Farris v. Bryant Grinder Corp., No. 03-516.

• Docket Nº: No. 03-516.
• Citation: 869 A.2d 131
• Case Date: January 14, 2005
• Court: United States State Supreme Court of Vermont

869 A.2d 131

Charles FARRIS
v.
BRYANT GRINDER CORPORATION/WAUSAU INSURANCE COMPANY
v.
Bryant Grinder Corporation/AIG Insurance Company

No. 03-516.

Supreme Court of Vermont.

January 14, 2005.

869 A.2d 132

Joshua L. Simonds of Mertz, Talbott & Simonds, P.L.C., Burlington, for Defendant-Appellant

John W. Valente and John A. Serafino of Ryan Smith & Carbine, Ltd., Rutland, for Defendant-Appellee.

Present: DOOLEY, JOHNSON, SKOGLUND and REIBER, JJ., and ALLEN, C.J. (Ret.), Specially Assigned.

DOOLEY, J.

¶ 1. This appeal involves a dispute between two insurance companies as to which one should pay workers' compensation benefits for an injury to Bryant Grinder Corporation (Bryant Grinder) employee Charles Farris. Appellant, Wausau Insurance Company (Wausau), appeals a superior court jury determination that Farris suffered a recurrence of a previous injury and therefore that it was liable instead of AIG Insurance Company (AIG), successor to Wausau and insurer at the time of Farris's later injury. On appeal, Wausau argues that the superior court erred by failing to: (1) allocate a burden of proof to one of the parties; (2) reformulate the certified question into five separate interrogatories; and (3) provide a specific jury instruction on the last injurious exposure rule. We find that although failure to allocate a burden of proof was error, it was harmless, and the jury instructions were otherwise within the court's discretion. We affirm.

¶ 2. Charles Farris began working for Bryant Grinder in July 1973, a year after he first had surgery on his right knee in May 1972. He again injured his right knee in April 1991 when he slipped on

869 A.2d 133

some oil at work. Farris received medical treatment for this injury, including surgery, and was out of work for fifteen months. He received workers' compensation benefits from Wausau, which insured Bryant Grinder from May 1989 to May 1992. Farris returned to work, and the condition of the knee deteriorated to the point where he again had surgery in 1993. Although after nine months Farris returned to work for Bryant Grinder, the condition of his knee continued to worsen until he had another operation in December 1996. He did not return to work after this operation

¶ 3. Bryant Grinder had three different insurance carriers during the period between the end of the Wausau coverage in 1992 and Farris's 1996 surgery. Only the last carrier, AIG, is involved in this action. It began to insure Bryant Grinder in May 1995. Despite the new carriers, Wausau continued to pay Farris workers' compensation benefits through the 1996 surgery and thereafter. In January 1998, it received an opinion from an orthopedic doctor that Farris's "degenerative arthritis of the right knee is aggravated and probably accelerated by his type of work which places excess stress across the knee through the work day." Based on that opinion, Wausau filed a "Notice of Intention to Discontinue Payments" pursuant to 21 V.S.A. § 643a, on the ground that Farris's current condition "should be current carrier's responsibility." This led to a proceeding before the Commissioner of Labor and Industry to determine whether Wausau or AIG was responsible for payments to Farris.¹

¶ 4. Generally, when two employers or insurers dispute liability for a workers' compensation claim arising out of successive injuries, the liability remains with the first insurer or employer if the second injury is a recurrence of the first. Pacher v. Fairdale Farms, 166 Vt. 626, 627, 699 A.2d 43, 46 (1997) (mem.). "If, however, the second incident aggravated, accelerated, or combined with a preexisting impairment or injury to produce a disability greater than would have resulted from the second injury alone, the second incident is an `aggravation,' and the second employer becomes solely responsible for the entire disability at that point." Id. at 627-28, 699 A.2d at 46. In September 2000, the Commissioner concluded that Farris's injury was an aggravation and, therefore, that AIG was responsible for the benefits related to the 1996 injury and should reimburse Wausau. AIG appealed the decision to superior court pursuant to 21 V.S.A. § 670² and requested a trial by jury. The Commissioner's certified question was: "Did the claimant suffer an aggravation or a recurrence of his pre-existing osteoarthritis after AIG began to insure Bryant Grinder." The jury found that the injury was a recurrence, leaving Wausau responsible.

869 A.2d 134

¶ 5. Wausau first argues that the superior court erred in not allocating a burden of proof between the parties. Before trial, the court discussed with the attorneys what burden of proof should be applied. AIG argued that since Wausau was attempting to relieve itself of the obligation to pay, it bore the burden of proof. AIG also advanced a theory that both parties were trying to relieve themselves of liability, and that neither bore the burden of proof. Wausau argued that AIG had the burden because the Commissioner had ordered AIG to reimburse Wausau and AIG was attempting to relieve itself of this responsibility. The court instructed that it would not allocate a burden of proof to either party, finding that "the cross burdens cancel each other out." Instead the jury instructions charged the jurors to "consider which party has made a case that is stronger than the other party's case."

¶ 6. On appeal, Wausau argues that 21 V.S.A. § 662(c) controls and allocates the burden of proof to AIG. We agree with Wausau that the statute is determinative of the burden of proof in this case.

¶ 7. Section 662(c) provides in pertinent part:

Whenever payment of a compensable claim is refused, on the basis that another employer or insurer is liable, the commissioner, after notice to interested parties and a review of the claim, but in no event

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