State of Connecticut Workers' Compensation Commission, John A. Mastropietro, Chairman
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Ruiz v. Camillo, Inc. et al.

CASE NO. 5248 CRB-7-07-7

COMPENSATION REVIEW BOARD

WORKERS’ COMPENSATION COMMISSION

JULY 7, 2008

JAMES J. RUIZ

CLAIMANT-APPELLEE

v.

CAMILLO, INC.

EMPLOYER

and

HARTFORD INSURANCE GROUP

INSURER

RESPONDENTS-APPELLEES

and

PINKERTON SECURITY

EMPLOYER

and

ACE USA

INSURER

RESPONDENTS-APPELLANTS

and

SECOND INJURY FUND

RESPONDENT-APPELLEE

APPEARANCES:

The claimant was represented at the trial by Barry S. Moller, Esq., Cramer & Anderson Law Offices, 46 West Street, P.O. Box 278, Litchfield, CT 06759-0278. However, the issues on appeal did not involve the claimant and they did not file a brief or appear at oral argument.

The respondents Camillo, Inc. and Hartford Insurance Group were represented at the trial by Douglas Drayton, Esq., Pomeranz, Drayton & Stabnick, 95 Glastonbury Boulevard, Glastonbury, CT 06033. However the issues on appeal did not involve this respondent and they did not file a brief or appear at oral argument.

The respondents Pinkerton Security and ACE USA were represented by Michael Buonopane, Esq., McGann, Bartlett & Brown, LLC, 111 Founders Plaza, Suite 1201, East Hartford, CT 06108.

The respondent Second Injury Fund was represented by Lisa G. Weiss, Esq., Assistant Attorney General, Office of the Attorney General, 55 Elm Street, P.O. Box 120, Hartford, CT 06141-0120.

This Petition for Review from the July 13, 2007 Finding of the Commissioner acting for the Seventh District was heard January 25, 2008 before a Compensation Review Board panel consisting of the Commission Chairman John A. Mastropietro and Commissioners Ernie R. Walker and Charles F. Senich.

OPINION

JOHN A. MASTROPIETRO, CHAIRMAN. In 2003 the Connecticut Supreme Court held in Hatt v. Burlington Coat Factory, 263 Conn. 279, 295 (2003) that “[a] statute which provides that a thing shall be done in a certain way carries with it an implied prohibition against doing that thing in any other way.” The appellants in the present case are seeking reimbursement from the Second Injury Fund (hereafter the “Fund”) for the concurrent employment portions of a settlement they reached with the claimant. This effort was denied by the trial commissioner primarily on the grounds that the parties had failed to obtain approval of a Form 44 for the settlement. We agree with the trial commissioner on this issue, as we believe the absence of such documentation makes it impossible for the Commission to order the Fund to issue such reimbursement. Therefore we affirm the trial commissioner’s ruling and dismiss this appeal.

This claim resulted from a heart attack suffered by the claimant, James J. Ruiz, over the weekend of October 21, 2000. The trial commissioner found that the claimant first experienced chest pain while working for Pinkerton Security. Later that day he continued to suffer chest pain while working as production manager at Camillo. Inc., a formalwear supplier. After suffering further chest pain while engaged in family activities at his home in Danbury that Sunday, the claimant sought medical attention on Monday, October 23, 2000 and was determined to have suffered a heart attack. Pinkerton received a timely Form 30C for this incident but failed to file a Form 43 contesting liability. It is uncertain from the record when Camillo received a notice of claim; but they filed a Form 43 in April 2001 and no Motion to Preclude was ever filed in response.

The record reflects that Pinkerton’s workers’ compensation carrier, ACE USA (“ACE”) and Camillo’s workers’ compensation carrier, The Hartford Insurance Group (“The Hartford”), collaborated on a 60/40 split of compensation payments to the claimant, with ACE paying 60% and The Hartford paying 40% while issues of compensability were being worked out between the two carriers. The commissioner found that there was difficulty locating accurate pay records for the claimant, and a comprised base compensation rate was shared between the carriers. Ultimately, ACE and The Hartford settled the claimant’s claim on a full and final basis without notice to, or participation by, the Fund. In paragraph 4 of the “Approval of Stipulation,” approved by Commissioner Metro on January 19, 2005, both respondents stated that they denied the claimant’s injury.

Pinkerton and their carrier sought reimbursement from the Fund as and for concurrent employment wages in the amount of $20,461.62. They claimed that a voluntary agreement was not necessary in order to obtain reimbursement of concurrent employment benefits paid to a claimant. They also argued that the Fund is not required to be a part of stipulation agreements when they are not asked to make a contribution. They also argued that denial of a reimbursement request would penalize an employer who made benefit payments on a without prejudice basis and would undermine the humanitarian purpose of the Workers’ Compensation Act.

The Fund argued that in order to reimburse ACE, it must have accepted the claimant’s claim and issued a voluntary agreement. The Fund cites to the Form 44 promulgated by the Commission as evidence that the voluntary agreement is necessary in order to process a request for reimbursement. The Fund also raised other arguments as to unjust enrichment and whether the claimant qualified for concurrent employment benefits which were not addressed by the trial commissioner.

The commissioner agreed with the substance of the Fund’s argument. She held that as the Fund was a derivative obligor in concurrent employment cases that it had a due process right to defend against concurrent employment liability. The respondents however, decided to resolve this issue without input from the Fund or obtaining a ruling from the Commission. The respondents also excluded the Fund from negotiations regarding the base compensation rate, which also limited its ability to challenge the evidence presented as to wage records and wage rates. Finally, the Form 44 promulgated by the Commission clearly contemplates that a voluntary agreement evidencing an accepted claim would be a predicate to seeking reimbursement. Both respondents, however, rejected the compensability of the claim in the compromise and settlement of the underlying claim. Therefore the trial commissioner dismissed, with prejudice, the reimbursement claim for concurrent employment wages under § 31-310 C.G.S.

The respondents filed a Motion to Correct which was denied in its entirety. The present appeal then ensued.

The appellants raise a number of issues on appeal, but the central issue was whether the trial commissioner correctly determined that an approved voluntary agreement was a prerequisite to obtaining reimbursement under the concurrent employment statute. The Fund argues that it is, citing Grillo v. Prestige Enterprises, Inc., 1704 CRB-1-93-4 (April 25, 1995). We believe Grillo is on point. Since the appellants have not advanced persuasive authority to the contrary, we believe we must accord stare decisis to the Grillo precedent.

In Mitchell v. J.B. Retail Inventory Specialists, 3458 CRB-2-96-10 (March 31, 1998) fn. 1, we held “Stare decisis, although not an end in itself, serves the important function of preserving stability and certainty in the law. Accordingly, ‘a court should not overrule its earlier decisions unless the most cogent reasons and inescapable logic require it. Maltbie, Conn. App. Proc., p. 226.’ Herald Publishing Co. v. Bill, 142 Conn. 53, 62 (1955).” Chambers v. General Dynamics Corp./Electric Boat Division, 4952 CRB-8-05-6 (June 7, 2006), aff’d, 283 Conn. 840 (2007)

To overcome the effect of stare decisis we would need to be presented with a compelling argument that Grillo was based on an erroneous application of the law or that the instant case is somehow distinguishable from Grillo. Our review of the facts involving this case finds no material difference from the Grillo case, and no persuasive argument has been presented that the existing precedent is somehow unsound.

In Grillo the employer sought pro-rata reimbursement from the Fund from the share of the award attributable to concurrent employment. This board upheld the denial of this relief when a Form 44 had not been approved prior to the reimbursement request.

We do not think that the language of § 31-310 mandated a contrary result from that reached by the commissioner. “Payment of an award from a special fund such as the second injury and compensation assurance fund . . . should be made only in accordance with express statutory authority . . . in order to protect that special fund and prevent unwarranted diversions of it from the specific purpose for which it was created.” Going v. Cromwell Fire District, 159 Conn. 53, 61 (1970) (citations omitted). In furtherance of this policy, the Connecticut Workers’ Compensation Commission has in this instance devised Form 44 as a mechanism by which an employer or insurer may invoke the statutorily created liability of the Second Injury Fund for concurrent employment benefits. The form, entitled “Order to Custodian of Second Injury and Compensation Assurance Fund,” must be issued by a Workers’ Compensation commissioner after the “computation of the Prorated Share of the ADJUSTED TOTAL WEEKLY BENEFIT on attached voluntary agreement has been checked for accuracy” by the commissioner. The use of this procedure allows the commissioner to supervise the payment of concurrent benefits to the claimant and order either reimbursement of the employer’s insurer for payments already completed or direct payment by the Second Injury Fund to the claimant. The form clearly contemplates the possibility that the employer’s insurer shall be ordered to pay the claimant the full compensation due him under the voluntary agreement, with reimbursement for the prorated share being provided by the Second Injury Fund upon presentation of proof that full benefits have indeed been paid by the insurer.
Here, no Form 44 was issued, for no voluntary agreement was reached. As the required procedure for assessing liability against the Fund was not followed, the commissioner properly refused to enter an award against the Fund.

We followed this precedent in Lizcano v. Holiday Inn Crowne Plaza, 4036 CRB-7-99-4 (May 24, 2000). There we held “a commissioner must issue a Form 44 order in order for an employer or insurer to obtain reimbursement from the Fund for concurrent employment benefits.” Id.

The Second Injury Fund therefore has established a long standing practice to require the Form 44 prior to issuing reimbursement to insurers under § 31-310 C.G.S. Moreover, the “plain meaning” of this statute (see Hummel v. Marten Transport 282 Conn. 477 (2007), applying § 1-2z C.G.S) is inconsistent with this tribunal ordering the Fund to honor a reimbursement request predicated on what the Fund has demonstrated is inadequate documentation.1

In this instance, the appellants failed to reach agreement on a Voluntary Agreement and failed to prepare a Form 44 prior to seeking reimbursement. The Fund requires this documentation and as the trial commissioner did not find this requirement unreasonable, we are not in a position to reach a differing conclusion.2

The appellants cite Horobin v. West Haven, 4724 CRB-3-03-9 (December 2, 2004) as supportive of their bid for reimbursement, appearing to argue that the trial commissioner in this case applied theories of apportionment to a § 31-310 C.G.S. request. As Horobin is factually distinguishable from Grillo, supra, and does not cite Grillo, we find this argument unpersuasive. Horobin involved a settlement which the Fund drafted. Here, the appellants seek to have the Fund honor a portion of a settlement which the Fund played no role in drafting. This factual scenario is akin to the situation in Christensen v. H & L Plastics Co., Inc., 5171 CRB-3-06-12 (November 19, 2007). In both cases, insurers made arrangements between themselves to deal with a pending claim and the lead insurer managing the claim reached a settlement of the claim without the participation of the entity that would ordinarily honor the balance of the claim. While Christensen was determined largely on the CIGA Act, in both cases an insurer that resolved a case on its own initiative could not later seek reimbursement from a nonparticipating third party to the settlement.3 4

We conclude that the appellants failed to preserve their right to seek statutory reimbursement from the Fund by their failure to execute a Form 44 accepting the claimant’s injury. While the respondents may have had proper grounds to stipulate the case with the claimant without the Fund’s participation, they now cannot revisit the entire case to seek a remedy which is barred by our binding precedent in Grillo, supra.

The Finding and Dismissal is affirmed and the appeal is dismissed.

Commissioners Ernie R. Walker and Charles F. Senich concur in this opinion.

1 The appellants argue that they were denied due process in this instance and they should have been able to substitute evidence at a formal hearing for a Form 44. Appellant’s Brief, pp. 5-6. We do not agree as, “The workers’ compensation system in Connecticut is derived exclusively from statute. . . . A commissioner may exercise jurisdiction to hear a claim only under the precise circumstances and in the manner particularly prescribed by the enabling legislation.” Hanson v. Transportation General, 245 Conn. 613 (1998). Our precedent has established that a Form 44 is a prerequisite to seeking reimbursement from the Fund. Therefore, we do not believe § 31-310 C.G.S. permits a trial commissioner to accept documentation which has consistently been unacceptable to the Fund to justify a reimbursement award. BACK TO TEXT

2 We reserve judgment on the question whether the Fund could require documentation beyond an approved Form 44 prior to honoring a request for § 31-310 C.G.S. reimbursement. BACK TO TEXT

3 At oral argument before this panel two issues were raised which are not advantageous to the appellants. Counsel for the appellants admitted that in this stage a proper Form 44 could not be prepared as the necessary records were no longer available, presumably having been expunged when Pinkerton Security changed hands. We do not believe equity can protect the respondents from their negligence in this instance, especially considering the lapse of time. See Kalinowski v. Meriden, 5028 CRB-8-05-11 (January 24, 2007). Counsel for the Fund also pointed out that the concurrent employer; Camillo, Inc. had already advanced their share of the award, leaving an unresolved issue as to whether ACE USA would be unjustly enriched were they to prevail. As we conclude the appellants failed to preserve their right to reimbursement, we decline to consider the issue. BACK TO TEXT

4 The appellants also present arguments claiming this is a double recovery issue herein based on the Fund’s argument that two separate injuries may have occurred to Mr. Ruiz. Appellant’s Brief, pp. 8-9. As the claimant has executed a full and final settlement with the two employers for his injuries, this fact pattern is not before the Commission in this case and we need not address it. The appellant’s arguments over apportionment law, Appellant’s Brief, pp. 10-14, are also irrelevant to the issues at hand. BACK TO TEXT

Workers’ Compensation Commission

Page last revised: July 17, 2008

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