Matteson v. Travelers Ins. Co.

• Decision Date: 19 July 1984
• Docket Number: No. 84-1078,84-1078
• Citation: 738 F.2d 619
• Parties: Wayne E. MATTESON, Plaintiff, Appellant, v. The TRAVELERS INSURANCE COMPANY, Defendant, Appellee
• Court: U.S. Court of Appeals — First Circuit

Page 619

738 F.2d 619

Wayne E. MATTESON, Plaintiff, Appellant, v. The TRAVELERS INSURANCE COMPANY, Defendant, Appellee

No. 84-1078.

United States Court of Appeals, First Circuit.

Argued June 7, 1984.

Decided July 19, 1984.

Robert S. Bruzzi, Providence, R.I., with whom Richard Nadeau, Jr., and Wistow, Barylick & Bruzzi Inc., Providence, R.I., were on brief, for plaintiff, appellant.

Hugh L. Moore, Providence, R.I., with whom Law Offices of Hugh L. Moore, Providence, R.I., was on brief, for defendant, appellee.

Before BOWNES and BREYER, Circuit Judges, and DOYLE, ^* Senior District Judge.

BREYER, Circuit Judge.

Francis Condon negligently crashed his small airplane into a tractor driven by Wayne Matteson, the appellant. Matteson, who was injured, received about $70,000 in workmen's compensation from Travelers, his employer's insurance carrier. Matteson also sued Condon, eventually settling the case for about $30,000. Matteson and Travelers disagreed about which of them was entitled to the $30,000--which is now in escrow. Matteson, invoking the federal court's diversity jurisdiction, sought a declaratory judgment that the money was his. The district court, however, entered summary judgment for Travelers. It pointed out that the relevant Rhode Island statute says that an employee, such as Matteson, is not

entitled to receive both damages and compensation; and if the employee has been paid [workmen's] compensation ..., the person by whom the compensation was paid [i.e. Travelers] shall be entitled to indemnity from the person so liable to pay damages [i.e. Condon] ..., and to the extent of such indemnity shall be subrogated to the rights of the employee [i.e. Matteson] to recover damages therefor ....

R.I.Gen.Laws Sec. 28-35-58. This statute, said the court, means that Travelers is entitled to what Condon owes Matteson--at least up to the $70,000 it has paid. Matteson appeals.

In our view, the district court is clearly correct. Neither of the two arguments that Matteson makes is convincing. First, citing Lombardi v. Merchants Mutual Insurance Co., R.I., 429 A.2d 1290 (1981), Matteson claims that Rhode Island does not allow a carrier to obtain indemnity from a wrongdoer until the victim has been fully compensated. To win with this argument, Matteson must show both that 1) until a victim has been "made whole," any payment by the wrongdoer must go to the victim, not to the compensating carrier; and 2) for indemnity purposes, Matteson is a victim who has not been "made whole."

In all likelihood Matteson is wrong as to step one. The statute plainly states that he is not entitled both to "damages" and "compensation." And, in Colarusso v. Mills, 99 R.I. 409, 416, 208 A.2d 381, 385 (1965) the Rhode Island Supreme Court held that "any ultimate recovery should be reduced by the amount of the compensation benefits received." See also Brimbau v. Ausdale Equipment Rental Corp., 119 R.I. 14, 19, 376 A.2d 1058, 1061 (1977) ("[O]ne who is injured ... cannot received both workmen's compensation benefits and damages from the tortfeasor. Accordingly, one who has received workmen's compensation benefits may only sue a third party tortfeasor if he first agrees to repay those who paid him compensation.") (emphasis in original). In neither Colarusso nor Brimbau did the court qualify these remarks or suggest that they apply only when the victim in some sense has been "made whole."

Lombardi neither concerns nor mentions workmen's compensation or the statute here at issue; rather it involves motor vehicle accidents and common law principles of surety. The victim in Lombardi obtained a $32,000 judgment against the wrongdoer. Two insurance companies had each paid the victim $10,000. The companies sought recovery of the funds they had advanced out of a $10,000 bond posted by the wrongdoer to secure the judgment. The court, citing Justice Cardozo, reiterated the principle that

a surety liable only for part of the debt does not become subrogated to collateral or to remedies available to the creditor unless he pays the whole debt or it is otherwise satisfied.

429 A.2d at 1292 (quoting American Surety Co. v. Westinghouse Electric Manufacturing Co., 296 U.S. 133, 137, 56 S.Ct. 9, 11, 80 L.Ed. 105 (1935) (Cardozo, J.)). Thus, Lombardi concluded, the insurance company was not subrogated to the victim's right until the "total judgment was satisfied." Id.

However sound a statement of common law principle Lombardi makes, that principle does not in terms apply to statutory workmen's compensation, see Nardolillo v. The Big G Supermarket, Inc., 111 R.I. 751, 754, 306 A.2d 844, 847 (1973) (rights of employee and employer under Workmen's Compensation Act "are purely statutory"); Traugott v. Petit, R.I., 404 A.2d 77, 79 (1979) (statutes supersede common law principles), particularly when the issue is only distantly related, as is the case here. Workmen's compensation is intended to replace common law actions for damages, R.I. Gen. Laws Sec. 28-29-17; it is not intended to make the employer or his carrier a common law surety of the employee. See Geigy Chemical Corp. v. Zuckerman, 106 R.I. 534, 541, 261 A.2d 844, 848-49 (1970); see generally 1 Larson's Workmen's Compensation Law, Secs. 1, 2 (1982). Nothing in the Lombardi court's opinion suggests that it would apply its common law principle where a statute explicitly subrogates the carrier to the rights of the victim to obtain damages and forbids his retention of both damages and compensation.

Matteson's other authorities are still farther afield. Rimes v. State Farm Mutual Automobile Insurance Co., 106 Wis.2d 263, 316 N.W.2d 348 (1982), is a Wisconsin case involving a different statute--a statute that...