Libby v. Goodwin Pontiac-GMC Truck, Inc.

• Decision Date: 20 May 1997
• Docket Number: No. SC,PONTIAC-GMC,SC
• Citation: 241 Conn. 170,695 A.2d 1036
• Court: Connecticut Supreme Court
• Parties: David LIBBY v. GOODWINTRUCK, INC., et al. 15520.

Page 1036

695 A.2d 1036

241 Conn. 170

David LIBBY v. GOODWIN PONTIAC-GMC TRUCK, INC., et al.

No. SC 15520.

Supreme Court of Connecticut.

Argued March 21, 1997.

Decided May 20, 1997.

Brian E. Prindle, Manchester, for the appellants (named defendant et al.).

Robert C. Ruggiero, Jr., with whom, on the brief, was Joseph S. Dobrowolski, New Haven, for the appellee (plaintiff).

Before CALLAHAN, C.J., and BERDON, KATZ, PALMER and PETERS, JJ.

BERDON, Associate Justice.

The sole issue in this appeal is whether, under the workers' compensation act (act), General Statutes § 31-275 et seq., the defendants ¹ were entitled to a credit against future workers' compensation liability measured by the amount of a settlement that the plaintiff, David Libby, reached with respect to a personal injury claim against a third party tortfeasor. Because the defendants failed to perfect their statutory rights under General Statutes (Rev. to 1991) § 31-293(a), ² we conclude that the defendants are not entitled to a credit against their workers' compensation liability in the amount of the plaintiff's recovery from the third party tortfeasor.

The opinion of the Appellate Court sets forth the relevant undisputed facts. "The plaintiff, David Libby, was an employee of the named defendant, Goodwin Pontiac-GMC Truck, Inc., on February 1, 1987, when he was injured in a work-related automobile accident involving a third party. ³ The plaintiff did not file an action against the third party, but, in September, 1989, the plaintiff received a $37,365 settlement from the third party. The defendants were not involved in the settlement, and neither the plaintiff nor the third party paid or promised to pay the defendants any settlement proceeds. The defendants did not file an action against the third party. On July 20, 1990, the plaintiff received treatment for his injury at John Dempsey Hospital and incurred a bill of $2058. The defendants declined to pay the bill, claiming that they were entitled to a credit against their workers' compensation liability in the amount of the plaintiff's settlement with the third party." Libby v. Goodwin Pontiac-GMC Truck, Inc., 42 Conn.App. 200, 202-203, 678 A.2d 995 (1996).

The workers' compensation commissioner (commissioner) determined that the defendants were not entitled to a credit in the amount of the plaintiff's settlement, and that the defendants were required to pay the plaintiff's hospital bill. In making his determination, the commissioner found that the defendants' rights were governed by § 31-293(a), which entitled the defendants to bring an independent action against the third party tortfeasor, and that the defendants' failure to bring such an action precluded them from claiming a credit in the amount of the plaintiff's settlement. The workers' compensation review board (board) affirmed the determination of the commissioner.

The Appellate Court affirmed the decision of the board, concluding that the defendants had failed to protect their statutory right to reimbursement by filing their own action against the third party tortfeasor and, therefore that they were not entitled to credit the plaintiff's settlement against their workers' compensation liability. Id., at 209, 678 A.2d 995. We granted the defendants' petition for certification, ⁴ and now affirm the judgment of the Appellate Court.

We begin our analysis with some overriding principles embodied in the act. "First, the [act] protects an injured employee by allowing the employee to sue a third party tortfeasor in a private cause of action for damages, such as pain and suffering, that are uncompensated by a workers' compensation award.... Second, the [act] protects an employer by allowing the employer to obtain reimbursement for workers' compensation benefits from a third party tortfeasor, either by becoming an intervening plaintiff in the employee's cause of action or by bringing a separate action derivative of the employee's cause of action.... Third, the employer's statutory right to subrogation of the proceeds of the employee's claim against the tortfeasor implements the public policy of preventing double recovery by an injured employee.... Fourth, the employer's statutory right to reimbursement reenforces the public policy that, between the employer and the employee, workers' compensation provides the exclusive remedy for personal injury to the employee...." (Citations omitted.) Durniak v. August Winter & Sons, Inc., 222 Conn. 775, 779-80, 610 A.2d 1277 (1992). Furthermore, "[w]e have repeatedly observed that our act represents a complex and comprehensive statutory scheme balancing the rights and claims of the employer and the employee arising out of work-related personal injuries. Because of the comprehensive nature of the act, the responsibility for carving out exceptions from any one of its provisions belongs to the legislature and not to the courts." (Emphasis added.) Id., at 781, 610 A.2d 1277.

Relying principally on Rosenbaum v. Hartford News Co., 92 Conn. 398, 103 A. 120 (1918), the defendants argue that they are entitled to a credit against their workers' compensation liability in the amount of the plaintiff's settlement with the third party tortfeasor, even though they did not bring an independent action pursuant to § 31-293(a). We disagree.

In Rosenbaum, an employee recovered a monetary settlement from a third party tortfeasor and subsequently sought workers' compensation benefits from his employer. Id., at 399, 103 A. 120. This court concluded that the predecessor of § 31-293(a) required that "if the employer has become obligated to pay compensation, but has not paid it, and the damages recovered [from the third party action] are greater than the amount of compensation the employer has become obligated to pay ... the entire excess is directed to be assessed in favor of the injured employee, with the consequence of discharging the employer from his ascertained liability under the award.... [Section 31-293(a) ] either reimburses or discharges the employer out of the first moneys available for the payment of damages." Id., at 401-402, 103 A. 120.

Since this court decided Rosenbaum, the road has been well traveled with respect to an employer's right to reimbursement for an employee's recovery from a third party under § 31-293(a). Indeed, we have stated that Rosenbaum and its progeny "establish only that an employer has a general right to be reimbursed from a third party tortfeasor for benefits paid to an employee for injuries caused by the third party. This right is established by ... § 31-293, which allows both employers and employees to bring an action against a third party who is allegedly responsible for the employee's injury. By allowing either an employer or an employee to bring an action, the law seeks to vindicate both the employee's interest in receiving the full scope of tort damages that remain uncompensated by a workers' compensation award and the employer's interest in being reimbursed for payments made because of the third party's malfeasance." (Emphasis added.) Skitromo v. Meriden Yellow Cab Co., 204 Conn. 485, 488, 528 A.2d 826 (1987).

In Skitromo, an injured employee who had received workers' compensation benefits sought to compel the defendants, his employer and its workers' compensation insurance carrier, to continue providing such benefits even after he had reached a settlement with a third party involved in the accident. The defendants conceded that because they had failed to intervene in a timely fashion in the third party action, they had no right to reimbursement of the amounts that they had already paid to the employee in benefits. Id., at 487-88, 528 A.2d 826. The defendants argued, however, that they were entitled to credit the amount received by the employee in the third party settlement against their future workers' compensation liability. Id., at 488, 528 A.2d 826.

Concluding that the defendants were not entitled to a credit for the third party payments, this court stated: "The defendants attempt to circumvent the requirements of ... § 31-293 by characterizing their claim not as a right to reimbursement from the third party tortfeasor, but as a right to reduce their future payments owed to the injured employee. The defendants, however, have no such right against an employee either by statute or common law. Norwalk v. Van Dyke, 33 Conn.Supp. 661, 666, 366 A.2d 554, cert. denied, 172 Conn. 681, 364 A.2d 864 (1976). Their sole means to assert any right against the plaintiff's third party recovery was by way of the procedure set forth in § 31-293. By failing to comply with the statutory procedure, any right of the defendants to the plaintiff's third party recovery, including the alleged right to credit that recovery against its future liability, was extinguished." (Emphasis added.) Skitromo v. Meriden Yellow Cab Co., supra, 204 Conn. at 489-90, 528 A.2d 826. ⁵

Furthermore, this court has stated repeatedly that "an employer's right to obtain reimbursement from a third party tortfeasor is a statutory claim that is derived in its entirety from § 31-293(a)." Durniak v. August Winter & Sons, Inc., supra, 222 Conn. at 782, 610 A.2d 1277; see also Skitromo v. Meriden Yellow Cab Co., supra, 204 Conn. at 489, 528 A.2d 826; Robinson v. Faulkner, 163 Conn. 365, 377-78, 306 A.2d 857 (1972).

The defendants argue that cases such as Skitromo must be distinguished from the present case because, in those cases, the employee brought an action against the third party tortfeasor, notice of which was given to the employer pursuant to § 31-293, and the employer failed to intervene. We are not persuaded, however, that the absence of such notice to the employer is dispositive because, at any time within the statute of limitations period, the defendants in the present case could have brought an independent action against the third party tortfeasor pursuant to § 31-293(a). See General Statutes (Rev. to 1991) ...