November 8, 2017
from the decision of the workers' compensation
commissioner for the first district determining that the
named defendant was entitled to a moratorium against paying a
certain amount of future workers' compensation benefits,
brought to the Compensation Review Board, which affirmed the
commissioner's decision, and the plaintiff appealed.
Reversed; judgment directed.
J. Strickland, for the appellant (plaintiff).
William J. Shea, for the appellees (defendants).
Patrick D. Skuret filed a brief for the Connecticut Trial
Lawyers Association as amicus curiae.
Palmer, McDonald, Robinson, D'Auria, Kahn and
Vertefeuille, J. [*]
appeal from the Compensation Review Board, we consider the
extent of an employer's right to a credit against its
obligation to pay workers' compensation benefits for an
injured employee when that employee has recovered damages
from a third-party tortfeasor who caused the employee's
injuries. When an employee is injured in a work related
accident, the Workers' Compensation Act (act), General
Statutes § 31-275 et seq., bars the employee from
bringing an action for damages against the employer but,
also, requires employers to pay certain benefits to the
injured employee. These benefits can include covering the
employee's medical expenses or providing compensation for
disabilities resulting from the injury. See General
Statutes § 31-275 (4).
the employee's injury is caused by a third-party
tortfeasor-someone other than the employee or the employer or
its agents-the act allows either the employer or the employee
to bring an action in tort to recover damages from the third
party. General Statutes § 31-293 (a); Libby v.
Goodwin Pontiac-GMC Truck, Inc., 241 Conn. 170, 174,
695 A.2d 1036 (1997). If damages are recovered in the
third-party action, § 31-293 (a) requires that, after
deducting attorney's fees and litigation expenses, the
employer must be reimbursed from the net proceeds of the
action for any workers' compensation benefits the
employer has paid to or on behalf of the injured employee.
General Statutes § 31-293 (a). Any remaining proceeds
from the third-party action must be ‘‘assessed in
favor of the injured employee.'' General Statutes
§ 31-293 (a).
the resolution of the third-party action, the employer
remains liable to pay for any later arising workers'
compensation benefits due the employee, but our case law
interpreting § 31-293 (a) establishes that this
subsection implicitly affords the employer a setoff, or a
credit, against any later arising benefits in the amount of
any proceeds the employee received in the action against the
third party. See, e.g., Enquist v.
General Datacom, 218 Conn. 19, 20-21, 587 A.2d 1029
(1991). This credit is often referred to as a ‘‘
‘moratorium' '' against future payments.
Id., 27 n.7; see also R. Carter et al., 19
Connecticut Practice Series: Workers' Compensation (Supp.
2017) § 15:6, p. 375. The moratorium remains in place
until the workers' compensation benefits due after the
judgment exceed the amount the employee received from the
action against the third party. Enquist v.
General Datacom, supra, 25-26. Once the
employee's later arising workers' compensation
benefits exceed the amount of the employee's recovery,
the employer again becomes obligated to pay the
employee's benefits. See id.
2011, the legislature amended § 31-293 (a) to allow the
employee, if the employee initiated the third-party action,
to keep one third of the net proceeds due to the employer
from that action, regardless of how much the employer is owed
for reimbursement. Public Acts 2011, No. 11-205, § 1
(P.A. 11-205). The relevant portion of P.A. 11-205 provides:
‘‘If the action has been brought by the employee,
the claim of the employer shall be reduced by one-third of
the amount of the benefits to be reimbursed to the employer,
unless otherwise agreed upon by the parties, which reduction
shall inure solely to the benefit of the employee . . .
.'' Under this amendment, even if the employer is
owed more than is recovered in the third-party action, the
employee retains one third of the proceeds for his sole
specific question we address in this appeal is whether the
moratorium applies to the one-third portion of the
employer's recovery that inures solely to the
employee's benefit-that is, whether the employer has a
right to a setoff against its obligation to pay for
post-judgment workers' compensation benefits until those
benefits exceed the one-third portion that the employee
received from the proceeds of the third-party action. We
conclude that the employee's one-third portion is not
subject to the moratorium, and, as a result, the employer
does not receive a credit against later arising benefits for
the one-third portion paid to the employee.
present case, the plaintiff, Patrick Callaghan, was injured
in a work related automobile collision while working for the
defendant, Car Parts International, LLC. The plaintiff
brought an action for damages against a third party, who was
also involved in the accident. The plaintiff also sought and
received about $74, 000 in workers' compensation benefits
from the defendant. The plaintiff and the third party later
settled the action for $100, 000. The net proceeds of the
settlement-after the deduction of attorney's fees and
litigation costs-totaled about $66, 000.
plaintiff reimbursed the defendant out of the proceeds of the
settlement, deducting for himself one third of the amount to
be reimbursed, as required by § 31-293 (a). The
defendant's two-thirds share of the net proceeds totaled
about $44, 000; the plaintiff's one-third share amounted
to about $22, 000.
the settlement and reimbursement, the plaintiff required
additional medical care for the work related injury and was
treated by his authorized physician. The defendant denied
payment for the service, claiming that it was entitled to a
moratorium in the amount of the net ...