Farrell's Case

| Mass. | Jun 6, 1962

Whittemore, J.

The facts, agreed to before the Industrial Accident Board, were as follows: The employee on July 2, 1958, sustained injuries arising out of and in the course of his employment when struck while on the public way by an automobile owned and operated by William E. Malinowski. The injuries resulted in his death on July 3, 1958. The employee was survived by his widow, Margaret, and a dependent son, born October 12,1940. The Hartford Accident and Indemnity Company (Hartford) was the carrier of both the workmen’s compensation insurance of the employer of Farrell and the automobile liability insurance of Malinowski with a limit of coverage of $20,000 for the injury or death of one person in one accident. Margaret claimed compensation under G. L. c. 152 for herself as dependent widow and for a dependent son. See § 32, as amended through St. 1950, c. 738, § 4. Under agreements on file Hartford, as the compensation insurer, has paid the required dependency compensation but now seeks an offset.

Hartford, as the compensation insurer, did not bring an action against the third party, Malinowski, within nine months. Margaret, as executrix, brought such action and the jury in the Superior Court returned a verdict of $25,735 on count 1 (conscious suffering) and $13,780 on count 2 (death). The executrix, before entry of judgment, agreed to accept $20,000 in full payment for damages and to release Malinowski from all further liability. Hartford, as the liability insurer, agreed to pay, and has paid, the entire amount of its coverage ($20,000) and, as the compensation insurer, agreed to waive recovery of all payments made by it under G. L. c. 152 prior to March 11, 1960, the date of execution of the stipulation and agreement for entry of judgment.

The single member in his findings ruled that the action taken by Margaret as executrix “resulting in entry of judgment of $20,000 which has been paid by . . . Hartford . . . does not in any way affect or relieve [the] obligation of the workmen’s compensation insurer ... to pay . . . [the] dependent widow benefits under ... [G. L. c. 152, § 31, as amended through St. 1956, c. 588].” His findings in accordance with the stipulation, and his order that the insurer continue the payment of dependency compensation to the claimant widow, were affirmed by the reviewing board.

This is the insurer’s appeal from the decree entered in the Superior Court that the dependency payments be made in accordance with the board’s decision subject to the provisions of the workmen’s compensation act.

There was no error.

We assume, but need not decide, that under G. L. c. 152, § 15, as amended through St. 1943, c. 432,¹ the insurer is entitled to full reimbursement from the proceeds of the law action against the third party before the claimant may receive any thereof. The rights of the insurer, however, are affected by the stipulation under which the settlement was made. This provided: “Whereas the executrix has agreed to accept twenty thousand dollars in full payment for damages and to release the defendant from all further liability [emphasis supplied]; . . . Hartford . . . will pay to the executrix the sum of twenty thousand dollars, of which thirteen thousand seven hundred eighty dollars is for the death, and six thousand two hundred twenty is for conscious suffering; . . . Hartford . . . agrees to waive recovery of all payments made to date under c. 152 of the General Laws . . ..”

Section 15 expressly provides that the hearing on the merits of the settlement is a time for determination of “the amount, if any, to which the insurer is entitled out of such settlement by way of reimbursement . . ..” The settlement stipulation is to he construed in the light of this provision.

Hartford obtained a reduction in the verdicts against its third party insured and this was not necessarily insignificant to Hartford even though the policy was limited to the amount paid. In any event, the executrix gave up her rights against the defendant. The stipulation specified that the executrix was accepting “twenty thousand dollars in full payment for damages.”

In these circumstances we think that by the stipulation Hartford agreed that Margaret would have the $20,000 as executrix and not subject to offset against future compensation payments.

The final decree is affirmed and costs and reasonable expenses under G. L. c. 152, § 11A, as amended through St. 1957, c. 693, § 3, shall be allowed by the single justice.

So ordered.

1 “ [T]he sum recovered shall be for the benefit of the insurer unless such sum is greater than that paid by it to the employee. If the insurer brings the action four fifths of the excess shall be paid to the employee, and if the employee brings the action he shall retain the entire excess. . . . For the purposes of this section, ‘excess’ shall mean the amount by -which the total sum received in payment for the injury, exclusive of interest and costs, exceeds the compensation paid under this chapter. . . . Except in the ease of a settlement by agreement by the parties to, and during a trial of, such an action at lawj no settlement by agreement shall be made with such other person without the approval of the industrial accident board after an opportunity has been afforded both the insurer and the employee to be heard on the merits of the settlement and on the amount, if any, to which the insurer is entitled out of such settlement by way of reimbursement, which amount shall be determined by said board at the time of such approval. In the case of a settlement by agreement by the parties to, and during a trial of, such an action at law the justice presiding at the trial shall have and exercise, relative to the approval of such settlement by agreement and to the protection of the rights and interests of the employee, all the powers hereinbefore granted to the industrial accident board. ...”