MICHAEL FERRARO v. RIDGEFIELD EUROPEAN MOTORS et al., SC 19043

Compensation Review Board

 

      Workers’ Compensation; Apportionment of Liability; Reimbursement of Last Employer; Whether Prior Insurer Properly Ordered to Pay Interest on its Share of Award Pursuant to General Statutes § 31-299b.  In June 2004, the workers’ compensation commission approved a voluntary agreement reflecting that the claimant sustained compensable injuries while working for the defendant employer.  Under General Statutes § 31-299b, once compensation is found to be payable, the claimant’s last employer or that employer’s insurer is initially liable to pay benefits.  Section 31-299b further provides: “The commissioner shall, within a reasonable period of time after issuing an award, on the basis of the record of the hearing, determine whether prior employers, or their insurers, are liable for a portion of such compensation and the extent of their liability.  If prior employers are found to be so liable, the commissioner shall order such employers or their insurers to reimburse the initially liable employer or insurer according to the proportion of their liability.  Reimbursement shall be made . . . with interest, from the date of the initial payment, at twelve per cent per annum.”  AmGuard Insurance Company, as the last insurer on the risk, began paying benefits to the claimant in mid-September 2004.  AmGuard asserted apportionment claims against two prior insurance carriers, Republic-Franklin Insurance Company and American Alternative Insurance Company.  The parties stipulated to their periods of coverage.  In October 2010, after formal hearings on the apportionment claims had taken place but before a final decision issued, Republic-Franklin agreed that its proportionate share of liability was 66.67 percent, or $217,760, and it paid AmGuard that amount.  Thereafter, AmGuard sought § 31-299b interest from Republic-Franklin.  The workers’ compensation commissioner issued a decision finding that Republic-Franklin, American Alternative and AmGuard were liable for 66.67 percent, 26.67 percent and 6.66 percent of the claim, respectively, and directing Republic-Franklin to pay AmGuard twelve percent interest.  Republic-Franklin appealed to the compensation review board, claiming that the § 31-299b interest award was improper.  It argued that, because the commissioner’s findings identifying the liable parties and the extent of their liability were made in reliance on the parties’ agreement, the commissioner did not engage in any independent fact-finding, which, Republic-Franklin insisted, is a statutorily-mandated prerequisite to an award of § 31-299b interest.  The board affirmed the commissioner’s decision, finding that the fact that the insurers had reached an agreement as to their proportionate shares did not foreclose the commissioner from entering an award of § 31-299b interest.  This is Republic-Franklin’s appeal from the compensation review board’s decision.