Brunet v. Liberty Mutual Insurance Group

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
  to press.


                                 No. 95-443


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'
  compensation through

 

  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
  party.

       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
  his

 

  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:



                              _______________________________________
                              Associate Justice