Peerless Ins Co. v. Hatford Ins. Co.

• Citation: 723 N.E.2d 996
• Decision Date: 25 May 1999
• Docket Number: No. 98-P-49,98-P-49
• Parties: (Mass.App.Ct. 2000) PEERLESS INSURANCE COMPANY V. HATFORD INSURANCE COMPANY
• Court: Appeals Court of Massachusetts

723 N.E.2d 996 (Mass.App.Ct. 2000)

PEERLESS INSURANCE COMPANY

V.

HATFORD INSURANCE COMPANY

No. 98-P-49

Appeals Court of Massachusetts, Middlesex.

May 25, 1999.

February 10, 2000

Andrew J. Fay for the plaintiff. Myles W. McDonough for the defendant.

Present: Armstrong, Perretta, & Gelinas, JJ.

Contract, Insurance. Insurance, Workers' compensation insurance, Insurer's obligation to defend. Workers' Compensation Act, To whom act applies. Statute, Construction. Wrongful Death.

The opinion of the court was delivered by: Armstrong, J.

Civil action commenced in the Superior Court Department on August 17, 1987.

Following review by this court, 34 Mass. App. Ct. 534 (1993), motions for summary judgment were heard by Carol Stroud Ball, J.

The present action arises out of a previous wrongful death suit brought by the administrator of the estate of John Doyon on behalf of Doyon's nondependent parents to recover damages for loss of consortium against two parties, only one of whom, Stephen F. Lewis, is material to this appeal. Lewis was doing business as Eastern Waterproofing Company (Eastern) and was waterproofing a building owned by the other defendant in the prior action when Doyon fell to his death from Eastern's scaffolding. The suit alleged negligent maintenance by Eastern of its equipment.

The present action is between Eastern's two liability insurers as to which one had the duty to defend Eastern and to indemnify in the event of an adverse judgment. Hartford Insurance Company (Hartford), Eastern's workers' compensation and employers' liability insurer, declined to defend the claim, alleging that Doyon was not an employee of Eastern and that it would not be responsible for defending against the claim even if Doyon had been an employee. Peerless Insurance Company (Peerless), Eastern's general liability insurer, undertook defense of the claim and eventually settled it for $125,000.¹ Peerless brought the present action for indemnification, alleging that it was Hartford that had the duty to defend against the claim.

Peerless's action came to this court once before, on a report that we discharged as improvidently made, see Peerless Ins. Co. v. Hartford Ins. Co., 34 Mass. App. Ct. 534, 537 (1993). In discharging the report we implied by way of dictum that as between the workers' compensation insurer and the general liability insurer, it was the former that had the broad, general duty of defending claims that arose from a worker's injury or death, regardless whether the claim was asserted before the Department of Industrial Accidents or a court, and that if the exclusivity of the administrative forum precluded the availability of an action in court, that was a matter that should be raised in the normal course of defending the claim in court, not a reason for refusing to defend. Id. at 536-537. We followed our Peerless holding in a subsequent case, HDH Corp. v. Atlantic Charter Ins. Co., 41 Mass. App. Ct. 131, 134-135 (1996). On further appellate review, however, that decision was reversed, see 425 Mass. 433 (1997). The latter decision, starting from the proposition that an insurer has a duty to defend only if the allegations of the complainant are reasonably susceptible of an interpretation that they state a claim covered by the terms of the insurance policy, reasoned that the Atlantic Charter Insurance Company (Atlantic Charter) policy, a standard workers' compensation and employers' liability policy, under coverage A² insured only for claims brought under the workers' compensation act -- i.e., claims for compensation brought before the department, not claims for damages brought in a civil action before a court (id. at 436-438) -- and that coverage B, "the employers' liability portion of the insurance policy, is intended to provide coverage in the rare circumstance in which an employee who has affirmatively opted out [of the compensation scheme under G. L. c. 152, Sect. 24,] brings a tort action for personal injuries." Id. at 439 n.11.

Following the Supreme Judicial Court's decision in the HDH case and in reliance thereon, a Superior Court judge allowed Hartford's motion for summary judgment in the still pending Peerless case, and Peerless claimed the appeal that is before us now.

Peerless concedes, as it must, that, under the HDH decision, Hartford had no potential liability under coverage A of its policy because the claim was not one for workers' compensation benefits. It argues, however, that Hartford had potential liability under coverage B, which by its terms covers the potential liability of an employer not only where the employee has affirmatively elected under G. L. c. 152, Sect. 24, to forego compensation benefits in favor of common law remedies but also in any other situation where the employer may be sued for an injury or death arising from the injured person's or decedent's employment. Such situations, Peerless argues, include suits brought by anyone not subject to the tort bar of G. L. c. 152, Sect. 68, for such employment-related injuries or death.

Peerless argues that this wrongful death action brought by Doyon's administrator on behalf of Doyon's parents is not subject to the tort bar. The argument has two parts. The first is that Doyon's accident occurred in 1982, during the period between the decision in Ferriter v. Daniel O'Connell's Sons, Inc., 381 Mass. 507, 519-530 (1980), and the passage of St. 1985, c. 572, Sect. 35, which rewrote G. L. c. 152, Sect. 24. During that period, Peerless argues, an employee's waiver under G. L. c. 152, Sect. 24, of his right to bring common law civil actions against his employer for on-the-job injuries did not extend to his family or dependents who might have common law claims for loss of consortium. (Peerless concedes that the wrongful death action would have been barred had the accident occurred after the effective date of the 1985 legislation.) The second part of Peerless's argument is that the Sect. 68 tort bar did not apply to Doyon's parents because Doyon's parents were not entitled to benefits under the workers' compensation law.³

The latter argument is based on a misreading of Sect. 68. The words "who...