Colarusso v. Mills

• Decision Date: 18 March 1965
• Docket Number: Nos. 10432,10433,s. 10432
• Citation: 99 R.I. 409,208 A.2d 381
• Parties: John COLARUSSO v. Dorothy MILLS. Minnie D. COLARUSSO v. Dorothy MILLS. Ex.
• Court: Rhode Island Supreme Court

Page 381

208 A.2d 381

99 R.I. 409

John COLARUSSO v. Dorothy MILLS.

Minnie D. COLARUSSO v. Dorothy MILLS.

Ex. Nos. 10432, 10433.

Supreme Court of Rhode Island.

March 18, 1965.

Hector D. Laudati, Joseph G. Miller, Providence, for plaintiffs.

Francis V. Reynolds, Bernard W. Boyer, Providence, for defendant.

JOSLIN, Justice.

These are two actions of trespass on the case for negligence brought by a husband and wife. The wife seeks damages for personal injuries and the husband is suing for consequential damages. Since liability in both cases is dependent upon our decision in the wife's case we shall discuss only her case, but our decision will apply to both. The case is before us on the plaintiff's exception to the decision of the trial justice overruling her demurrer to the defendant's plea numbered I.

We shall refer to only such of the pleadings as are essential to the present inquiry. In her declaration plaintiff alleges that she received personal injuries as a result of the negligent operation by defendant of an automobile in which she was riding as a passenger.

The defendant pleaded specially alleging in substance that at the time of the accident plaintiff was acting in the scope of her employment by Dorothy Williams, Incorporated, a corporation and hereinafter referred to as 'the corporation'; that the vehicle being operated by defendant although registered to her husband, William Mills, was owned by the corporation; that both William and Dorothy Mills were officers, agents, servants and employees of the corporation; and that at the time of the accident Dorothy Mills was acting within the scope of her employment.

The plea further alleges that plaintiff and her employer, the corporation, were subject to the workmen's compensation act; that plaintiff, not having expressly reserved her common-law rights, had waived the same; and that, therefore, no right or remedy as to such injury accrued to plaintiff either at common law or otherwise.

The first question is whether plaintiff may maintain suit against defendant tort-feasor notwithstanding her prior recovery of workmen's compensation benefits for the same injury.

The controlling statute is G.L.1956, § 28-35-58, as amended, which other than for the proviso is in substantially the same form as when first enacted by P.L.1912, chap. 831, art. III, sec. 21. It reads as follows:

'Where the injury for which compensation is payable under chapters 29 to 38, inclusive, of this title, was caused under circumstances creating a legal liability in some person other than the employer to pay damages in respect thereof, the employee may take proceedings, both against that person to recover damages and against any person liable to pay compensation under said chapters for such compensation, but shall not be entitled to receive both damages and compensation; and if the employee has been paid compensation under said chapters, the person by whom the compensation was paid shall be entitled to indemnity from the person so liable to pay damages as aforesaid, and to the extent of such indemnity shall be subrogated to the rights of the employee to recover damages therefor; provided, however, that when money has been recovered either by judgment or by settlement by such employee from the person so liable to pay damages as aforesaid, by suit or settlement, and the employee is required to reimburse the person by whom the compensation was paid, the employee or his attorney shall be entitled to withhold from the amount to be reimbursed that proportion of the costs, witness expenses, and other out-of-pocket expenses and attorney fees which the amount which the employee is required to reimburse the person by whom compensation was paid bears to the amount recovered from the third party.'

Because the parties are in complete disagreement as to the nature and effect of our previous holdings on the question before us, we re-examine in detail our earlier decisions. In Mingo v. Rhode Island Co., 41 R.I. 423, 103 A. 965, the defendant pleaded specially in an action for negligence that Mingo had entered into an agreement with his employer under the compensation act and had received payments pursuant thereto. To Mingo's replication that he had contracted to reimburse his employer for the benefits received under the agreement between them out of any recovery in the pending suit, the defendant demurred and in reliance on the precursor to § 28-35-58 claimed that Mingo's agreement with his employer for compensation benefits constituted an election of remedies which barred his suit for damages. The trial justice sustained the demurrer and the case came to this court on Mingo's exception to that ruling.

This court, with two justices dissenting, reversed on the ground that the receipt of compensation benefits does not bar a suit by an employee against a wrongdoer if the payments have been received under a bona fide agreement that they are to be returned upon recovery of damages from the wrongdoer.

The rationale of the majority was that the statutory prohibition against recovery of both damages and compensation did not bar an adjudication of the claims against both the employer and the wrongdoer. Under the statute, the court said at page 432, 103 A. at page 968: 'The employer is given the right of indemnity against the negligent third person with the intention that the final payment for the damage suffered by the employe shall be made not by the employer but by the negligent third person who is responsible for the injury.' The court refused to impute to the legislature an intention that a wrongdoer should be allowed to escape full responsibility for the consequences of his actions because of the coincidence of a prior recovery of compensation benefits. The employer's right of indemnity against the third person was conferred, the court held, with the intention that ultimate liability should fall on the person responsible for the injury. The effect of the reimbursement agreement, the court reasoned, was to accomplish the statutory purpose by aiding the employer to secure that right of indemnity.

The view of the minority was that the statute did not contemplate two suits and in their judgment the statute required that the injured party elect between compensation and damages. His acceptance of compensation benefits, they said, barred his suit for damages.

Mingo, after his victory on the pleadings, proceeded to trial on the merits and the case was submitted to the jury with the following instruction: 'If you are satisfied that there was such an agreement you should find for the plaintiff. If you find there was no such agreement, or if your minds are fairly in doubt upon that point, then you should return your verdict for the defendant.' The jury found specially in the affirmative as to the existence of the reimbursement agreement and its general verdict was for Mingo.

In denying the wrongdoer's motion for a new trial, the trial justice in a written rescript, 2 Rescripts Superior Court 356, referring to the first Mingo case, said at page 357: 'The Supreme Court has sustained the right of the plaintiff to maintain the action if the agreement can be established,' and continued: '* * * the jury was warranted in finding that a bona fide agreement, such as is contemplated in the decision of the Supreme Court, was made. This action can therefore be maintained.'

The wrongdoer then prosecuted its exception to this court, Mingo v. Rhode Island Co., 42 R.I. 543, 109 A. 81. The defendant's briefed contention was that the first Mingo case should be overruled and that a reimbursement agreement should not remove the bar which otherwise would prohibit suit against a wrongdoer by an injured party who had received compensation benefits. The court refused to consider that contention because it had not properly been brought upon the record and the defendant's exceptions were overruled.

The holding of the first Mingo case is that a prior recovery under the compensation act does not bar a subsequent suit against the wrongdoer provided that the injured worker has agreed to reimburse...