Wesco Insurance Company aso Jean Larson, Jean Larson, Individually and John Larson, Individually
Lori Berube et al.
(with first initial, no space for Sullivan, Dorsey, and
Walsh): Feeley, Timothy Q., J.
MEMORANDUM AND ORDERS ON PLAINTIFFâS SECOND MOTION TO
AMEND COMPLAINT AND COMPETING PETITIONS FOR APPROVAL OF
Timothy Q. Feeley Associate Justice
Jean Larson (" Larson") commenced this personal
injury action against defendant Lori Berube ("
Berube") on August 25, 2015. Larson was working within
the scope of her employment when the vehicle she was riding
in (as a passenger) was struck by a vehicle driven by
Berube. Now before the court is Larsonâs first
amended complaint, adding defendant Thomas Theriault ("
Theriault") as a defendant. [D. 18.] Theriault is the
registered owner of the vehicle operated by Berube. Despite
the caption in this case, this is a subrogation case
commenced by WESCO Insurance Company (" WESCO"),
the workersâ compensation insurance carrier that paid
workersâ compensation benefits to Larson the injuries she
suffered during the scope of her employment. See G.L.c. 152,
Â§ 15. According to the first amended complaint, Larson has
incurred $17, 109.56 in lost wages and $147, 338.51 in
medical expenses. However, the courtâs current understanding
is that WESCO paid something the range of $275, 000 in
workersâ compensation benefits to Larson. The court has been
told that about $38, 000 of that amount was paid to Larsonâs
husband, John Larson.
although nominally Jean Larson, but actually WESCO, moved to
file a second amended complaint. [D. 25.] The proposed second
amended complaint had several purposes. It re-identified the
original plaintiff (Larson) as WESCO, as subrogee of Larson,
identified Jean Larson individually as a plaintiff, and added
her husband John Larson as a plaintiff. The three counts of
the first amended complaint were reasserted on behalf of both
WESCO and Larson. In addition, three counts were added on
behalf of John Larson: (1) loss of consortium against Berube;
(2) respondeat superior against Theriault seeking loss of
consortium; and (3) negligent entrustment against Theriault
seeking loss of consortium.
time of acting on the motion to amend the complaint, the
court incorrectly viewed the proposed second amended
complaint as asserting a claim by WESCO up to the amount of
benefit payments made to Larson under its workersâ
compensation insurance policy, and a claim by Larson for any
settlement or verdict amount in excess of the benefits paid.
See G.L.c. 152, Â§ 15; Pinto v. Aberthaw Construction
Co., 418 Mass. 494, 500 (1994). The court will sua
sponte reconsider its ruling on the motion to amend
complaint in light of its current understanding of the
respective rights of WESCO and Larson to the settlement
proceeds negotiated by WESCO with the insurance carriers
defending this personal injury action.
court continues to characterize this action as a subrogation
action, in that it was permissively commenced by WESCO, and
not by Larson. " An insurer who has paid all or part of
a loss may sue in the name of the assured to whose rights it
is subrogated." Mass.R.Civ.P. 17(a). In addition to
subrogation rights, the right to maintain an action against a
potentially negligent third-party is conferred by legislative
grant and is not dependent upon contractual subrogation
rights. Burke v. Atlantic Research Corp., 358 Mass.
764, 766 (1971). But at the same time, the court understands
that WESCO is pursing Larsonâs personal injury claim against
potentially liable third-parties in its entirety, and not
just the reimbursement of the benefits it paid. The original
complaint and all subsequent complaints are to that effect.
before the court are competing petitions for approval of the
$200, 000 settlement negotiated by WESCO. [D. 32, 41.] The
court sees no challenge by the Larsons to the amount of the
settlement, but the parties submit very different plans for
apportionment of the $200, 000 between WESCO and the Larsons.
WESCO, relying on statutory language, as the court did, seeks
the full amount of the settlement, which is well less than
the workersâ compensation benefits it paid to the Larsons.
The Larsons seek to apportion the $200, 000 as follows: $120,
000 to Jean Larson for pain and suffering; $40, 000 to John
Larson for loss of consortium; $40, 000 to WESCO under its
lien; and counsel fees to be deducted " ratably."
is no dispute that Section 15 of Chapter 152 (" Section
15") governs the apportionment of settlements/verdicts
in circumstances where workersâ compensation is payable and a
legal liability is established (by settlement or verdict) in
some other person (i.e., third-party). For purposes of this
case, the crucial language of Section 15 is as follows:
Either the employee or insurer may proceed to enforce the
liability of such person, but the insurer may not do so
unless compensation has been paid in accordance with sections
seven, eight, ten A, eleven C, twelve or nineteen nor until
seven months following the date of such injury. The sum
recovered shall be for the benefit of the insurer, unless
such sum is greater than that paid by it to the employee, in
which event the excess shall be retained by or paid to the
employee . For purposes of this section, "
excess" shall mean the amount by which the gross sum
received in payment for the injury exceeds the compensation
paid under this chapter. (Emphasis added.)
Supreme Judicial Court has stated that " the provisions
of G.L.c. 152, Â§ 15, are, in certain respects,
unambiguous." Pinto v. Aberthaw Construction
Co., 418 Mass. 494, 498 (1994). The court was obviously
not referring to the above-emphasized portion of Section 15.
At least as the law has developed since 1994, the
above-emphasized portion of Section 15 would not be referred
to as unambiguous. The law has in fact developed since 1994,
and this court did not recognize the change until the recent
oral argument in this case and the Lawsonâs reliance on the
Supreme Judicial Courtâs decision in DiCarlo v. Suffolk
Construction Co., Inc., 473 Mass. 624 (2016).
DiCarlo did not change the lien of the insurer under
Section 15. It changed the reach of the lien (i.e., that to
which it attaches), making the lien unenforceable against the
portion of any settlement/verdict against a third-party that
compensated the injured employee for pain and suffering. See
also Curry v. Great American Ins. Co., 80
Mass.App.Ct. 592, 595 (2011). The lien remains as set by
Section 15 as the workersâ compensation benefits paid to the
employee. But it is the reach of the lien, that is, to what
portions of any settlement/verdict it attaches to or does not
attach to, that must be determined in this case and other
cases in which liability is established by suit against a
third-party or parties (other than the employer) who might be
liable for the injury for which compensation is payable under
the workersâ compensation law. G.L.c. 152, Â§ Â§ 1 et seq.
this court thought was the plain meaning of the
above-emphasized language of Section 15 is no longer the law
of this Commonwealth. WESCO or any other workersâ
compensation carrier may have a lien to the full extent of
workersâ compensation benefits paid, but the lien is
enforceable only to the extent of appropriate judicial (or
DIA) approval that takes into account the non-compensable
(under Chapter 152) aspects of the settlement/verdict and
shields them from the reach of the insurerâs lien. Nor does
this courtâs prior view that the above-emphasized language
applies to subrogation cases such as this, permissibly
commenced after seven months from date of injury by the
workersâ compensation carrier, survive DiCarlo .
This court reads DiCarlo as applying to all
settlements/verdicts with liable third-parties, with no
distinction drawn between those actions commenced by the
injured employee and those commenced by the
insurer. In this courtâs view, there is no
principled way, and certainly not after DiCarlo, to
recognize an insurerâs right to attachment/reimbursement to
the full extent of workersâ compensation benefits paid in a
subrogation case, but not in the more typical lien case, such
as DiCarlo, commenced by the injured employee
against one or more third-parties.
reconsideration, plaintiffâs second motion to amend complaint
is ALLOWED without limitation. The second amended
complaint is already docketed. A hearing will be scheduled
for argument on the competing petitions for approval of the
respective requested apportionments. The parties will be
expected to address attorneys fees at the hearing, including
specific amounts and not just percentages. The parties should
confer about mutually convenient dates, and should consult
with Ms. Patten about the courtâs availability. Of course, a
contested hearing will only be necessary if the parties ...