Peerless Ins. Co. v. Hartford Ins. Co.

• Decision Date: 10 February 2000
• Docket Number: 98P0049
• Citation: 48 Mass. App. Ct. 551
• Parties: MASSACHUSETTS COURT OF APPEALS No.: 98-PEERLESS INSURANCE COMPANY vs. HARTFORD INSURANCE COMPANY. Middlesex County
• Court: Appeals Court of Massachusetts

MASSACHUSETTS COURT OF APPEALS

No.: 98-P-49

PEERLESS INSURANCE COMPANY vs HARTFORD INSURANCE COMPANY

Middlesex County

February 10, 2000

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.

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.

Andrew J. Fay for the plaintiff.

Myles W. McDonough for the defendant.

Argued May 25, 1999.

ARMSTRONG, 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 in surer 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 A[2] 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, 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, 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, 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, 35,

which rewrote G. L. c. 152, 24. During that period, Peerless argues, an employee's waiver under

G. L. c. 152, 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 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 68. The words "who are entitled to the benefits

provided by said sections" refer to the public employees ("laborers, workmen, or mechanics") of

the Commonwealth or subdivisions of the Commonwealth which have accepted the public

employee workers' compensation scheme set out in G. L. c. 152, 69-75, inclusive. The words

do not modify "employees of an insured person," a phrase which, because of a provision of G. L.

c. 152, 1(4) (last par., as appearing in St. 1945, c. 369), includes, "when the employee is dead, .

. . his legal representatives, dependents and other persons to whom compensation may be

payable."

The principal obstacle to Peerless's argument lies in the wrongful death statute itself, G. L. c.

229, 2, which, as Peerless concedes, is the exclusive procedural remedy for recovery of

wrongful death damages in a civil action.[4] Section 2 provides (as appearing in St. 1973, c. 699,

1) that "the liability of an employer to a person in his employment shall not be governed by this

section." In conjunction with G. L. c. 152, 24 and 68, that section has been read consistently to

preclude any civil action for wrongful death of an employee who is subject to the provisions of

the workers' compensation laws. See McDonnell v. Berkshire St. Ry. Co., 243 Mass. 94, 95

(1922) ("The employer who is insured under the workmen's compensation act is relieved of all

statutory liability, including that for death of an employee under the employers' liability act");

Cozzo v. Atlantic Refining Co., 299 Mass. 260, 262 (1938) ("Nor can an action at law be

maintained against such employer [i.e., one who is insured under the workers' compensation law]

to recover for the death of an employee resulting from such injury [i.e., one arising out of and in

the course of his employment]," citing G. L. c. 152, 68); Ferriter v. Daniel O'Connell's Sons,

Inc., 381 Mass. at 528 ("We acknowledge that G. L. c. 152, 1[4] and 68, bar a deceased

employee's dependents from recovering under G. L. c. 229, 2 and 2B, for loss of consortium,

as against an employer covered by G. L. c. 152"); Hallett v. Wrentham, 398 Mass. 550, 555

(1986) ("Neither do[es] . . . Ferriter create an independent right of recovery for lost consortium

when the victim suffers death rather than...