CASE NO. 4308 CRB-8-00-10
COMPENSATION REVIEW BOARD
WORKERS’ COMPENSATION COMMISSION
AUGUST 29, 2001
AURORE HARBEC, Dependent widow of LEO HARBEC
STONE & WEBSTER ENGINEERING CORP.
HARTFORD INSURANCE GROUP
ROYAL INSURANCE CO.
B.F. SHAW CO.
W.J. BARNEY CORP. OF CONNECTICUT, INC.
CONNECTICUT INSURANCE GUARANTY ASSOCIATION
UTC/PRATT & WHITNEY
LIBERTY MUTUAL INSURANCE CO.
TRAVELERS INSURANCE CO.
SECOND INJURY FUND
The claimant was represented by Chris Meisenkothen, Esq., Early, Ludwick & Sweeney, L.L.C., 265 Church Street, P.O. Box 1866, New Haven, CT 06508-1866.
The respondents Stone & Webster Engineering and Hartford Insurance Group were represented by Frank Ancona, Esq., Edward Henfey & Associates, 55 Farmington Avenue, Suite 500, Hartford, CT 06105.
The respondents Stone & Webster Engineering and Royal Ins. Co. were not represented at oral argument. Notice sent to James Moran, Esq., Maher & Williams, 1300 Post Road, P.O. Box 550, Fairfield, CT 06430-0550.
The respondents B.F. Shaw, W.J. Barney Corp. and NAVCO were represented by David Kelly, Esq., Montstream & May, L.L.P., Salmon Brook Corporate Park, 655 Winding Brook Drive, Glastonbury, CT 06033.
The respondent CIGA was represented by Alan Cooke, Esq., Hutchins, Wheeler & Dittmar, 101 Federal Street, Boston, MA 02110.
The respondents UTC/Pratt & Whitney and Liberty Mutual Ins. Co. were not represented at oral argument. Notice sent to Nicone Gordon, Esq., Law Office of Nancy S. Rosenbaum, 655 Winding Brook Drive, Glastonbury, CT 06033.
The respondents Bishop Piping and Security Insurance were not represented at oral argument. Notice sent to Brian Prindle, Esq., 72 Bissell Street, Manchester, CT 06040-5304.
The respondents Union Carbide and Travelers Insurance Co. were represented by Michael McAuliffe, Esq., Pomeranz, Drayton & Stabnick, 95 Glastonbury Boulevard, Glastonbury, CT 06033.
The Second Injury Fund was represented by Michael J. Belzer, Esq., Assistant Attorney General, 55 Elm Street, P. O. Box 120, Hartford, CT 06141-0120.
These Petitions for Review from the October 17, 2000 Finding and Award Re: Motion to Dismiss of the Commissioner acting for the Eighth District were heard March 30, 2001 before a Compensation Review Board panel consisting of the Commission Chairman John A. Mastropietro and Commissioners George A. Waldron and James J. Metro.
JOHN A. MASTROPIETRO, CHAIRMAN. Several of the respondents have petitioned for review from the October 17, 2000 Finding and Award Re: Motion to Dismiss of the Commissioner acting for the Eighth District.1 Their common contention on appeal is that the trier erred by ruling that the claimant was free to bring an occupational disease claim against certain former employers of her late spouse whose workers’ compensation insurer had become insolvent, despite her previous settlement with other employers and insurers. We find error, and reverse the trial commissioner’s decision.
The decedent, Leo Harbec, worked as a tradesman for many different employers between 1951 and 1986, during which time period he was allegedly exposed to asbestos. He was diagnosed with asbestos-related cancer on December 18, 1987, and died from the disease on January 19, 1989. Of the nineteen or so employers for whom the decedent had worked, all but three had maintained workers’ compensation insurance policies with insurers who continue to exist in some form. On February 19, 1993, a commissioner approved a stipulation between the decedent’s surviving spouse, Aurore Harbec, and each of those still-solvent insurers. This compromise fully and finally settled her claim for $141,700.00. Claimant’s Exhibit B. In turn, the claimant agreed not to prosecute her workers’ compensation claim against any of the employers or insurers who participated in the stipulation.
Later, the claimant attempted to pursue a claim for benefits against several of the remaining employers: Benjamin Shaw, W.J. Barney and the National Asbestos Valve Company (NAVCO). Her action was initially dismissed by a trial commissioner who had concluded that the claimant was legally barred from such proceedings by Duni v. United Technologies Corporation/Pratt & Whitney Aircraft Division, 239 Conn. 19 (1996). This board reversed that ruling in Harbec v. Stone & Webster Engineering, 3628 CRB-8-97-6 (October 16, 1998) (hereinafter Harbec I), where we held that the stipulation expressly preserved the claimant’s right to proceed against all other employers. Similar language had not existed in the agreement before the Duni Court. The claimant was thus free to bring an action pursuant to § 31-306 against “the insurer American Mutual and an uninsured employer, none of which were listed in the stipulation.” Harbec I, supra.
Proceedings eventually resumed. The respondents B.F. Shaw Co.2 and W.J. Barney Corp. had been insured at the time of the decedent’s employment by the American Mutual Liability Insurance Co., which went bankrupt in 1989. According to the trier’s findings, the respondent NAVCO had not maintained workers’ compensation coverage at all. Findings, ¶ 5. All parties have since conceded, however, that NAVCO also maintained insurance with American Mutual at the time of said employment, and there appears to be no dispute on that point. See, e.g., August 14, 2000 Transcript, p. 12. Under § 38a-841 C.G.S. [formerly § 38-278], the Connecticut Insurance Guaranty Association (CIGA) is responsible for certain claims against insolvent insurers such as American Mutual, though there are restrictions to the definition of “covered claim” in § 38a-838(6) [formerly § 38-275(6)]. The respondents who were ostensibly “insured” by CIGA filed a motion in April 2000 requesting that the trier dismiss the claimant’s action on the ground that the CIGA statutes and associated caselaw precluded recovery. The trier agreed that CIGA should not be a party to this matter, but declined to dismiss the claimant’s action directly against the employers themselves. Those three employers and CIGA have appealed from the trier’s denial of the Motion to Dismiss.
Our Supreme Court has confirmed that, when a claim originates under the Workers’ Compensation Act, this board has subject matter jurisdiction to interpret the provisions of other enactments such as the Connecticut Insurance Guaranty Act if such forays into the law are necessary to resolve the underlying compensation claim. Hunnihan v. Mattatuck Mfg. Co., 243 Conn. 438, 445-47 (1997). In this case, the need has arisen for us to construe CIGA. To begin, we must decide which version of the statute should be applied to the facts before us, as the parties have advanced differing theories. The applicable law in a workers’ compensation case is generally presumed to be that which is in effect on the date of a claimant’s injury. Gil v. Courthouse One, 239 Conn. 676, 686-87 (1997). In an occupational disease case, the operative date of injury is the date of first manifestation of a symptom of the disease. Green v. General Dynamics Corporation, 245 Conn. 66, 70 (1998); Bremner v. Eidlitz & Son, Inc., 118 Conn. 666, 669-70 (1934). Here, that date was December 18, 1987, the date the decedent was diagnosed with asbestos-related cancer. His period of total disability, for which the claimant now seeks compensation, began on April 15, 1988, and ended with his death on January 19, 1989. At that point, the claimant’s right to survivor’s benefits pursuant to § 31-306 fully phased into existence. Tardy v. Abington Constructors, Inc., 4105 CRB-2-99-8 (Oct. 30, 2000) (for purposes of § 31-294c, limitations period for filing of claim differs for workers and their dependents).
Though the claimant’s cause of action as a dependent widow did not come into being until her late husband’s death, ultimately, her claim is derivative of, and wholly reliant upon, the existence of the decedent’s compensable injury. Belanger v. American Optical, 3353 CRB-1-96-5 (Jan. 22, 1998). In fact, the benefits she seeks now include a period of total disability that preceded the decedent’s demise. Thus, insofar as the date of injury rule applies to the CIGA Act, the controlling date should be December 18, 1987, the decedent’s established injury date. Id.; Daly v. Sikorsky Aircraft/UTC, 10 Conn. Workers’ Comp. Rev. Op. 47, 1104 CRD-4-90-9 (Jan. 29, 1992) (dependents’ benefits governed by law as it existed at time of injury); Kachaluba v. Greenwich, 8 Conn. Workers’ Comp. Rev. Op. 46, 766 CRD-7-88-9 (Feb. 26, 1990) (spousal benefits are calculated from date of injury rather than date of death), aff’d, 217 Conn. 50 (1991). We are unpersuaded by the arguments advocating the adoption of a different date.
Next, we address the potential liability of CIGA. The claimant herein alleges that the decedent contracted an occupational disease due to many years of exposure to asbestos, over the course of numerous terms of employment. Under § 31-299b, which was in effect on the date of the decedent’s injury, liability for benefits stemming from such a disease initially becomes the liability of the employer who last employed the injured worker prior to the filing of the claim. Prior employers or their insurers who are found to be liable for a portion of the compensation are later ordered by the commissioner to proportionally reimburse the initially liable employer or insurer. See, e.g., Hunnihan, supra, 453-54; Thomen v. Turri Electric, 11 Conn. Workers’ Comp. Rev. Op. 299, 301-302, 1324 CRD-5-91-10 (Dec. 23, 1993). The nature of this shared liability is grounded in common-law joint tortfeasor doctrine, however, which allows a claimant to recover the full amount of his compensation from either insurer. Plecity v. McLachlan Hat Co., 116 Conn. 216 (1933). Section 31-299b simply modifies that process to account for the industry custom of apportioning liability where multiple insurers were on the risk for repetitive trauma and occupational disease cases.
At the time of the claimant’s injury, § 38-282(1) [now § 38a-845(1)] stated, “Any person having a claim against an insurer under any provision in an insurance policy, other than a policy of an insolvent insurer, which is also a covered claim under this chapter, shall exhaust first his rights under such policy. Any amount payable on a covered claim under this chapter shall be reduced by the amount of any recovery under such insurance policy.” (Emphasis added.) Interestingly, P.A. 88-76 also amended the closing words, “such insurance policy,” to read “the claimant’s insurance policy or Chapter 568.” The claimant had a right of recovery under numerous insurance policies for the instant claim, most of which were issued by insurers who remain solvent. There is no question that she did not exhaust her rights under those policies, including that of the decedent’s last employer, Morris A. Fierberg. Instead, she compromised her claim via settlement with that entity and its insurers Travelers and Aetna, as well as the other solvent insurers who had insured the decedent’s various employers during the years of his alleged exposure.
A claimant who settles with a solvent primary carrier (such as the workers’ compensation insurers for Morris A. Fierberg) for less than the limits of said insurers’ policies is not then free to pursue a claim against CIGA for additional financial recovery. The exhaustion provision in § 38-282(1) is “apparently designed to limit the Association’s liability to situations in which no other source of recovery for damages exists. . . . The claimant’s settlement with one carrier would transform the Association from its role as an insurer of the last resort into a contributor to every settlement in which an insolvent insurer may be found near the scene.” Harbor Insurance Co. v. CIGA, 711 F.Supp. 70, 74 (D. Conn. 1989); see also, Doucette v. Pomes, 247 Conn. 442, 470-71 n.20 (1999) (distinguishing Harbor Insurance from the case at bar). Whether or not CIGA has improvidently been excused from this case by the claimant, as some of the respondents have alleged, the claimant would not be entitled to seek relief from CIGA due to her failure to exhaust other available policies in accordance with the liability established by § 31-299b.
Insofar as the claimant seeks to recover directly from the decedent’s former employers in lieu of CIGA, we find such action impermissible under § 38-275(6). As of December 18, 1987, § 38-275(6) defined “covered claim” as follows:
‘Covered claim’ means an unpaid claim, including, but not limited to, one for unearned premiums, which arises out of and is within the coverage and subject to the applicable limits of an insurance policy to which this chapter applies issued by an insurer, if such insurer becomes an insolvent insurer after October 1, 1971, . . . provided the term ‘covered claim’ shall not include any amount due any reinsurer, insurer, insurance pool, or underwriting association, as subrogation recoveries or otherwise.”
This definition was amended the following year by Public Act No. 88-76, which took effect on April 20, 1988. It added the following language after the word “otherwise:”
provided that a claim for any such amount, asserted against a person insured under a policy issued by an insurer which has become an insolvent insurer, which, if it were not a claim by or for the benefit of a reinsurer, insurer, insurance pool or underwriting association, would be a ‘covered claim’ may be filed directly with the receiver of the insolvent insurer but in no event shall any such claim be asserted against the insured of such insolvent insurer.
(Emphasis added.) The italicized provision of the 1988 amendment has become the focus of some discussion here, insofar as the trial commissioner held that the claimant could proceed directly against those employers who were insured by the now-insolvent American Mutual, even though CIGA itself was not a party. The claimant contends that this provision does not apply due to the “date of injury” rule, while CIGA offers authority supporting the notion that P.A. 88-76 was a clarificatory amendment that reflected the existing law protecting insureds. See Eastern Press, Inc. v. Peterson Engineering Co., Conn. Super. Ct., Dec. 4, 1991 (Gordon, J.).
Though Superior Court decisions do not create binding precedent as do Appellate and Supreme Court decisions, we nonetheless find the reasoning of Eastern Press persuasive. The authoring judge quoted the legislative history of CIGA upon its initial passage in 1961, which indicates that the act was intended to protect all Connecticut residents, including the holders of insurance policies whose insurers became insolvent. 14 S. Proc., Pt. 6, 1971 Sess., pp. 2613-14 (remarks of Senators Dinelli and Ives). “If an insurance company were allowed to exercise its rights of subrogation against the defendant directly when the defendant’s insurer has become insolvent, such action would be in contravention of the general legislative intent.” Eastern Press, supra. By extension, it would also be anomalous to hold that the insured employer can be personally tapped by a workers’ compensation claimant as a source of recovery where, if not for the claimant’s failure to exhaust other insurance policies, CIGA would have been required to accept responsibility for any outstanding benefits due. We agree with the holding of the Eastern Press court, therefore, that P.A. 88-76 merely clarified the definition in § 38-275(6), and that policyholders are protected from direct action under either version of the statute. Thus, we reverse the trier’s holding permitting the claimant-widow to proceed directly against the respondents B.F. Shaw Co., W.J. Barney Co., and NAVCO.
The trial commissioner’s decision is hereby reversed.
Commissioners George A. Waldron and James J. Metro concur.
1 One of those appellants is the Second Injury Fund, which sought to have itself dismissed from this case on the ground that there were no uninsured employers through whom liability could devolve upon the Fund as per § 31-355 C.G.S. At oral argument, none of the parties objected to the Fund’s withdrawal from this case. Thus, the issues raised in the Fund’s appeal need not be discussed. Similarly, none of the parties objected to the withdrawal of another appellant, The Hartford Insurance Group, whose liability in this matter has already been settled via stipulation. BACK TO TEXT
2 During the decedent’s term of employment, the respondent B.F. Shaw Co. had also insured a portion of its workers’ compensation liability with the still-solvent Liberty Mutual Insurance Co. That part of its liability was incorporated into the 1993 settlement, and is no longer at issue. BACK TO TEXT