39 Mass. App. Ct. 271 | Mass. App. Ct. | 1995
This is an appeal from a summary judgment entered in favor of the plaintiff (CNA) on its complaint seeking reimbursment for the workers’ compensation benefits that it paid to the defendant Semedo-Anacleto, who was seriously injured in the course of her employment and who thereafter entered into a settlement agreement with the Massachusetts Insurers Insolvency Fund (Fund) and the insured of the insolvent insurer. Because G. L. c. 175D precludes reimburse
1. The undisputed facts. We relate the undisputed facts. In 1984, Semedo-Anacleto was employed by Helen Walsh Associates, a placement service. She was injured while working at a packaging plant owned by Howard Johnson’s, Inc. That corporation has since been merged into the Marriott. Semedo-Anacleto claimed that Marriott, the third-party defendant, negligently allowed her to work unprotected and improperly clothed for a protracted period of time in an area of extreme cold temperature, causing her serious injury, including severe frostbite, leading to gangrene of the toes of the left foot, transmetatarsal amputation of the right foot, and permanent nerve damage to both lower extremeties.
For her injuries, Semedo-Anacleto received $80,451.27 in workers’ compensation benefits from her employer’s workers’ compensation carrier, CNA. Thereafter, she brought suit against Marriott, which had primary liability insurance through American Mutual Insurance Company (American), with limits of $500,000.00. Prior to trial on that tort claim, American was declared insolvent, and the Fund, pursuant to G. L. c. 175D, took over American’s obligations to defend Marriott and to indemnify it up to the Fund’s statutory limit of $300,000.00.
Marriott offered Semedo-Anacleto a settlement in the amount of $395,000.00. She and her attorney refused the offer on the basis that if any settlement amount was to be subject to a workers’ compensation lien by CNA under G. L. c. 152, § 15, she would accept no less than $475,000.00.
Prior to trial, Semedo-Anacleto and her attorney settled her tort claim for $395,000.00, to which Marriott contributed $175,451.27 and the Fund paid in $219,548.73, that is, the difference between $300,000.00, the Fund’s statutory
On these undisputed facts, all the parties sought summary judgment. CNA argued that c. 152, § 15, creates a statutory right of reimbursement from settlement proceeds contributed by responsible third parties even if the Fund contributes to the total settlement pursuant to c. 175D, while Semedo-Anacleto and Barrett contended that c. 175D precludes CNA from enforcement of any lien against them. As we construe the decision of the Superior Court judge, she determined that because Semedo-Anacleto would be indemnified by the Fund for any money she was required to pay CNA, there was, for all intents and purposes, a $300,000.00 contribution by the Fund to the settlement. Had American remained solvent and contributed that amount to the settlement, CNA would be entitled to reimbursement, which, therefore, was not precluded by c. 175D.
CNA’s claim of a right to reimbursement arises under G. L. c. 152, § 15 (as appearing in St. 1991, c. 398, § 39
We turn to the third-party action, Semedo-Anacleto’s negligence claim against Marriott. As a result of the insolvency of Marriott’s liability insurer, American, the Fund became obligated, under G. L. c. 175D, § 5(1) (a) (as inserted by St. 1970, c. 261, § 1), to pay “covered claims” against Marriott up to the statutory amount of $300,000.00, less the amount of the workers’ compensation payments which, by definition, cannot be part of a “covered claim.” As defined by c. 175D, § 1(2) (as amended by St. 1975, c. 341, § 1), a “ ‘Covered claim’ shall not include any amount due any ... in
Recognizing these statutory limitations and relying upon Gaeta v. National Fire Ins. Co. of Hartford, 410 Mass, at 595, CNA argues that because the total amount of the settlement is well in excess of the amount of the compensation benefits paid Semedo-Anacleto and because the third-party defendant, Marriott, also contributed to the settlement, it can be reimbursed independent of the money paid by the Fund. In Gaeta, however, several parties contributed to the settlement, and the compensation insurer could be reimbursed in full from the contribution to the settlement made by a party other than the insured of the insolvent insurer. The difference is, in our view, crucial in light of the proviso in § 1(2), that “in no event” may any claim for any amount due an insurer be “asserted against the insured of such insolvent insurer.” In the present case, there were only two contributors to the settlement, the Fund and Marriott, the insured of the insolvent insurer.
Our conclusion, that CNA is precluded in this case from reimbursement by the provisions of c. 175D, is not inconsistent with the purpose of either G. L. c. 152, § 15, to prevent double recovery, see Percoco’s Case, 418 Mass, at 139, or G. L. c. 175D, “to indemnify injured persons.” Ferrari v. Toto, 9 Mass. App. Ct. 483, 487 (1980), S.C., 383 Mass. 36 (1981). Semedo-Anacleto sought recovery from Marriott in the amount of $475,000.00. Had American not become insolvent and had Marriott settled with her, CNA would have been reimbursed, and Semedo-Anacleto would have been in no better position than the one in which her settlement of $395,000.00 placed her.
Although CNA will sustain a loss as a result of our conclusion, that G. L. c. 175D precludes it from reimbursement of the compensation benefits it paid to Semedo-Anacleto, that conclusion is, in the present case, “consistent with the legislative intent [of c. 175D] and is not inconsistent with any demonstrated public policy.” Ferrari v. Toto, 383 Mass, at 39.
Accordingly, the judgment is reversed, and the matter is remanded to the Superior Court for entry of summary judgments for the defendants.
So ordered.
The parties to this appeal agreed that the question whether the indemnity agreement is null and void is not before us. In any event, any concerns about the enforceability of that agreement need not be addressed in view of our conclusion that CNA is precluded from seeking reimbursement from Semedo-Anacleto.
There is some difference of opinion among the parties concerning CNA’s knowledge of the settlement of Semedo-Anacleto’s tort claim and its opportunity to be heard. CNA makes no argument before us that this disagreement is material and would prevent summary judgment in favor of the defendants.
Specifically, the Superior Court judge stated: “[T]he structure of the settlement deprives the workers’ compensation insurer of the protection guaranteed by G. L. c. 152, § 15. Under the analysis in Gaeta [v. National Fire Ins. Co. of Hartford, 410 Mass, at 595], if American Mutual had remained solvent and had contributed $300,000 to the settlement, the amount of workers’ compensation benefit payments would ‘very clearly’ be
See St. 1991, c. 398, § 107. The section prior to its rewriting contained the same provision.
CNA suggests that the figure of $475,000.00 is “fraught with speculation.” Aside from the undisputed allegations concerning the severity of Semedo-Anacleto’s injuries, we think that CNA’s view of the amount of recovery she sought is irrelevant. The undisputed fact of the matter is that if Semedo-Anacleto was required to reimburse CNA, she was not going to settle for less than $475,000.00.