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Massachusetts Insurers Insolvency Fund v. Berkshire Bank

Supreme Judicial Court of Massachusetts, Suffolk

November 3, 2016

MASSACHUSETTS INSURERS INSOLVENCY FUND
v.
BERKSHIRE BANK.

          Heard: September 8, 2016.

         Civil action commenced in the Superior Court Department on July 14, 2014.

         The case was heard by Mitchell H. Kaplan, J., on motions for summary judgment.

         The Supreme Judicial Court granted applications for direct appellate review.

          Gregory P. Deschenes (Kurt Mullen with him) for the plaintiff.

          Owen Gallagher (Gordon Prescott with him) for the defendant.

          Present: Gants, C.J., Botsford, Lenk, Hines, Gaziano, Lowy, & Budd, JJ.

          BOTSFORD, J.

         General Laws c. 175D, § 17 (§ 17), authorizes the Massachusetts Insurers Insolvency Fund (Fund) to recover from "high net worth insureds" certain amounts paid by the Fund "on behalf of" such insureds. G. L. c. 175D, § 17 (3). The Fund brought this action in the Superior Court pursuant to § 17, seeking to recover from the defendant Berkshire Bank (Berkshire) an entity that meets the definition of "high net worth insured, " workers' compensation benefits it has paid to a Berkshire employee. Ruling on cross motions for summary judgment, a judge of that court interpreted § 17 (3) to preclude the Fund's recovery. We conclude that the Fund is authorized to recoup the amounts in question because they were paid by the Fund "on behalf of" Berkshire within the meaning of § 17 (3). Accordingly, we reverse the judgment of the Superior Court.

         Background.

         Both parties agree that there are no material facts in dispute. The memorandum of decision of the Superior Court judge sets out the background facts succinctly, which we quote here:

"In May 2003, [Donna] Poli, an assistant branch manager for Woronoco Savings Bank (Woronoco), injured her back while lifting coin-filled bags. Woronoco was then the named insured under a workers' compensation/employer's liability policy issued by Centennial [Insurance Company]. Woronoco notified Centennial of the injury and Centennial began paying Poli weekly workers' compensation benefits pursuant to G. L. c. 152, § 34 [providing temporary total incapacity benefits for up to three years]. On June 16, 2005, Woronoco merged with and into Berkshire.
"In August 2006, Poli exhausted her entitlement to benefits under G. L. c. 152, § 34, and Centennial voluntarily commenced payments under G. L. c. 152, § 35 [providing for partial incapacity benefits]. Four years later, in August 2010, Poli exhausted her entitlement to benefits under G. L. c. 152, § 35, and Centennial ceased making any payments. In response, Poli sought permanent and total disability compensation under G. L. c. 152, § 34A. [I]n February 2011, the Department of Industrial Accidents (DIA) denied her claim after a conference. Poli appealed.
"In April 2011, the New York Supreme Court placed Centennial, which is domiciled in New York, into liquidation. Pursuant to the provisions of G. L. c. 175D, the Fund assumed administration of Poli's claim. On September 7, 2011, the Fund entered into a lump sum agreement with Poli, under G. L. c. 152, ยง 48, pursuant to which it agreed to pay her $85, 000 and to pay all future medical expenses arising from the injury. The DIA approved the ...

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