Short v. Connecticut Bank & Trust

The claimant was represented by Christopher T. Goulden, Esq., Mihaly & Kascak, 925 White Plains Road, Trumbull, CT 06611.

The respondents were represented by Nancy Berdon, Esq., Sizemore Law Offices, Crossroads Corporate Park, 6 Devine Street, First Floor, North Haven, CT 06473.

This Petition for Review from the May 8, 1998 Finding and Award of the Commissioner acting for the Fourth District was heard November 6, 1998 before a Compensation Review Board panel consisting of the Commission Chairman Jesse M. Frankl and Commissioners Donald H. Doyle, Jr., and Michael S. Miles.

OPINION

JESSE M. FRANKL, CHAIRMAN. The claimant has petitioned for review from the May 8, 1998 Finding and Award of the Commissioner acting for the Fourth District. She argues on appeal that the trial commissioner erred by ruling that the respondents were entitled to a credit for proceeds she recovered in her settlement of a third-party action, despite certain language in a release that suggests otherwise. We disagree with the claimant’s position, and affirm the trial commissioner’s decision.

The claimant suffered a compensable injury on April 29, 1991. The respondents paid her workers’ compensation benefits totaling $67,396.55. See December 16, 1997 Stipulation of Facts. The claimant then filed a third-party action against an alleged tortfeasor, in which action the respondents intervened as a third-party plaintiff. The case was settled for $40,000 by agreement of all parties. The respondent insurer accepted $13,333.33 in satisfaction of its lien, and a release was signed; meanwhile, the claimant netted $12,007.44 from the settlement proceeds.

As the text of the release is fairly brief, we shall reprint it here in its entirety:

See Exhibit A. The claimant and the respondents disagreed whether the release waived the respondents’ right to a moratorium on future compensation benefits up to the value of the claimant’s § 31-293 net proceeds. The respondents denied waiving their credit, while the claimant cited an “inartfully-drafted paragraph contained in the Superior Court release” to support her legal position. Findings, ¶ 7. It is noteworthy that the claimant was not a party to this release.

The trial commissioner noted that a “standard (generic) release and withdrawal” running only to the third-party defendants would have negated the claimant’s position. He found no evidence that the respondents contemplated a full release of the credit during negotiations, and observed that either party could have refused to accept the Superior Court pre-trial result in favor of going forward with the third party action. The trier held that the release only ran to the defendants in the Superior Court action, and described the “inartfully-worded” language as a mere attempt to identify to whom and for what purpose the respondents paid such sums. After reviewing the release and the parties’ Stipulation of Facts, the trier held that the Respondents had not released their moratorium based upon the $12,007.44 value of the claimant’s net settlement proceeds. He awarded the respondents a credit in that amount, and the claimant appealed his decision to this board.

Section 31-293 C.G.S. allows an injured employee to proceed at law against a third party when her compensable injury was sustained under circumstances that make the third party legally liable to pay damages. The statute also allows the employer to join in that action as a party plaintiff, and if “any damages are recovered, the damages shall be so apportioned that the claim of the employer . . . shall take precedence over that of the injured employee in the proceeds of the recovery . . . . If the damages . . . are more than sufficient to reimburse the employer, damages shall be assessed in his favor in a sum sufficient to reimburse him for his claim, and the excess shall be assessed in favor of the injured employee.” The employer’s “claim” is defined as “(1) the amount of any compensation which he has paid on account of the injury which is the subject of the suit and (2) an amount equal to the present worth of any probable future payments which he has by award become obligated to pay on account of the injury.”

Caselaw provides that an employer may construe the excess proceeds received by a claimant in a third party action as a credit against both known and unknown future workers’ compensation benefits to which the claimant is later entitled. Enquist v. General Datacom, 218 Conn. 19 (1991); Longo v. Liebovitz, 3464 CRB-3-96-11 (Jan. 15, 1998). This board has held as such even where the claimant has received a settlement for less than the amount of the employer’s outstanding lien. Schiano v. Bliss Exterminating, 13 Conn. Workers’ Comp. Rev. Op. 45, 47, 1852 CRB-4-93-9 (Dec. 7, 1994). Despite the arguments offered by the claimant in her brief, the issue in this case is not whether an offset is generally awarded in the instant situation. Under § 31-293 and related cases, it is. Instead, the issue is whether the release executed by the respondents waived their right under § 31-293 to seek such reimbursement beyond the $13,333.33 specified in that document.

After reviewing the parties’ stipulation of facts and the language of the release, the trier concluded that the respondents had not released their claim for a credit. There is nothing unreasonable or arbitrary about this reasoning. Although the “inartfully drafted” provision of the release, taken alone, could be read to waive the respondents’ claim, the release as a whole was not directed at the claimant, and can just as reasonably be read to implicate only the respondents’ claim against the defendants in the lawsuit. Several considerations support this analysis.

First, the release does not mention the claimant’s recovery against the defendants, and was not signed by the claimant. It merely discharges the respondents’ claim against the defendants arising out of their payment of workers’ compensation benefits to the claimant for her compensable hip injury. The fact that the respondents agreed to accept less than the full amount of their existing lien from the third-party defendants does not automatically translate into a waiver of all ancillary rights under § 31-293, such as the right to take credit for the claimant’s recovery should she claim future workers’ compensation benefits for her injury. See Schiano, supra.

Second, the policies underlying § 31-293 that were discussed in Enquist, supra, 26, and in Libby v. Goodwin Pontiac-GMC Truck, Inc., 241 Conn. 170, 174 (1997), favor the construction of the release that most closely adheres to the purpose of the statute, and prevents the claimant from receiving a “double recovery” for her injuries. Although the respondents did draft the release, it was not drafted for the claimant’s signature or acceptance, and its relinquishment of rights was not intended to run to her benefit. Instead, it was one part of the total settlement agreement. We are aware of no compelling reasons why the presence of an ambiguous, or “inartfully drafted,” sentence in that release should be held to grant the claimant a bit of a windfall to which she would not have been entitled absent that arguably overbroad language.

Third, and not insignificantly, the trial commissioner has already made a determination as to the facts. He has found that the claimant presented no evidence that the respondents ever contemplated relinquishing their entire claim for a credit. He observed that all of the parties participated in the civil action and, after pre-trial, amicably agreed to settle the third-party liability claim in a manner that benefited both parties. Findings, ¶ 6. This circumstance would not necessarily preclude the respondents from seeking an offset if the claimant later sought to receive further workers’ compensation benefits for her injury. Though much of the trier’s decision was based on inferences that he drew from a set of stipulated facts and the text of the release, he also heard the arguments presented by counsel, and afforded the parties the opportunity to introduce evidence in support of their claims. Some deference to his assessment of the facts is thus warranted. See Funaioli v. New London, 52 Conn. App. 194, 198 (1999)(CRB erred by rejecting inferences that trial commissioner drew from cover letter sent by claimant’s attorney regarding request for hearing). As the trier’s conclusion is not without support in the record, it would be inappropriate for this board to reverse that decision by drawing its own inferences in place of those drawn by the commissioner.

The trial commissioner’s decision is hereby affirmed.

Commissioners Donald H. Doyle, Jr. concurs.

MICHAEL S. MILES, COMMISSIONER, DISSENTING. In my opinion, the $13,333.33 amount received by the respondents from the third-party defendants operates as a settlement of the entire $67,396.55 lien against the claimant’s future workers’ compensation benefits, and the trial commissioner erred by ruling otherwise. The respondents drafted the settlement, and could have easily included language making it clear that they intended to retain the right to offset future workers’ compensation benefits against the $12,007.44 received from the respondents by the claimant. They failed to do this, however, and have consequently waived their right to deduct the claimant’s recovery from any further workers’ compensation benefits that may be due her. I find no ambiguity in the language of the release: the respondents explicitly relinquished any rights they had to recover workers’ compensation benefits paid to the claimant in connection with her April 29, 1991 compensable injury. Accordingly, I dissent.