Walton v. Hector Trucking

The claimant was represented by Carlos M. Santos, Esq., Polinsky & Santos, 890 West Boulevard, Hartford, CT 06105-4139.

The Second Injury Fund was represented by Michael J. Belzer, Esq., Assistant Attorney General, 55 Elm St., P.O. Box 120, Hartford, CT 06141-0120.

This Petition for Review from the August 26, 1993 Finding and Award of the Commissioner acting for the First District was heard December 2, 1994 before a Compensation Review Board panel consisting of Commissioners Angelo L. dos Santos, Nancy A. Brouillet and Michael S. Miles.

OPINION

ANGELO L. dos SANTOS, COMMISSIONER. The Second Injury Fund has petitioned for review from the First District Commissioner’s Finding and Award dated August 26, 1993, and a subsequent Order to Pay Finding and Award dated November 16, 1993. The Fund claims on appeal 1) that the trial commissioner improperly failed to make a finding regarding the status of the employer’s lessee as a general contractor pursuant to § 31-291 C.G.S., and 2) that the discharge of the uninsured employer in bankruptcy subsequent to the filing of the claimant’s workers’ compensation claim has rendered the commissioner’s award against the employer a legal nullity with respect to § 31-355. We reverse the trial commissioner and remand the case to him for further findings.

The commissioner found that the claimant suffered a compensable injury while driving a truck for Hector Trucking on February 25, 1991. At the time of the injury, the truck had been leased by the employer to Pastorah Virgo pursuant to an oral contract. The commissioner awarded 8.75 weeks of permanent partial disability to the claimant along with medical expenses, and ordered that the award be paid by Hector Taylor. No finding regarding Pastorah Virgo’s status as a general contractor was made. The subsequent bankruptcy of the uninsured employer has resulted in the commissioner’s entry of an order to pay against the Second Injury Fund, who argues that a further hearing should be held regarding the potential liability of Pastorah Virgo under § 31-291.1

The only finding made by the commissioner on the subject of Pastorah Virgo was that Virgo leased the truck driven by the claimant from Hector Trucking on the date of the claimant 2’s injury. No other discussion of Virgo’s potential status as a general contractor was made. We think that sufficient evidence existed to require the commissioner to make findings and draw a legal conclusion as to the applicability of § 31-291, as it is at least conceivable that its conditions may have been satisfied. See Kasowitz v. Mutual Construction Co., 154 Conn. 607, 611 (1967); Altieri v. B.K.S. Excavating, Inc., 10 Conn. Workers’ Comp. Rev. Op. 83, 84, 1146 CRD-3-90-12 (April 10, 1992). The fact that Hector Trucking was found to be an employer of the claimant did not automatically eliminate the potential liability of Pastorah Virgo, as § 31-291 is, in essence, the “workers’ compensation analogue to the joint tortfeasor concept in the common law of torts.” Id. Thus, further findings on that issue will be necessary.

We next consider the Fund’s argument regarding the effect of the claimant’s discharge in bankruptcy on the Fund’s liability under § 31-355. On June 13, 1991, subsequent to the date of the claimant’s injury, Hector G. Taylor, and his wife, Doris M. Taylor, filed a joint Chapter 7 voluntary petition in the United States Bankruptcy Court for the District of Connecticut. The relief requested in the petition was granted, and an order was entered on November 8, 1991 by Judge Krechevsky discharging the Taylors from all of their dischargeable debts. The Fund argues that the Taylors’ Chapter 7 discharge renders the subsequent workers’ compensation award against Hector Taylor null and void pursuant to 11 U.S.C. § 524,2 and thereby precludes any § 31-355 claim against the Fund deriving from that judgment.

The discharge order in the record states that the Taylors were released from their dischargeable debts, and that any judgment “heretofore or hereafter obtained in any court other than this court is null and void as a determination of the personal liability of the debtor with respect to any of the following: (a) debts dischargeable under 11 U.S.C. § 523; (b) unless heretofore or hereafter determined by order of this court to be nondischargeable, debts alleged to be excepted from discharge under clauses (2), (4) and (6) of 11 U.S.C. Section 523 (a) . . . .” What is not clear from the record, however, is whether liability for the claimant’s benefits was in fact encompassed by this order.

Nothing in the bankruptcy court’s order specifically includes or excludes the claimant’s claim from discharge, and there is no copy of the list of creditors required by 11 U.S.C. § 521 (1). We are thus unable to determine whether the claim at issue here satisfied § 523 (a) (3), which prohibits the discharge of debts “neither listed nor scheduled under Section 521 (1) of this title, with the name, if known to the debtor, of the creditor to whom such debt is owed, in time to permit . . . timely filing of a proof of claim and timely request for a determination of dischargeability of such debt [the latter if applicable], unless such creditor had actual knowledge of the case in time for such timely filing and request.” See In re Gray, 57 B.R. 927 (Bankr. D. R. I. 1986), affirmed, 60 B.R. 428 (D. R. I. 1986) (failure to schedule creditor ordinarily results in debtor being excepted from discharge); In re Saturday, 138 B.R. 132 (Bankr. S. D. Ga. 1991) (debtor/sole proprietor of moving business acted willfully in failing to carry required workers’ compensation insurance thus rendering debt nondischargeable under § 523 (a) (6)); but see In re Frias, 153 B.R. 9 (Bankr. D. R. I. 1993) (negligent default to provide workers’ compensation insurance not willful within meaning of discharge exception). There is simply not enough information in the record for us to determine whether liability for the claimant’s claim actually was discharged by the bankruptcy court.

Furthermore, the order to pay benefits was entered against Hector Taylor by the commissioner, although the caption on the award lists Hector Trucking as the employer. Some clarification as to the exact nature of the relationship between the individual debtor and the employer should be made by the commissioner upon remand, as the presence of a separate legal entity could make a difference in our evaluation of the current legal status of the claim at issue in this case. See In re Kolinsky, 100 B.R. 695 (Bankr. S. D. N. Y. 1989) (debtor’s ownership of corporation stock is property of bankruptcy estate, but assets of non-debtor corporation are off limits); In re Loughnane, 28 B.R. 940 (Bankr. D. Col. 1983) (assets of sole proprietorship are property of debtor’s bankruptcy estate). Only with a complete understanding of the scope of the Chapter 7 bankruptcy discharge would this Board be willing or able to undertake a meaningful evaluation of the § 31-355 issue raised by the Fund. We thus decline to consider the issue any further at this time.

Meanwhile, we note that as of the date of oral argument, no benefits had been paid to the claimant, despite the presence of the commissioner’s November 16, 1993 order requiring the Fund to pay the award pursuant to § 31-301 (f) and § 31-355 on behalf of the delinquent employer. It is neither equitable nor consistent with the humanitarian spirit of the Workers’ Compensation Act for a claimant who has proceeded and been awarded benefits under the Connecticut workers’ compensation system to remain uncompensated for over a year while those liable for payment challenge the commissioner’s ruling on appeal. When an order for payment is made, we expect it to be honored. A refund can always be obtained later if it turns out that the commissioner’s order for payment was improper.

We reverse the award of the trial commissioner and remand the case to him for further findings in accordance with this opinion. We also direct the commissioner to consider whether attorney’s fees and interest should be awarded against the Second Injury Fund for their unconscionable failure to pay the claimant as per the commissioner’s order.

Commissioners Nancy A. Brouillet and Michael S. Miles concur.

1 Section 31-291. Principal employer, contractor, and subcontractor. “When any principal employer procures any work to be done wholly or in part for him by a contractor, or through him by a subcontractor, and the work so procured to be done is a part or process in the trade or business of such principal employer, and is performed in, on or about premises under his control, such principal employer shall be liable to pay all compensation under this chapter to the same extent as if the work were done without the intervention of such contractor or subcontractor. . . .” BACK TO TEXT

2 11 U.S.C. § 524 provides in relevant part: “(a) A discharge in a case under this title (1) voids any judgment at any time obtained, to the extent that such judgment is a determination of the personal liability of the debtor with respect to any debt discharged under section 727 . . . of this title, whether or not discharge of such debt is waived; [and] (2) operates as an injunction against the commencement or continuation of an action, the employment of process, or an act, to collect, recover or offset any such debt as a personal liability of the debtor, whether or not discharge of such debt is waived . . . .” BACK TO TEXT