CASE NO. 5065 CRB-3-06-3
COMPENSATION REVIEW BOARD
WORKERS’ COMPENSATION COMMISSION
MARCH 1, 2007
NICHOLAS ESPOSITO, Deceased
ANGELINA ESPOSITO, Dependent Widow
SIMKINS INDUSTRIES, INC.
CONNECTICUT INSURANCE GUARANTY ASSOCIATION
INSURER et al
The claimant was represented by Chris Meisenkothen, Esq., Early, Ludwick, & Sweeney, 265 Church Street, 11th Floor, P.O. Box 1866, New Haven, CT 06508-1866. However, he did not file a brief or appear at oral argument.
The respondent Simkins Industries, Inc. was represented by Lucas Strunk, Esq., and Anne Kelly Zovas, Esq., Pomeranz, Drayton & Stabnick, 95 Glastonbury Boulevard, Glastonbury, CT 06033.
The respondent Connecticut Insurance Guaranty Association was represented by Joseph J. Passaretti, Jr., Esq., Montstream & May, LLP, 655 Winding Brook Drive, P.O. Box 1087, Glastonbury, CT 06033-6087.
The respondents American Employers Insurance Company and OneBeacon Insurance were represented by David J. Weil, Esq., and Jane Carlozzi, Esq., Nuzzo & Roberts, P.O. Box 747, Cheshire, CT 06410. However, they did not file a brief.
The respondent Liberty Mutual Insurance Group was represented by Marian Yun, Esq., Law Offices of Rosenbaum & Vollono, 655 Winding Brook Drive, Glastonbury, CT 06033. However, they did not file a brief or appear at oral argument.
The respondent Second Injury Fund was represented by Taka Iwashita, Esq., Assistant Attorney General, 55 Elm Street, P.O. Box 120, Hartford, CT 06141-0120. However, they did not file a brief or appear at oral argument.
This Petition for Review filed from the February 16, 2006 Finding and Award of the Commissioner acting for the Eighth District was heard August 25, 2006 before a Compensation Review Board panel consisting of the Commission Chairman John A. Mastropietro and Commissioners Donald H. Doyle, Jr., and Nancy E. Salerno.
JOHN A. MASTROPIETRO, CHAIRMAN. The instant appeal involves an issue of statutory apportionment of an award. The respondent, Simkins Industries, Inc. is presently self-insured and is seeking apportionment under § 31-299b C.G.S. against their prior insurance carriers for a proportionate share of the award. One of the insurers from whom apportionment is sought has become insolvent and Simkins sought reimbursement from the Connecticut Insurance Guaranty Association (CIGA) for its share of the award. CIGA contested this effort, but the trial commissioner in this matter found such apportionment appropriate. CIGA has appealed. As we find the recent case of Connecticut Ins. Guaranty Assn. v. State, 278 Conn. 77 (2006) (hereafter “CIGA v. State”) dispositive of the issues in this appeal, we uphold the trial commissioner.
The commissioner found the following facts. The claimant is the executrix of the estate of and surviving spouse of Nicholas Esposito, who worked for the respondent Simkins Industries, Inc. from 1948 to 1984. The decedent filed a timely Notice of Claim on February 2, 1999 alleging that he suffered from asbestosis as a result of his employment. An investigation determined that Simkins was self-insured after April 1, 1965, but prior to that date a number of carriers had insured the firm’s workers’ compensation claims. One of those carriers, American Mutual Liability Insurance Company had declared bankruptcy and claims against it were administered by CIGA. Simkins had reached a settlement of the decedent’s asbestosis claim, and based on the duration of coverage by the defunct carrier, sought $63,400 in reimbursement from CIGA.
Both parties raised the precedent of Doucette v. Pomes, 247 Conn. 442 (1999). Simkins argued this case supported its claim for reimbursement from CIGA, while CIGA distinguished the case and asserted Hunnihan v. Mattatuck Manufacturing, 243 Conn. 438 (1997) and Konovaluk v. Graphite Die Mold, Inc., 4437 CRB 3-01-9 (August 8, 2002) prohibited apportionment in this scenario. In his Finding and Award of February 16, 2006, the commissioner concluded the Doucette case permitted apportionment against CIGA and directed it to reimburse Simkins for a $63,400 share of the award.
Following the denial of a Motion for Articulation and the denial of three of the four corrections sought by the respondent CIGA, they appealed this Finding and Award. This appeal hinges on a single issue: can a self-insured employer obtain reimbursement from CIGA for a workers’ compensation award if a prior insurer has become insolvent? We believe the Supreme Court has answered this question conclusively in the affirmative in CIGA v. State, supra, thus as we find the rationale in that case controlling we must uphold the trial commissioner.
The facts in the CIGA v. State case are directly applicable. An employee of the state of Connecticut was injured in a car accident and sued Elmcrest Hospital, which was insured by an insolvent insurer. At the time of the accident, the state was self-insured for workers’ compensation, paid benefits to its injured employee, and sought to recover the benefits against Elmcrest. The state subsequently obtained indemnity coverage for its compensation claims, but the indemnity carrier waived any right to reimbursement on this claim. CIGA then brought a declaratory judgment action disclaiming any obligation to pay the state, alleging the claim was for the benefit of an insurer and thus was not a “covered claim” under § 38a-838(5) C.G.S. The trial court and the Supreme Court sided with the state that CIGA was legally bound to honor the claim for reimbursement.
The Supreme Court clearly delineated that self-insured employers are entitled to seek reimbursement from CIGA when carriers are insolvent. “[t]he present case, unlike Besack involves no attempt to exercise an insurer’s claim for reimbursement” Id., 89. (Emphasis in original). The Court also restated the principle behind Doucette v. Pomes, supra, “This court previously has concluded, and the parties do not dispute, that a self-insurer is not an ‘insurer’ for the purposes of the act and may, therefore, recover from the association. Doucette v. Pomes, 247 Conn. 474.” CIGA, 84, fn.6.
Reviewing the CIGA v. State case we see the Supreme Court rejected a broad interpretation of what constitutes acting for the benefit of an insurer in their analysis of § 38a-838(5) C.G.S. CIGA argued the state was acting on behalf of an insurer. The Supreme Court reviewed the exemption language in that statute “ provided the term ‘covered claim’ shall not include (i) any claim by or for the benefit of any reinsurer, insurer, insurance pool, or underwriting association, as subrogation recoveries or otherwise . . .;” id., 83 and as noted above, drew a clear distinction between self-insured parties and insurers. The Supreme Court did so in holding that “[t]he association’s statutory mandate, and sole reason for existence, is to provide compensation for those whose remedy otherwise would be thwarted by insurer insolvency,” and this purpose was fulfilled by permitting the state to recover against the guaranty fund. Id., 86. Certainly, had American Mutual Liability Insurance Company still been in operation Simkins would have had a viable claim against it in this matter for apportionment based on our application of § 31-299b C.G.S. in Konavaluk (the final insurer or self-insurer can apportion against prior insurers.). The trial commissioner’s decision to place CIGA in the shoes of the defunct carrier is consistent with the Supreme Court’s reasoning herein.
We note that the present case is proceeding under § 31-299b C.G.S. and not § 31-293(a) C.G.S. but CIGA has alleged in both matters that the self-insured party is actually acting as or on behalf of an insurer.1 Therefore, they assert that pursuant to Hunnihan, supra, and Konavaluk, supra, we must treat a self-insured employer as the functional equivalent of an insurer. We believe the Supreme Court’s application of Doucette in CIGA v. State renders this argument obsolete.
A review of Hunnihan and Konavaluk indicate as both are factually dissimilar from this case that neither justifies a reversal of the trial commissioner’s decision.
In Hunnihan, this board had determined that § 31-299b permitted the last insurer on the risk to seek reimbursement from the Connecticut Insurance Guaranty Association (CIGA) for the share of liability attributable to the coverage period of American Mutual Insurance Co., which was determined to be insolvent as of March 9, 1989. Hunnihan, 16 Conn. Workers’ Comp. Rev. Op. 72, 2297 CRB-5-95-2 (October 30, 1996). Our Supreme Court reversed this board’s ruling, holding that the definition of “covered claim” in § 38a-838(6) C.G.S. did not include amounts due to any insurer, including an insurer whose liability is premised on being the last insurer under § 31-299b.
Konavaluk, supra.2 The instant case does not involve a claim of reimbursement by an insurer.
Konavaluk is also distinguishable. In that case the trial commissioner denied the claimant’s employer’s insurer reapportionment of an insolvent insurer’s share of an award against other solvent insurers. The CRB reversed to permit re-apportionment.
[W]e rule that § 31-299b allows the last insurer on the risk at the time of substantial exposure in an occupational disease or repetitive trauma case to seek reimbursement from all other solvent insurers or self-insured employers not only for the proportional shares of benefits attributable to their periods of coverage, but also for a similarly proportional share of any benefits that were due from an employer whose insurer has been declared insolvent and is therefore unable to remit reimbursement. Id.
Unlike Konavaluk, in the present case the party seeking apportionment is self-insured and therefore, we believe this matter is a “covered claim” within the scope of § 38a-838(5) C.G.S.3
We understand the respondent’s effort to apply our holding in Konavaluk to obtain a different result. They believe the better reasoned outcome in this matter would be similar to our holding in that case: to cause a reapportionment of the insolvent carrier’s share of the award between the other solvent insurers on the claim. In the present case some insurers may indirectly benefit from the entire amount of the insolvent carrier’s burden being shifted to the guaranty fund, as otherwise they would bear an additional claim via reapportionment. The result desired by the respondents would require us to find the claim by Simkins was “for the benefit” of an insurer. Such a result is inconsistent with the clear principle expressed in Doucette and CIGA v. State that claims by self-insured entities are enforceable against CIGA.
We find the other arguments raised by CIGA unpersuasive, as we can distinguish the fact that a § 31-299b party seeking apportionment may seek it from a previous self-insured employer of the claimant from the issue of whether a self-insured employer can seek apportionment from a guaranty fund for insolvent insurance carriers.4 CIGA may well believe that self-insured employers should not have any greater right to seek reimbursement from the insolvent insurer guaranty fund than another insurer, particularly if there is available recourse against other solvent insurers. In light of the Supreme Court’s precedent on this matter, we believe such a public policy argument cannot be resolved by this board and must be directed to the General Assembly.
We therefore affirm the Finding and Award and dismiss this appeal. Commissioners Donald H. Doyle Jr. and Nancy E. Salerno concur in this opinion.
1 We are not persuaded that for the purposes of apportionment there is a difference between § 31-293 C.G.S. and § 31-299b C.G.S. While CIGA asserts a difference between their role of protecting claims brought against insolvent liability carriers and insolvent workers’ compensation carriers, this supposed difference is not codified in statute either in the Workers’ Compensation Act or in Chapter 704a of the Connecticut General Statutes. BACK TO TEXT
2 Public Act 03-49 redesignated subsection (6) of § 38a-838 C.G.S. as subsection (5). BACK TO TEXT
3 We also note our analysis in Konavaluk was focused on determining the intent of the legislature. The subsequent enactment of § 1-2z C.G.S. limits this board to the application of the “plain meaning” of the statute. BACK TO TEXT
4 The CIGA interpretation of Konavaluk essentially is a self-insured employer can seek apportionment under § 31-299b C.G.S. from a solvent insurer but cannot seek apportionment from the guaranty fund for the insolvent insurer. The plain language of the statutes does not compel this result which as noted is incompatible with the rationale of the CIGA v. State opinion. BACK TO TEXT