436 A.2d 308 | Conn. Super. Ct. | 1981
In this case we are called upon to determine the constitutionality, on equal protection grounds, of the statutory scheme created by General Statutes 38-325 (b) and (c).2 The plaintiff sued for *725 reimbursement of basic reparations benefits paid by it to the defendant who thereafter settled a claim against a third-party tortfeasor. The court below held that the statutory scheme violates both the federal and state equal protection clauses,3 and rendered summary judgment for the plaintiff in an amount which deducted from the plaintiff's recovery a portion of the attorney's fee paid by the defendant in settling his claim. We hold that the statute is constitutional and remand the case for further proceedings.
Both parties moved for summary judgment. The trial court held that the defendant was required by 38-325 (b) to make full reimbursement to the plaintiff, without any deduction for any portion of his attorney's fee, thus in effect ruling out the defendant's first special defense; and that the statutory scheme created by 38-325 (b) and (c) deprived the defendant of equal protection of the laws in violation of both the federal and state constitutions, thus in effect ruling that the defendant's third special defense was valid. Because of its conclusion on the equal protection issue, the court did not rule on the defendant's second special defense based on the due process clauses of the federal and state constitutions. Rather than render judgment for the defendant, however, the court below sought to cure the statutory defect by rendering summary judgment for the plaintiff in the amount of $448.75, which represented the benefits it paid, $673.12, minus one-third of the defendant's attorney's fee, $224.37.
The plaintiff appealed from the court's decision of unconstitutionality of the statutory scheme. The defendant cross appealed, claiming that the trial court *727 erred by not rendering judgment in his favor upon its conclusion that the statute was unconstitutional.5
General Statutes 38-325 provides an insurer with a right to either direct reimbursement or to subrogation for basic reparations benefits which it previously paid to its insured, upon recovery by the insured of consequential damages, beyond the basic reparations benefits, from the third-party tortfeasor who caused his injuries. The equal protection issue arises from the classification created by subsections (b) and (c) of this section. Under subsection (b), if an insured recovers from an insured operator of a private passenger motor vehicle he must, because of his insurer's lien on the recovery, make direct and full reimbursement to his insurer of the basic reparations benefits without deduction of any portion of any attorney's fee he may have incurred in obtaining that *728
recovery. See note 4, supra. Under subsection (c), however, if an insured recovers from an operator of a motor vehicle which is not an insured private passenger motor vehicle, he need not make direct and full reimbursement to his insurer; the insurer has no direct lien on the recovery but is merely subrogated to the insured's recovery rights to the extent of the benefits paid. In that case, then, if the insured recovers he would be entitled, before remitting to his insurer the basic reparations benefits paid, to deduct therefrom a fair portion of his attorney's fee attributable to its collection. See 6A Appleman, Insurance Law
Practice (Rev. Ed.) 4096, pp. 287-88; 16 Couch, Cyclopedia of Insurance Law (2d Ed. Sup. 1980) 61.44; note, 2 A.L.R. 3d 1441, 2; Cary v. Phoenix Ins. Co.,
In the example given by the trial court, if an insurer pays $3000 basic reparations benefits to its insured who thereafter, with the aid of his attorney, recovers $9000 from a subsection (b) tortfeasor, the insured must reimburse his insurer the full $3000; after paying his attorney an assumed fee of one-third of his recovery, or $3000, he retains a net recovery of $3000. If the same insurer pays $3000 basic reparations benefits to the same insured who thereafter, with the aid of his attorney, recovers $9000 from a subsection (c) tortfeasor, the $9000 would be allocated, in the first instance, $3000 to the attorney, $3000 to the insured and $3000 to the insurer. But
The statutory scheme created by 38-325 (b) and (c) has a rational basis in that, in cases of relatively small total recovery the difference in the insured's net recovery, depending on whether he must bear or may share his attorney's fee, creates a system of disincentives and incentives to sue. This system bears a rational relationship to a legitimate state end and is based on reasons related to that goal. United Illuminating Co. v. New Haven, supra, 640.6
The vast majority of motor vehicles are private passenger motor vehicles. See Keeton O'Connell, op. cit. 12, n. 13. Thus most injuries from motor vehicle accidents will involve private passenger motor vehicles, and the great majority of those injuries are minor. Id., 43, n. 112. Requiring the subsection (b) insured in those cases of minor injury, and likely minor recovery, to bear the full brunt of his attorney's fee creates a disincentive in him to sue, since his net recovery will be reduced and may even, depending on the recovery and the amount of basic reparations paid, be eliminated entirely. This disincentive in turn serves twin goals of the no-fault system: reducing the pressure of litigation on the court system; and, by maximizing the return to the insurer through full recovery of the benefits paid and by lowering liability costs to insurers of private passenger motor vehicles, permitting reduction in insurance premiums or less of an increase than would otherwise be the case. At the same time, in minor cases involving subsection (c), the insured has, vis-a-vis a subsection (b) insured, an incentive to sue, since his insurer will share the burden of his attorney's fee. The tortfeasors he is encouraged to sue are the owners and operators of motorcycles, large trucks and public or livery vehicles. There is a body of experience to suggest *733
that operation of motorcycles is more dangerous than that of four-wheeled vehicles because of their relative instability; see Shavers v. Attorney General,
Differences in consequences flowing from the differences between private passenger motor vehicles and such vehicles as motorcycles, commercial vehicles and common carriers are not unknown to our law. They run throughout the licensing, registration, safety and equipment provisions of title 14 of the General Statutes. Gentile v. Altermatt, supra, upheld them against an attack that requiring no-fault coverage of one class but not the other violated the equal protection principle.8 Similarly, statutes awarding attorney's fees to one party and not another, or in certain kinds of cases but not others, have been held to have a rational basis rooted in a public policy to encourage certain kinds of litigation. See note, 73 A.L.R. 3d 515. Permitting a sharing of attorney's fees in one kind of case involving one class of vehicles in order to encourage some suits against them, while denying such a sharing in another kind of case involving another class of vehicles in order to discourage suits against them, has no less a rational basis.
We conclude, therefore, that the statutory scheme of General Statutes 38-325 (b) and (c) does not violate either the federal or state constitutional requirement of equal protection of the laws. Because, however, the trial court did not rule on the due process issues raised by the defendant's second special defense those issues are not before us and we do not decide them. *735
There is error; the judgment is set aside and the case is remanded to be proceeded with according to law.
In this opinion SHEA and BIELUCH, Js., concurred.