Brunet v. Liberty Mutual Insurance Group (95-443); 165 Vt 315; 682 A.2d 487
[Opinion Filed 12-Jul-1996]
NOTICE: This opinion is subject to motions for reargument under
V.R.A.P. 40 as well as formal revision before publication in the Vermont
Reports. Readers are requested to notify the Reporter of Decisions,
Vermont Supreme Court, 109 State Street, Montpelier, Vermont 05609-0801 of
any errors in order that corrections may be made before this opinion goes
Chad Brunet Supreme Court
On Appeal from
v. Addison Superior Court
Liberty Mutual Insurance Group April Term, 1996
Michael S. Kupersmith, J.
Thomas Z. Carlson and Eric M. Knudsen of Langrock Sperry & Wool,
Burlington, for plaintiff-appellee
Robert P. Gerety, Jr. of Plante, Hanley & Gerety, P.C., White River
Junction, for defendant-appellant
PRESENT: Allen, C.J., Gibson, Dooley, Morse and Johnson, JJ.
MORSE, J. This interlocutory appeal arises from an opinion and order
issued by the Addison Superior Court interpreting § 624(e) of the Vermont
Workers' Compensation Statute, 21 V.S.A. ch. 9. The court held that where
an injured employee recovers from a third-party tortfeasor, the
unemployment compensation carrier is entitled to recoup a sum that bears
the same proportion to the total award that the employee's economic losses
bear to his total damages. Thus, where the employee's economic damages
constitute 10% of his total damages, the unemployment carrier would be
entitled to only 10% of any award received. We reverse.
Plaintiff Chad Brunet was injured in the course of his employment when
the truck he was driving was negligently struck by a vehicle owned by B&M
Auto Parts. The injuries plaintiff sustained left him permanently
paralyzed from the neck down. B&M has essentially conceded liability and
has paid plaintiff $493,900 which is insufficient to compensate him fully.
As of February 2, 1995 defendant Liberty Mutual had paid plaintiff
$491,581.52 in workers' compensation benefits to cover economic damages,
including lost wages and medical expenses. Liberty Mutual continues to pay
benefits, which eventually may exceed the sum of
the award plaintiff received from B&M.
Plaintiff petitioned the Addison Superior Court for a declaratory a
judgment to the effect that an unemployment compensation carrier is not
entitled to reimbusement from a third-party award unless the award fully
compensates the employee for all economic and non-economic injuries.
Defendant claimed that, under the plain language of 21 V.S.A. § 624(e), a
carrier is entitled to be reimbursed from any recovery against third
parties. Both parties moved for summary judgment, and the court ruled that
a carrier is entitled to that portion of a third-party award that bears the
same proportion to the total award that an employee's economic losses bear
to his total damages. The court granted defendant permission to file an
interlocutory appeal under V.R.A.P. 5(b)(1).
Although five questions were certified for review, the central issue
in this case is the proper interpretation of 21 V.S.A. § 624(e), which
reads as follows:
In an action to enforce the liability of a third party, the injured
employee may recover any amount which the employee or the employee's
personal representative would be entitled to recover in a civil action.
Any recovery against the third party for damages resulting from personal
injuries or death only, after deducting expenses of recovery, shall first
reimburse the employer or its workers' compensation insurance carrier for
any amounts paid or payable under this chapter to date of recovery, and the
balance shall forthwith be paid to the employee or the employee's
dependents or personal representative and shall be treated as an advance
payment by the employer on account of any future payment of compensation
benefits. (Emphasis added.)
Plaintiff concedes that under the plain language of the statute a
workers' compensation carrier is entitled to reimbursement from any
third-party recovery up to the amount of benefits paid. Nevertheless,
relying on St. Paul Fire and Marine Ins. Co. v. Surdam, 156 Vt. 585, 595 A.2d 264 (1991), plaintiff argues that "[t]he Vermont Legislature could not
have intended that an injured employee must lose a noneconomic recovery to
pay back economic damages received from a workers' compensation carrier,"
and that the proper interpretation of § 624 is the one advanced by the
trial court. Id. at 590, 595 A.2d at 266. We disagree.
In St. Paul, an employee injured in New York received workers'
her employer in Vermont. Recovery of damages was controlled by New York
law, which proscribed third-party suits for economic damages. Id. at 588,
595 A.2d at 265. Plaintiff prevailed in a suit for noneconomic damages and
the Vermont unemployment carrier sought reimbursement from the third-party
award. We held that where an "injured employee by law cannot recover
economic losses from a third party, her workers' compensation carrier
should likewise not be entitled to recoup its losses from the injured
employee." Id. at 590-91, 595 A.2d at 266-67. Our holding in St. Paul was
narrow, and based on the peculiar circumstances of that case. It is
inapplicable in a case where a worker-plaintiff may recover both economic
and noneconomic damages from a third party. Id. at 589, 595 A.2d at 266.
In that circumstance, the plain language of the section controls, and the
workers' compensation carrier may recoup its compensation award from any
recovery obtained in a third-party suit. Id.; see Green Tree Credit Corp.
v. Kenyon, __ Vt. __, __, 660 A.2d 296, 298 (1995) (where statute's meaning
is plain on its face, court will enforce it according to its terms).
Contrary to plaintiff's assertion, this interpretation is not at odds
with the policies behind the workers' compensation statute. "Workers
compensation law provides injured workers with expeditious and certain
payments for economic losses without proof of fault and employers with
limited liability." St. Paul, 156 Vt. at 589-90, 595 A.2d at 266. In
exchange for the benefit of receiving prompt and certain compensation, the
employee must reimburse the carrier if an award is obtained from a third
This rule may seem inequitable where, as here, the third-party award
does not fully compensate the injured employee. In actuality, however, the
workers' compensation statute has guaranteed plaintiff the substantial
benefit of prompt and certain compensation for his economic losses, and has
cost him nothing. Absent the statute, plaintiff would have received no
more, and probably less, than he will ultimately recover here. Had the
tortfeasor not conceded liability, plaintiff would have had to go to trial
to recover anything at all, and in any case his recovery would have been
limited by the tortfeasor's ability to pay. Here, although he must commit
award to reimbursing the carrier, he retains the benefit of ongoing
workers' compensation payments, the total value of which may exceed that of
the third party award.
Reversed and remanded for a computation of attorney's fees and
expenses incurred in prosecuting the third party action.
FOR THE COURT: