45 N.E.3d 571
Mass.2016Background
- Two injured employees (DiCarlo; Martin) received workers' compensation benefits and then settled third-party tort claims that allocated portions of the recovery to pain and suffering.
- The same insurer had paid statutory workers' compensation benefits (medical and lost wages) and asserted a lien under G. L. c. 152, § 15 against the employees' third-party recoveries to recoup those payments.
- Each settlement expressly allocated a percentage to pain and suffering and sought exemption from the insurer's lien for that portion; one Superior Court judge rejected such an allocation (DiCarlo), another approved it (Martin).
- Appeals Court decisions (relying on Curry v. Great American Ins. Co.) held that damages for pain and suffering are exempt from the insurer's lien.
- The insurer sought further review; the Supreme Judicial Court consolidated the cases to decide whether § 15’s lien reaches third-party awards for pain and suffering.
- The SJC held that § 15’s lien applies only to damages for the injury "for which compensation is payable," and therefore excludes damages allocated to pain and suffering.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether an insurer's § 15 lien attaches to third-party damages for pain and suffering | Pain-and-suffering damages are distinct from compensable benefits and thus fall outside § 15 | "Injury" in § 15 should be read broadly to include all harms (including pain and suffering), so the lien reaches the entire recovery | The lien does not extend to damages allocated to pain and suffering; "injury" in § 15 means the injury for which workers' compensation is payable |
Key Cases Cited
- Curry v. Great American Ins. Co., 80 Mass. App. Ct. 592 (Mass. App. Ct.) (Appeals Court decision treating pain-and-suffering awards as outside insurer lien and relied on by employees)
- DiCarlo v. Suffolk Constr. Co., 86 Mass. App. Ct. 589 (Mass. App. Ct.) (Appeals Court decision reversing trial judge and exempting pain-and-suffering allocation)
- Eisner v. Hertz Corp., 381 Mass. 127 (1980) (§ 15 reimbursement requires injury be one "for which compensation is payable")
- Bruso's Case, 295 Mass. 531 (1936) (insurer entitled to recover only where third-party damages are part of compensation benefits)
- Rhode v. Beacon Sales Co., 416 Mass. 14 (1993) (discussing insurer reimbursement and "excess" recovery concept)
- Bongiorno v. Liberty Mut. Ins. Co., 417 Mass. 396 (1994) (statute construed to minimize litigation and avoid double recovery)
- Lane v. Plymouth Rest. Group, 440 Mass. 469 (2003) (purpose of § 15 is to reimburse insurer and prevent double recovery)