Opinion
LLICV186018418
10-17-2018
Mary Lou PAVLIK v. TOWN OF SIMSBURY et al.
UNPUBLISHED OPINION
OPINION
Pickard, J., Judge Trial Referee
This case was brought by the plaintiff, Mary Lou Pavlik, pursuant to General Statutes § 7-464(c)(4), for a resolution of a dispute regarding a lien claimed by the defendant, Town of Simsbury ("Town"), and supported by the defendants, Conduent Payment Integrity Solutions, Inc. ("Conduent") and Cigna Health and Life Insurance Company ("Cigna"). The Town has filed a motion for summary judgment (# 118), as have Conduent and Cigna (# 120). The plaintiff has also filed a motion for summary judgment (# 122). The parties have agreed upon an extensive joint stipulation of facts. The issues have been fully briefed and were argued before the court on August 8, 2018. For the reasons stated, the court grants the plaintiff’s motion for summary judgment and denies those of the Town and of Conduent and Cigna.
Facts
The plaintiff, whose husband was an employee of the Town, was a participant in the Town’s group health benefits plan ("Plan") for the period of December 30, 2015 until June 30, 2017. Cigna was the third-party administrator of the Plan. Conduent was retained by Cigna to review claims for benefits where the underlying injury was the result of an accident.
The plaintiff claims to have been injured in an accident on December 30, 2015 ("Incident"). The Town, pursuant to the Plan, made payments for the plaintiff’s medical, hospital and/or prescription expenses resulting from the Incident.
The plaintiff, represented by the law firm of Logan & Mencuccini, LLC, brought an action ("Action") to recover damages arising from the Incident. The Action was dated January 26, 2017 and was returnable on February 28, 2017.
On or about January 12, 2018, Conduent sent two letters to Blair Pavlik, the plaintiff’s husband who was the insured under the Plan. The letters are attached as exhibits to the joint stipulation of the parties. In brief, the letters state that the Plan entitles the Town to be reimbursed for medical expenses paid on the plaintiff’s behalf out of any proceeds received as a result of the Action. The plaintiff’s attorneys responded with a letter disputing this claim.
On February 1, 2018, the plaintiff mediated her claims in the Action with retired Judge Michael E. Riley. The Action was settled at the mediation for $140,000 ("Settlement Proceeds"). The plaintiff incurred $51,116.08 in attorneys fees and costs from the Settlement Proceeds in the Action. The Town made payments on behalf of the plaintiff in the amount of $45,296.55 and claims a lien in that amount less a percentage of the plaintiff’s legal fees and costs. The plaintiff brought this action to challenge the validity of the lien.
The Town agrees that the lien must be reduced by 36.5% of the plaintiff’s total attorneys fee, the percentage ration that the plaintiff’s total legal fees and costs bear to the total settlement.
Arguments of the Parties
The two motions for summary judgment filed by the defendants make arguments which overlap and will be summarized together. The defendants assert that the Town has a valid lien on the Settlement Proceeds pursuant to Public Act 17-165 ("the Act"), because the plaintiff settled her claims in the Action four (4) months after the October 1, 2017 effective date of the Act, now codified as General Statutes § 7-646(c) and (d). First, the defendants point to the language of the Act highlighted below which states that the lien applies to the portion of any settlement "that represents payment for economic loss for medical, hospital and prescription expenses paid as of the time of settlement or judgment ..." (Emphasis added.) General Statutes § 7-464(c)(3). Next, they point to § 7-464(c)(5) which provides that the lien is effective when written notice of the lien is provided to the employee. This did not occur until after the effective date of the Act. Since the settlement took place after notice was given to the plaintiff’s husband, and after the effective date of the Act, the defendants argue that the Act applies without having a retroactive effect. The defendants argue that if the legislature had intended for the Act to apply only to injuries occurring after the effective date, or for medical expenses paid after the effective date, or to litigation commenced after the effective date, it could have said so. The defendants point to legislative history which indicates that the purpose of the Act was to help "cities struggling financially" without hurting injured municipal employees who can take the lien into consideration when negotiating their legal settlement. The defendants ask for summary judgment.
The plaintiff relies on the common-law presumption against retroactive application of substantive changes in the law, as well as General Statutes § 1-1(u) and General Statutes § 55-3. The plaintiff argues that a statute should not be applied retroactively to pending actions unless the legislature clearly expressed an intent to do so, and that the legislature expressed no intent to apply the Act on a retroactive basis to claims already in litigation. The plaintiff relies heavily on General Statutes § 1-1(u) which provides, in part, that: "(t)he passage or repeal of an act shall not affect any action then pending." The plaintiff also relies on General Statutes § 55-3 which provides, in part: "(n)o provision of the general statutes, not previously contained in the statutes of the state, which imposes any new obligation on any person or corporation, shall be construed to have retrospective affect." The plaintiff argues that both statutes and the case law interpreting them entitle the plaintiff to summary judgment.
Summary Judgment Standard
Practice Book § 17-49 provides that summary judgment shall be rendered forthwith if the pleadings, affidavits and any other proof submitted show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. "The motion for summary judgment is designed to eliminate the delay and expense of litigating an issue when there is no real issue to be tried." Wilson v. City of New Haven, 213 Conn. 277, 279 (1989).
Discussion
The parties have agreed that the issue of proper notice of the alleged lien will not be considered by the court at this time. Nor will the court consider a potential reduction in the lien for comparative negligence if the court does not agree that the lien is invalid. For the sole purpose of determining the validity of the lien, there are not genuine issues of material fact. Therefore, the court will proceed to decide the issue of the applicability of the Act and leave the issues of notice and comparative negligence undecided.
There is, as yet, no Connecticut appellate or trial court law on this issue. The resolution of the issue in these motions requires the court to determine the meaning of the Act. "When construing a statute, our fundamental objective is to ascertain and give effect to the apparent intent of the legislature ... In other words, we seek to determine, in a reasoned manner, the meaning of the statutory language as applied to the facts of [the] case, including the question of whether the language actually does apply ... In seeking to determine that meaning, [General Statutes] § 1-2z directs us to first consider the text of the statute itself and its relationship to other statutes. If, after examining such text and considering such relationship, the meaning of such text is plain and unambiguous and does not yield absurd or unworkable results, extra-textual evidence of the meaning of the statute shall not be considered ... When a statute is not plain and unambiguous, we also look for interpretive guidance to the legislative history and circumstances surrounding its enactment, to the legislative policy it was designed to implement, and to its relationship to existing legislation and common-law principles governing the same general subject matter ..." (Internal quotation marks omitted.) Kackman v. McAnulty, 324 Conn. 277, 286 (2017).
"The test to determine ambiguity is whether the statute, when read in context, is susceptible to more than one reasonable interpretation." (Citations omitted.) State v. Brown, 310 Conn. 693, 702 (2013). A plain and unambiguous meaning is "the meaning that is so strongly indicated or suggested by the language as applied to the facts of the case, without consideration, however, of its purpose or the other, extra-textual sources of meaning ... that, when the language is read as so applied, it appears to be the meaning and appears to preclude any other likely meaning ... Put another way, if the text of the statute at issue, considering its relationship to other statutes, would permit more than one likely or plausible meaning, its meaning cannot be said to be plain and unambiguous." (Citation omitted; emphasis in original; internal quotation marks omitted.) Commissioner of Public Safety v. Freedom of Information Commission, 137 Conn.App. 307, 313-14, cert. granted on other grounds, 307 Conn. 918 (2012).
The first step in deciding the motions before the court is to decide whether the meaning of the Act is plain and unambiguous. If so, there is no reason to consider extra-textual evidence. The defendants say that the words "paid as of the time of settlement or judgment" mean that the apparent intent of the legislature was to make the act applicable to any benefits paid as of the date of the settlement provided that the settlement takes place after the effective date of the act. The plaintiff says that the meaning is not plain at all and that the legislature’s intent with respect to the act’s application to existing legislation is unclear.
I agree with the plaintiff for the following reasons. There is nothing in the Act which plainly and unambiguously states whether it is applicable to existing litigation. This silence has left health and liability carriers, their attorneys, and the plaintiff’s bar to guess about whether the Act applies to existing litigation. The legislature could have made its intent clear but, instead, was silent on this issue. The plaintiff argues that this silence is the reason that General Statutes § 1-1(u) applies to provide an answer. "§ 1-1(u) provides: ‘The passage or repeal of an act shall not affect any action then pending.’ We have interpreted § 1-1(u) as reflecting the general rule concerning the effect of a statute on a pending action. The situation is not within the provision of § 1-1(u) of the General Statutes, that the passage or repeal of an act shall not affect any action then pending, for this is merely declaratory of a rule of construction and not applicable where the legislative intent to the contrary appears. Section 1-1(u) and our interpretation of it is a rule of construction, an aid in construing statutes, and not a rule that preempts the legislature’s clearly expressed intent." (Internal quotation marks omitted; citations omitted.) Gil v. Courthouse One, 239 Conn. 676, 688 (1997). In other words, § 1-1(u) is inapplicable if the legislature’s intent is clearly expressed, but comes into play when, as is the case here, the legislature’s intent is not clear.
There are other construction rules which lead in the same direction. "Whether to apply a statute retroactively or prospectively depends upon the intent of the legislature in enacting the statute ... In order to determine the legislative intent, we utilize well established rules of statutory construction. Our point of departure is General Statutes § 55-3, which states; no provision of the general statutes, not previously contained in the statutes of the state, which imposes any new obligation on any person or corporation, shall be construed to have retrospective effect. The obligations referred to in the statute are those of substantive law ... Thus we have uniformly interpreted § 55-3 as a rule of presumed legislative intent that statutes affecting substantive rights shall apply prospectively only ... The rule is rooted in the notion that it would be unfair to impose a substantive amendment that changes the grounds upon which an action may be maintained on parties who have already transacted or are already committed to litigation ... In civil cases, however, unless considerations of good sense and justice dictate otherwise, it is presumed that procedural statutes will be applied retrospectively ... Procedural statutes have been traditionally viewed as affecting remedies, not substantive rights, and therefore leave the preexisting scheme intact ... [A]lthough we have presumed that procedural or remedial statutes are intended to apply retroactively absent a clear expression of legislative intent to the contrary ... a statute which, in form, provides but a change in remedy but actually brings about changes in substantive rights is not subject to retroactive application ... While there is no precise definition of either [substantive or procedural law], it is generally agreed that a substantive law creates, defines and regulates rights while a procedural law prescribes the methods of enforcing such rights or obtaining redress." (Citations omitted; internal quotations marks omitted.) Walsh v. Jodoin, 283 Conn. 187, 195, 196 (2007).
In order for the court to determine whether General Statutes § 55-3 is applicable, it must decide whether the Act is substantive or procedural. The defendants do not address this issue directly but do cite the court to legislative history for the proposition that the Act will not change the net personal injury recoveries of municipal employees and their dependents. This is because the statutory scheme for handling collateral sources is designed to ensure that a plaintiff in a personal injury case does not receive a double recovery, i.e., collecting economic damages from a defendant and also receiving collateral sources payments. The scheme creates conflict between those who pay benefits for health care (usually health insurance companies, but in this case, the self-insured Town) and liability insurance carriers who must pay damages in personal injury cases. If the health insurance carrier has no right of subrogation, the liability carrier gets a collateral source reduction from the award of economic damages. On the other hand, if the health insurance carrier has a right of subrogation, there will be no reduction in the award. In either scenario it is true that the claimant should receive roughly the same net recovery. But, the burden of paying the medical bills will shift between the carriers depending on the right of subrogation or lack thereof. Thus, the Act is certainly substantive for the carriers because it creates and defines their rights regarding the payment of the injured party’s medical bills.
"The design of the bill would not harm employees, as when the legal settlement is being negotiated the payback amounts will be taken into consideration when looking to achieve a certain dollar in pocket amount." Joint Standing Committee Hearings, Planning and Development Committee, HB 6221, February 22, 2017 testimony of Representative Stephanie Cummings.
"The language and legislative history of Section 52-225a clearly indicate that Section 52-225a was intended to prevent plaintiffs from obtaining double recoveries, i.e., collecting economic damages from a defendant and also receiving collateral sources payment." Alvarado v. Black, 248 Conn. 409, 417 (1999).
The defendants have cited the court to legislative history which indicates that the Act was designed "to help cities struggling financially to recoup funds that they have paid out of their self-insured funds when municipal employees are involved in out of work accident, and thereafter recover a settlement." Joint Standing Committee Hearings, Planning and Development Committee Public Hearing, Hearing on HB 6222 (Statement of Representative Stephanie Cummings). The defendants then argue that "if a self-insured town can only possess a lien on settlements that pertain to injuries occurring on or after October 1, 2017, then it will take several years for municipalities to reap the benefits of the act. This is not what the legislature intended." However, the facts of this case only require the court to determine if the Act applies to pending legislation. This sharply limits the number of cases to those pending in court on October 1, 2017. Further, General Statutes § 1-1(u) only applies to "any action then pending." By its very terms, § 1-1(u) would not "save" a potential cause of action not in suit on October 1, 2017. Thus, the prediction of there being "several years" until the Town can receive the benefits of the act is overblown. The Act would immediately apply to potential injury cases not in suit on the effective date of the Act. Thus, municipalities would begin to immediately begin reaping the benefits of the Act.
The defendants rely heavily on a case from the Supreme Court of Kansas, Anderson v. National Carriers, Inc., 727 P.2d 899 (Kan. 1986). In that case an injured employee was paid workers’ compensation benefits for injuries she suffered during the course of her employment. She then sued a third party to recover for her injuries, and the employer intervened to assert a subrogation lien pursuant to Kansas law. The law at the time permitted the employer to recover the entire amount of the payments made, even if the employer was found to be partially at fault for the employee’s injuries. However, while the suit was pending, the legislature amended the law to provide that an employer’s subrogation lien would be reduced to the extent of the employer’s own fault in causing the injuries. At trial the employer was found to be 49% at fault. The trial court applied the amendment and reduced the employer’s lien by 49%. The employer appealed and claimed that the trial court had applied the amendment retroactively. The Kansas Supreme Court affirmed the trial court and found that the plain terms of the amendment permitted the employer to recover the amount of its lien only "[i]n the event of recovery" by the plaintiff. Thus, the employer’s right of subrogation "only arises in cases where the injured workman has obtained a judgment against the third-party tortfeasor ... Since the statutory subrogation right does not exist until there is a recovery, the amended statute was not retroactively applied in this case." Id., 1071.
The defendants argue that the Anderson case is on all fours with this case, and that the Town’s right to reimbursement vested when the plaintiff settled the underlying action, not at the time of injury or at the time the suit was commenced. Thus, the defendants argue that the Town’s right of subrogation created by the Act does not depend on a retroactive application of the Act because the Town’s right of subrogation did not exist until there was a settlement of judgment.
The court does not find that the Anderson case should control the court’s analysis here. First, there is no indication in the Anderson case that Kansas has a statute similar to General Statutes § 1-1(u). That statute clearly provides that: "The passage or repeal of an act shall not affect any action then pending." The Kansas court never discussed such a statute. If Kansas had a similar statute, it is quite possible that the result in Anderson would have been different.
In addition, there is reason to believe that the Connecticut Appellate Court or the Connecticut Supreme Court would have handled the Anderson fact situation differently. There is one Superior Court case in Connecticut dealing with a very similar situation to that found in Anderson . It was written by Judge Patty Jenkins Pittman, an extremely experienced and highly respected civil trial judge. Judge Pitman determined that in third-party actions following a workers’ compensation case, the 2011 amendment to the workers’ compensation statutes permitting the reduction by one-third of an employer’s claim for workers’ compensation benefits paid should not be applied to a suit brought before the effective date of the amendment. Judge Pittman followed the familiar substantive vs. procedural rule of statutory construction to find that the amendment was substantive in nature and operates only prospectively. Dwyer v. Zonk, Superior Court, judicial district of New Haven, Docket No. CV 095030301 (August 14, 2013). In her decision Judge Pittman cites the Appellate Court case of Esposito v. Waldbaums, Inc., 78 Conn.App. 472, 827 (2003) as follows: "For example, in Esposito v. Waldbaums, Inc., supra, the question of whether an amendment to the workers’ compensation act reduced a disabled worker’s benefits by the amount of that worker’s Social Security retirement benefits was considered substantive or procedural, that is, whether it applied to those workers’ compensation disability benefits grew out of an injury that occurred before the statutory change, or whether it applied only to those workers who became injured and eligible for workers’ compensation benefits after the statutory change. Holding that the rights and obligations between employee and employer under the workers’ compensation act became fixed as of the date of injury, the court held that new statute was substantive in nature and would not be applied retroactively to reduce the benefits of those workers who were injured before the statutory change. Id., at 478-79, 827 A.2d 747."
Conclusion
In conclusion, the court finds that the meaning of the Act is not plain and unambiguous as to whether the Act applies to cases in litigation on the effective date. General Statutes § 1-1(u) supplies the answer that the Act does not apply to existing cases. This result is supported by General Statutes § 55-3 and a substantive vs. procedural analysis. The plaintiff’s motion for summary judgment is granted and the defendants’ motions for summary judgment are denied.