F.H. Buffington Co. v. Hanrahan

• Decision Date: 26 March 1993
• Docket Number: No. 92-8-M,92-8-M
• Citation: 622 A.2d 470
• Parties: F.H. BUFFINGTON COMPANY et al. v. Michael J. HANRAHAN, in his capacity as Administrator of the Second Injury Indemnity Fund. P.
• Court: Rhode Island Supreme Court

Page 470

622 A.2d 470

F.H. BUFFINGTON COMPANY et al. v. Michael J. HANRAHAN, in his capacity as Administrator of the Second Injury Indemnity Fund.

No. 92-8-M.P.

Supreme Court of Rhode Island.

March 26, 1993.

Dennis Gannon, Thomas Bruzzese, Warwick, George Furtado, East Providence, for plaintiff.

Judith Scott, and Sharon O'Keefe, Division of Workers Compensation, Providence, for defendant.

OPINION

FAY, Chief Justice.

This case comes before us on the petition for writ of certiorari of Michael J. Hanrahan, in his capacity as the administrator of the Second Injury Indemnity Fund (administrator). The administrator asks us to review the decree of the Workers' Compensation Appellate Division (appellate division) granting reimbursement to F.H. Buffington Company (Buffington) through its insurer, American Universal Insurance Company, from the Second Injury Indemnity Fund for workers' compensation payments made to Daniel Ouellette (Ouellette). We affirm the decree.

The relevant facts are as follows. On September 27, 1983, Ouellette sustained an injury to his back while he was employed at Foxon Packaging Corporation. According to a memorandum of agreement entered into on March 19, 1984, his injury was diagnosed as "acute lumbosacral myofascitis and radiculitis." After his first injury, for which he was paid compensation benefits, Ouellette returned to work in 1984 at several other factories. At the later places of employment he did not experience any back problems.

On April 24, 1986, Ouellette began working at Buffington. Ouellette testified that he informed Buffington about his prior injury the day he was hired. His initial injury and disability was not revealed on the employment application that he had submitted to Buffington.

On November 12, 1986, Ouellette was injured while employed at Buffington. On that day he was treated at the emergency room of Memorial Hospital. During his treatment Ouellette revealed a history of back problems. In a memorandum of agreement the Department of Workers' Compensation characterized Ouellette's injury as "severe low back strain." Under the terms of the agreement Ouellette received compensation for total incapacity.

Buffington directed a request for reimbursement from the Second Injury Indemnity Fund established by G.L.1956 (1986 Reenactment) § 28-37-1, to the director of the Department of Workers' Compensation. On July 29, 1988, the request was denied because there was no relationship between the pre-existing condition and the new injury. Additionally the director opined that the employee's disability was not serious enough to constitute a hindrance or an obstacle to obtaining employment.

Buffington, through American Universal, filed an employer's petition with the trial court, seeking reimbursement from the Second Injury Indemnity Fund. A hearing before the trial judge commenced on December 15, 1988. After the presentation of testimony the trial judge denied Buffington's petition for reimbursement. The trial judge found that Buffington knew of the previous injury. However, he held that the nature of Ouellette's injury failed to satisfy the pre-existing disability requirement set forth in § 28-37-4(e). He ruled that the purpose of the statute is to encourage employment of disabled employees. The trial judge concluded that at the time of his employment with Buffington, Ouellette was not suffering a disability or loss of earning capacity. In addition Buffington failed to demonstrate that Ouellette's prior injury constituted a hindrance or an obstacle to employment.

On appeal Buffington argued that the trial judge misconstrued the meaning of pre-existing disability. The appellate division agreed with Buffington and reversed the decree of the trial judge. It found that the trial judge's holding was based on an impermissibly restrictive reading of § 28-37-4, subsections (d) and (e). The appellate division held that the trial judge's interpretation of pre-existing disability would limit the statute's protection to prospective employees who were completely disabled when they applied for work. The appellate division concluded that the Legislature intended to equip the fund with a broader remedial mission. It opined that the statute was premised on returning previously injured workers to the workplace to reduce compensation costs, which action in turn would reduce the expenses borne by all employers from the workers' compensation system. Therefore, the appellate division ruled that "the mere fact that an employee has sustained a prior compensable injury and has been the recipient of compensation benefits * * * places upon him a stigma that per se ' * * * constitute(s) a hindrance or obstacle to obtaining employment.' " We agree with the appellate division's analysis.

The sole issue presented in this matter is whether Ouellette had a pre-existing disability that would entitle Buffington to relief under § 28-37-4. The specific statutory provisions before us read:

"(d) In order to qualify under this section for reimbursement from the special fund, the employer must establish by written records that it had knowledge of the preexisting disability at the time that the employee was hired, or if that knowledge was acquired thereafter, that the employee was retained in employment after the employer acquired that knowledge; Provided, however, That if the employee fails to disclose a prior injury for which compensation was paid, the employer shall qualify for reimbursement under this section.

"(e) As used in this section, preexisting disability means any disability, due to work-related injury or disease, of such seriousness as to constitute a hindrance or obstacle to obtaining employment or to obtaining reemployment if the employee should become unemployed." Section 28-37-4.

The administrator asserts that the appellate division erred in its broad construction of the provisions of the Second Injury Indemnity Fund. This court is responsible for determining the Legislature's intent on questions of statutory construction. In the Matter of Almeida, 611 A.2d 1375, 1382 (R.I.1992). Our analysis begins with the wording of the statute. In construing statutory language, we have it as our duty to effectuate what the Legislature intended and give it a meaning consistent with its policies or obvious purposes. Gryguc v. Bendick, 510 A.2d 937, 939 (R.I.1986).

The Second Injury Indemnity Fund was created in the nature of a trust fund. Gilbane Co. v. Poulas, 576 A.2d 1195, 1196 (R.I.1990). Both statutory and decisional law mandate the liberal construction of its provisions. Id.; § 28-37-4(a). The policy underlying the fund promotes...