Gonzalez v. O. & G. Industries, Inc.
140 A.3d 950
| Conn. | 2016Background
- O&G Industries (general contractor) implemented a Contractor Controlled Insurance Program (CCIP) for a power plant project and paid a $1,150,465 workers’ compensation premium plus a $250,000 deductible and $17,500 claim-handling fee to Old Republic (insurer).
- Subcontractors (United Anco, Ducci Electrical, Instrument Sciences) enrolled in the CCIP; each received individual policies in their names but the CCIP materials and policies identified O&G as the “sponsor” and responsible for premiums.
- O&G issued deductive change orders subtracting the subcontractors’ bid-line insurance costs from their subcontract prices; subcontractors also issued corresponding change orders for lower-tier subs.
- An explosion injured Thompson (United Anco employee) and McVay (Instrument Sciences employee); they received workers’ compensation benefits paid by Old Republic pursuant to the CCIP policies.
- Plaintiffs sued O&G under § 31-293 for negligence/strict liability; O&G moved for summary judgment asserting principal-employer immunity under § 31-291 because it had “paid compensation benefits.”
- Trial court granted summary judgment, interpreting “paid” as simply transferring money; plaintiffs appealed arguing "paid" means to bear the cost and that O&G passed the costs to subcontractors.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Meaning of “paid compensation benefits” in § 31-291 | "Paid" means to bear the cost (must shoulder expense, not mere transfer) | "Paid" means simply to transfer money (e.g., paid premium/deductible) | Ambiguous in isolation; legislative history supports "paid" = bear the cost |
| Whether principal employer must pay all benefits to obtain immunity | Principal employer must bear the entire cost of the injured employee’s WC benefits; partial payment insufficient | Principal employer need only have paid (transferred) benefits; partial payment suffices | Principal employer must bear the cost of all of the injured employee’s WC benefits to get immunity |
| Whether O&G bore the full cost of Thompson’s and McVay’s benefits | O&G recouped CCIP costs via deductive change orders; subcontractors effectively paid | CCIP change orders merely removed subcontractors’ preexisting insurance line-item (preventing double payment); O&G actually paid premiums/deductibles | No genuine factual dispute: documentary and deposition evidence show O&G bore the CCIP premiums/deductible/fees and did not receive reimbursement; summary judgment for O&G affirmed |
| Effect of CCIP structure/change orders on immunity | CCIP + change orders can be a conduit for subcontractor money; raises triable issue whether O&G bore costs | CCIP documents, policies, manual, and O&G testimony show sponsor pays and change orders simply eliminate subcontractors’ insurance obligation | Change orders and manual do not create a genuine issue; policies and testimony establish O&G paid costs; immunity applies |
Key Cases Cited
- Doe v. Norwich Roman Catholic Diocesan Corp., 279 Conn. 207 (statutory interpretation/plenary review; ambiguity test)
- Pelletier v. Sordoni/Skanska Construction Co., 264 Conn. 509 (history and purpose of § 31-291; 1988 amendment requiring payment for immunity)
- Bishel v. Connecticut Yankee Atomic Power Co., 62 Conn. App. 537 (owner-controlled insurance program can support principal-employer immunity)
- Misiti, LLC v. Travelers Property Casualty Co. of America, 308 Conn. 146 (public policy against duplicative insurance/economic waste)
- Viera v. Cohen, 283 Conn. 412 (statutory omission significance in construction)