rather than compromise the interests of the claimant, this board opts to direct the commissioner to address [the insurer’s] liability for its putative agent’s actions by applying the relevant law.” (Citations omitted.)

The instant case is more similar to Dibello than it is different. It is alleged that the claimant’s employer was uninsured on the date of injury. In order to address the employer’s allegation that this is not actually the case, it would be necessary for the trier of fact to look beyond the computer records of this commission by determining what the parties did following the apparent cancellation of the policy, and by assessing the legal consequences of their actions. The question is clearly worth answering. If a policy was in effect at the time of injury, not only would it provide a source of recovery for the claimant; this would also signify that the employer should not be fined pursuant to § 31-288 for failing to carry proper coverage, and would prevent another party—the principal employer and its insurer—from becoming liable for benefits as the result of the subcontractor’s otherwise uninsured status. See n.1, supra; Fidelity & Casualty Ins. Co. v. Sears, Roebuck & Co., 124 Conn. 227 (1938)(immediate employer is primarily liable for workers’ compensation benefits, and its insurer is not entitled to financial contribution from the secondarily liable principal employer). This is not a mere insurers’ dispute of the Stickney variety. All of the above issues concern matters that are part of the Workers’ Compensation Act, which means that the commissioner had jurisdiction to consider laws beyond the Act itself in order to address the employer’s allegation that it was insured.

As for the distinction between “incidentally necessary” interpretations of statutes and the common law that was hinted at in footnote 6 of Stickney, we fail to see why such a difference should be meaningful in this situation. A federal bankruptcy or tax statute is as “foreign” to the workers’ compensation forum as a legal agency or contract issue. Indeed, such legislation would arguably be more exotic. The common law provides a general foundation of governance for all state judicial proceedings, and often applies incidentally to workers’ compensation matters, most frequently with respect to evidentiary issues. See, e.g., Swaggerty v. Mattie’s Service Station, 3378 CRB-6-96-7 (Feb. 3, 1998)(where trier dismissed claim as result of horseplay, he was not required to make findings regarding alleged assailant’s prior record of criminal convictions); Casagrande v. Federal Express Corp., 15 Conn. Workers’ Comp. Rev. Op. 300, 2247 CRB-5-94-12 (June 20, 1996)(CRB analyzed conflicts of laws rules in determining that Kentucky, not Connecticut, should have jurisdiction over claim). Meanwhile, the administration of the Bankruptcy Code and Internal Revenue Code is delegated to specialized federal courts. This agency’s occasional construction of those laws is best performed very tentatively, given the detailed and quasi-technical nature of such intricate statutes. Still, when those issues arise, we can no more ignore the mandate of a code-based federal law than we can a controlling state statute, a constitutional principle, or a relevant judicially-created doctrine. What is pertinent here is not the source of these statutory and common-law tenets; it is the fact that this commission sometimes needs to venture beyond traditional workers’ compensation law in order to determine and apply the controlling legal principles in a given case, whatever their origin.

Accordingly, we reverse the trial commissioner’s decision to grant the motion to dismiss. This matter is hereby remanded with instruction that the trier consider the employer’s evidence, and determine whether insurance coverage existed on the date of injury, applying whatever legal principles are necessary.

Commissioners Robin L. Wilson and Leonard S. Paoletta concur.

1 In the November 11, 1999 Finding and Award, the trial commissioner found that Clifford B. Green and Sons, Inc. (Green) was the principal employer of the claimant on May 3, 1995, the date of his compensable injury. The trier also noted his own August 17, 1999 ruling, which effectively established that N&E, Green’s subcontractor and the claimant’s immediate employer, was uninsured for its workers’ compensation liability at the time of said injury (pending the ultimate resolution of the dispute between N&E and Travelers regarding coverage, which we will discuss below). Pursuant to § 31-291 C.G.S., the trier accordingly ordered Green’s workers’ compensation insurer, Nationwide (formerly Wausau), to assume responsibility for the payment of the claimant’s benefits. Nationwide then appealed. At oral argument before this panel, its counsel represented that all parties agreed not to require Nationwide to reimburse N&E for any benefits the latter had already paid to the claimant. Rather, Nationwide would simply assume liability for future unpaid benefits in place of N&E. We therefore need not further consider this issue, which was the only one briefed by Nationwide pursuant to its appeal from the November 16, 1999 decision. BACK TO TEXT

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State of Connecticut Workers' Compensation Commission, John A. Mastropietro, Chairman
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