Opinion
CASE NO. 5105 CRB-1-06-6CLAIM NO. 100147706
SEPTEMBER 26, 2007
These Petitions for Review from the June 9, 2006 Finding and Award/Finding and Dismissal and June 30, 2006 Supplemental Finding and Award of the Commissioner acting for the First District was heard March 30, 2007 before a Compensation Review Board panel consisting of the Commission Chairman John A. Mastropietro and Commissioners Amado J. Vargas and Scott A. Barton.
We note that extensions of time as well as a postponement were granted during the pendency of this appeal.
The claimant was represented by Alan Reisner, Esq., Butler, Norris Gold, 254 Prospect Avenue, Hartford, CT 06106-2041.
The respondent LSP Enterprises, Inc. was represented by James J. Walker, Esq., Kahan, Kerensky Capossla, 45 Hartford Turnpike, P.O. Box K, Vernon, CT 06066-2181.
The insurer Liberty Mutual Insurance was represented by Marian Yun, Esq., Law Office of Rosenbaum Vollono, 655 Winding Brook Drive, Glastonbury, CT 06033.
The respondent Second Injury Fund was represented by Donna H. Summers, Esq., Assistant Attorney General, 55 Elm Street, P.O. Box 120, Hartford, CT 06141-0120.
OPINION
This appeal involves a dispute not about the claimant's injuries, but whether the respondent-employer had insurance in effect to cover the injury. The respondent-employer believes its workers' compensation insurance coverage had been cancelled in error by Liberty Mutual Insurance, a position shared by the Second Injury Fund. They further assert that the form of cancellation employed by Liberty Mutual was legally ineffective to cancel a policy under Connecticut law. Liberty Mutual asserts that they properly cancelled the respondent-employer's policy and no coverage was in place on the date the claimant was injured. The trial commissioner was persuaded by this argument and determined Liberty Mutual was not liable for this claim. On appeal, we conclude that this decision was not contrary to the evidence or the law, and affirm the trial commissioner.
A motor vehicle accident on October 25, 2003 started this chain of events into motion and there is little dispute as to the basis of this claim. On that date, the claimant was employed by the respondent-employer delivering pizzas from the employer's shop at 152 Franklin Avenue, Hartford. While making a delivery the claimant's car was struck by a second car that failed to obey a stop sign. That accident caused the claimant to feel pain in his neck, shoulder and right knee. A fellow employee brought the claimant back to the respondent's Franklin Avenue shop. He was first treated for the accident on October 27, 2003 at the Hartford Hospital emergency room. He was referred from there to a general practitioner, Dr. Mark Mashia, who diagnosed blunt trauma to the knee and acute sprain/strain injuries to the claimant's cervical and upper dorsal spine.
Dr. Mashia referred the claimant for knee pain to an orthopedic surgeon, Dr. Kenneth Alleyne, who diagnosed a knee sprain with possible medial collateral ligament damage. He found this injury to be causally related to the October 25, 2003 motor vehicle accident. Dr. Mashia has attributed a 5% permanent partial impairment of the neck to the accident.
The narrative gets far less definitive when the issue of insurance coverage is raised. The trial commissioner found the following facts after a formal hearing which commenced on January 26, 2005 with sessions being held on May 17, 2005, June 28, 2005, September 13, 2005, November 22, 2005 and January 12, 2006 with the record closing February 14, 2006. Seven witnesses testified in person or via deposition. Following this hearing, the trial commissioner found these facts concerning insurance coverage.
The claimant testified that he did not have health insurance at the time of the accident and had to incur his medical expenses personally. The owner of the respondent-employer, Mr. Pedro Rosario, offered testimony on the insurance coverage issue that the trial commissioner found "was at best contradictory." Mr. Rosario testified he had purchased a policy from Liberty Mutual effective June 13, 2003 to June 13, 2004. Existence of this policy was documented with the Chairman's Office of this Commission. Mr. Rosario paid $945 to NCCI for the policy period. NCCI received the premium as this was an assigned risk policy. Mr. Rosario signed an application where he chose to be excluded from coverage, but did not submit the required 6B form for NCCI to obtain the exclusion. On June 30, 2003 a policy was issued to Mr. Rosario indicating the premium owed was $1551. Liberty Mutual also requested additional payroll information and submission of the exclusion form in a June 20, 2003 letter to Mr. Rosario. Mr. Rosario and his agent, Georgina Arias, received copies of all correspondence from Liberty Mutual. Neither the additional premium nor the exclusion form was received by Liberty Mutual. On August 4, 2003 Liberty Mutual sent Mr. Rosario a letter which indicated the policy would be cancelled by August 24, 2003, and noted an additional payment was due prior to that date. Mr. Rosario testified he received this letter dated August 4, 2003 but did not tender the additional $606 premium demanded by the insurer.
The August 4, 2003 letter from Liberty Mutual stated, "in accordance with the provisions of the policy contracts, we hereby cancel the policy numbered: WC7-31S-344191-013. Said cancellation to be effective as of 12:01 A.M. Standard Time August 24, 2003." This letter was documented in the Chairman's office on August 7, 2003 with an effective date of cancellation being August 24, 2003.
The trial commissioner then reviewed the terms of § 31-348 C.G.S. to ascertain if the cancellation was effective within the terms of this statute, which requires that the name of the person or corporation insured be provided to the Commission, and that cancellations cannot become effective until fifteen days after such notice of such cancellation has been filed with the Chairman. The trial commissioner reviewed an apparent discrepancy in the address in the notice, but determined the mail had not been returned for an inaccurate address and that the employer was aware the policy had been cancelled. He also reviewed the results of a post-cancellation audit by Liberty Mutual. While Mr. Rosario completed the audit on July 19, 2004, Liberty Mutual refunded the remaining amount of premium on the policy and the policy was not reinstated or rewritten. The trial commissioner also credited the testimony of an investigator for the Second Injury Fund, who testified the NCCI database was the database used to ascertain if a carrier satisfied the § 31-348 C.G.S. notice requirement to the Chairman, and that this database evidenced no coverage for the date of injury.
Sec. 31-348. Compensation insurance companies to report their risks. Every insurance company writing compensation insurance or its duly appointed agent shall report in writing or by other means to the chairman of the Workers' Compensation Commission, in accordance with rules prescribed by the chairman, the name of the person or corporation insured, including the state, the day on which the policy becomes effective and the date of its expiration, which report shall be made within fifteen days from the date of the policy. The cancellation of any policy so written and reported shall not become effective until fifteen days after notice of such cancellation has been filed with the chairman. Any insurance company violating any provision of this section shall be fined not less than one hundred nor more than one thousand dollars for each offense.
NCCI is the National Council of Compensation Insurance. The Commission has contracted with NCCI to receive notices of cancellation pursuant to § 31-348 C.G.S. on behalf of the Chairman.
Based on this evidence, the trial commissioner concluded that the claimant had proven he had suffered a compensable injury on October 25, 2003 and was entitled to reasonable and necessary medical treatment, including expenses already incurred, as well as 5.85 weeks of benefits for permanent partial disability. On the insurance issues, the trial commissioner found the claimant's employer had received proper notice their workers' compensation insurance had been cancelled. The trial commissioner also found the NCCI records showed that Liberty Mutual had cancelled the policy effective August 24, 2003 and both the employer and the commission had received proper notice of the cancellation. Therefore, Liberty Mutual did not insure the employer on the date of the accident and there was no workers' compensation insurance coverage in effect for the employer as of that date. As a result, the trial commissioner found that the respondent-employer Domino's Pizza a/k/a LSP Enterprises was responsible for paying the claimant's award and if the award was not paid, the Second Injury Fund would be statutorily obligated to pay the award under § 31-355 C.G.S. On September 21, 2006 the trial commissioner issued a Finding and Award under § 31-301(f) C.G.S. directing the Second Injury Fund to "pay the benefits so ordered in the Finding Award/Finding Dismissal dated June 9, 2006, Supplemental Order dated June 30, 2006 and Supplemental Order, as corrected on September 21, 2006." The Second Injury Fund filed a timely appeal from this award.
The respondent-employer LSP Enterprises, Inc. did not file a petition for review from this Finding and Award, but as an appellee has submitted a brief challenging the trial commissioner's decision and presented oral argument before the board contesting the Finding and Award.
The appellant had presented numerous claims of error. In considering these claims we take notice that the trial commissioner held an extensive hearing and had the benefit of hearing a number of fact witnesses for both the appellant and the appellees. We recently restated our standard of review in Testone v. C.R. Gibson Company, 5045 CRB-5-06-1 (May 30, 2007):
In reviewing this instant decision, our standard of review is deferential to the finder of fact. "As with any discretionary action of the trial court, appellate review requires every reasonable presumption in favor of the action, and the ultimate issue for us is whether the trial court could have reasonably concluded as it did." Daniels v. Alander, 268 Conn. 320, 330 (2004). The dispute herein, while involved, is to a great extent a dispute over the factual record presented to the trial commissioner. This further limits our scope of review, as explained in Berube v. Tim's Painting, 5068 CRB-3-06-3 (March 13, 2007).
The scope of review of a trial court's factual decision on appeal is limited to a determination of whether it is clearly erroneous in view of the evidence and pleadings. . . . Conclusions are not erroneous unless they violate law, logic or reason or are inconsistent with the subordinate facts . . . A finding of fact is clearly erroneous when there is no evidence in the record to support it . . . or when although there is evidence to support it, the reviewing court on the entire evidence is left with the definite and firm conviction that a mistake has been committed. (Citations omitted; internal quotation marks omitted.) citing Moutinho v. Planning and Zoning Commission, 278 Conn. 660, 665-666 (2006).
As a result, to the extent the appellant and the respondent-employer challenges the factual findings of the trial commissioner; we are compelled to uphold them unless they are inconsistent with the evidence on the record or are "clearly erroneous." Our review of the arguments presented by the respondent-employer and the Second Injury Fund indicate their primary focus is whether the trial commissioner's findings concerning the cancellation of the Liberty Mutual policy were legally well founded. As an appellate body, we are empowered to review whether a trial commissioner properly applied the law to the facts on the record, and to vacate orders when a trial commissioner improperly applies the law to the facts. See Sullivan v. Madison-Police Department, 4893 CRB-3-04-12 (June 9, 2006) and Carroll v. Flattery's Landscaping, Inc., 4499 CRB-8-02-2 (March 25, 2003).
The respondent-employer does contest many of the factual findings reached by the trial commissioner concerning whether Mr. Rosario had actual knowledge LSP's insurance coverage had been cancelled. We believe these findings must stand on appeal since they are based on evaluating the testimony presented at the hearing, in particular evaluating the credibility of witnesses. See Burton v. Mottolese, 267 Conn. 1, 40 (2003); Liano v. Bridgeport, 4934 CRB-4-05-4 (April 13, 2006) andBerube, supra.
The central argument presented by the appellant is that the trial commissioner's conclusions were inconsistent with the legal standards for cancellation of a workers' compensation insurance policy as delineated in Dengler v. Special Attention Health Services, Inc., 62 Conn. App. 440 (2001). We have reviewed Dengler and believe that case is distinguishable from this case at hand.
In Dengler the defendant insurance carrier argued that it had cancelled the employer's insurance policy prior to the date of injury. The trial commissioner concluded based on the facts presented, they had not effectively cancelled the policy and our board affirmed this finding. The Appellate Court upheld our decision. Construing § 31-348 C.G.S. the court pointed out "the present dispute rests on the words of the cancellation notice itself." Id., 459-460. In Dengler the carrier sent two letters of cancellation, and the trial commissioner and this board concluded the initial letter served as a warning to the policyholder of an impending cancellation. The Appellate Court concurred with our opinion that "the trust's initial letter did not act as a final cancellation notice" id., 461; and that "[t]he trust's August 16, 1996 letter unequivocally canceled Special Attention's policy." Id., 462.
In the present case only one notice was sent to the insured canceling the policy. This notice was sent to the NCCI database which provides notice as to whether insurance coverage is in force. The NCCI database, which is relied on by the Commission, showed the policy had been cancelled as of August 24, 2003. In Dengler, the court found as to the initial notice "[a] third party examining the records in the commissioner's office could not ascertain" if the insured had reinstated the policy. Id, 461. We believe these circumstances are different as the trial commissioner found the relevant records would have caused one to conclude unequivocally the policy had been cancelled. "The plain language of § 31-348 requires an insurer to provide notice to the workers' compensation commission upon the happening of two events: Either when insurance is effected or when it is canceled." DiBello v. Barnes Page Wire Products Inc., 67 Conn. App. 361, 368 (2001). We believe this notice was provided and it is probative to the issues herein.
The date of accident in this case was many months after the date of cancellation, which would lead a third party to discount the possibility the policy would have been reinstated due to a delay in processing payments. In our recent decision in Costa v. Brake King Automotive, 4962 CRB-1-05-6 (June 19, 2006), we pointed out the critical issue in determining whether a cancellation has become effective is whether 15 days have elapsed "after notice of such cancellation has been filed with the chairman." In Costa, we determined coverage had continued until this 15 day period had expired, and in the present case it had expired far before the date of injury.
Our precedent in DeGruchy v. Buy, Sell or Hold Company, 4676 CRB-7-03-6 (July 27, 2004) provides further insight into this issue. InDeGruchy the trial commissioner found no insurance policy had been in effect as of the date of injury. "If, according to the N.C.C.I. records, an employer is insured by a workers' compensation policy on the date of a claimant's injury, the Commission is presumably aware of this record and prima facie evidence of insurance exists . . . Under existing case law an insurer is limited in its ability to deny the existence of a workers' compensation policy effective on the date of injury when the records created and maintained by the Commission pursuant to General Statutes Sec. 31-348 show otherwise." Id. In DeGruchy, the NCCI records in question did not reference a policy issued to cover claims in Connecticut, and the trial commissioner concluded no insurance was in place. We believe that if the NCCI database is to be considered persuasive evidence as to the existence of insurance, it must also be given due weight as evidence as to the absence of insurance coverage due to cancellation.
The appellant argues that the verbiage in the August 4, 2003 notice was contingent in that it alerted the insured that it "must pay the full amount of the `Cancellation Balance' on or before the effective date herein to continue your insurance protection." They argue this makes the notice somehow less than unequivocal. We believe that the rest of the notice is unequivocal, however. The notice stated that Liberty Mutual had decided to "hereby cancel the policy numbered: WC7-31S-344191-013. Said cancellation to be effective as of 12:01 A.M. Standard Time August 24, 2003." As a result, unlike Dengler, the trial commissioner concluded that this notice represented an unequivocal cancellation including a date certain in which coverage would cease. We note the notice in Dengler clearly implied payment of the unpaid balance would reverse the termination of coverage; utilizing the dependent term "unless" to describe termination due to overdue payment. Id., fn 3. Conversely, the notice sent by Liberty Mutual had no representations that the policy in question would not be cancelled on the date certaineven were the `Cancellation Balance' to be paid. Therefore, unlikeDengler we do not believe this notice "was merely a warning that a cancellation might occur" id., 461, and we concur with the trial commissioner's judgment this notice complied with the statute.
The appellant additionally challenge not only the form of the cancellation notice, but whether the notice was effectively provided to the insured employer. They rely on a recent federal court decision,Bepko v. St. Paul Fire Marine Insurance Co., 2006 WL 2331076 (D. Conn. 2006) (Dorsey, J.), for the proposition that such a notice cannot be effective unless it is sent by registered or certified mail or hand delivered to the insurer. They also cite Piscitello v. Boscarello, 113 Conn. 128 (1931) for the proposition a policy cancellation is ineffective unless the carrier can provide a receipt. We must reviewBepko and Piscitello to determine whether they are factually and legally congruent with this case.
We find Bepko distinguishable on two points. The statute governing theBepko case, § 38a-324 C.G.S., governs the cancellation of professional liability insurance policies and is not binding to the issues under Chapter 568. In addition, the plaintiff in Bepko offered a rather detailed factual argument that he was not in the country to sign for the cancellation notice, his employees were instructed not to sign for him, and the signature on the receipt was not his. He argued successfully, using parol evidence, that the presumption of receipt under Connecticut law in Echavarria v. National Grange Mutual Insurance Co., 275 Conn. 408 (2005) should not be upheld since he had not received the notice. In the present case the trial commissioner reached a different factual finding on the basis of the insured's testimony.
In its opinion in Echavarria, supra, the Supreme Court permitted an insurance to be cancelled through the use of regular mail, utilizing a log procedure to act as a certificate of mailing. They also concluded the plaintiffs failed to put forward evidence that they did not receive the notice. "Even if § 38a-343 (a) requires actual notice, as the plaintiffs claim that it does, the plaintiffs cannot prevail in the present case because they have failed to rebut the presumption generated by the mailbox rule that they had, indeed, received notice of cancellation of their automobile insurance from the defendant at least fifteen days before it was canceled." Id., fn. 12. We note that it is undisputed in this case that Liberty Mutual had a certificate of mailing for the notice. Second Injury Fund's Appellant Brief, p. 3. We also note the respondent-employer admitted receipt of the notice in the present case.
The trial commissioner found that the insured's President, Mr. Rosario, testified he had received the August 4, 2003 letter canceling the insurance policy. He further found that the August 4, 2003 letter of cancellation had not been returned to the carrier as undelivered. Therefore the finder of fact concluded that the insurer "had actual knowledge that his policy had been cancelled prior to August 24, 2003."
We also find Piscitello distinguishable from this case. The policy cancellation in Piscitello was deemed ineffective because it had not been filed with the Workers' Compensation Commission. "The files of the commissioner's office disclose no such notice was ever filed there." In the present case it is indisputable that the cancellation of this policy was properly received by the Commission. The appellant arguesPiscatello stands for the proposition "mere mailing" of a notice is inadequate. We note that in Piscitello this regarded notice to the Commission and not to the insured; and to the extent "mere mailing" of a notice to the insured may be deemed insufficient; we note that the trial commissioner specifically found in this case the cancellation noticehad been received by the insured. While counsel for the appellant Second Injury Fund has based an extensive argument on the theory the insured had only "constructive notice" of the policy cancellation, the actual finding of fact reached in this case is the insured actually received the notice provided by the carrier prior to the date of cancellation. Findings, ¶ G. This finding was supported by the actual testimony of the respondent's president, Pedro Rosario.
Appellant argues that § 31-321 C.G.S mandates the use of registered or certified mail or personal service to cancel an insurance policy under § 31-348 C.G.S. They offer no precedent which bars a trial commissioner from considering parol evidence as to whether an insurance policy cancellation once mailed has been received, or has mandated the use of such service to the insured. The actual text of the statute provides discretion to the trial commissioner. "Unless otherwise specifically provided, or unless the circumstances of the case or the rules of the commission direct otherwise, any notice required under this chapter to be served upon an employer, employee or commissioner shall be by written or printed notice, service personally or by registered or certified mail addressed to the person upon whom it is to be served at his last-known residence or place of business." (Emphasis added) We also note the Dengler precedent relied upon by appellant makes no mention of § 31-321 C.G.S or the use of certified or registered mail. Therefore, we are not persuaded by this argument.
At the formal hearing held May 17, 2005 counsel for the claimant asked the following question of Mr. Rosario:
Q: But my question was did you receive a cancellation notice?
A: Yes, I did.
May 17, 2005 Transcript, p. 32.
Therefore, we simply find the Bepko and Piscitello cases inapposite to the facts herein. While such precedent would be persuasive were there a factual question of whether the cancellation notice had been received, we find that the trial commissioner had a judicial admission herein from the respondent-employer that the notice had been received.
Finally, we address the various factual issues raised by the respondent-employer in its Motion to Correct. In their brief, the respondent-employer argues that due to a series of administrative errors (such as failing to properly process a policy application which excluded the firm's principal from coverage) Liberty Mutual erred in canceling the policy. We are not persuaded by this argument. The various arguments presented alleging mishaps by the insurance carrier do not alter the fact that the carrier did issue a cancellation for the policy which it never reinstated. Our inquiry is whether workers' compensation insurance was in force as of the date of the accident. The stance suggested by the respondent-employer would require extensive research beyond the NCCI database to ascertain whether insurance is in place, which is not supported by appellate precedent or policy considerations.
In Verrinder v. Matthew's Tru Colors Painting Restoration, 4936 CRB-4-05-4 (December 6, 2006) we upheld a trial commissioner who determined issues concerning compliance with the terms of an insurance policy were matters which had to be addressed in another forum. See alsoStickney v. Sunlight Construction, Inc., 248 Conn. 754 (1999).
We also note that by arguing that the trial commissioner failed to properly consider the issue of whether Liberty Mutual appropriately cancelled the policy the respondent-employer is essentially seeking to re-try the case. Since the Motion to Correct essentially sought to interpose the respondent-employer's conclusions as to the facts presented, we find no error in the trial commissioner denying this Motion to Correct. See Liano, supra, Hernandez v. American Truck Rental, 5083 CRB-7-06-4 (April 19, 2007) and D'Amico v. Dept. of Correction, 73 Conn. App. 718, 728 (2002), cert. denied, 262 Conn. 933 (2003).
For the aforementioned reasons, we affirm the Finding and Award and the September 21, 2006 (Supplemental) Finding and Award of the trial commissioner and dismiss this appeal.
Commissioners Amado J. Vargas and Scott A. Barton concur in this opinion.