Dodd v. Middlesex Mut. Assur. Co.

Decision Date12 August 1997
Docket NumberNo. 15398,15398
Citation242 Conn. 375,698 A.2d 859
PartiesDarrell DODD v. MIDDLESEX MUTUAL ASSURANCE COMPANY.
CourtConnecticut Supreme Court

Louis N. George, Hartford, with whom were John S. Rubrich and, on the brief, David Garofoli, legal intern, for appellant (intervening plaintiff).

Jon Berk, Hartford, for appellee (defendant).

Before BORDEN, NORCOTT, KATZ, McDONALD and PETERS, JJ.

KATZ, Associate Justice.

At issue in this appeal is whether General Statutes (Rev. to 1993) § 31-293(a), 1 which authorizes employers who have made workers' compensation payments to employees injured by a third party to take action to recover those payments from that third party, entitles an employer to make such a claim against any recovery the employee may be due under the employee's own uninsured motorist provision of his or her automobile insurance policy. We conclude that any amounts an employee may receive from his or her uninsured motorist coverage are not within the reach of § 31-293(a), and, therefore, that the employer has no right to recovery from those funds.

The facts are undisputed. The plaintiff, Darrell Dodd, 2 was at all times pertinent to this case an employee of the appellant, Eddie's Evergreen Mobil Service (Evergreen). On December 12, 1993, Dodd was seriously injured when the car he was driving was struck by another car that was unregistered, uninsured and bore stolen license plates. Because at the time of the accident Dodd was acting within the course of his employment, Evergreen was obligated to pay, and did pay, workers' compensation to Dodd. General Statutes § 31-291 et seq. In order to recover for losses not covered by workers' compensation, Dodd initiated this action against the defendant, Middlesex Mutual Assurance Company, from whom he had purchased an automobile insurance policy that included uninsured motorist coverage.

On October 10, 1993, relying on § 31-293, Evergreen filed a motion to intervene in Dodd's action, along with an intervening complaint seeking reimbursement of workers' compensation paid to Dodd. The trial court, Holzberg, J., granted Evergreen's motion to intervene, whereupon the defendant, claiming that an employer has no right to reimbursement from uninsured motorist benefits, filed a motion to strike the intervening complaint for failure to state a cause of action. The defendant's motion was granted, and this appeal followed. 3

"The function of a motion to strike is to test the legal sufficiency of a pleading; it admits all facts well pleaded. See Practice Book § 152. The role of the trial court [is] to examine the [complaint], construed in favor of the plaintiffs, to determine whether the [pleading party has] stated a legally sufficient cause of action." Napoletano v. CIGNA Healthcare of Connecticut, Inc., 238 Conn. 216, 232-33, 680 A.2d 127 (1996). In this case, the issue is whether the facts as pleaded by Evergreen support a cause of action under § 31-293(a). Evergreen claims that § 31-293(a), which allows an employer seeking to recover workers' compensation payments made to an injured employee to institute an action or to intervene in an action arising from "circumstances creating in a third person other than the employer a legal liability to pay damages for the injury," applies to payments made pursuant to an uninsured motorist provision. Specifically, Evergreen asserts that because an insurance carrier, like the defendant, has agreed to pay its insured damages he or she would otherwise have received from an adequately insured tortfeasor, and because the insurance carrier may assert the same defenses as the tortfeasor, the defendant in this case has, in effect, stepped into the shoes of the tortfeasor and is therefore subject to the strictures of § 31-293(a). The defendant responds by arguing that the statute was enacted to protect employers from having to pay workers' compensation when an employee's injury was caused by a tortfeasor from whom damages may be recovered, and not to provide access to payments made to the employee under the employee's own uninsured motorist provision. The defendant argues that payments under such a provision are contractual benefits arising from a first party contract between an insurer and its insured, and "damages" are involved only to the extent that the insured's injuries, or damages, are the basis upon which the insurance benefits are calculated. We agree with the defendant that § 31-293(a) does not apply to uninsured motorist coverage.

When we set out to interpret the meaning of a statute, "[o]ur fundamental objective is to ascertain and give effect to the apparent intent of the legislature.... In seeking to discern that intent, we look to the words of the statute itself, to the legislative history and circumstances surrounding its enactment, to the legislative policy it was designed to implement, and to its relationship to existing legislation and common law principles governing the same general subject matter." (Internal quotation marks omitted.) Conway v. Wilton, 238 Conn. 653, 663, 680 A.2d 242 (1996). Furthermore "[w]hen a statute is in derogation of common law or creates a [right] where formerly none existed, it should receive a strict construction and is not to be extended, modified, repealed or enlarged in its scope by the mechanics of [statutory] construction.... In determining whether or not a statute abrogates or modifies a common law rule the construction must be strict, and the operation of a statute in derogation of the common law is to be limited to matters clearly brought within its scope." (Citation omitted; internal quotation marks omitted.) Lynn v. Haybuster Mfg., Inc., 226 Conn. 282, 289-90, 627 A.2d 1288 (1993).

We begin with the language of the statute. Section 31-293(a) allows an employer to take action against a "third person" who is legally liable to pay "damages" for an injury to an employee. Evergreen asserts that § 31-293(a) applies to the defendant because, as the plaintiff's uninsured motorist insurance carrier, the defendant is a "third person" who has a legal liability to pay "damages." In response, the defendant argues that it is not a third person as contemplated by the statute and that any payments made by it to the plaintiff are not damages, but simply the benefits of a first party contract between the plaintiff and the defendant for which the plaintiff has paid a premium. Both parties find support for their arguments in the language of the statute, the state insurance regulations and the uninsured motorist provision itself. 4 We conclude that although the definitional difference between "damages" and "benefits" may be relevant to an understanding of the parties' positions, the outcome of this case is determined not by definitions but by an examination of the purpose of workers' compensation, the policy reasons for allowing an employer, in certain circumstances, to recoup compensation payments, and the nature of an insurance policy.

Connecticut first adopted a statutory scheme of workers' compensation in 1913. 5 "The purpose of the Workers' Compensation Act [act]; General Statutes § 31-275 et seq.; is to provide compensation for injuries arising out of and in the course of employment, regardless of fault. Klapproth v. Turner, 156 Conn. 276, 279, 240 A.2d 886 (1968). Under the statute, the employee surrenders his right to bring a common law action against the employer, thereby limiting the employer's liability to the statutory amount. Jett v. Dunlap, 179 Conn. 215, 217, 425 A.2d 1263 (1979)." Lynn v. Haybuster Mfg., Inc., supra, 226 Conn. at 297, 627 A.2d 1288. In return, the employee is compensated for his or her losses without having to prove liability. 1 A. Larson & L. Larson, Workmen's Compensation (1997) § 1.10, pp. 1-1 through 1-2. " 'In a word, these statutes compromise an employee's right to a common law tort action for work related injuries in return for relatively quick and certain compensation.' Mingachos v. CBS, Inc., 196 Conn. 91, 97, 491 A.2d 368 (1985)." Lynn v. Haybuster Mfg., Inc., supra, at 297, 627 A.2d 1288.

Chapter 138, part B, § 6, of the 1913 Public Acts provided in relevant part: "When any injury for which compensation is payable under this act shall have been sustained under circumstances creating in some other person than the employer a legal liability to pay damages in respect thereto ... any employer having paid the compensation shall be subrogated to the rights of the injured employee to recover against that person...." That provision was subsequently amended, removing the reference to subrogation and substituting language allowing an employer either to intervene in an action brought by an employee or to bring its own direct action against a third party. See Public Acts 1917, c. 368, § 1. The language of the 1917 act is virtually identical to that of the current § 31-293(a), 6 the application of which is at issue in this case.

This statutory right of action, allowing a person other than the injured party to bring an action for an injury, did not exist at common law. "Under common law a cause of action for personal injuries cannot be assigned, and in the absence of a statutory provision to the contrary a right of action for personal injuries resulting from negligence is not assignable before judgment. 6 Am.Jur.2d 220, Assignments, § 37. The rule is succinctly stated in the Restatement, 2 Contracts § 547(1)(d): 'An assignment of a claim against a third person or a bargain to assign such a claim is illegal and ineffective if the claim is for ... (d) damages for an injury the gist of which is to the person rather than to property, unless the claim has been reduced to judgment.' The annotation, 'Assignability of claim for personal injury or death,' 40 A.L.R.2d 500, 502 § 3, has noted: 'It seems that few legal principles are as well settled, and as universally agreed upon, as the rule that the common law does not permit...

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