State of Connecticut Workers' Compensation Commission, John A. Mastropietro, Chairman
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Ferraro v. Ridgefield European Motors

CASE NO. 5646 CRB-7-11-4

COMPENSATION REVIEW BOARD

WORKERS’ COMPENSATION COMMISSION

APRIL 17, 2012

MICHAEL FERRARO

CLAIMANT-APPELLEE

v.

RIDGEFIELD EUROPEAN MOTORS

EMPLOYER

and

REPUBLIC-FRANKLIN INSURANCE CO. c/o UTICA MUTUAL INSURANCE

INSURER

RESPONDENTS-APPELLANTS

and

AMGUARD INSURANCE CO.

INSURER

RESPONDENTS-APPELLEES

and

AMERICAN ALTERNATIVE INSURANCE c/o REM

INSURER

RESPONDENTS-APPELLEES

APPEARANCES:

At the trial level the claimant was represented by Laura Ondrush, Esq., The Dodd Law Firm, LLC, 1781 Highland Avenue, Cheshire, CT 06410-1254 who did not attend oral argument.

The respondents-appellants, Ridgefield European Motors and Republic-Franklin Insurance Company c/o Utica Mutual Insurance were represented by Melanie I. Haslam-Kolek, Esq., and Sharon McLoughlin, Esq., Behman Hambelton, LLP, 190 Washington Street, Middletown, CT 06457-3219.

The respondent Amguard Insurance Company was represented by Lucas D. Strunk, Esq., Pomeranz, Drayton & Stabnick, LLC, 95 Glastonbury Boulevard, Suite 216, Glastonbury, CT 06033.

The respondent American Alternative Insurance c/o REM was represented by Jason K. Matthews, Esq., Nuzzo & Roberts, LLC, One Tower Center Plaza, Cheshire, CT 06410-3150.

This Petition for Review from the March 28, 2011 Findings and Orders of the Commissioner acting for the Sixth District was heard September 30, 2011 before a Compensation Review Board panel consisting of the Commission Chairman John A. Mastropietro and Commissioners Scott A. Barton and Christine L. Engel.

OPINION

JOHN A. MASTROPIETRO, CHAIRMAN. This appeal arises out of the March 28, 2011 Findings and Orders of the Commissioner acting for the Sixth District [hereafter Finding]. In that Finding the trial commissioner held that the respondent Utica Mutual Insurance’s [hereafter Utica] obligation pursuant to § 31-299b was to pay its proportionate share of liability plus interest at the rate of twelve percent (12%) per annum to the last carrier on the risk. The respondent-appellant Utica filed this appeal.

The pertinent facts are as follows. The claimant was employed by Ridgefield European Motors. The trial commissioner took administrative notice of an approved Voluntary Agreement reflecting that on or about June 26, 2002 the claimant sustained a bilateral carpal tunnel injury and cervical injury which arose out of and in the course of his employment. That Voluntary Agreement was approved by the Commissioner on June 18, 2004.

Pursuant to § 31-299b the respondent-appellee, AmGuard Insurance [hereafter Guard] in its capacity as the last insurer on the risk, administered the claim. See Finding, ¶ 1. The respondent-appellee, Guard, paid the claimant $207,746.43 in indemnity benefits for the period between September 17, 2004 through October 31, 2010. Guard also paid $118,878.18 in medical expenses on behalf of the claimant for the period from 2004 through October 31, 2010. See Findings, ¶¶ 5-6.

The parties to the § 31-299b apportionment included; Guard, Utica, and American Union.1 The parties stipulated to coverage for the following periods:

Utica09/01/98–03/14/00
Utica03/15/00–03/14/01
American Union03/15/01–03/14/02
Guard03/15/02–06/26/02

The parties acknowledged their proportionate shares of liability as follows:

Utica66.67%
American Union26.67%
Guard6.66%

See Findings, ¶¶ 4 and A.

On or about October 29, 2010 the respondent-appellant, Utica, acknowledged its proportionate share of liability (66.67%) and on November 24, 2010 paid Guard $217,760.62. In Finding, ¶ 7 the trial commissioner noted that the point at which Utica acknowledged its 66.67% of proportionate liability was after three evidentiary hearings were held but prior to the scheduled deadline for filing briefs and proposed finding with the trial commissioner. Although the respondent-appellant Utica reimbursed the respondent-appellee Guard, Guard claimed that pursuant to § 31-299b it was entitled to interest at the rate of 12% per annum.

The trial commissioner agreed and in his March 28, 2011 Finding ordered the appellant, Utica to pay Guard interest at the annual rate of 12% pursuant to § 31-299b. The amount of interest which the trial commissioner ordered Utica to pay amounted to $82,692.21. The respondent-appellant Utica took this appeal.

The appellant raised the following issues for review; (1) whether the trial commissioner erred in ordering Utica to pay interest pursuant to § 31-299b, (2) whether the trial commissioner erred in failing to grant the appellant’s Motion To Correct and (3) whether the trial commissioner erred in failing to grant the appellant’s Motion For Articulation. As to the first issue, the appellant argues that the trial commissioner’s order to pay 12% interest was entered without the trial commissioner’s fact finding as to the proportionate liability and reimbursement amounts due from the other respondents on the claim.

Sec. 31-299b provides:

If an employee suffers an injury or disease for which compensation is found by the commissioner to be payable according to the provisions of this chapter, the employer who last employed the claimant prior to the filing of the claim, or the employer’s insurer, shall be initially liable for the payment of such compensation. The commissioner shall, within a reasonable period of time after issuing an award, on the basis of the record of the hearing, determine whether prior employers, or their insurers, are liable for a portion of such compensation and the extent of their liability. If prior employers are found to be so liable, the commissioner shall order such employers or their insurers to reimburse the initially liable employer or insurer according to the proportion of their liability. Reimbursement shall be made within ten days of the commissioner’s order with interest, from the date of the initial payment, at twelve per cent per annum. If no appeal from the commissioner’s order is taken by any employer or insurer within twenty days, the order shall be final and may be enforced in the same manner as a judgment of the Superior Court. (Emphasis ours.)

Essentially, § 31-299b provides that in instances where a claimant is injured as the result of occupational disease or repetitive trauma the last employer/insurance carrier on the risk will be initially liable. Hatt v. Burlington Coat Factory, 263 Conn. 279, 287 (2003). Thereafter, the other employers/insurers who share in the liability of the claim will reimburse the initially liable insurance carrier “for a portion of such compensation” and interest at twelve percent per annum.

The appellant argues, inter alia, that as the adjudicatory circumstances of this case did not require the trial commissioner to review evidence and make a determination as to the other liable parties and the extent of their liability, no award for interest may lie. In short, the appellant argues that as the parties reached an agreement as to the proportionate share of each insurer on the risk, the trial commissioner was relieved of engaging in the actual fact finding process and thus, the prerequisite to awarding interest was not met.

We disagree with the appellant’s rationale for a number of reasons.

First, if we were to agree with the rationale of the appellant we would discourage parties from discussing issues and attempting to reach resolution through compromise. The appellant agreed to the proportionate 66.67% liability assessment.2 Certainly, until such time as the appellant chose to accept the agreed upon percentage of liability, it was free to put evidence before the commissioner from which the trial commissioner could assign a different apportionment percentage of liability. In fact it appears that this is what occurred, as the appellant did not agree to its pro rata share until after the third session of the formal hearing in this matter.

We also note that the appellant appears to assume that the trial commissioner was bound by the agreement of the parties as to the extent of their liability. Clearly, the power to make such a determination is vested with the trial commissioner.3

In Konovaluk v. Graphite Die Mold, Inc., 4437 CRB-3-01-9 (August 8, 2002) this board was presented with a dispute as to the percentage liability for carriers pursuant to § 31-299b where one of the carriers was insolvent. In the course of his 25 years of employment the claimant in Konovaluk was exposed to metallic dust. That exposure resulted in the claimant’s development of pneumoconiosis. The last insurance carrier on the risk was the Hartford Insurance Group [Hartford]. The Hartford administered the claim pursuant to § 31-299b and then sought reimbursement from the other carriers on the risk. One of the carriers on the risk, American Mutual was insolvent. The issue then arose as to whether the Hartford could apportion the insolvent carrier’s liability under § 31-299b among the other liable insurers or was the Hartford without recourse to reimbursement for the insolvent carrier’s proportionate share. The board held that § 31-299b permits;

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.

In its analysis in Konovaluk, the board concluded that the statute’s language was unclear. It then proceeded to review the legislative history of § 31-299b. The board noted that the jurisprudential genesis for permitting the apportionment of liability among insurance carriers was rooted in Plecity v. McLachlan Hat Co., 116 Conn. 216 (1933). In Plecity the court held that an award to a claimant who developed mercury poisoning during the period that three different insurers covered the employer’s risk was to be made against all 3 employers.

As the board in Konovaluk pointed out, the apportionment/contribution scheme that presently exists pursuant to § 31-299b resulted from the legislature’s consideration of two different schemes. The legislature settled on one permitting apportionment among all carriers on a risk while the last carrier was initially liable. The scheme accepted by the legislature was the one in which the last carrier on the risk was responsible in toto.

Our lawmakers preferred the version of § 31-299b that allowed the last insurer to be reimbursed by other carriers, and at a 12% annual interest rate “[s]o that the last carrier and/or employer does not get hurt too much by having to pay the claim and maybe [have] it drag on for two or three years [while] somebody else is using their money.” Id., p. 340 (remarks of Ms. Tianti). The inclusion of this reimbursement protocol in the statute bespeaks a concern for the fate of that last insurance carrier on the risk, and a recognition that this procedure was a better means of protecting the rights of the claimant and, secondarily, the insurance carriers as well.

The board also noted:

Section 31-299b, therefore, is primarily designed to protect the interest of claimants, but it was consciously constructed to also allow for an ultimate distribution of liability that would not place an undue burden on the last insurer on the risk. Our legislature would not have directed that 12% interest be paid on reimbursement amounts if it were indifferent to the ultimate assignment of fiscal responsibility. ... [T]he law employs language that allows a commissioner some leeway to account for anomalies that might arise in a case. (Emphasis ours.)

Konovaluk, supra. See note 3, supra.

In the board’s analysis of Public Act 81-55 (codified as § 31-299b) it also noted, that the Act “would make the last employer/insurer on the risk initially liable for administering the claim. If subsequent litigation were to reveal that other employers and insurers were also accountable for some of the claimant’s injurious exposure, the last employer/insurer would be able to obtain reimbursement for those shares of the payments, plus interest.” Id. We think this principle is applicable to the instant matter. The appellant in this matter chose to pursue litigation to determine its portion of liability. The fact that the appellant abandoned litigation of its liability and ultimately reached an agreement as to its proportionate share does not foreclose the trial commissioner from entering an award of interest pursuant to the statute. We, therefore, fail to see the trial commissioner’s error in directing that the appellant pay interest pursuant to § 31-299b to the respondent appellee Guard.4

Additionally, the appellant argues that the trial commissioner should have also entered an award of interest against the other carrier on the risk, otherwise the 12% per annum interest award constitutes the levying of a fine. We think the legislative intent clearly as expressed in Konovaluk, supra, reflects that the award of interest is intended to compensate the last insurer on the risk for its outlay of funds and its administrative efforts in claims handling. Further, we cannot discern a basis which accords the appellant with the legal standing to raise that issue. Whether the trier failed to award Guard the 12% interest against American Union is an issue that could have been raised by Guard. Guard, for whatever reason did not.

The appellant also claims the trial commissioner erred in failing to grant its Motion To Correct. We note the trial commissioner did grant one of the corrections sought by the claimant.5 The remainder of the corrections sought by the appellant either do not compel a different outcome or are merely the findings which the appellant would have preferred the trial commissioner made. Therefore, the trial commissioner’s failure to grant all the corrections sought by the movant is not error. See D’Amico v. Dept of Correction, 73 Conn. App. 718, 728 (2002).

Finally, we consider the appellant’s claim that the trial commissioner erred in failing to grant its Motion for Articulation. As we have noted previously:

There is no question that a Motion for Articulation is a suitable remedy when the basis for the trial commissioner’s conclusions is unclear or the factual findings as written are perceived to be ambiguous. “An articulation is appropriate where the trial court’s decision contains some ambiguity or deficiency reasonably susceptible of clarification ....” Alliance Partners, Inc. v. Oxford Health Plans, Inc., 263 Conn. 191, 204 (2003), citing Miller v. Kirschner, 225 Conn. 185, 208 (1993).

Biehn v. Bridgeport, 5232 CRB-4-07-6 (September 11, 2008).

The appellant has not persuaded us that the trial commissioner abused his discretion in failing to grant its Motion for Articulation.

We therefore affirm the March 28, 2011 Findings and Orders of the Commissioner acting for the Sixth District.

Commissioners Scott A. Barton and Christine L. Engel concur.

1 We note that in documents submitted before the trial commissioner and this appellate body, AmGuard Insurance Co., is identified at various points as Guard Insurance, American Union is at various points referred to as REM and Republic-Franklin Insurance and Graphic Arts Mutual Insurance are referred to as “Utica”. BACK TO TEXT

2 Additionally, we note that in the appellant’s Motion to Correct, the second paragraph seeks a correction of the trial commissioner’s Finding, ¶ 4. The appellant’s correction requests that the word “stipulated” be stricken and replaced with “agreed,” all other aspects of Finding, ¶ 4 remain as uttered by the trial commissioner. The appellant asserts the amendment of Finding, ¶ 4, “is necessary to identify that all parties involved herein reached an agreement as to their respective proportionate shares, which was the basis upon which each prior respondent carrier agreed to reimburse AmGuard, the initially liable carrier.” Appellant’s Motion To Correct p. 2. BACK TO TEXT

3 Put another way the trial commissioner was free to reject the proportionate liability of the insurers and engage in his own fact finding. In fact in Konovaluk v. Graphite Die Mold, Inc., 4437 CRB-3-01-9 (August 8, 2002), the board noted that § 31-299b allowed;

a commissioner some leeway to account for anomalies that might arise in a case. Rather than specifically stating that prior employers or their insurers may be held liable only for their share of causal responsibility, it instructs the commissioner to determine, on the basis of the hearing record, “whether prior employers, or their insurers, are liable for a portion of such compensation and the extent of their liability.”

Query as to the depth of the expressions of consternation among parties who agree/stipulate to a material fact only to have a trial commissioner require the parties to adduce evidence supporting same. BACK TO TEXT

4 We suspect the gravamen of the appellant’s complaint is not so much an award of interest but the amount of interest. While we cannot be certain we wonder if the appellant would have been less motivated in taking this appeal if the interest rate set out in § 31-299b more closely resembled current rates of return. If that is the case then the actual remedy lies with the legislature. BACK TO TEXT

5 The trial commissioner granted ¶ 3 of the appellant’s Motion to Correct which amended ¶ 7 of the trier’s Finding. As corrected ¶ 7 of the March 28, 2011 Finding now states:

AmGuard acknowledges that after the conclusion of the three evidentiary hearings, but prior to the first deadline for briefs and proposed findings (October 29, 2010), Utica agreed to accept liability for compensation benefits paid in the underlying workers’ compensation claim equal to 66.67% and paid AmGuard $217,760.62 on November 24, 2010. BACK TO TEXT

Workers’ Compensation Commission

Page last revised: April 20, 2012

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