CHARLES BENSON vs. CITY of CRANSTON and JAMES CASALE vs. CITY OF CRANSTON CONSOLODATED C.A. No. 07-5714 and C.A.
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STATE OF RHODE ISLAND AND PROVIDENCE PLANTATIONS
Filed – July l6, 2009
PROVIDENCE, SC.
SUPERIOR COURT
CHARLES BENSON
vs.
CITY of CRANSTON
JAMES CASALE
vs.
CITY OF CRANSTON
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C.A. No. 07-5640
CONSOLIDATED
C.A. No. 07-5714
DECISION
DARIGAN, J.
James Casale (“Casale”) and Charles Benson (“Benson”) (collectively
“Employees”) filed separate complaints for declaratory judgment against the City of Cranston
(“City”) pursuant to G.L. 1956 § 9-30-1 et seq., requesting that this Court declare that under the
provisions of G.L. 1956 § 19-45-1.1, the City has no right of reimbursement for injured on duty
(“IOD”) benefits paid by the City from any money that the Employees may receive from their
uninsured motorist carriers. The City has filed separate counterclaims for declaratory judgment
against the Employees, pursuant to § 9-30-1 et seq., seeking this Court to declare that pursuant to
G. L. 1956 § 45-19-1.1, the City has a right to reimbursement from the Employees’ uninsured
motorist carriers. These matters were consolidated by order.
Facts and Travel
On August 9, 2004, 1 the Employees, firefighters for the City, were responding to a “fire
call” when their fire/rescue vehicle was struck by a vehicle operated by Kristin Rosa. 2 As a
result of Ms. Rosa’s negligence in operating her vehicle, the Employees sustained severe and
permanent mental and physical injuries and continue to require medical care.
As a result of their injuries and disabilities, the Employees received IOD benefits
pursuant to § 45-19-1 et seq. 3 Benson received $50,538.49 in IOD benefits. 4 Casale received
$58,768.06 in IOD benefits for a first period of disability from August 10, 2004 to April 2, 2006.
On April 3, 2006, Casale returned to modified duties with the City. Casale currently receives
IOD benefits for a second period of disability.
The Employees have not recovered monetarily from Kristin Rosa, as she failed to
maintain general liability insurance coverage. Thus, the Employees submitted claims to their
1
The parties have stipulated to sixteen facts.
Kristin Rosa is not a party to this litigation.
3
Section 45-19-1 provides in pertinent part:
2
(a) Whenever any police officer of the Rhode Island Airport Corporation or
whenever any police officer, fire fighter, crash rescue crewperson, fire
marshal, chief deputy fire marshal, or deputy fire marshal of any city, town,
fire district, or the state of Rhode Island is wholly or partially incapacitated
by reason of injuries received or sickness contracted in the performance of
his or her duties or due to their rendering of emergency assistance within
the physical boundaries of the state of Rhode Island at any occurrence
involving the protection or rescue of human life which necessitates that they
respond in a professional capacity when they would normally be considered
by their employer to be officially off-duty, the respective city, town, fire
district, state of Rhode Island or Rhode Island Airport Corporation by
which the police officer, fire fighter, crash rescue crewperson, fire marshal,
chief deputy fire marshal, or deputy fire marshal, is employed, shall, during
the period of the incapacity, pay the police officer, fire fighter, crash rescue
crewperson, fire marshal, chief deputy fire marshal, or deputy fire marshal,
the salary or wage and benefits to which the police officer, fire fighter,
crash rescue crewperson, fire marshal, chief deputy fire marshal, or deputy
fire marshal, would be entitled had he or she not been incapacitated, and
shall pay the medical, surgical, dental, optical, or other attendance, or
treatment, nurses, and hospital services, medicines, crutches, and apparatus
for the necessary period . . . .
4
Benson has retired from the Cranston Fire Department.
2
respective motor vehicle insurance carriers seeking uninsured motorist (“UM”) benefits. On the
date of the accident, Benson was insured for UM benefits through his motor vehicle insurance
carrier, Allstate Insurance Company, (“Allstate”) for $100,000.
Allstate tendered the full
$100,000, but in accordance with its contract with Benson, Allstate proffered that tender with a
$50,583.49 reduction based on the IOD payments he had received. Similarly, Casale was
insured for UM benefits through his motor vehicle insurance carrier, Amica Insurance Company,
(“Amica”) for up to $500,000. Amica initially tendered $100,000 to Casale, but, in accordance
with its contract with Casale, has reduced the tender by $58,768.06 based on the IOD payments
made to Casale. 5 Though the Employees paid for these UM benefits personally, the City asserts
that it is entitled to reimbursement from these UM benefits for the IOD benefits previously paid
to the Employees and for payments presently being made to Casale.
On October 23, 2007, Benson filed a complaint in the Superior Court, seeking that this
Court declare, pursuant to § 9-30-1 et seq., that the City has no right of reimbursement from any
money that Benson may receive from Allstate pursuant to the UM provisions of his personal
motor vehicle insurance policy. Similarly, on October 26, 2007, Casale filed a complaint in the
Superior Court, requesting that this Court declare the City has no right of reimbursement from
any payments that Casale may receive from Amica pursuant to the UM provisions of his
personal motor vehicle insurance policy. The City answered the complaints of Benson and
Casale on November 6, 2007 and December 3, 2007, respectively. The City requests that the
Employees’ complaint be denied and dismissed and it be awarded the cost of defense. The City
requested, in counterclaims against the Employees pursuant to § 9-30-1 et seq., that this Court
declare that the City has the right of reimbursement from Benson’s insurer, Allstate, for
5
Although, the amounts tendered to Benson and Casale based on their respective insurance contracts were not
among the stipulated facts, the City admitted to these facts in its answer. (See Answer of Defendant, City of
Cranston to Plaintiff, Charles Benson ¶ 11; Answer of Defendant, City of Cranston to Plaintiff, James Casale ¶ 11).
3
$50,583.49 and Casale’s insurer, Amica, for $58,768.06. On March 24, 2008, pursuant to the
City’s motion to consolidate, Benson v. City of Cranston, C.A. No. 07-5640 was consolidated
with Casale v. City of Cranston, C.A. No. 07-5714.
Standard of Review
The Uniform Declaratory Judgments Act, § 9-30-1 et seq., grants this Court the “power
to declare rights, status, and other legal relations whether or not further relief is or could be
claimed.” Section 9-30-1. Further, § 9-30-2 provides in pertinent part:
Any person . . . whose rights, status, or other legal relations are
affected by a statute, municipal ordinance, contract, or franchise,
may have determined any question of construction or validity
arising under the instrument, statute, ordinance, contract, or
franchise and obtain a declaration of rights, status, or other legal
relations thereunder.
This Court’s power under the Uniform Declaratory Judgments Act is “broadly construed, to
allow the trial justice to ‘facilitate the termination of controversies.’” Bradford Assocs. v. Rhode
Island Div. of Purchases, 772 A.2d 485, 489 (R.I. 2001) (quoting Capital Properties, Inc. v.
State, 749 A.2d 1069, 1080 (R.I. 1999) (further citation omitted)). Furthermore, it is “well
settled that the Superior Court has broad discretion to grant or deny declaratory relief under the
[Uniform Declaratory Judgments Act].”
Tucker Estates Charlestown, LLC v. Town of
Charlestown, 964 A.2d 1138, 1140 (R.I. 2009) (citation omitted).
Law and Analysis
Our Supreme Court has explained that the “intent behind § 45-19-1 was to ‘provide
greater work-related-injury benefits to certain public employees whose jobs require them to serve
the state or its municipalities, often in dangerous situations.’” Hargreaves v. Jack, 750 A.2d 430,
433 (R.I. 2000) (citing Labbadia v. State, 513 A.2d 18, 21 (R.I. 1986)).
Section 45-19-1
“automatically triggers IOD benefits upon the occurrence of a line-of-duty illness or injury
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without requiring the police officer [or fire fighter] to show fault on the part of the respective
city, town, fire district, or state. Kaya v. Partington, 681 A.2d 256, 258 (R.I. 1996) (citing
Labbadia, 513 A.2d at 21)). However, “the IOD statute does not preclude an officer from
seeking recovery of damages, including compensation for pain and suffering, from a third party.”
Id. at 259. Section 45-19-1.1 provides a means for reimbursement, under certain circumstances,
for the city or town that has made IOD payments. Sections 45-19-1.1 provides:
Where the injury or sickness for which compensation is payable
under § 45-19-1, was caused under circumstances creating a legal
liability in some person other than the employer to pay damages in
respect of the injury or sickness, the employee may take
proceedings, against that person to recover damages, and the
employee is be [sic] entitled to receive both damages and
compensation; provided, that the employee, in recovering damages
either by judgment or settlement from the person liable to pay
damages, shall reimburse the city, town, or the state of Rhode
Island by whom the compensation was paid to the extent of the
compensation paid as of the date of the judgment or settlement,
and the receipt of those damages by the employee does not bar
future compensation.If [sic] the employee has been paid
compensation under that chapter, the city, town, or state of Rhode
Island, by whom the compensation was paid, is entitled to
indemnity from the person liable to pay damages as previously
stated, and to the extent of the indemnity, is subrogated to the
rights of the employee to recover damages; provided, that when
money has been recovered, either by judgment or by settlement, by
the employee from the person liable to pay damages as previously
stated, by suit or settlement, and the employee is required to
reimburse the city, town, or state of Rhode Island by whom the
compensation was paid, the employee or the employee’s attorney
is entitled to withhold, from the amount to be reimbursed, that
proportion of the costs, witness expenses, and other out-of-pocket
expenses and attorney fees, which is the amount which the
employee is required to reimburse the city, town, or state of Rhode
Island by whom compensation was paid, bears to the amount
recovered from the third party.
The Employees contend that § 45-19-1.1 clearly and unambiguously requires an
employee who recovers damages from a third party tortfeasor, not UM benefits, to reimburse his
or her employer for IOD payments. The City argues that the UM benefits are available to the
5
Employees as a result of a negligent third party’s, Kristin Rosa’s, legal liability, and thus the City
must be reimbursed from the UM payments.
When this Court “is confronted with a statute that contains clear and unambiguous
language, [it] construe[s] the statute literally and accord[s] the terms their plain and ordinary
meaning.” Lynch v. Spirit Rent-a-Car, Inc., 965 A.2d 417, 425 (R.I. 2009) (citing Liberty Mut.
Ins. Co. v. Kaya, 947 A.2d 869, 872 (R.I. 2008)). However, when statutory provisions are
ambiguous, this Court will “examine the statute in its entirety in order to discern the legislative
intent and purpose behind it.” Planned Environments Mgmt. Corp. v. Robert, 966 A.2d 117,
122 n.8 (R.I. 2009) (citing State v. LaRoche, 925 A.2d 885, 888 (R.I. 2007)) (further citations
omitted).
Also, given § 45-19-1 et seq.’s “remedial nature, any ambiguities in the statute
generally ‘must be construed liberally in favor of the employee.’” Rison v. Air Filter Systems,
Inc., 707 A.2d 675, 681 (R.I. 1998) (quoting Coletta v. State, 106 R.I. 764, 772, 263 A.2d 681,
685 (1970)).
This Court’s interpretation of § 45-19-1.1 is guided by our Supreme Court’s
interpretation, in Rison, 6 of G.L. 1956 § 28-35-58, providing for the reimbursement of workers’
compensation carriers. The pertinent portion of § 28-35-58 interpreted in Rison is inescapably
similar to § 45-19-1.1. Section 28-35-58 provides in part:
(a) Where the injury for which compensation is payable under
chapters 29--38 of this title was caused under circumstances
creating a legal liability in some person other than the
employer to pay damages in respect of the injury, the employee
may take proceedings, both against that person to recover
damages and against any person liable to pay compensation
under those chapters for that compensation, and the employee
shall be entitled to receive both damages and compensation.
The employee, in recovering damages either by judgment or
6
The portion of § 28-35-58 interpreted by our Supreme Court in Rison v. Air Filter Systems, Inc., 707 A.2d 675
(R.I. 1998) was not altered by subsequent amendments to § 28-35-58 through P.L. 2002 ch. 199 § 4 and P.L. 2002
ch. 280 § 4.
6
settlement from the person so liable to pay damages, shall
reimburse the person by whom the compensation was paid to
the extent of the compensation paid as of the date of the
judgment or settlement and the receipt of those damages by the
employee shall not bar future compensation.
In determining that a specific compensation award, from a workers’ compensation
carrier, should be credited against settlement damages, our Supreme Court provided its
interpretation of § 28-35-58 and similar statutes in other jurisdictions, explaining that they
mandate reimbursement from funds acquired from culpable tortfeasors:
These statutes share a common policy: to permit injured workers to
recover tort damages from third parties while preserving their
employers’ potential workers’ compensation liability as security
against a deficient tort recovery and, at the same time, guarding
against any double recovery or windfall to the injured employees
. . . . However, to avoid an excessive or a double recovery by the
employee, the employer is allowed to obtain reimbursement of its
compensation payments from damages recovered by the employee
from responsible third parties. The employer's workers'
compensation obligations are typically set off against the proceeds
of any tort settlement or judgment so that the employer is
reimbursed for any compensation previously paid or payable in the
future to the employee. Once this is done, the injured employee is
allowed to retain any excess tort damages (net of reimbursed or
credited workers' compensation benefits) recovered from the
settling third-party tortfeasor. ‘The central objective is to provide
the mechanics that will achieve the result described . . . the third
party paying what he would normally pay if no compensation
question were involved; the employer and carrier [insurer]
“coming out even” by being reimbursed for their compensation
expenditure; and the employee getting any excess of the damage
recovery over compensation.’ Rison, 707 A.2d at 683 (quoting
Arthur Larson, 6 Workers’ Compensation Law § 74.16(a) (1997))
(emphasis added).
Further, our Supreme Court reiterated that reimbursement is necessitated by recovery
from tortfeasors, not the employees’ UM coverage providers:
[A]lthough the [Workers’ Compensation Act (“WCA”)] creates
no-fault liability on the employer’s part to benefit and protect the
employee, it also reflects a policy judgment that, whenever
possible, any culpable tortfeasor(s) should bear the ultimate
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financial burden for the employee’s injuries. Thus, when a
recovery can be obtained against a responsible third party (who
usually cannot be held liable or amenable to a substantial
settlement without some degree of culpability), the third party is
made to bear the cost of those injuries while the employer whose
liability arises solely through the WCA's no-fault liability
provisions is reimbursed or credited pro tanto for its past and
continuing WCA obligations. It is critical to recognize that under
the WCA the employer serves as a vanguard for the employee’s
welfare, standing ready to advance benefits to the employee
without delay and without determination of fault until the
employee obtains a recovery from any settling third-party
tortfeasor or tort-judgment debtor. Id. at 683-684 (citations
omitted) (emphasis added).
Noting that “‘the well-known canon of statutory construction in pari materia dictates that
similar statutes should be interpreted similarly[,]’”
State v. DiStefano, 764 A.2d 1156,
1160 (R.I. 2000) (quoting State v. DiCicco, 707 A.2d 251, 253-54 (R.I. 1998)), this Court finds,
in light of our Supreme Court’s interpretation of § 28-35-58, that our Supreme Court would
interpret § 45-19-1.1 to require reimbursement from funds acquired from culpable, third-party
tortfeasors, not employees’ UM coverage providers. 7 In the case at bar, the Employees are
pursuing insurance claims against their UM carriers, not the negligent third-party. Accordingly,
this Court finds that § 45-19-1.1 provides no right to reimbursement from any proceeds the
Employees have received or may receive from their respective UM coverages.8
7
The Court of Appeals of Maryland, Maryland’s highest court, has noted that “[t]he jurisdictions that have
addressed the question of whether a workers' compensation carrier that has paid compensation benefits should have
a lien upon the proceeds of the claimant's recovery under an uninsured motorist policy have almost unanimously
held that the carrier is not entitled to such a lien.” Erie Ins. Co. v. Curtis, 330 Md. 160, 170, 623 A.2d 184, 189
(1993) (citing 2A Arthur Larson, The Law of Workmen’s Compensation § 71.23(a)(1993)); see also Modern
Workers Compensation, § 206:16 (1993) (stating that “most states have held that the workers’ compensation lien
does not apply to a recovery from the UM carrier[]”) (footnotes omitted).
8
The City correctly points out that but for a third party’s negligence and accompanying legal liability, the
Employees would be unable to collect funds from their insurers. Thus, the City contends that it should be
reimbursed from the UM benefits. This Court finds, however, that § 45-19-1.1 plainly requires that the funds used
to reimburse a city derive from the legally liable tortfeasor, not UM payments made by insurers in lieu of the
responsible party’s damages. See Lynch, 965 A.2d at 425; § 45-19-1.1 (providing, in part, that “the employee, in
recovering damages either by judgment or settlement from the person liable to pay damages, shall reimburse the
city”).
8
The City argues that Manzotti v. Amica Mut. Ins. Co., 656 A.2d 625 (R.I. 1995)
(“Manzotti I”) and Manzotti v. Amica Mut. Ins. Co., 695 A.2d 1001 (R.I. 1997) (“Manzotti II”)
recognize its right to reimbursement from the payments made by the Employees’ insurers
pursuant to their UM coverage. In these cases, a police officer struck by a motor vehicle
obtained $50,000 from the tortfeasor’s insurer. Manzotti I, 656 A.2d at 626. He also received
$22,400 in IOD payments from the City of Providence. Id. In an arbitration proceeding between
the police officer and his insurer, Amica, regarding his claim for underinsured motorist coverage,
the arbitrator determined that the police officer suffered total damages of $80,000. Id. In the
police officer’s suit to confirm the award, filed against his insurer, the trial justice ordered his
insurer to pay the officer $30,000 pursuant to his underinsured motorist coverage, after reducing
the $80,000 arbitration award by the $50,000 received from the tortfeasor’s insurer, and ordered
the police officer to reimburse to Providence the $22,400 in IOD benefits that he had been paid.
Id. Our Supreme Court explained that this distribution was an “equitable remedy.” Id. Further,
“The Superior Court reasoned that this would assure [the police officer] full compensation for his
injuries and would avoid a double recovery.” Id. (citing Poulos v. Aetna Ca. & Sur. Co., 119
R.I. 409, 379 A.2d 362 (1977)). The Manzotti I Court remanded the case to the Superior Court
to allow Providence to become a party to the dispute to effectuate the trial justice’s distribution
of damages. Id. After Providence intervened, Manzotti and his insurer argued in a later appeal
that Providence was not entitled to reimbursement from Manzotti because the city failed to
perfect its lien pursuant to § 45-19-1.3. 9
9
Section 45-19-1.2 provides for a lien for a municipality:
Any employer paying compensation under the provisions of § 45-19-1 shall, if
the employee recovers damages from a third person on account of the injuries or
sickness for which compensation is payable, have a lien upon that part going to
the employee, of any recovery or sum had or collected or to be collected by the
employee, or by the employee’s heirs or personal representatives in the case of
9
Our Supreme Court held:
Manzotti . . . is required by the statute to reimburse the city
regardless of whether the city has complied with the statutory lien
provisions in order to enforce its lien against a third party. The
city's right to reimbursement from Manzotti is not dependent upon
the existence of a written notice of statutory lien against him but is
instead clearly provided to the city by § 45-19-1.1. Accordingly,
any failure on the part of the city to perfect its lien against
Manzotti is not fatal to the city's claim for reimbursement from the
funds he receives from his insurer. Manzotti II, 695 A.2d at 100304.
Though our Supreme Court seemed to indicate that the police officer’s reimbursement
payment would come from underinsured motorist benefits, this Court finds significant that the
trial justice ordered reimbursement only after the police officer had recovered $50,000 from the
tortfeasor’s insurer, making it possible for the police officer to reimburse the city from those
funds. Manzotti II, 695 A.2d at 1002. Such an “equitable remedy” would be consistent with this
Court’s interpretation of § 45-19-1.1. This Court further notes that while double recovery was a
concern in Manzotti, see Manzotti I, 656 A.2d at 626, it is not a concern here because Allstate
has reduced its tender by $50,583.49 and Amica has reduced its tender by $58,768.06 based on
the IOD payments made to Benson and Casale, respectively. Cf. Poulos v. Aetna Cas. & Sur.
the employee’s death, whether by judgment or by settlement or compromise, up
to the amount of compensation paid . . . .
Section 45-19-1.3 provides the means of perfecting such a lien:
No lien is effective, unless a written notice containing the name and address of
the employee, the date that the employee became wholly or partially
incapacitated, the name and location of the employer, and the name of the
person or persons, firm or firms, corporation or corporations, alleged to be liable
to the employee for the injuries received or sickness contracted, is filed in the
office of the city or town clerk, if the employer is a municipality, or the office of
the department of administration, if the employer is the state of Rhode Island
prior to the payment of any moneys to the employee, or the employee's attorneys
or legal representatives as compensation for the injuries or sickness. The
employer shall mail a copy of the notice to any insurance carrier which has
insured the person, firm, or corporation against the liability.
10
Co., 119 R.I. 409, 379 A.2d 362 (1977) (interpreting insurance contract to permit deduction of
workers’ compensation benefits from UM payments to the extent the workers’ compensation
benefits represented a double recovery).
Thus, Manzotti I and Manzotti II are distinguishable
from the case at bar, in which the Employees have been unable to obtain any recovery from the
tortfeasor, meaning reimbursement would therefore have to come from their UM benefits.
This
Court finds as a fact and as a conclusion of Law that reimbursement in this case can be obtained
from the Employees who received IOD benefits, only if they recovered damages from a
responsible third party pursuant to § 45-19-1.1.
Receipts from the respective Employees, U.M. carriers, which did, in fact, set off IOD
payments made to the Employees from their UM proceeds are not subject to be reimbursed to the
City of the Employees.
Conclusion
For the reasons stated herein, this Court finds for the Plaintiffs in this matter.
Counsel shall prepare an Order consistent with this Opinion.
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