WILLIE FRANKLIN v. SUPERIOR CASTING et al., SC 18501
Compensation Review Board
Workers' Compensation; Where the Connecticut Insurance Guaranty Association (CIGA) Assumes the Obligations of the Last Insurance Carrier with Respect to a Particular Claim, Whether CIGA's Liability for the Claim Should be Shifted to Earlier Insurers who are Partially Responsible for that Claim. The claimant, Willie Franklin, filed a workers' compensation claim against his employer, Superior Casting. During the years Franklin was employed, Superior Casting retained two insurance carriers for workers' compensation, Liberty Mutual Insurance Group (Liberty Mutual), and, subsequently, American Mutual Liability Insurance (American Mutual). American Mutual eventually became insolvent, and the Connecticut Insurance Guaranty Association (CIGA), which was established by the Connecticut Insurance Guaranty Act (guaranty act), assumed American Mutual's obligations on "covered claims." The trial commissioner determined that CIGA was liable for Franklin's claim because it constituted a "covered claim" within the meaning of the guaranty act. Pursuant to General Statutes § 31-299b of the Workers' Compensation Act, he made CIGA, as the last insurer on the risk, initially liable for the payment of Franklin's temporary total disability benefits. The commissioner also ordered Liberty Mutual to reimburse CIGA for its proportionate share of the award. CIGA appealed to the compensation review board (board). CIGA argued that § 31-299b, which imposes initial liability on the last insurer on the risk subject to an apportionment claim against earlier insurers on the risk, conflicted with General Statutes § 38a-845 (1) of the guaranty act, which requires that a claimant, before bringing a claim against CIGA, first exhaust its rights against all solvent insurers under all insurance policies affording coverage for the same claim. Contending that the guaranty act takes precedence when such a conflict arises, CIGA argued that, because Liberty Mutual's coverage had not been exhausted first as required by § 38a-845 (1), CIGA could not be held liable for Franklin's claim and, consequently, § 31-299b could not be applied to impose initial liability on CIGA. CIGA further maintained that, because § 31-299b was not applicable to it, the responsibility for the entire claim should be shifted to Liberty Mutual as it was the only "employer's insurer" within the meaning of § 31-299b. The board disagreed with CIGA that § 31-299b was not applicable to it, stating that § 31-299b expressly exempts from apportionment or liability for a repetitive trauma injury only one entity, the second injury fund, and that, if the legislature had intended to exempt CIGA from liability, it would have done so in express terms. Thereafter, noting that the legislative objective of the guaranty act was to make CIGA liable to the same extent that the insolvent insurer would have been liable under its policy, the board rejected CIGA's exhaustion first argument, ruling that the statutory scheme requires that Liberty Mutual, as the solvent insurer, absorb the portion of liability that the trial commissioner found it was liable for and that the balance inure to CIGA as a "covered claim." In this appeal, the Supreme Court will review the board's ruling.