425 Mass. 433 | Mass. | 1997
The primary question presented is whether a workers’ compensation insurer has a duty to defend an insured employer in a civil action brought by an employee who has not preserved her right of action at common law. See G. L. c. 152, § 24.
HDH notified its workers’ compensation and employers’ liability insurer, the defendant, Atlantic Charter Insurance Company (Atlantic), and requested that Atlantic defend the civil action. Atlantic refused to defend and denied coverage.
Atlantic moved for summary judgment, claiming that there was no coverage for liability arising from the employee’s civil action under either Part One, the workers’ compensation portion of the insurance policy, or Part Two, the employers’ liability portion. Atlantic argued that Part One only covered claims for benefits payable under the Workers’ Compensation Act, G. L. c. 152, and not civil actions for common law damages. Atlantic further claimed that, because the employee had not given statutory notice
However, the Appeals Court determined that the insurer may have had a duty to defend HDH in the civil action because the allegations of the employee’s complaint, reasonably read, stated a claim covered under the terms of Part One, the workers’ compensation portion of the policy.
The well-settled rule is that an insurer has a duty to defend if the allegations of the complaint are reasonably susceptible of an interpretation that they state a claim covered by the terms of the insurance policy. Liberty Mut. Ins. Co. v. SCA Servs., Inc., 412 Mass. 330, 331-332 (1992), and cases cited.
The terms of Part One of the policy clearly limit defense and indemnity of the employer to claims for benefits required by the workers’ compensation statute.
The record demonstrates that a claim for benefits was never initiated by the employee, as mandated by G. L. c. 152, § 10. Accordingly, Atlantic is correct that it had no duty to defend the civil action because the complaint did not state a claim that could result in liability which Atlantic would be obligated to pay under any reasonable interpretation of Part One of the policy. See, e.g., Jimmy’s Diner, Inc. v. Liquor Liab. Joint Underwriting Ass’n of Mass., 410 Mass. 61, 65 (1991).
The distinction is not merely a procedural matter of bringing an action in the wrong forum. As amici point out, there are fundamental differences between a claim for workers’ compen
Our conclusion also is bolstered by courts in other jurisdictions which have, in similar circumstances, interpreted virtually identical language in workers’ compensation and employers’ liability insurance policies as providing no duty to defend in civil litigation. See La Jolla Beach & Tennis Club, Inc. v. Industrial Indem. Co., 9 Cal. 4th 27, 46 (1994)
The Appeals Court also relied on G. L. c. 152, § 25, as buttressing its conclusion that Atlantic may have had a duty to defend the civil action. 41 Mass. App. Ct. 131, 134 (1996). See note 5, supra. However, when properly read in its statutory context and in accordance with the legislative intent of the
The language of G. L. c. 152, § 25, directing an insurer to reimburse an employer that has been “required by a judgment of a court to pay to an employee any damages on account of personal injury,” must be read consistently with the immediately preceding exclusive remedy provision, § 24, to require payments solely for judgments arising from a civil action for personal injuries brought by an employee who has affirmatively rejected the workers’ compensation system.
Any other reading of G. L. c. 152, § 25, would render the waiver provisions of G. L. c. 152, § 24, meaningless and would subvert the legislative intent of the statute. Cf. Price v. Railway Express Agency, Inc., 322 Mass. 476, 480 (1948) (construing the phrase “every employer” in a provision of the workers’ compensation statute so as not to subvert the intent of other sections expressly excepting certain employers from the ambit of the act). General Laws c. 152, § 25, does not create an independent civil remedy for injured employees.
Public policy also supports our decision. The fundamental purpose of the workers’ compensation system is to make funds more readily available to injured employees. Accordingly, the
The decision of the Superior Court allowing summary judgment for Atlantic is affirmed.
Judgment of the Superior Court affirmed.
General Laws c. 152, § 24, provides: “An employee shall be held to have waived his right of action at common law ... in respect to an injury that is compensable under this chapter, to recover damages for personal injuries, if he shall not have given his employer, at the time of his contract of hire, written notice that he claimed such right .... If an employee has not given notice to bis employer that he preserves his right of action at common law as provided by this section, the employee’s spouse, children, parents . . . shall also be held to have waived any right created ... at common law . . . against such employer, including, but not limited to claims for damages due to emotional distress, loss of consortium . . . when such loss is a result of any injury to the employee that is compensable under this chapter.”
The contract of insurance was a standard form contract generally used by all workers’ compensation insurers.
The judge was not provided with the employee’s complaint and relied on the parties’ representations as to the nature of the employee’s claims. The judge noted that the basis for her decision was that HDH conceded that the exclusivity provisions of the workers’ compensation statute applied to all of the employee’s claims.
The Appeals Court said that the former employee’s discrimination claim may not be covered by Part One of the policy. See HDH Corp. v. Atlantic Charter Ins. Co., 41 Mass. App. Ct. 131, 133-134 (1996), quoting College-Town, Div. of Interco, Inc. v. Massachusetts Comm’n Against Discrimination, 400 Mass. 156, 169 (1987) (“we do not agree that damages in this case resulting from the violation of G. L. c. 151B, § 4, are compensable exclusively under the Workmen’s [szc] Compensation Act”). The Appeals Court concluded that Atlantic’s duty to defend arose out of the employee’s claim for emotional injury resulting from her wrongful termination. See id. at 134, citing Simmons v.
General Laws c. 152, § 25, provides: “If an insured person who has complied with the rules, regulations and demands of the insurer is required by a judgment of a court to pay to an employee any damages on account of personal injury sustained by such employee during the period covered by insurance, the insurer shall pay to the insured the full amount of such judgment and the cost assessed therewith if the insured shall have given the insurer written notice of the bringing of the action in which the judgment was recovered and an opportunity to appear and defend the same.”
We acknowledge the amicus briefs of the Independent Property-Casualty Insurers of Massachusetts, Inc., Alliance of American Insurers, and National Association of Independent Insurers; American Insurance Association, Industrial Indemnity Insurance Company, Travelers Indemnity Company, and Aetna Casualty and Surety Company; the New England Legal Foundation; and Hartford Insurance Company, on behalf of Atlantic.
The workers’ compensation portion of the policy at issue provides in relevant part:
“B. We Will Pay
“We will pay promptly when due the benefits required of you by the workers compensation law.
*437 “C. We Will Defend
“We have the right and duty to defend at our expense any claim, proceeding or suit against you for benefits payable by this insurance. We have the right to investigate and settle these claims, proceedings or suits.
“We have no duty to defend a claim, proceeding or suit that is not covered by this insurance.” (Emphases added.)
The workers’ compensation statute does grant a Superior Court judge jurisdiction to enforce orders of the Department of Industrial Accidents, and provides for appellate review by the Appeals Court, but only after a claim for benefits has been adjudicated through the statutorily prescribed workers’ compensation system. G. L. c. 152, § 12. See Neff v. Commissioner of the Dep’t of Indus. Accs., 421 Mass. 70, 74 (1995). Those circumstances are not presented here.
The Appeals Court distinguished La Jolla Beach & Tennis Club, Inc. v. Industrial Indem. Co., 9 Cal. 4th 27, 43 (1994), as relying on definitions in California’s workers’ compensation statute contrasting “damages” with “compensation.” 41 Mass. App. Ct. at 135-136. However, the distinction between similar terms is evident in the Commonwealth’s statute as well. See, e.g., G. L. c. 152, § 15 (using the terms “benefits” and “damages” as mutually exclusive).
The plaintiff quotes language from Young v. Duncan, 218 Mass. 346, 350 (1914), as supporting the proposition that nothing in the workers’ compensation statute indicates that §§24 and 25 were intended to be interdependent. However, the relationship between §§24 and 25 was not at issue in Young.
Part Two, the employers’ liability portion of the insurance policy, is intended to provide coverage in the rare circumstance in which an employee who has affirmatively opted out brings a tort action for personal injuries. Because G. L. c. 152, § 25, requires insurers to indemnify employers for the full amount of damages awarded to such employees, an endorsement to the insurance policy provides: “Our liability to you under [§] 25 of [c.] 152 . . . is not subject to the limit of liability that applies to Part Two (Employers Liability Insurance).” By its terms, the endorsement has no import in determining the scope of the duty to defend or indemnify under Part One, the workers’ compensation portion of the policy.
The common practice for employers seeking coverage for claims outside of the workers’ compensation system is to purchase some form of general liability insurance to protect against such risks.