Liberty Mut. Ins. Co. v. Weeks

CourtSupreme Judicial Court of Maine (US)
Writing for the CourtWERNICK; McKUSICK
Citation404 A.2d 1006
PartiesLIBERTY MUTUAL INSURANCE COMPANY and Sanborn's Motor Express v. Leland WEEKS and Mildred Weeks.
Decision Date21 August 1979

Page 1006

404 A.2d 1006
Leland WEEKS and Mildred Weeks.
Supreme Judicial Court of Maine.
Aug. 21, 1979.

Page 1007

Norman & Hanson by Robert F. Hanson (orally), Stephen Hessert, Portland, for plaintiffs.

Berman, Berman & Simmons, P. A. by Paul F. Macri (orally), Jack H. Simmons, Lewiston, for defendants.


WERNICK, Justice.

This appeal arises from an action brought in the Superior Court (Cumberland County) by Liberty Mutual Insurance Company and Sanborn's Motor Express against Leland Weeks and his wife, Mildred, as the defendants, seeking a declaratory adjudication regarding the extent of the lien created by 39 M.R.S.A. § 68 (1978).

That statutory provision secures the right of the employer, or its insurance carrier, 1 liable for compensation benefits 2 to an injured worker 3 under our Workers' Compensation Act (39 M.R.S.A. § 1 et seq.) to share in any proceeds of an action brought by the worker against "the third person liable for the injury." The appeal

Page 1008

brought by the defendants presents the single question 4 whether the lien guarantees the carrier reimbursement of compensation (for which liability had been incurred) paid after the termination, by settlement or judgment for the worker, of the action against the third person. 5 The judgment of the Superior Court decided this issue in the affirmative, holding that the carrier's lien extended to entitle the carrier not only to recoup postsettlement compensation payments already made but also to set off any future compensation payments for the liability incurred, until the amount so credited to the carrier should equal the worker's net recovery from the third party. Defendants contend that in so deciding, the Superior Court misconceived the law.

Our conclusion is that the Superior Court's decision was correct. We deny the appeal.

In November of 1972 Leland Weeks was operating a tractor-trailer rig for his employer, Sanborn's Motor Express, which collided with another vehicle. By February of 1973, Weeks and Liberty Mutual (the carrier) had entered into an approved agreement for the payment of weekly compensation benefits. These weekly payments were made at least until (and the record suggests perhaps beyond) the issuance of the Superior Court's judgment in the present action. Meanwhile, in September of 1974, the injured worker, and his wife Mildred, instituted an action against Currier Leasing, Inc., and William Kelley, the owner and operator, respectively, of the other vehicle involved in the collision. Included in the complaint was a count alleging that the negligence of Currier and Kelley had deprived Mrs. Weeks of her husband's companionship.

In December of 1975 Mr. and Mrs. Weeks settled their claims against Currier and Kelley for $70,664.07. By the time of settlement the carrier had expended on Leland Weeks' behalf a total of $17,147.73 in compensation benefits. It was repaid for this outlay, less its proportionate share of the attorney's fees, See 39 M.R.S.A. § 68 (1978), and realized a net reimbursement of $11,431.82. From the remainder of the settlement amount the rest of the attorney's fee, as well as $664.07 for expenses, were subtracted, leaving $35,235.18 as the net proceeds inuring for the benefit of Mr. and Mrs. Weeks. The dispute regarding this amount, as a remaining fund, is responsible for the bringing of the instant action for declaratory judgment.

As the defendants in the action, Mr. and Mrs. Weeks have taken the position that

Page 1009

the statute governing the distribution of proceeds from recoveries against third persons specially limits the extent of a carrier's lien where, as here, the injured worker has initiated the tort action against the third person. Defendants point to the third and fourth paragraphs of Section 68 in which the Legislature expressly differentiates the action brought by the worker from that brought by the employer or carrier. By making this distinction, defendants argue, the Legislature has indicated differing measures of protection for the carrier, and this point is highlighted, say defendants, by the following language, more particularly the portions we have marked with emphasis:

"If the employEe or compensation beneficiary recovers damages from a third person, he shall repay to the employer or compensation insurer, out of the recovery against the third person, The benefits paid to him by the employer or compensation insurer under this Act . . ..

"If the employEr or compensation insurer shall recover from a third person damages in excess of the compensation and Benefits so paid or for which he has thus become liable, then any such excess shall be paid to the injured employee . . .." (emphasis added)

Defendants contend that where the worker has brought the action against the third person the carrier's lien cannot be a "continuing" lien. This is so, maintain defendants, because of the allegedly critical difference in the statutory language applicable where the Carrier has proceeded against the third person; then, the carrier is guaranteed the right to retain amounts equal not only to "benefits . . . paid" but also to those for which the carrier has "become liable." That language, however, is absent in the statute's dealing with the duty of the "employee" who has proceeded against the third person; there the language requires only that the worker "repay . . . the benefits paid . . . ." Defendants contend that the Legislature may be taken to have had a sound reason for thus differentiating the extent of the carrier's lien depending on whether the worker or carrier had brought the common law suit: arguably, the intendment was to confer a benefit upon the party who undertook the burden of bringing the action against the third person tortfeasor, as a reward to that party for his help in furthering the compensation system's goals of making whole the worker and carrier "injured" by a third person's tortious conduct.

We reject defendants' proffered interpretation of the statute. We believe it does violence to the legislative language, defeats the goals to be served by the scheme of utilizing the third person tortfeasor for the benefit of the worker's compensation system, and distorts the otherwise straightforward structure designed to implement those goals.

Despite defendants' repeated emphasis upon particular discrete phrases as plainly indicating, according to defendants, legislative intendment, we cannot fairly say that Section 68 Plainly establishes Anything about the extent of the lien it creates. We conclude, rather, that we must approach the interpretation of the statute with the basic point uppermost in mind that the current lien provisions are the product of a somewhat disparate superimposition, during more than half a century, of one layer of language upon another. Such a process tends to engender ambiguities, if not inconsistencies, and we can achieve clear perception of the legislatively intended dimensions of the carrier's lien only by an approach that infuses the words used by the Legislature with the spirit of the basic principles that have always governed the utilization of the tort liability of third persons as one of the cornerstones of the worker's compensation system.

We begin analysis by quoting in their entirety the current statutory provisions concerning the tort liability of third persons in relation to the worker's compensation system.

Page 1010

" S 68. Liability of third persons; election of employee; subrogation

"When an injury or death for which compensation or medical benefits are payable under this Act shall have been sustained under circumstances creating in some person other than the employer a legal liability to pay damages in respect thereto, the injured employee may, at his option, either claim such compensation and benefits or obtain damages from or proceed at law against such other person to recover damages.

"If the injured employee elects to claim compensation and benefits under this Act, any employer having paid such compensation or benefits or having become liable therefor under any decree or approved agreement shall have a lien for the value of compensation paid on any damages subsequently...

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