Mustapha v. Liberty Mutual Insurance Company

• Decision Date: 22 May 1967
• Docket Number: Civ. A. No. 3210.
• Parties: Elizabeth MUSTAPHA v. LIBERTY MUTUAL INSURANCE COMPANY.
• Court: U.S. District Court — District of Rhode Island

268 F. Supp. 890

Elizabeth MUSTAPHA v. LIBERTY MUTUAL INSURANCE COMPANY.

Civ. A. No. 3210.

United States District Court D. Rhode Island.

May 22, 1967.

Aram A. Arabian, Providence, R. I., for plaintiff.

John F. Dolan, Providence, R. I., for defendant.

OPINION

PETTINE, District Judge.

The issue before the court is one of initial impression never having been raised in this state since the adoption of the Rhode Island Workmen's Compensation Act in 1912.

This action is brought by Elizabeth Mustapha, an employee of Patton-MacGuyer Company, who was injured at the plant on September 4, 1962 in an accident arising out of and in the course of her employment. The defendant, Liberty Mutual Insurance Company, is the workmen's compensation insurance carrier for Patton-MacGuyer Company and has entered into payments of the statutory benefits to the plaintiff.

This action is brought pursuant to the third-party liability provision of the Rhode Island Workmen's Compensation Act, which allows an injured employee to accept workmen's compensation benefits and also proceed against a third person who caused the injury.

Section 28-35-58 of the Rhode Island General Laws reads as follows:

"Liability of third person for damages —

Where the injury for which compensation is payable under Chapters 29 to 38, inclusive, of this title, was caused under circumstances creating a legal liability in some person other than the employer to pay damages in respect thereof, the employee may take proceedings, both against that person to recover damages and against any person liable to pay compensation under said chapters for such compensation; and if the employee has been paid compensation under said chapters, the person by whom the compensation was paid shall be entitled to indemnity from the person so liable to pay damages as aforesaid, and to the extent of such indemnity shall be subrogated to the rights of the employee to recover damages therefor; provided, however, that when money has been recovered either by judgment or by settlement by such employee from the person so liable to pay damages as aforesaid, by suit or settlement, and the employee is required to reimburse the person by whom the compensation was paid, the employee or his attorney shall be entitled to withhold from the amount to be reimbursed that proportion of the costs, witness expenses, and other out-of-pocket expenses and attorneys fees which the amount which the employee is required to reimburse the person by whom compensation was paid bears to the amount recovered from the third party."

The plaintiff alleges in her complaint, paragraphs five, six and seven that:

a) The defendant, as workmen's compensation insurer of Patton MacGuyer Co., conducted periodic safety inspections of the Patton-MacGuyer machinery and plant;

b) that the defendant "had a duty based upon an undertaking which is distinct from the contract of workmen's compensation insurance, to inspect and provide safety measures in the operation and maintenance of said Patton-MacGuyer machinery and equipment" and

c) that the defendant negligently failed to perform this duty causing the plaintiff to be injured.

In other words, there is no allegation of a contractual undertaking but that the defendant voluntarily undertook to conduct the inspection in question.

The defendant moved under rule 50(a) of F.R.Civ.P. for a motion for directed verdict on the ground that it is not subject to liability as a third-party tortfeasor under the Rhode Island Workmen's Compensation Act. Defendant contends that as workmen's compensation insurer of plaintiff's employer, it shares the tort immunity of her employer from a third-party action under the provisions of the act.

Thus, the question before this court is entirely one of law: Is the workmen's compensation insurance carrier of the plaintiff's employer, who must pay the statutory benefits provided by the Rhode Island Workmen's Compensation Act, also subject to liability under the third-party liability provisions of that act (Sec. 28-35-58)?

In determining this question, the court must look to the scope and purpose of the act along with all the applicable provisions in order to get a more comprehensive insight as to what the legislature actually intended. The language of an act is, of course, the fundamental guide to legislative meaning and purpose, but it is the language of the act as a whole that is to be read and not the words of a section or provision in isolation. Elizabeth Arden Sales Corp. v. Gus Blass Co. (8 Cir. 1945), 150 F.2d 988, 993, 161 A.L.R. 370.

The scope and purpose of the act were set out for this court by Judge Day in Whitmarsh v. Durastone Co., (D. C.R.I.1954), 122 F.Supp. 806, 810.

"The Workmen's Compensation Act of Rhode Island provided a new system of compensation for personal injuries to employees arising out of and in the course of their employment. Provision is made therein for definite compensation to the employee or if death results from the injury to his dependents. (cases cited)

Its purpose was to provide a simple and expeditious procedure by which an employee or his dependents would receive from his employer compensation for injuries sustained in industrial accidents. It abolished the employee's right to maintain a common law action for his injuries against his employer who in turn was deprived of certain common law defenses previously available to him." Sec. 28-29-20.

It is clear a reading of the act shows that the legislature did not specifically grant immunity to a compensation insurer from being amenable to suit as a third-party tortfeasor, but numerous provisions equating the workmen's compensation insurer with the employer does negative an intent to hold it, the insurer, liable to suit as a third party.

Several pertinent provisions of the act which point this up are:

Sec. 28-36-5—Provisions covering entire liability—Direct liability of insurer—"Every such policy shall cover the entire liability of the employer under chapters 29 to 38, inclusive, of this title, and shall contain an agreement by the insurer to the effect that the insurer shall be directly and primarily liable to the employee, and, in the event of his death, to his dependents, to pay to him or them the compensation, if any, for which the employer is liable."

Sec. 28-36-7—Proceedings by employee against insurer or employer— "Any employee entitled to compensation from his employer under chapters 29 to 38, inclusive, of this title shall, irrespective of any insurance contracts, have the right to recover such compensation directly from the employer or the insurer in the manner provided in said chapters, and, in addition thereto, the right to enforce in his own name, in the manner provided in said chapters, either by making the insurer or the employer a party to the original petition, or by filing against either a separate petition, to determine the liability of any insurer who may have insured the employer against liability for such compensation, or to determine the liability of the employer for such compensation * * *."

Considering these two sections together with Section 28-29-20, which provides that the right to compensation is in lieu of common law rights and remedies, the right of compensation from the workmen's compensation carrier bars, by its very language, a common law tort action against such workmen's compensation insurance carrier.

Section 28-36-8—Subrogation of insurer to right of employer—"When any employer is insured against liability for compensation and the insurer shall have paid any compensation for which the employer was liable, or shall have assumed the liability of the employer thereof, the insurer shall be subrogated to all the rights and duties of the employer and may enforce such rights in its own name."

Throughout the whole context of the act, the words "employer" and insurer are used interchangeably, thus denoting an equating of the two. See, for example, in addition to those already mentioned Sec. 28-35-3, Sec. 28-35-7, Sec. 28-35-13, Sec. 28-35-39, Sec. 28-35-40, Sec. 28-35-41, Sec. 28-35-45, etc.

Turning once more to the third party liability provision, Sec. 28-35-58, supra, it seems very doubtful, upon a close reading of it that the legislature ever contemplated a compensation insurer being brought in as a third party. The reasoning behind this statement is that there is a clear division between "a person so liable to pay damages" and "a person liable to pay compensation." As the defendant argues, a workmen's compensation insurer cannot be held to fit both of these descriptions. Also, the use of the words "some other person than" would seem to contemplate a stranger to the workmen's...