Ferraro v. Ridgefield European Motors, Inc.

• Decision Date: 23 September 2014
• Docket Number: No. 19043.,19043.
• Citation: 313 Conn. 735,99 A.3d 1114
• Parties: Michael FERRARO v. RIDGEFIELD EUROPEAN MOTORS, INC., et al.
• Court: Connecticut Supreme Court

313 Conn. 735

99 A.3d 1114

Michael FERRARO

v.RIDGEFIELD EUROPEAN MOTORS, INC., et al.

No. 19043.

Supreme Court of Connecticut.

Argued Feb. 24, 2014.

Decided Sept. 23, 2014.

Elycia Solimene, with whom, on the brief, was Sharon R. McLoughlin, Middletown, for the appellants (named defendant et al.).

Lucas D. Strunk, Glastonbury, for the appellees (defendant AmGuard Insurance Company et al.).

Jason K. Matthews, Cheshire, for the appellees (defendant American Alternative Insurance Company et al.).

ROGERS, C.J., and PALMER, ZARELLA, EVELEIGH, McDONALD, ESPINOSA and ROBINSON, Js.

Opinion

ESPINOSA, J.

The issue we must resolve in this workers' compensation case is whether, pursuant to General Statutes § 31–299b,¹ interest can be assessed against a prior insurance company if such insurer agrees to its apportionment liability after formal proceedings have concluded, but before the Workers' Compensation Commissioner (commissioner) issues his findings and order. In the underlying workers' compensation case, the plaintiff, Michael Ferraro (claimant), sought compensation for hand, arm, and neck injuries that he sustained while employed with the defendant Ridgefield European Motors, Inc. (Ridgefield). The insurer for Ridgefield at the time the claimant filed his claim, the defendant AmGuard Insurance Company (AmGuard), entered into a voluntary agreement on the claim, and subsequently sought apportionment against Ridgefield's prior insurers, the defendant Republic–Franklin Insurance Company (Republic–Franklin) and the defendant American Alternative Insurance Company (American Alternative). American Alternative settled its apportionment claim prior to the commencement of formal proceedings before the Workers' Compensation Commission (commission), but Republic–Franklin did not agree to its apportionment liability until just before the close of evidence, after the third formal hearing. Thereafter, the commissioner issued his findings and orders, over the objection of Republic–Franklin, and ordered Republic–Franklin to pay interest pursuant to § 31–299b. Republic–Franklin appealed to the Workers' Compensation Review Board (board), which affirmed the finding of the commissioner. Republic–Franklin appealed,² arguing that interest should not have been assessed against it because: (1) the statutory requirements for ordering interest were not met; and (2) even if the statutory requirements were met, the interest order was not valid because it was not issued within a reasonable period of time after the issuance of the compensation award. We conclude that the plain and unambiguous language of § 31–299b permits an award of interest against a prior insurer if the apportionment claim has been submitted to a commissioner after the conclusion of formal hearings. We also conclude that Republic–Franklin failed to preserve its claim that the commissioner improperly awarded interest because the findings and orders were not issued within a reasonable period of time after the issuance of the compensation award. Accordingly, we affirm the decision of the board.

The record reveals the following undisputed facts and relevant procedural history. The claimant was employed by Ridgefield as a “heavy hit” motor vehicle mechanic from 1998 until 2003.³ In November, 2001, he began experiencing tingling and numbness in his hands and arms. His primary care physician suspected carpal tunnel syndrome

, and after a subsequent evaluation and further diagnostic studies, another physician recommended that he undergo carpal tunnel decompression. The claimant consequently filed a workers' compensation claim alleging carpal tunnel syndrome caused by repetitive and cumulative trauma, with a date of injury of November 1, 2001 (carpal tunnel claim).

In early 2002, the claimant was referred to Alan S. Waitze, a neurosurgeon. After an initial consultation during which the claimant primarily complained of neck pain, arm pain and bilateral hand pain, and during which an MRI scan of the claimant was performed, Waitze informed the claimant that the MRI had revealed spinal stenosis⁴

with resultant spinal compressions, and opined that his spinal problems were likely responsible for his arm and hand problems as well as his carpal tunnel syndrome. Accordingly, Waitze recommended that the claimant undergo a cervical discectomy, decompression and fusion, and that if the claimant continued to experience symptoms in his hands after the surgery, he should address the carpal tunnel syndrome. Following his evaluation by Waitze, the claimant filed a second workers' compensation claim, with an injury date of June 26, 2002, alleging injury to multiple body parts due to repetitive strain (cervical spine claim). The claimant and AmGuard entered into a voluntary agreement on the cervical spine and carpal tunnel claims, which was approved in June, 2004 (voluntary agreement).

AmGuard requested a formal hearing on its apportionment claim against Republic–Franklin and American Alternative for the cervical spine claim in August, 2009. Instead, a preformal hearing was held in September, 2009, during which AmGuard, Republic–Franklin and American Alternative agreed to proceed on the apportionment of the cervical spine claim. Following the pre-formal hearing, in a letter to AmGuard, dated September 25, 2009, American Alternative agreed to accept its apportionment share of 26.67 percent, based on its coverage dates.

The first formal hearing took place on November 16, 2009. At the start of the hearing, American Alternative stated on the record that it already had accepted its apportionment share of 26.67 percent, pending the outcome of the formal hearings, and that the agreement was without prejudice and could change. AmGuard relayed to the commissioner a stipulation regarding the coverage dates for the three insurers and then offered a number of exhibits with respect to the cervical spine claim. At the conclusion of the hearing, Republic–Franklin asked that both the carpal tunnel

and cervical spine claims be heard, in the interest of judicial economy. AmGuard observed that although at the preformal hearing the parties had agreed to proceed solely on the cervical spine claim, it did not object to including the carpal tunnel claim since the commissioner had opened both claims at the start of the hearing and AmGuard anticipated that the report for the physician who had performed the carpal tunnel surgeries would be completed by the next hearing date. American Alternative clarified that its acceptance of apportionment liability related to the cervical spine claim only and that it would evaluate whether to accept its apportionment share with respect to the carpal tunnel claim when it received the physician's report.

At the second formal hearing, which occurred on January 19, 2010, a witness for AmGuard testified and additional exhibits were submitted into evidence. After the testimony, American Alternative represented that it was in negotiations with AmGuard to resolve the carpal tunnel

claim and that they hoped to resolve it prior to the closure of the record. AmGuard represented that it was not seeking apportionment against Republic–Franklin for the carpal tunnel claim and that it would not need to do so if AmGuard reached an agreement with American Alternative as to that claim.⁵

At the third formal hearing, held on September 27, 2010, the parties agreed that although the notice for the hearing did not so indicate, the issue to be addressed was apportionment liability. The parties then submitted the depositions of various physicians who had examined the claimant, as well as the claimant's deposition that had been taken by Republic–Franklin in the time between the second and third formal hearing, and the matter was set for a pro forma hearing date of October 29, 2010, for the filing of briefs and proposed findings.

After the third hearing, in a letter to the commissioner dated October 21, 2010, Republic–Franklin represented that it had agreed to accept the apportionment share requested by AmGuard, but that AmGuard still wished to seek interest pursuant to § 31–299b. Republic–Franklin maintained that an order from the commission would be moot and unnecessary, as it had agreed to the full requested percentage, but requested that if the commission determined that an order was necessary, the record should be reopened to allow for the presentment of additional evidence on the issue of interest. AmGuard responded to the commission by letter dated October 22, 2010, disputing Republic–Franklin's representation about the agreement and objecting to a reopening of the record. Specifically, AmGuard represented that Republic–Franklin had informed it on October 14, 2010, that Republic–Franklin would be willing to accept the requested apportionment share only if AmGuard waived any interest claims. AmGuard indicated that it was not willing to waive interest claims, in part, because of the extent of the proceedings. AmGuard stated that Republic–Franklin's October 21 letter to the commissioner was the first acknowledgment of its acceptance of apportionment liability, and was not communicated to AmGuard directly. Moreover, AmGuard contended, Republic–Franklin's October 21 letter was a “blatant attempt to avoid the mandatory interest under § 31–299b ” and the record did not need to be reopened because the mandatory interest claim was not a penalty provision.

Republic–Franklin subsequently informed the commissioner by letter dated October 22, 2010, that it had agreed to accept its 66.67 percent apportionment liability on the cervical spine claim and that it would issue payment once it had received an updated accounting. Moreover, Republic–Franklin maintained that AmGuard's claim that it was entitled to interest notwithstanding Republic–Franklin's agreement to its apportionment share raised a new issue, not addressed by the evidence presented at the formal hearings. Accordingly, Republic–Franklin again requested that the record be reopened.

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