Farris v. Bryant Grinder Corp.
Annotate this Case
Farris v. Bryant Grinder Corp. (2003-516); 177 Vt. 456; 869 A.2d 131
2005 VT 5
[Filed 14-Jan-2005]
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.
2005 VT 5
No. 2003-516
Charles Farris Supreme Court
On Appeal from
v. Windsor Superior Court
Bryant Grinder Corporation/Wausau October Term, 2004
Insurance Company
v.
Bryant Grinder Corporation/AIG
Insurance Company
Mary Miles Teachout, J.
Joshua L. Simonds of Mertz, Talbott & Simonds, PLC, Burlington, for
Defendant-Appellant.
John W. Valente and John A. Serafino of Ryan Smith & Carbine, Ltd.,
Rutland, for Defendant-Appellee.
PRESENT: Dooley, Johnson, Skoglund and Reiber, JJ., and
Allen, C.J. (Ret.), Specially Assigned
¶ 1. DOOLEY, J. This appeal involves a dispute between two
insurance companies as to which one should pay workers' compensation
benefits for an injury to Bryant Grinder Corporation (Bryant Grinder)
employee Charles Farris. Appellant, Wausau Insurance Company (Wausau),
appeals a superior court jury determination that Farris suffered a
recurrence of a previous injury and therefore that it was liable instead of
AIG Insurance Company (AIG), successor to Wausau and insurer at the time of
Farris's later injury. On appeal, Wausau argues that the superior court
erred by failing to: (1) allocate a burden of proof to one of the parties;
(2) reformulate the certified question into five separate interrogatories;
and (3) provide a specific jury instruction on the last injurious exposure
rule. We find that although failure to allocate a burden of proof was
error, it was harmless, and the jury instructions were otherwise within the
court's discretion. We affirm.
¶ 2. Charles Farris began working for Bryant Grinder in July 1973, a
year after he first had surgery on his right knee in May 1972. He again
injured his right knee in April 1991 when he slipped on some oil at work.
Farris received medical treatment for this injury, including surgery, and
was out of work for fifteen months. He received workers' compensation
benefits from Wausau, which insured Bryant Grinder from May 1989 to May
1992. Farris returned to work, and the condition of the knee deteriorated
to the point where he again had surgery in 1993. Although after nine
months Farris returned to work for Bryant Grinder, the condition of his
knee continued to worsen until he had another operation in December 1996.
He did not return to work after this operation.
¶ 3. Bryant Grinder had three different insurance carriers during
the period between the end of the Wausau coverage in 1992 and Farris's 1996
surgery. Only the last carrier, AIG, is involved in this action. It began
to insure Bryant Grinder in May 1995. Despite the new carriers, Wausau
continued to pay Farris workers' compensation benefits through the 1996
surgery and thereafter. In January 1998, it received an opinion from an
orthopedic doctor that Farris's "degenerative arthritis of the right knee
is aggravated and probably accelerated by his type of work which places
excess stress across the knee through the work day." Based on that
opinion, Wausau filed a "Notice of Intention to Discontinue Payments"
pursuant to 21 V.S.A. § 643a, on the ground that Farris's current condition
"should be current carrier's responsibility." This led to a proceeding
before the Commissioner of Labor and Industry to determine whether Wausau
or AIG was responsible for payments to Farris. (FN1)
¶ 4. Generally, when two employers or insurers dispute liability for
a workers' compensation claim arising out of successive injuries, the
liability remains with the first insurer or employer if the second injury
is a recurrence of the first. Pacher v. Fairdale Farms, 166 Vt. 626, 627,
699 A.2d 43, 46 (1997) (mem.). "If, however, the second incident
aggravated, accelerated, or combined with a preexisting impairment or
injury to produce a disability greater than would have resulted from the
second injury alone, the second incident is an 'aggravation,' and the
second employer becomes solely responsible for the entire disability at
that point." Id. at 627-28, 699 A.2d at 46. In September 2000, the
Commissioner concluded that Farris's injury was an aggravation and,
therefore, that AIG was responsible for the benefits related to the 1996
injury and should reimburse Wausau. AIG appealed the decision to superior
court pursuant to 21 V.S.A. § 670 (FN2) and requested a trial by jury. The
Commissioner's certified question was: "Did the claimant suffer an
aggravation or a recurrence of his pre-existing osteoarthritis after AIG
began to insure Bryant Grinder." The jury found that the injury was a
recurrence, leaving Wausau responsible.
¶ 5. Wausau first argues that the superior court erred in not
allocating a burden of proof between the parties. Before trial, the court
discussed with the attorneys what burden of proof should be applied. AIG
argued that since Wausau was attempting to relieve itself of the obligation
to pay, it bore the burden of proof. AIG also advanced a theory that both
parties were trying to relieve themselves of liability, and that neither
bore the burden of proof. Wausau argued that AIG had the burden because
the Commissioner had ordered AIG to reimburse Wausau and AIG was attempting
to relieve itself of this responsibility. The court instructed that it
would not allocate a burden of proof to either party, finding that "the
cross burdens cancel each other out." Instead the jury instructions
charged the jurors to "consider which party has made a case that is
stronger than the other party's case."
¶ 6. On appeal, Wausau argues that 21 V.S.A. § 662(c) controls and
allocates the burden of proof to AIG. We agree with Wausau that the
statute is determinative of the burden of proof in this case.
¶ 7. Section 662(c) provides in pertinent part:
Whenever payment of a compensable claim is refused, on the basis
that another employer or insurer is liable, the commissioner,
after notice to interested parties and a review of the claim, but
in no event later than 30 days, shall order that payments be made
by one employer or insurer until a hearing is held and a decision
is rendered. For the purposes of this review the employer or
insurer at the time of the most recent personal injury for which
the employee claims benefits shall be presumed to be the liable
employer or insurer and shall have the burden of proving another
employer's or insurer's liability.
It is undisputed that if this statute applies, AIG had the burden of
proving Wausau was liable because AIG was the insurer "at the time of the
most recent personal injury." Id. AIG argues that the statute does not
apply for two reasons: (1) the statute is intended for the situation where
two insurers are disputing payment and the claimant is receiving no
benefit, a situation not applicable here; and (2) the statutory language
refers to proceedings before the Commissioner, not a trial de novo in the
superior court. We find AIG's attempts to distinguish the statute
unpersuasive.
¶ 8. The overall goal in statutory interpretation is to implement
the Legislature's intent. We will first look to the statute's terms and
apply the plain language if it is unambiguous. Sagar v. Warren
Selectboard, 170 Vt. 167, 171, 744 A.2d 422, 426 (1999). In addition, we
look to the statute as a whole and "its consequences and effects to reach a
fair and rational result." In re Margaret Susan P., 169 Vt. 252, 262, 733 A.2d 38, 46 (1999).
¶ 9. We do not believe that the statutory language supports either
of AIG's arguments. As to the first, § 662(c) is triggered if "payment of
a compensable claim is refused on the basis that another . . . insurer is
liable." The trigger applied to the facts of this case. By its notice,
Wausau refused to keep paying on Farris's claim because it alleged that AIG
was responsible for such payments. Nothing in the language of the statute
suggests it is inapplicable if the insurer that refuses payment had paid in
the past. Indeed, under AIG's construction, no insurer should pay
voluntarily pending an allocation decision of the commissioner because the
voluntary payment would then prevent assignment of the burden of proof to
the opposing insurer. This result would run afoul of the last sentence of
§ 662(c) that provides "[p]ayments pursuant to this subsection shall not be
deemed an admission . . . of an . . . insurer's liability . . . or
prejudice the rights of either party to a hearing or appeal." Even without
this protective language, it is difficult to understand what the
willingness to extend voluntary payments pending determination of an
allocation dispute has to do with proper assignment of the burden of proof.
¶ 10. We also reject AIG's second argument that § 662 does not
apply where the commissioner's allocation decision is appealed to the
superior court. In doing so, we recognize that the statutory language
applies explicitly to the commissioner's "review" and does not mention any
appeal. Nevertheless, the burden of proof is linked to review of the
subject matter-resolving which insurer is liable-not where the hearing is
held. Superior court review of the Commissioner's decision involves a
"retrial de novo." Sivret v. Knight, 118 Vt. 343, 350, 109 A.2d 495, 499
(1954). Therefore, the superior court is determining the certified
questions in the same posture as the Commissioner. It would make no sense
to apply a different burden of proof in the superior court. Although we
have not yet decided this question, many other courts have, and the weight
of authority is that the burden of proof applicable in the first level
proceeding is also applicable in the de novo review proceeding. E.g. Sch.
Dist. of Erie v. Hamot Med. Ctr., 602 A.2d 407, 409 (Pa. Cmmw. Ct. 1992);
Cooper v. Williamson County Bd. of Educ., 746 S.W.2d 176, 182 (Tenn. 1987);
Attorney Gen. of Texas v. Orr, 989 S.W.2d 464, 467 (Tex. App. 1999). We
see no reason not to follow these decisions.
¶ 11. We hold that § 662(c) required the superior court to assign
the burden of proof to AIG, and the court erred in charging the jury that
neither party bore that burden. Nevertheless, we find that this error was
harmless. "The court at every stage of the proceeding must disregard any
error or defect in the proceeding which does not affect the substantial
rights of the parties." V.R.C.P. 61. Furthermore, appellant bears the
burden of demonstrating that a trial court error resulted in prejudice.
Corti v. Lussier, 140 Vt. 421, 424, 438 A.2d 1114, 1116 (1981).
¶ 12. The court charged the jury to "consider which party has made a
case that is stronger than the other party's case." We presume that the
jury followed the trial court's instructions. Claude G. Dern Elec., Inc.
v. Bernstein, 144 Vt. 423, 427, 479 A.2d 136, 139 (1984). The jury found
that Farris had suffered a recurrence of the injury that occurred when
Wausau was the insurer. In order to so find under the court's
instructions, the jury must have concluded that AIG had a stronger case
than Wausau. Therefore, Wausau could not have been prejudiced by the
court's failure to instruct that AIG bore the burden of proof. The burden
could have been determinative only if the jury found that the persuasive
effect of each party's case was equal. The jury did not conclude there was
an even match; it found that AIG had a stronger case. As a result, we find
the error in the assignment of the burden of proof was harmless.
¶ 13. Wausau next argues that the court erred by not using a special
interrogatory jury form. Wausau's request was based on its position that
the jury should be required to analyze the recurrence versus aggravation
question in light of five factors that the commissioner has routinely used
and used in this case. The factors are: (1) whether the subsequent
incident or work condition destabilized a previously stable condition; (2)
whether the claimant had stopped medical treatment; (3) whether the
claimant had successfully returned to work; (4) whether the claimant had
reached a medical end result; and (5) whether the subsequent work
contributed to the disability. None of our decisions adopt this list of
factors or require that they be used. In its proposed instructions, Wausau
requested that the jury be required to answer whether each of these factors
was present. Further, it requested that if the answer to each was "yes"
that the jury be instructed to return a verdict for Wausau, if the answer
to each was "no" that the jury be instructed to return a verdict for AIG,
and if the answers were mixed that the jury be instructed to use the
answers as guidance.
¶ 14. In its instructions, the court listed the five factors and
explained that the jury should consider them in determining whether Farris
suffered an aggravation or a recurrence. The court also adopted Wausau's
view that if all the factors supported its position, or that of AIG, the
jury had to render a verdict for the party supported by the factors. It
added: "If the results are mixed, then you must weigh and balance the
different factors in reaching an overall decision." Thus, the court fully
adopted Wausau's request, except that it did not require the jury to
specify which factors supported which party on an interrogatory form.
¶ 15. The trial court has broad discretion in fashioning jury
verdict questions and deciding whether to employ interrogatories. See
V.R.C.P. 49(b) (court "may submit" interrogatories in addition to a general
verdict form); Hardwick?Morrison Co. v. Albertsson, 158 Vt. 145, 152, 605 A.2d 529, 533 (1992). Although we have encouraged the use of special
interrogatories in cases of "overlapping and multiple theories of
liability," we have held that even in such cases use of interrogatories is
optional. Id.; accord English v. Myers, 142 Vt. 144, 150, 454 A.2d 251,
254 (1982). This was not a case of multiple theories of liability. The
court acted well within its discretion in refusing to submit
interrogatories to the jury.
¶ 16. Finally, Wausau argues that the court should have instructed
the jury that responsibility for workers' compensation payments should be
assigned to the insurer that covered the employer during the employee's
last injurious exposure, and not by determining whether the employee
suffered a recurrence or an aggravation. The last injurious exposure rule
may be appropriate where there are separate injuries that all causally
contribute to a disability so that it is difficult to allocate liability
among several employers or insurers. Pacher, 166 Vt. at 628 n.2, 699 A.2d
at 47 n.2. We explained in Pacher, however, that where "different
accidents produce distinct injuries, the Commissioner can fairly define and
apportion the liability of each employer, without confusion to either
employers or employees." Id. (citing 21 V.S.A. § 662(c)). Since then we
have reiterated that the Commissioner is not required to use the last
injurious exposure rule in cases involving apportionment of liability
between insurers. Ethan Allen, Inc. v. Bressett-Roberge, 174 Vt. 518, 520,
811 A.2d 171, 172 (2002) (mem.). As we explained in Stannard v. Stannard
Co., 2003 VT 52, ¶ 11, 175 Vt. 549, 830 A.2d 66 (mem.), when evaluating
successive injuries related to a degenerative disease, the pivotal question
is whether the disability occurred earlier than it would have without the
second injury. As in Stannard, the last injurious exposure rule is not
applicable in this case, and the trial court did not err in not giving such
an instruction to the jury.
Affirmed.
FOR THE COURT:
_______________________________________
Associate Justice
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Footnotes
FN1. The record the Commissioner supplied is incomplete and does not
contain the action, if any, taken in response to Wausau's notice. The
procedural posture was further complicated by another notice to discontinue
benefits, also filed in January 1998, alleging that Farris had reached a
medical end result and temporary partial disability benefits were no longer
appropriate. It was additionally complicated by the filing of a new claim
that Farris was partially disabled as a result of injury to his left knee
and the onset of carpal tunnel syndrome. Responsibility for these
additional injuries is not part of this appeal.
FN2. Wausau has not contested AIG's right to appeal under 21 V.S.A. § 670
and thus we do not consider whether the Commissioner's decision under §
662(c) can be considered an award for purposes of § 670. See also 21
V.S.A. § 671 (order on review shall be treated as an award made pursuant to
§§ 663, 664 and 665).
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