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Love v. J.P. Stevens and Co., Inc.

Court of Appeals of Connecticut

March 6, 1990

William LOVE
v.
J.P. STEVENS AND COMPANY, INC., et al.

Argued Oct. 12, 1989.

[21 Conn.App. 10] John M. Creane, with whom, on the brief, was Jamie L. Mills, Milford, for appellant (plaintiff).

Kevin J. Maher, Bridgeport, with whom, on the brief, was Colette Mauborgne, Easton, for appellees (defendants).

Before SPALLONE, DALY and EDWARD Y. O'CONNELL, JJ.

EDWARD Y. O'CONNELL, Judge.

This is an appeal from a decision of the workers' compensation review division holding that the defendants, an employer and its insurance company, are entitled to a credit equal to the plaintiff's recovery from a third party tortfeasor for injuries resulting from an industrial accident.

The facts are not in dispute. On March 22, 1979, the plaintiff suffered a severe and disabling injury to his right, master hand. He immediately underwent emergency surgery and reconstructive surgery some months later. The plaintiff filed a timely claim for workers' compensation. The commissioner found that he had suffered 100 percent disability of his right hand and awarded him compensation payments totalling $48,011.92. Thereafter, a specialist in reconstructive hand surgery evaluated the plaintiff's condition and recommended that further surgery, estimated to cost a maximum of $40,000, be performed in an attempt to [21 Conn.App. 11] give the plaintiff increased use of his injured hand. A hearing was held on the question of whether the defendants should pay for this surgery, and in a finding

Page 1137

and award, dated October 14, 1981, the workers' compensation commissioner found that additional surgery was reasonable and necessary and ordered that the defendants provide such treatment. To date, the surgery has not been performed.

While the workers' compensation proceedings were pending Before the commissioner, the plaintiff filed a third party action against the manufacturer of the machine that he was operating at the time of his injury. The defendants intervened as parties plaintiff pursuant to General Statutes § 31-293(a). [1] The case was settled [21 Conn.App. 12] on January 8, 1982, for $250,000 under the terms of a court approved stipulated judgment. After costs and fees were subtracted, the defendants received $48,011.92 as reimbursement for payments made under the workers' compensation statutes. The balance of $118,654.75 was awarded to the plaintiff. At no time prior to the entry of the stipulated judgment did the defendants seek, from the third party, reimbursement of future expenses. Instead, when the stipulated judgment was rendered, the defendants stated only that they reserved their rights to reimbursement for future benefits under § 31-293(a).

Thereafter, the defendants filed a motion for credit with the workers' compensation commissioner claiming that the plaintiff's recovery should be applied toward his future medical expenses. They argued that they should not be obligated to make further compensation payments until such time as the plaintiff incurred [21 Conn.App. 13] expenses exceeding his third party recovery. The plaintiff opposed the motion on the ground that the commissioner had no authority to grant such a credit. The commissioner

Page 1138

granted the motion and ordered the plaintiff to pay the defendants $1990.24 as reimbursement for compensation payments made after the settlement of the third party claim. The commissioner then granted the defendants a credit of $116,664.51, an amount equal to the plaintiff's net recovery. The compensation review division affirmed the award on November 29, 1988, and this appeal followed.

The plaintiff's claims of error are all subsumed under the single issue of whether a workers' compensation commissioner has the authority to award a credit in the amount of a worker's net recovery from a third party tortfeasor, thereby relieving the employer of its obligations under the workers' compensation statutes until such a time as the worker's expenses related to the injury exceed that credit. We conclude that the commissioner has no such authority. Accordingly, we find error.

In reaching this conclusion, we are guided by General Statutes § 31-293(a), which preserves the right of an injured worker and an employer to recover damages from one responsible for an injury compensable under the workers' compensation statutes. Section 31-293(a) provides that where an employer joins an employee in an action against a third party, the employer's claim "shall take precedence over that of the injured employee." Thus, the "statute gives to an employer the substantive right to reimbursement of the workmen's compensation which he has become obligated to pay." Stavola v. Palmer, 136 Conn. 670, 677, 73 A.2d 831 (1950). The statute defines the employer's claim as "(1) the amount of any compensation which he has paid on account of the injury which is the subject of the suit and (2) an amount equal to the present worth of any [21 Conn.App. 14] probable future payments which he has by award become obligated to pay on account of such injury." General Statutes § 31-293(a). It is only when the amount received from the third party exceeds the employer's claim that the employee receives anything. Id.

Section 31-293 is the exclusive route for an employer to assert a claim over any portion of an employee's recovery from a third party. In Skitromo v. Meriden Yellow Cab Co., 204 Conn. 485, 489, 528 A.2d 826 (1987); our Supreme Court held that an employer must strictly comply with the procedures of § 31-293(a). In that case, the employer failed to follow the statutory mandate and, as a result, "any right of the [employer] to the [employee's] third party recovery, including the alleged right to credit that recovery against future liability, was extinguished." Id., at 489-90, 528 A.2d 826. We must likewise determine whether the defendants here have waived their rights to any further portion of the plaintiff's third party recovery.

An examination of the workers' compensation statutes of other jurisdictions discloses that some provide for the type of credit that the defendants now seek. See, e.g., Kan.Stat.Ann. § 44-504(b); N.Y. Workmen's Compensation Law § ...


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