Travelers Insurance Co. v. Henry

Annotate this Case
Travelers Insurance Co. v. Henry (2004-174); 178 Vt. 287; 882 A.2d 1133

2005 VT 68

[Filed 24-Jun-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 68

                                No. 2004-174


  Travelers Insurance Company	                 Supreme Court

                                                 Original Jurisdiction
       v.	


  John P. Henry	                                 February Term, 2005


  Stephen D. Ellis and Jennifer K. Moore of Kiel Ellis & Boxer, Springfield,
    for  Plaintiff-Counter-Defendant-Appellant.

  Craig Weatherly of Gravel and Shea, Burlington, for
    Defendant-Counter-Claimant-Appellee.


  PRESENT:  Reiber, C.J., Dooley, Johnson and Skoglund, JJ., and 
            Allen, C.J. (Ret.), Specially Assigned

        
       ¶  1.  REIBER, J.   In this appeal, we are asked by the United States
  Court of Appeals for the Second Circuit to answer the following certified
  question: under 21 V.S.A. § 624(e), does a workers' compensation carrier
  have a right to reimbursement from, or a future credit against, 
  underinsured/uninsured (UIM) benefits recovered by an injured employee
  under an automobile liability policy that was purchased by his employer?
  (FN1)   As discussed below, we conclude that under the plain language of 21
  V.S.A. § 624(e), a workers' compensation carrier does not have a right to
  be reimbursed out of such proceeds, nor to have the balance of the proceeds
  treated as a credit against future payment of benefits, except to prevent a
  double recovery.  The question of whether an employee has received a double
  recovery can be answered only after the nature and extent of the injured
  employee's damages has been determined.  When this determination has been
  made, the extent of a workers' compensation carrier's right to
  reimbursement or to a credit against future payments can be ascertained.  

       ¶  2.  The underlying facts are undisputed.  In December 1999,
  defendant John Henry was  seriously injured in a two-car automobile
  accident that occurred during the course of his employment.  The driver of
  the second car, Kristy Herrick, was solely responsible for the accident. 
  Henry received workers' compensation benefits from plaintiff Travelers
  Insurance Company, his employer's workers' compensation carrier.  He also
  recovered $100,000 in damages from Herrick's personal liability insurer,
  the limit of the policy.  After deducting the costs of recovery (including
  attorney's fees), $66,060.75 of this money was paid to Travelers
  ($56,004.42 for a lien and $10,103.83 as an advance payment of permanency
  benefits not yet paid).  Henry also sought to recover under the UIM
  provisions of two automobile liability policies:  one that he had purchased
  himself, which had a policy limit of $100,000, and one that had been
  purchased by his employer, and issued by Travelers, with a policy limit of
  $400,000.  
   
       ¶  3.  In August 2001, Travelers filed a declaratory judgment action
  in the United States District Court for the District of Vermont seeking a
  declaration that pursuant to 21 V.S.A. § 624(e),  it was entitled to
  reimbursement from all of the UIM proceeds that Henry recovered.  According
  to Travelers, Henry's recovery of UIM proceeds in addition to his receipt
  of workers' compensation benefits constituted a "double recovery" within
  the meaning of 21 V.S.A. § 624(e).  Thus, Travelers sought reimbursement
  out of the UIM proceeds for the workers' compensation benefits that it had
  paid up to the date of recovery, as well as a credit toward any future
  benefits that it would be obligated to pay. (FN2)  

       ¶  4.  In an April 2002 entry order, the district court granted
  partial summary judgment to Henry, concluding that under 21 V.S.A. §
  624(e), Travelers had a right to reimbursement out of the UIM proceeds only
  to the extent that Henry had received a double recovery.  The court
  explained that the question of whether Henry had received a double recovery
  could not be decided until all potential coverage had been determined and
  the nature and extent of Henry's damages had been considered.  In its
  order, the court also granted Henry's request to join his personal
  automobile liability insurer as a party and add a counterclaim against both
  UIM carriers for the benefits allegedly due under the policies.  The
  parties then stipulated, solely for the purpose of determining their
  respective rights with respect to the UIM proceeds, that Henry's "total
  damages" were the sum of the available UIM coverage ($500,000) and the
  total amount of workers' compensation benefits paid through the date of the
  court's final judgment order. (FN3) 
                                     
       ¶  5.  In late 2003, the court granted judgment in Henry's favor,
  dismissing Travelers' complaint and awarding Henry $500,000 in UIM
  proceeds.  The court found that the plain language of 21 V.S.A. § 624(e)
  protected two types of recoveries from the reimbursement rights of workers'
  compensation insurers: (1) payments from privately purchased plans
  (including UIM coverage) and (2) payments from any other first party plan. 
  Because the UIM policy purchased on Henry's behalf by his employer was a
  first party insurance policy, the court concluded that Henry was not
  obligated to reimburse Travelers out of the UIM proceeds.  Travelers
  appealed to the Second Circuit, which certified the questions at issue in
  this appeal.

       ¶  6.  We begin with an overview of the reimbursement statute. 
  Generally speaking, 21 V.S.A. § 624 allows an injured employee to pursue a
  cause of action against a third party where the injury for which workers'
  compensation is payable "was caused under circumstances creating a legal
  liability to pay the resulting damages in some person other than the
  employer . . . ."  Id. § 624(a).  If an injured employee recovers damages
  from a liable third party, the employer or workers' compensation carrier is
  generally entitled to reimbursement for the workers' compensation benefits
  that it has paid.  Id. § 624(e).  Ideally, the statute operates to provide
  a fair result for all parties:  

    [T]he insurance carrier, representing the employer, comes out
    even, being without fault or injury; the third party wrongdoer
    pays exactly the damages he would have paid without any workers'
    compensation law; the attorney is reimbursed for services
    rendered, and the employee-in addition to what he has already
    received in compensation benefits-is entitled to the remainder.  

  St. Paul Fire & Marine Ins. Co. v. Surdam, 156 Vt. 585, 590, 595 A.2d 264,
  266 (1991) (quotation  omitted); see also, 6 A. Larson, Larson's Workers'
  Compensation Law § 110.02 (2004). 

       ¶  7.  Prior to its amendment in 1999, 21 V.S.A. § 624(e) provided:  

    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.  

  In Travelers Cos. v. Liberty Mutual Ins. Co., 164 Vt. 368, 372-73, 670 A.2d 827, 829-30 (1995), we interpreted this provision to allow a workers'
  compensation insurer to be reimbursed out of UM/UIM payments made to an
  employee by his employer's liability carrier after concluding that the 
  employer's liability carrier was a "third party" within the meaning of 21
  V.S.A. § 624(e) and UM/UIM payments constituted "damages." 
   
       ¶  8.  Subsequent to our decision in Travelers Cos., we held that a
  workers' compensation insurer was entitled to "first dollar" reimbursement
  from any recovery that an employee received from a third party, regardless
  of whether the recovery represented economic or noneconomic damages. 
  Brunet v. Liberty Mut. Ins. Group, 165 Vt. 315, 317, 682 A.2d 487, 488
  (1996).  Our conclusion rested on the plain language of § 624(e), which
  allowed an insurer to be reimbursed out of "any recovery" that an employee
  received from a third party.  Id.  This rationale implicitly extended to an
  employee's recovery of UM/UIM benefits under a privately purchased
  insurance policy under our holding in Travelers Cos., 164 Vt. at 373, 670 A.2d  at 829-30.

       ¶  9.  Effective July 1, 1999, the Legislature amended 21 V.S.A. §
  624(e) to include the following sentence:  

    Reimbursement required under this subsection, except to prevent
    double recovery, shall not reduce the employee's recovery of any
    benefit or payment provided by a plan or policy that was privately
    purchased by the injured employee, including uninsured-under
    insured motorist coverage, or any other first party insurance
    payments or benefits.

       ¶  10.  We are now asked to interpret the terms of the amended
  statute.  Travelers argues that under § 624(e), as amended, it is still
  entitled to "first dollar" reimbursement from Henry's recovery of UIM
  benefits under his employer-purchased policy.  According to Travelers, the
  1999 amendment was enacted to protect an employee's recovery of UIM
  benefits under a privately-purchased policy, and it argues that there is no
  suggestion in either the plain language of the statute or its legislative
  history that the Legislature intended to protect UIM benefits recovered
  under an employer-purchased policy. 
   
       ¶  11.  We disagree.  In interpreting 21 V.S.A. § 624(e), our goal is
  "to discern and implement the intent of the Legislature."  Merkel v.
  Nationwide Ins. Co., 166 Vt. 311, 314, 693 A.2d 706, 707 (1997).  If the
  Legislature's intent is clear from the plain meaning of the words used, we
  must enforce the statute according to its terms.  Tarrant v. Dep't of
  Taxes, 169 Vt. 189, 197, 733 A.2d 733, 739 (1999).  In this case, the
  Legislature's intent is clear from the plain language of the statute-an
  employee's recovery of UIM proceeds under an automobile liability policy
  purchased by his employer is a "first party insurance payment or benefit"
  that is not subject to the workers' compensation carrier's right to
  reimbursement except to prevent a double recovery.
         
       ¶  12.  The text of the statute is unambiguous-the phrase "privately
  purchased by the injured employee" does not modify the phrase "or any other
  first party insurance payments or benefits."  The latter phrase is set off
  by a comma, and it stands independently of the "privately purchased"
  requirement.  While Travelers asserts that this interpretation renders the
  "privately purchased" requirement meaningless, Travelers' proposed
  construction would disregard the latter portion of the statute.  From the
  statute, as written, it is apparent that the Legislature sought to protect
  two types of payments-those made under privately-purchased plans (including
  UIM coverage) and those payments made to the employee under "any other
  first party" plan.  Because the language of the statute is clear, we need
  not discuss Travelers' assertion that testimony received at a legislative 
  hearing on the amendment supports a contrary construction.  See Cavanaugh
  v. Abbott Labs., 145 Vt. 516, 530, 496 A.2d 154, 162-63 (1985) (explaining
  that where statutory language is unambiguous, there is no need to review
  legislative history).  We note that this testimony would be of little
  weight in any event.  See State v. Madison, 163 Vt. 360, 373, 658 A.2d 536,
  545 (1995) ("[T]he remarks of a witness at a committee hearing are accorded
  little weight in determining the intent of the legislature in enacting a
  statute.").
   
       ¶  13.  Travelers maintains that, even accepting this interpretation
  of the statute, the UIM proceeds at issue here should be considered a
  "third-party recovery" subject to its first-dollar reimbursement right, and
  not a "first-party recovery" to which its right to reimbursement attaches
  only to prevent a double recovery.  In support of this assertion, Travelers
  relies on Travelers Cos., 164 Vt. at 372-73, 670 A.2d  at 829, and Colwell
  v. Allstate Ins. Co., 2003 VT 5, ¶¶ 25-26, 175 Vt. 61, 819 A.2d 727.

       ¶  14.  We reject this argument because it disregards the plain
  language of the statute.  The Legislature amended the statute to
  specifically exclude "first party insurance payments or benefits" from the
  carrier's right to first-dollar reimbursement.  The UIM proceeds at issue
  here clearly fall within this category.  Henry has a first-party claim as a
  covered insured under the automobile policy purchased by his employer. 
  See, e.g., Reese v. State Farm Mut. Auto. Ins. Co., 403 A.2d 1229, 1231-32
  (Md. 1979) (explaining that uninsured motorist coverage reflects the
  defendant-insurer's direct promise to pay the insured-plaintiff under
  certain conditions).  As the Reese court explained,  "[b]ecause it is a
  promise by the insurer to pay its own insured, rather than a promise to its
  insured to pay some third party, the uninsured motorist coverage is in
  insurance parlance 'first party coverage' like collision, comprehensive,
  medical payments or personal injury protection, and not 'third party
  coverage' such as personal injury or property damage liability insurance." 
  Id.  As an insured under his employer's policy, Henry has a contractual
  right to receive benefits directly from his employer's insurer.  It is
  Henry's direct right to claim UIM benefits, as an insured under the
  employer-purchased policy, that confers first-party status to him
  respecting such benefits.  It is precisely this contractual relationship to
  UIM proceeds that the amended legislation addresses.  
   
       ¶  15.  Neither Travelers Cos. nor Colwell support Travelers'
  assertion that Henry's UIM  recovery should not be considered a "first
  party payment or benefit" under § 624(e).  Our decision in Travelers Cos.,
  which held that UIM proceeds recovered under an employer-purchased
  liability policy fell within the reimbursement statute, preceded the
  Legislature's amendment of § 624(e), and it offers little support for
  Travelers' argument here.  Colwell is equally unhelpful.  In that case, we
  considered whether a self-insured employer could be considered a "third
  party" subject to UIM liability under 21 V.S.A. § 624(a).  2003 VT 5, ¶
  25.  We applied the dual capacity doctrine and held that the employer was
  responsible for paying both workers' compensation benefits and UIM benefits
  to the injured employee.  Our recognition that an employer can be a third
  party under the statute does not support Travelers' assertion that an
  employee's claim against his employer's UIM policy must be characterized as
  a "third-party claim," and his recovery of proceeds from that policy must
  therefore be a "third-party recovery" to which Travelers' first-dollar
  reimbursement right attaches.  This argument ignores the insurance contract
  that is the source of Traveler's obligation as well as the plain language
  of the amended statute.  While the amount and scope of Henry's recovery may
  be characterized as a third-party recovery because it is defined by the
  tortfeasor's liability for Henry's damages, Henry's relationship by
  contract to the UIM insurer defines a first-party right.  The UIM proceeds
  that Henry recovers under his employer's policy are plainly "first party
  benefits or payments" under the ordinary meaning of these terms.  See Brown
  v. Roadway Express, Inc., 169 Vt. 633, 634, 740 A.2d 352, 354 (1999) (mem.)
  ("We enforce the plain, ordinary meaning of language used by the
  Legislature.").  
   
       ¶  16.  Travelers suggests that an employee's UIM recovery under a
  privately-purchased policy should be considered a "first-party payment or
  benefit," while a UIM recovery under an employer-purchased policy should
  not.  The critical question is the source of the obligation.  Having
  concluded above that § 624(e) protects first-party contract rights under
  both privately-purchased policies as well as employer-purchased policies,
  we find this argument without merit.  The statute does not draw the
  distinction urged on us by Travelers, nor does Travelers offer any reason
  for distinguishing between these two types of recoveries that is not at
  odds with the plain meaning of the statute.  We therefore reject Travelers'
  assertion that UIM benefits recovered under an employer-purchased policy
  are not "first party insurance payments or benefits" under 21 V.S.A. §
  624(e).
        
       ¶  17.  We turn next to Travelers' assertion that its right to a
  credit against the balance of an employee's third-party recovery for any
  future benefits owed was not affected by the amendment to § 624(e). 
  According to Travelers, the plain language of the statute and its
  legislative history do not indicate that the Legislature contemplated
  impairing its right to a future credit.  In support of this assertion,
  Travelers argues that the phrase "except to prevent double recovery"
  applies only to "reimbursement" required under § 624(e), and its right to a
  credit does not constitute reimbursement. Travelers thus argues that the
  district court erred in dismissing its complaint and awarding Henry
  $500,000 in damages free and clear of its right under § 624(e) to treat
  those monies as an advance payment or credit against future workers'
  compensation benefits. (FN4)
                              
       ¶  18.  Travelers essentially reiterates its assertion that it is
  entitled to first-dollar reimbursement, in this case, from the balance of
  an employee's UIM recovery.  We reject this argument, which is at odds with
  a reasonable interpretation of § 624(e).  We can discern no policy reason
  why the Legislature would distinguish between a carrier's right to
  reimbursement for the workers' compensation benefits paid and its corollary
  right to a credit against the balance of the third-party recovery for
  future benefits owed.  The two are distinguished only by the date on which 
  an injured employee obtains a third-party recovery.  Economically, they are
  the same thing.  To say that the term reimbursement does not include an
  offset for future benefits owed is to draw an artificial distinction, and
  we reject Travelers' narrow interpretation of the term.  Travelers' right
  to an offset against the balance of Henry's UIM proceeds for future
  benefits owed, like its right to recoup benefits paid, exists only to the
  extent necessary to prevent a double recovery.

       ¶  19.  To determine Travelers' rights under the statute, we must
  therefore address the meaning of the phrase "except to prevent a double
  recovery."  The federal district court awarded Henry $500,000 in UIM
  proceeds, free of Travelers' right to reimbursement and its right to an
  offset  against the balance of such proceeds for future benefits owed. 
  Although it is not clear from the district court's opinion, it appears that
  the court construed the phrase "double recovery" to mean a recovery by the
  employee that exceeds his "total damages."  Because the parties in this
  case stipulated that Henry's "total damages" were the sum of the available
  UIM coverage ($500,000) and the total amount of workers' compensation
  benefits paid through the date of the court's final judgment order, the
  court presumably concluded that Travelers did not have any right to Henry's
  UIM proceeds. 
   
       ¶  20.  Travelers argues that the federal district court erred in
  interpreting the words "double recovery."  According to Travelers, "double
  recovery" must be construed to mean a recovery from both the insurer and a
  third party for the same injury.  See Surdam, 156 Vt. at 590, 595 A.2d  at
  266  ("When a third party is found responsible in a personal injury action
  for damages suffered by the worker, the worker is not permitted double
  recovery from both the insurer and third party for the same injury.").  In
  other words, Travelers reiterates its assertion that it is entitled to a
  "first dollar" reimbursement right from Henry's UIM recovery under his
  employer-purchased policy.  Travelers argues that this is the only
  interpretation that will implement the policy underlying the reimbursement
  statute, i.e., the prevention of a double recovery.  

       ¶  21.  We reject Travelers' interpretation because it would render
  the 1999 amendment a nullity.  Under Travelers' proposed interpretation,
  the result would be the same under both the pre-amendment and
  post-amendment versions of the statute-Travelers would be entitled to
  first-dollar reimbursement from an employee's UIM recovery.  We must
  presume that, by amending the statute, the Legislature intended to change
  the law.  State v. Yorkey, 163 Vt. 355, 358, 657 A.2d 1079, 1080 (1995)
  ("[T]here is a presumption that the Legislature does not intend to enact
  meaningless legislation.").  Thus, we must construe 21 V.S.A. § 624(e) in a
  way that will not render the amendment "ineffective or meaningless."  Id. 
   
       ¶  22.  We conclude that by amending the statute, the Legislature
  intended to change the result reached in Travelers Cos. and Brunet, and
  protect an employee's UIM recovery from a workers' compensation carrier's
  right to "first dollar" reimbursement.  The Legislature remained mindful of
  the need to prevent a double recovery, however, and this makes salient an
  inquiry into the nature of the damages recovered under first-party
  insurance policies.  On this point, we find our reasoning in Surdam, 156
  Vt. at 590, 595 A.2d  at 266, instructive.  In Surdam, we drew a distinction
  between economic and noneconomic damages in considering an injured
  employee's obligation to reimburse a workers' compensation carrier under §
  624(e).  See id. at 590-91, 595 A.2d  at 266-67.  We concluded that a
  workers' compensation carrier was not entitled to reimbursement from an
  employee's third-party recovery, where the recovery, under New York law,
  represented solely noneconomic damages.  Id.  We stated that allowing the
  insurance carrier to be reimbursed out of such damages would saddle the
  injured employee with a "double debit," as opposed to a "double recovery." 
  Id. at 589, 595 A.2d  at 266 (quotations omitted).  As we explained, "[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."  Id. at 590, 595 A.2d  at 266.  

       ¶  23.  We rejected this approach in 1996 in Brunet, 165 Vt. at 317,
  682 A.2d  at 488, concluding that under the plain language of § 624(e), a
  workers' compensation carrier was entitled to first-dollar reimbursement
  from "any recovery" in a third-party suit.  "Double recovery," however, is
  distinct from "any recovery."  In light of the Legislature's amendment to §
  624(e), in which this language is used, we find the approach used in
  Surdam, distinguishing between economic and noneconomic damages, persuasive
  in the context of an employee's recovery of UIM benefits.  The plain
  meaning of the amended statute indicates the Legislature's intent to
  protect an employee's UIM benefits to the extent that it does not represent
  a double recovery.  Drawing a distinction between economic and noneconomic
  damages pays heed to the unique character of UIM benefits while remaining
  consistent with the general concept of preventing a double recovery present
  in § 624(e). 
   
       ¶  24.  Therefore, when an injured employee recovers damages under an
  employer-purchased insurance policy, or any other first-party insurance
  policy, the settling parties, or the trial court, must apportion the award
  between economic and noneconomic damages.  Workers' compensation benefits
  reflect an employee's economic losses.  See Surdam, 156 Vt. at 589-90, 595 A.2d  at 266 ("Workers' compensation law provides injured workers with
  expeditious and certain payments for economic losses without proof of fault
  and employers with limited liability."); see also 1 A. Larson, Larson's
  Workers' Compensation Law § 1.03[4] (2004) ("In compensation, unlike tort,
  the only injuries compensated for are those which either actually or
  presumptively produce disability and thereby presumably affect earning
  power.").  Using the type of benefits provided by workers' compensation as
  a guide, we conclude that the economic damages recoverable by the workers'
  compensation insurer include those awarded for lost wages, diminished
  earning capacity, medical expenses, vocational rehabilitative services, and
  in the case of the employee's death, burial and funeral expenses, and wage
  replacement paid to a surviving spouse, dependent children, or other
  dependents.  See generally 21 V.S.A. §§ 601-711.  If the employee recovers
  such damages and has already been compensated for these losses by the
  insurer, the insurer is entitled to reimbursement to prevent a double
  recovery.  All other damages that the employee recovers under a first-party
  insurance policy, including compensation for pain and suffering and other
  related non-monetary injuries, are considered noneconomic damages.  Because
  workers' compensation does not compensate an employee for such losses,
  there is no danger of a double recovery, and the insurer is not entitled to
  reimbursement from this portion of the employee's award. 
   
       ¶  25.  We recognize that an injured employee and a UIM carrier could
  attempt to structure a settlement agreement so as to avoid reimbursing the
  employer or the workers' compensation insurer for the benefits that it has
  provided.  See, e.g., Colo. Comp. Ins. Auth. v. Jorgensen, 992 P.2d 1156,
  1166 (Colo. 2000) (en banc) (holding that employee may not attempt to
  circumvent legitimate subrogation rights of insurer without risking that
  apportionment between economic and noneconomic damages will be set aside). 
  Section 624 provides some protection against such a result.  See 21 V.S.A.
  § 624(a) (employee must notify workers' compensation insurance carrier  of
  action against liable third party; any party in interest shall have a right
  to join in suit); id. § 624(b) (consent of employer or workers'
  compensation insurer required if employee seeks to settle claim against
  third party for less than compensation benefits that would have been
  payable in the future); id. § 624(c) (settlement and release by employee
  not a bar to action by employer or its insurance carrier to proceed against
  third party for any interest or claim that it might have).  As an
  additional safeguard, the employer, or workers' compensation carrier, has a
  right to seek judicial review of such a settlement agreement to ensure that
  the apportionment of damages is fair and that it reasonably reflects the
  injured party's actual economic and noneconomic losses.  See Jorgensen, 992 P.2d  at 1166; see also Dearing v. Perry, 499 N.E.2d 268, 272 (Ind. Ct. App.
  1986) (invalidating provision in settlement agreement allocating
  reimbursable and non-reimbursable damages where workers' compensation
  carrier had no opportunity to participate in settlement; carrier is
  entitled to decision on allocation by impartial factfinder).  The parties
  must have an opportunity to present evidence on the proper allocation of
  the injured employee's economic and noneconomic losses.  Jorgensen, 992 P.2d  at 1166; Dearing, 499 N.E.2d  at 272.

       ¶  26.  It is unclear from the record in this case what portion of
  Henry's UIM recovery can be attributed to economic damages.  The resolution
  of Travelers' claim to reimbursement, as well as its claim to a credit
  against the balance of Henry's UIM recovery, must therefore await a
  determination as to the nature and extent of Henry's damages.   

       The reformulated certified question is answered as follows:  a
  workers' compensation carrier has no right to reimbursement from, nor a
  future credit against, UIM proceeds that an employee recovers under an
  employer-purchased automobile liability policy, except to prevent a double
  recovery.  To determine whether a double recovery has occurred, the nature
  and extent of an injured employee's damages must first be determined.  The
  employee must then reimburse the workers' compensation carrier out of the
  economic damages portion of his UIM award.



                                       FOR THE COURT:


                                       _______________________________________
                                       Chief Justice


------------------------------------------------------------------------------
                                  Footnotes


FN1.  We have reformulated the original certified questions.  See V.R.A.P.
  14(b).  The questions certified to this Court were: (1) what effect, if
  any, does the 1999 amendment to 21 V.S.A. § 624(e) have on a workers'
  compensation carrier's right to obtain reimbursement from an injured
  worker's recovery of proceeds under an underinsured/uninsured (UIM)
  insurance policy that was not "privately purchased by the injured
  employee"?; and (2) what effect, if any, does the 1999 amendment to 21
  V.S.A. § 624(e) have on a workers' compensation carrier's right to a credit
  against future benefits from an injured worker's recovery of proceeds under
  a UIM policy that was not "privately purchased by the injured employee"? 

FN2.  It appears from the record that Henry's entitlement to vocational
  rehabilitation and permanent disability benefits has not yet been
  determined as he has not yet reached a medical end result.

FN3.  As discussed in greater detail below, Travelers and Henry differ in
  their interpretation of  the prohibition on "double recovery" found in 21
  V.S.A. § 624(e).  Travelers asserts that "double recovery" means a recovery
  from both the insurer and a third party for the same injury.  Henry, in
  contrast, asserts that a "double recovery" does not occur until an employee
  has been "made whole," i.e., until his total recovery from all sources
  exceeds his "actual damages." Consistent with its position, Travelers
  maintained in the parties' stipulation that the question of Henry's "total
  damages" was irrelevant to the determination of the parties' rights and
  obligations under 21 V.S.A. § 624(e).

FN4.  Henry asserts that we should decline to address what effect, if any,
  the amendment to 21 V.S.A. § 624(e) has on Travelers' right to a credit
  against Henry's recovery for any future benefits owed.  According to Henry,
  there can be no justiciable issue as to Travelers' right to a credit unless
  and until he recovers UIM proceeds.  Henry also asserts that the Court
  should leave the resolution of this question in the first instance to the
  Commissioner of Labor and Industry.  We reject these arguments.  Given the
  plain language of the statute, and because this issue is plainly implicated
  by the facts of this case, we find it expeditious to address the argument
  here.