Nichols v. Cantara & Sons

• Decision Date: 15 February 1995
• Citation: 659 A.2d 258
• Parties: Raymond L. NICHOLS v. CANTARA & SONS. Richard L. MOOERS v. AUGUSTA AUTO MALL.
• Court: Maine Supreme Court

Page 258

659 A.2d 258

Raymond L. NICHOLS v. CANTARA & SONS.

Richard L. MOOERS v. AUGUSTA AUTO MALL.

Supreme Judicial Court of Maine.

Argued Sept. 21, 1994.

Decided Feb. 15, 1995.

David Ordway (orally), Ordway & Associates, Biddeford, for Nichols.

Maurice Libner (orally), McTeague, Higbee, Libner, MacAdam, Case & Watson, Topsham, for Mooers.

Thomas V. Laprade (orally), Black, Lambert, Coffin & Rudman, Portland, for Cantara & Sons.

Evan M. Hanson (orally), Preti, Flaherty, Beliveau & Pachios, Portland, for Augusta Auto Mall.

Before WATHEN, C.J., and ROBERTS, GLASSMAN, CLIFFORD, RUDMAN, and DANA, JJ.

DANA, Justice.

Employees Raymond L. Nichols and Richard L. Mooers, in this consolidated appeal raise the issues of whether, pursuant to 39 M.R.S.A. § 68 (1989), the Workers' Compensation Board erred in failing to allocate a portion of a third-party settlement to the employee's spouse's loss of consortium claim when the parties to the settlement made no express allocation. They also question whether the Board properly handled the employer's lien under section 68 with respect to a third-party settlement relating to one work related injury when the workers' compensation benefits paid or payable are partially attributable to a second work related injury. We conclude that, pursuant to section 68, the employee bears the burden of showing that a portion of a third-party settlement is allocable to a loss of consortium claim and that, absent an express agreement or a judicial allocation, the Board did not err in concluding that both employees failed to meet that burden of proof. Because we also conclude that the employer is only entitled to a lien against the third-party recovery for the amount of the benefits paid or payable for that portion of the employee's incapacity for which the third-party is responsible, we affirm the decision in Nichols, vacate the decision in Mooers, and remand the latter decision to the Board for further proceedings.

1. Nichols

On November 16, 1979, Raymond L. Nichols suffered a work related injury to his back while his employer, Cantara & Sons, was insured by Maine Bonding & Casualty. Pursuant to Commission decrees in 1981, Nichols was awarded total incapacity benefits for a period ending on June 2, 1980. Nichols suffered a second compensable injury on October 31, 1984, while employed by Buck/C & G Construction, which was also insured by Maine Bonding. By agreement, Buck/C & G accepted responsibility for the second injury and paid benefits to Nichols.

Nichols and his spouse brought a civil action against a third party responsible for the 1979 injury and ultimately settled that claim for $75,000. After deduction of attorney fees and expenses, Nichols received approximately $50,000. In November 1990 Maine Bonding notified Nichols that it was unilaterally offsetting two-thirds of its future liability against the third-party recovery, based on Maine Bonding's determination that the 1979 injury contributed to two-thirds of Nichols's ongoing incapacity.

In 1991 Nichols filed several petitions with the Workers' Compensation Commission, including a petition seeking to allocate a portion of the settlement to his spouse's loss of consortium claim, thereby protecting that portion of the settlement from the employer's lien. See Dionne v. Libbey-Owens Ford Co., 621 A.2d 414, 418 (Me.1993) (hereinafter Dionne II ). Nichols testified that the tort settlement included his wife's claim for loss of consortium, but Nichols did not enter a copy of the complaint or the settlement agreement in the record. The hearing officer concluded that Nichols's testimony, by itself, did not give the Board a sufficient factual basis for calculating an allocation for loss of consortium and found that Nichols failed to meet his burden of proof to show a proper allocation. The Board awarded Cantara & Sons a lien against the full third-party settlement to be applied against two-thirds of its obligation to pay workers' compensation benefits.

Nichols contends that the Board erred in awarding a lien in the full amount of the settlement (net of attorney fees) without allocating a portion of the tort recovery to lost consortium. Title 39 M.R.S.A. § 68 provides, in pertinent part:

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 compensation payment scheme shall have a lien for the value of compensation paid on any damages subsequently recovered against the third person liable for the injury....

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, less said employer's or compensation insurer's proportionate share of cost of collection, including reasonable attorney's fees.

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....

39 M.R.S.A. § 68 (1989). ¹

Nichols relies primarily on our decisions in Dionne v. Libby-Owens Ford Co., 565 A.2d 657 (Me.1989) (hereinafter Dionne I ) and Dionne II, 621 A.2d 414. In Dionne I, we held that the Commission has jurisdiction to determine the employer's right to a lien against a third-party settlement pursuant to its broad authority to adjudicate a petition for review as provided in 39 M.R.S.A. § 100 (1989). 565 A.2d at 658. In Dionne II, we held that an employer is not entitled to a lien against that portion of a third-party settlement that is allocated to a spouse's lost consortium.

Relying on Dionne I, Nichols contends that the Board has broad authority to determine subrogation rights which includes the authority to calculate a reduction for Nichols's spouse's loss of consortium claim. This argument is misplaced. Dionne I did not address the burden of proof required to show the employee's net recovery from a third-party settlement. While the Board has broad authority to determine subrogation rights, that authority must be confined within the Board's general authority as provided by the Workers' Compensation Act and limited to areas within its traditional expertise. The Board's "expertise is limited to the Maine Workers' Compensation Act," LeBlanc v. United Eng'rs & Constructors, Inc., 584 A.2d 675, 677 (Me.1991), and the Board has "only such authority as is conferred upon it by express legislative grant or such as arises therefrom by implication as incidental to full and complete exercise of the powers granted." Clark v. International Paper Co., 638 A.2d 65, 66 (Me.1994) (quoting Hird v. Bath Iron Works., 512 A.2d 1035, 1038 (Me.1986); see also Cote v. Georgia-Pacific Corp., 596 A.2d 1004, 1006 (Me.1991) (Commission has no authority to reimburse an injured employee for housekeeping services); Hird, 512 A.2d at 1038 (Commission may not employ doctrine of equitable estoppel to bar the assertion of a statute of limitations defense); Black v. Electronic & Missile Facilities, 250 A.2d 694, 695 (Me.1969) (Commission lacks authority to adjudicate whether an individual is engaged in unauthorized practice of law). We agree with the hearing officer that because the Act provides no recovery for loss of consortium, the calculation of a loss of consortium claim, in the absence of a judicial determination or an express allocation in a settlement agreement, is not within the authority or traditional expertise of the Board. Abshire v. City of Rockland, 388 A.2d 512, 514 (Me.1978); McKellar v. Clark Equip. Co., 472 A.2d 411, 414 (Me.1984). We conclude therefore that it was not error for the hearing officer to find that Nichols failed to meet his burden of proof in this case. ²

Nichols raises a second issue concerning whether the Board was authorized to apportion the liability for the benefits between the 1979 and 1984 injuries, absent an express statutory grant of such authority. Title 39 M.R.S.A. § 104-B (1989) provides in pertinent part:

1. Applicability. Where 2 or more occupational injuries occur, during either a single employment or successive employments, which combine to produce a single incapacitating condition, and more than one insurer is responsible for that condition, their liability shall be governed by this section.

2. Liability to employee. If an employee has sustained more than one injury while employed by different employers, or if an employee has sustained more than one injury while employed by the same employer and that employer was insured by one insurer when the first injury occurred and insured by another insurer when the subsequent injury or injuries occurred, the insurer providing coverage at the time of the last injury shall initially be responsible to the employee for all benefits payable under this Act.

3. Subrogation. Any insurer determined to be liable for benefits under subsection 2 shall be subrogated to the employee's rights under this Act for all benefits the insurer has paid and for which another insurer may be liable. Any such insurer may ... file a petition for an apportionment of liability among the responsible insurers. The commission has jurisdiction over all claims for apportionment under this section. In any proceeding for apportionment, no insurer is bound as to any finding of fact or conclusion of law made in a prior proceeding in...