Opinion
No. CV 02 0518502 S
April 22, 2005
MEMORANDUM OF DECISION
I
On December 8, 2000, while attempting to assist a fellow Staples employee whose truck had become disabled on Interstate 91, Corey James Johnson was fatally injured when he was struck by a car driven by Moukda Afshar. Ms. Afshar's insurance company, Colonial Penn, paid the full $20,000 limit of her liability policy. Mr. Johnson had a policy of insurance with the defendant, State Farm Fire Casualty Company, which had uninsured/underinsured coverage limits of $100,000 per person and $300,000 per accident subject to certain reductions. Cheryl Ann Deprey, Administratrix of Corey Johnson's estate, brought the present action seeking that coverage.
Underinsured motor vehicle is defined in section three of the policy as follows:
"Underinsured Motor Vehicle-means a land motor vehicle, the ownership, maintenance or use of which is insured or bonded for bodily injury liability at the time of the accident, but the sum of the limits of liability of all policies and bonds that apply:
1. is less than; or
2. has been reduced by payments to persons other than an insured to less than the limits of liability of this coverage under this policy."
(Emphasis in original.)
Section three of the State Farm policy of insurance states:
Any amount payable under this coverage shall be reduced by any amount:
a. paid to or for the insured for bodily injury under the liability coverage; or
b. paid or payable to or for the insured under workers' compensation, disability benefits, or similar law.
General Statutes § 38a-334 instructs the "Insurance Commissioner [to] adopt regulations with respect to minimum provisions to be included in automobile liability insurance policies . . ." The specific regulation concerning uninsured/underinsured drivers, § 38a-334-6(d), Regulations of Connecticut State Agencies, states, in part:
d) Limits of liability.
(1) The limit of the insurer's liability may not be less than the applicable limits for bodily injury liability specified in subsection (a) of Section 14-112 of the general statutes, except that the policy may provide for the reduction of limits to the extent that damages have been
(A) paid by or on behalf of any person responsible for the injury,
(B) paid or are payable under any workers' compensation law, or
(C) paid under the policy in settlement of a liability claim.
(2) The policy may also provide that any direct indemnity for medical expense paid or payable under the policy will reduce the damages which the insured may recover under this coverage.
(3) Any payment under these coverages shall reduce the company's obligation under the bodily injury liability coverage to the extent of the payment.
Our Supreme Court has recognized such regulatory reductions: "we have concluded that an insurer may not, by contract, reduce its liability for such uninsured or underinsured motorist coverage except as § 38-175a-6 [now § 38a-334-6] of the Regulations of Connecticut State Agencies expressly authorizes." Allstate Ins. Co. v. Ferrante, 201 Conn. 478, 483, 518 A.2d 373 (1986).
The Administratrix and the decedent's daughter, Oshakwe Johnson, previously made a claim, pursuant to General Statutes § 31-306 of the Workers' Compensation Act, for dependent benefits. The claim was ultimately settled for $200,000. The parties agree that the $20,000 received from the tortfeasor's policy reduces the uninsured benefit to $80,000 under Section (a). The parties are in disagreement about the meaning and applicability of Section (b) to the $200,000 received by the decedent's daughter. State Farm has filed this motion for summary judgment claiming that Section (b) requires that the remaining underinsured coverage of $80,000 be offset by the $200,000 payment.
II
A "motion for summary judgment is designed to elminate the delay and expense of litigating an issue when there is no real issue to be tried." Wilson v. New Haven, 213 Conn. 277, 279, 567 A.2d 829 (1989). "In deciding a motion for summary judgment, the trial court must view the evidence in the light most favorable to the nonmoving party." (Internal quotation marks omitted.) Barrett v. Montesano, 269 Conn. 787, 791, 849 A.26 839 (2004). "[S]ummary judgment is appropriate only if a fair and reasonable person could conclude only one way." (Internal quotation marks omitted.) Dugan v. Mobile Medical Testing Services, Inc., 265 Conn. 791, 815, 830 A.2d 752 (2003). "Unlike certain other contracts . . . where . . . the intent of the parties and thus the meaning of the contract is a factual question subject to limited . . . review . . . construction of a contract of insurance presents a question of law for the court . . ." (Internal quotation marks omitted.) Mallozzi v. Nationwide Mutual Ins. Co., 72 Conn.App. 620, 624, 806 A.2d 97, cert. denied, 262 Conn. 915, 811 A.2d 1292 (2002).
III
The court is required to determine what the phrase "to or for an insured" in Section (b) of the decedent's policy means. The defendant argues that under the policy and relevant case law, the phrase clearly must be interpreted as meaning payment made for the benefit of or on behalf of the deceased and thus would include statutory benefits paid to his child. The plaintiff claims that the payment made to the dependent child is a separate and distinct claim and is not a benefit paid to or for the insured. The plaintiff argues that, under two early Connecticut decisions, workers' compensation benefits paid to an employee constituted different claims than those paid to his dependents. In Jackson v. Berlin Construction Company, 93 Conn. 155, 159, 105 A.2d 326, (1918), the court held that "[t]he compensation to the employee is distinct from that to the dependent. The allowance of payments made to the employee cannot be made against the compensation to the dependent, and vice versa. A different construction might lead to the anomaly of having the entire claim of the dependent exhausted by a credit of sums paid the employee for the injury which later resulted in death. The compensation expressly given the dependent by this Act should not be permitted to be diminished by crediting sums paid the employee in his lifetime . . ." The Supreme Court noted that the "trial court assumes in its reasoning that the payments to the employee were payments to the dependent. This is quite contrary to the fact and the law. The payments to the employee belonged to him. The [trial] court failed to note that the Act provides two distinct forms of compensation. The one for incapacity, the other for death; the one payable to and belonging to the employee, the other payable to and belonging to the dependent." Id., 159-60.
In Biederzycki v. Farrel Foundry Machine Co., 103 Conn. 701, 704-5, 131 A. 739 (1926), the court stated that "the classes of compensation awarded the employee and his dependents are separate and independent of each other. But each arises out of the same compensable injury. If the employee is awarded compensation for an injury, and in consequence of it, subsequently dies, the injury preceding the death and the death arose out of the one injury, compensation for the latter is payable to and belongs to the dependent, while the compensation awarded to the living employee is payable to and belongs to him."
Our Supreme Court revisited the issue in 1996 in Duni v. United Technologies Corp., 239 Conn. 19, 682 A.2d 99 (1996), in the context of a widow's claim for survivor benefits under § 31-306 despite a final stipulation that had been entered into several years before which constituted a "complete satisfaction of all claims due or to become due at any time in favor of anybody on account of the claimed injuries . . . in any way arising out of the said injuries." (Internal quotation marks omitted.) Id., 31. The court stated that "the availability of survivorship benefits under § 31-306 is inextricably linked to, and wholly dependent upon, the existence of a compensable injury or illness suffered by the employee. Thus, in the absence of a work-related injury or illness, a surviving dependent of the employee has no claim whatsoever under § 31-306 . . . Similarly, a person who has not attained dependent status until after the date of the employee's injury is not entitled to bring a claim under § 31-306. See General Statutes § 31-275(6). Thus, a surviving dependent's compensation rights under § 31-306 flow directly from the work-related injury or disease suffered by the employee." (Citation omitted.) Id., 25-26. The court commented on its prior Biederzycki decision: "[t]hus, although it is apparent that the dependent of an injured employee who dies as a result of work-related injuries has certain compensation rights that exist independent of the employee's rights, we have never decided whether the employee, in agreeing to settle his workers' compensation claim, may also compromise any claim that the dependent may have upon his or her death." Duni v. United Technologies Corp., supra, 239 Conn. 26-27 n. 8. In finding that the stipulation was valid, the court rejected the plaintiff's argument that "her right to compensation . . . is completely independent of the decedent's right for work-related injuries . . ." (Citation omitted.) Id., 23.
This derivative connection between the claims certainly lends support to State Farm's argument that the phrase "paid or payable to or for the insured" includes payments such as those made to the decedent's daughter. If the policy said only "paid or payable to the insured," the plaintiff's argument might have more support as perhaps it could be argued that reductions could only be for payments made to the deceased's estate. It does not. It requires a deduction for those workers' compensation, disability benefits or similar law payments made for the insured — which under § 31-306, has always been, and long before this insurance policy went into effect in September 2000, payments made on behalf of a deceased party to his or her dependents. Moreover, as noted in footnote 3, § 38a-334-6(d) of the Regulations of Connecticut State Agencies allows for a reduction of payment "under any workers' compensation law." (emphasis supplied.) The policy limitation and reduction of payment, as suggested by State Farm, conform to this regulatory pattern. The $200,000 payment "for the insured" was made "under any workers' compensation law."
See, Teschendorf v. State Farm Ins. Co., No. 03-3521 (Wis.Ct.App., December 7, 2004), hereinafter discussed.
In Mingione v. Transamerica Ins. Co., Superior Court, judicial district of Fairfield, Docket No. CV 96 0329892 (July 24, 2002, Melville, J.) ( 32 Conn. L. Rptr. 596), Judge Melville faced almost the exact same question in considering a policy the provided for a reduction of "[a]ll sums paid or payable under any workers' compensation, disability benefits or similar law . . ." In that case, the spouse of an auxiliary trooper sought uninsured motorist benefits after her husband was killed while working on Interstate 91. Id., 597. The total benefits paid or to be paid under the workers' compensation law exceeded the uninsured benefits. Id. The arbitration panel initially hearing the matter ruled that the workers' compensation benefits belonged solely to her as a separate legal entity from her husband's estate, and thus, she was entitled to receive the insurance benefits. Id. After initially upholding the arbitration award, Judge Melville, upon reconsideration, vacated the award. Id., 600.
First, Judge Melville noted that in Wilson v. Security Ins. Co., 213 Conn. 532, 538, 569 A.2d 40 (1990), the court, in considering a prior version of the uninsured/underinsured legislation, stated that "[w]e see nothing in the language of regulation 38-175a-6(d) [now § 38-334-6(d)] that quantifies the kinds of damages that must be paid before a valid reduction in uninsured motorist benefits may occur by reason of any payments made pursuant to the workers' compensation law. If damages are paid pursuant to the workers' compensation law, the uninsured motorist coverage may be reduced accordingly . . . General Statutes 38-175c [now § 38-336] contains no mandate that uninsured motorist coverage benefits may not be reduced . . ." Mingione v. Transamerica Ins. Co., supra, 32 Conn. L. Rptr. 598. He reasoned that the reduction promoted the public policy of not permitting a double recovery, citing Vitti v. Allstate Ins. Co., 245 Conn. 169, 194, 713 A.2d 1269 (1998), wherein "[t]he Supreme Court has noted its support of this public policy [by] stating [that] offsetting workers' compensation benefits against uninsured motorist coverage benefits ensures compensation while preventing a double recovery because workers' compensation benefits provide an alternative protection available to the insured." (Internal quotation marks omitted.) Mingione v. Transamerica Ins. Co., supra, 32 Conn. L. Rptr. 600.
After analyzing two sister state cases, the court in Mingione reasoned that "the intent of the Connecticut legislature as expressed in § 38a-334-6(d) would be properly served by allowing an uninsured motorist carrier to reduce the limits of its liability by the amount of the death benefits paid or payable to a decedent's dependent pursuant to § 31-306. The regulation itself specifically permits an uninsured motorist insurance carrier to reduce its policy limits to the extent that damages have been . . . paid or are payable under any workers' compensation law . . . Moreover, the public policy behind the legislation, i.e., preventing an insured from receiving a double recovery, is served by allowing this limitation." (Internal quotation marks omitted.) Mingione v. Transamerica to Ins. Co., supra, 32 Conn. L. Rptr. 600.
Decisions from other states on this issue are pretty consistent. In the Iowa case of McClure v. Employers Mutual Casualty Co., 238 N.W.2d 321, 328 (Iowa 1976), the court held that "workmen's compensation cannot be deducted from uninsured motorist insurance in the absence of manifestation of legislative intent that it may." Judge Melville noted that, unlike Iowa, the Connecticut legislature had expressed its intent. See also, Condon v. Employers Mutual Casualty Co, 529 N.W.2d 630 (Iowa App. 1995). The North Carolina Supreme Court upheld a workers' compensation reduction in Liberty Mutual Ins. Co. v. Ditillo, 348 N.C. 247, 499 S.E.2d 764 (1998). In another 1998 case, Estate of Greenslitt v. Farmers Ins. Co. of Oregon, 156 Or.App. 75, 964 P.2d 1129 (1998), the Oregon Court of Appeals rejected the non-dependent plaintiff's claim that payment of the workers' compensation benefits to the decedent's granddaughter and great granddaughter should not be deducted from its claim for uninsured motorist benefits. The court held that "[t]he express language provides, without limit or exception, that UIM benefits . . . are to be reduced by the amount paid . . . under any workers' compensation, disability or similar law." Id., 80. The plaintiff's argument that the Greenslitt decision can be distinguished because the Oregon legislature used the phrase "all amounts payable" is not persuasive as it is a distinction without a difference.
Finally, in Tesehendorf v. State Farm Ins. Co., 03-3521 (Wis.Ct.App., December 17, 2004), the Wisconsin court held that a workers' compensation death benefit payment made to the state could not reduce an uninsured motorist benefit as "the unambiguous language of both the statute and the insurance policy allows a reduction only for those payments paid or payable to the insured or the insured's heirs or estate." Under Wisconsin law, as the decedent had no dependents, the death benefit payments were made to the state. The Tesehendorf court then discussed the statutory language, not dissimilar to Connecticut's, which states, "[a] policy may provide that the limits under the policy for uninsured or underinsured motorist coverage for bodily injury or death resulting from any one accident shall be reduced by . . . [a]mounts paid or payable under any workers' compensation law." Id. The court noted that it had previously upheld reducing clauses as "unambiguous and enforceable" citing Badger Mutual Ins. Co. v. Schmitz, 255 Wis.2d 61, 647 N.W.2d 223 (2002). It held, however that its prior decisions were based on payments to the insured and, although the statute did not expressly state that payments must be made to the insured, "these words are implied from the context of the overall statutory scheme . . ." Teschendorf v. State Farm Insurance Companies, 03-3521 (Wis.Ct.App., December 17, 2004). Unlike Teschendorf, the decedent's daughter in the present action received the workers' compensation benefits.
Based upon the above analysis, this court finds that the policy language providing for the reduction of amounts payable of uninsured or underinsured coverage as a result of any amount "paid or payable to or for the insured under any workers' compensation . . . law" is unambiguous and conforms to state law. Accordingly, State Farm's motion for summary judgment is granted.
Berger, J.