DiCarlo v. Suffolk Construction Co., Inc. Professional Electrical Contractors of Connecticut (SJC-11854) Martin v. Angelini Plastering, Inc.

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SJC-11854
SJC-11853

ROBERT M. DiCARLO vs. SUFFOLK CONSTRUCTION CO., INC.,
& others; 1 PROFESSIONAL ELECTRICAL CONTRACTORS OF
CONNECTICUT, INC., third-party defendant.

BERNARD J. MARTIN & another 2 vs. ANGELINI PLASTERING,
INC., & others. 3

Suffolk. Middlesex. October 8, 2015. - February 12, 2016.

Present: Gants, C.J., Spina, Cordy, Botsford, Duffly, & Lenk,
JJ.

Workers' Compensation Act, Action against third person,
Settlement agreement, Insurer. Lien. Statute,
Construction.

Civil action commenced in the Superior Court Department on
March 29, 2007.

A petition for settlement was heard by Frances A. McIntyre,
J.

1
Walter Brook Crossing, LLC; Twin City Fire Insurance
Company, interested party.
2
Nora Martin, individually and as parent and next friend of
Philip Martin.
3
Shawmut Design and Construction; Hartford Insurance
Company of the Midwest, interested party.
 2

A proceeding for interlocutory review was heard in the
Appeals Court by Judd J. Carhart, J. After review by the
Appeals Court, the Supreme Judicial Court granted leave to
obtain further appellate review.

Civil action commenced in the Superior Court Department on
September 15, 2011.

A petition for settlement was heard by Dennis J. Curran, J.

After review by the Appeals Court, the Supreme Judicial
Court granted leave to obtain further appellate review.

Wystan M. Ackerman for Twin City Fire Insurance Company &
another.
Charlotte E. Glinka for Bernard Martin & another.
Thomas R. Murphy for Robert M. DiCarlo.
Paul M. Kessimian & David J. Pellegrino, for American
Insurance Association, amicus curiae, submitted a brief.
Annette Gonthier Kiely, Michael C. Najjar, & J. Michael
Conley, for Massachusetts Academy of Trial Attorneys, amicus
curiae, submitted a brief.

LENK, J. Under Massachusetts law, employees who receive

workers' compensation benefits may not sue their employers for

claims arising from work-related injuries. See G. L. c. 152,

§ 24. 4 Employees may, however, file claims against third parties

for damages arising from those injuries. See G. L. c. 152,

§§ 15, 24. When an employee recovers damages from a third

party, the workers' compensation insurer is statutorily entitled

to a lien on the recovery in the amount that the insurer paid to

the employee in benefits. See G. L. c. 152, § 15. In these two

4
Employees may, however, opt out of the workers'
compensation system at the time of their hire. See G. L.
c. 152, § 24. If they do so, they retain their rights to sue at
common law for damages, see id., but lose their rights to
workers' compensation benefits. See G. L. c. 152, § 26.
 3

cases, we are asked to ascertain the extent of this lien and, in

particular, to clarify whether the lien attaches to damages paid

by a third party for an employee's pain and suffering.

The cases involve two employees, Robert M. DiCarlo and

Bernard J. Martin, who were injured in the course of their

employment, collected workers' compensation benefits, and then

reached settlement agreements with third parties including

damages for, among other things, their pain and suffering. The

same insurer insured both employers. 5 The insurer sought

reimbursement under G. L. c. 152, § 15, from the employees'

recoveries, including their awards for pain and suffering. In

DiCarlo's case, a Superior Court judge rejected a settlement

agreement providing that the insurer would not have a lien on

the damages for pain and suffering, concluding that the

insurer's lien attached to DiCarlo's entire recovery. DiCarlo

appealed, citing the Appeals Court's decision in Curry v. Great

American Ins. Co., 80 Mass. App. Ct. 592, 595 (2011) (Curry),

which held that an insurer's lien does not attach to damages

paid for pain and suffering because workers' compensation does

not cover those harms. In Martin's case, a Superior Court judge

approved a settlement agreement similar to the agreement

5
Twin City Fire Insurance Company is a subsidiary of
Hartford Insurance Company of the Midwest. For simplicity, we
refer to both entities as "the insurer."
 4

rejected by the judge in DiCarlo's case; the insurer appealed

from this decision.

Relying in both cases on its precedent in Curry, the

Appeals Court determined that the employees' awards for pain and

suffering were exempt from the insurer's liens. See DiCarlo v.

Suffolk Constr. Co., 86 Mass. App. Ct. 589 (2014); Martin v.

Angelini Plastering, Inc., 86 Mass. App. Ct. 1122 (2014). We

granted the insurer's applications for further appellate review

and combined the two cases for argument. We conclude,

similarly, that an insurer's lien does not extend to damages

allocated to an employee's pain and suffering.

1. Background and procedural history. In October, 2004,

DiCarlo suffered serious injuries to his back while working as

an electrician at a construction site. The injuries resulted in

ongoing physical and emotional suffering. In the wake of these

injuries, the workers' compensation insurer for DiCarlo's

employer paid him workers' compensation benefits for medical

expenses ($48,431.16) and for lost wages ($233,387.95).

DiCarlo and his wife then filed a tort action in the

Superior Court against the defendants: Walter Brook Crossing,

LLC, the owner of the construction site where DiCarlo worked;

and Suffolk Construction Co., Inc., the contractor managing that

site. The defendants then filed third-party complaints against

Professional Electrical Contractors of Connecticut, Inc.
 5

(Professional Electrical), seeking indemnification. The

defendants and Professional Electrical thereafter reached an

agreement with DiCarlo to settle all claims for $100,000. After

reaching this agreement, the parties presented a proposed

settlement agreement to the court as required by G. L. c. 152,

§ 15. The agreement allocated thirty-five per cent of the

settlement to DiCarlo's pain and suffering, indicating

specifically that the amount would not be subject to the

insurer's lien.

A Superior Court judge reviewed the settlement agreement

and, as required by G. L. c. 152, § 15, gave the insurer an

"opportunity to be heard" on the fairness of the settlement.

The insurer objected to the agreement, arguing that, the Curry

case notwithstanding, its lien should attach to the award for

pain and suffering. The judge agreed with the insurer and

declined to approve the settlement. DiCarlo appealed, and the

Appeals Court reversed. See DiCarlo v. Suffolk Constr. Co.,

supra at 594.

Martin was injured in August, 2010, while working as an

electrician at a construction site. Since then, he has suffered

ongoing physical pain and mental anguish. The insurer paid

Martin $566,392.94 in benefits. 6 Martin and his wife thereafter

6
The record does not indicate how this amount was
apportioned between lost wages and medical expenses.
 6

filed a tort action against Angelini Plastering, Inc., a

subcontractor at the construction site where Martin was injured,

and Shawmut Design and Construction, the general contractor

managing that site. The parties agreed to settle all claims for

$1 million.

In a settlement agreement filed pursuant to G. L. c. 152,

§ 15, the parties requested that thirty per cent of the payment

be allocated to Martin's pain and suffering, and that the amount

be exempt from the insurer's lien. A different Superior Court

judge approved the settlement, over the insurer's objection that

the award for pain and suffering should be included in its lien.

The insurer, as an interested party, appealed from the judge's

decision, and a panel of the Appeals Court affirmed. See Martin

v. Angelini Plastering, Inc., supra.

2. Discussion. General Laws c. 152, § 15 (§ 15), 7

generally provides that, where an injured employee collects

7
General Law c. 152, § 15, provides, in relevant part:

"Where the injury for which compensation is payable
was caused under circumstances creating a legal liability
in some person other than the insured to pay damages in
respect thereof, the employee shall be entitled, without
election, to the compensation and other benefits provided
under this chapter. . . . 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 the
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. . . .
 7

workers' compensation benefits and then recovers damages for the

same injury from a third-party tortfeasor, "[t]he sum recovered

[from the third party] shall be for the benefit of the [workers'

compensation] insurer." The "sum" to which the insurer is

entitled is described, in the next sentence, as "the gross sum

received in payment for the injury." G. L. c. 152, § 15.

The nub of the dispute before us concerns the meaning of

the phrase "gross sum received in payment for the injury," and,

Except in the case of settlement by agreement by the
parties to, and during a trial of, such an action at law,
no settlement by agreement shall be made with such other
person without the approval of either the board [of the
Department of Industrial Accidents (department)], the
reviewing board [of the department], or the court in which
the action has been commenced after a hearing in which both
the employee and the insurer have had an opportunity to be
heard. At such hearing the court shall inquire and make a
finding as to the taking of evidence on the merits of the
settlement, on the fair allocation of amounts payable to
the employee and the employee's spouse, children, parents
and any other member of the employee's family or next of
kin who may have claims arising from the injury for which
are payable, under this chapter in which the action has
been commenced after an opportunity has been afforded both
the insurer and the employee to be heard on the merits of
the settlement and on the amount, if any, to which the
insurer is entitled out of such settlement by way of
reimbursement, and on the amount of excess that shall be
subject to offset against any future payment of benefits
under this chapter by the insurer, which amount shall be
determined at the time of such approval. . . . In the case
of a settlement by agreement by the parties to and during a
trial of such an action at law, only the justice presiding
at the trial shall have and exercise, relative to the
approval of such settlement by agreement and to the
protection of the rights and interests of the employee, his
family members, and the insurer, the powers granted in the
preceding sentence."
 8

in particular, the meaning of the word "injury." The employees

urge that "injury" be construed narrowly to mean only those

injuries for which workers' compensation benefits are payable,

thereby excluding pain and suffering from its purview and, by

consequence, excluding damages for pain and suffering from the

reach of an insurer's lien. The insurer, on the other hand,

advocates a more expansive view of the term "injury" as used in

the phrase "gross sum received in payment for the injury." By

including pain and suffering within the meaning of "injury," all

damages awarded the employee would be subject to the insurer's

lien. 8 For the reasons that follow, we conclude that both

statutory language and legislative intent support the narrower

meaning of "injury," and that damages for pain and suffering are

not within the insurer's lien.

Like all statutory provisions, § 15 "must be interpreted

according to the intent of the Legislature ascertained from all

its words construed by the ordinary and approved usage of the

language, considered in connection with the cause of its

enactment, the mischief or imperfection to be remedied and the

8
Certain amounts are, however, expressly exempt from the
insurer's lien. General Laws c. 152, § 15, excludes from the
lien an employee's "excess" recovery (defined as "the amount by
which the gross sum received in payment for the injury exceeds
the [workers'] compensation paid"), as well as any "amounts
payable to the . . . employee's spouse, children, parents and
any other member of the employee's family or next of kin" for
their loss of consortium. Id.
 9

main object to be accomplished, to the end that the purpose of

its framers may be effectuated." Galenski v. Erving, 471 Mass.

305, 309 (2015), quoting Worcester v. College Hill Props., LLC,

465 Mass. 134, 139 (2013) (College Hill). "In interpreting the

meaning of a statute, we look first to the plain statutory

language." College Hill, supra at 138.

As mentioned, the workers' compensation statute provides an

insurer with a lien on the "gross sum received in payment for

the injury" (emphasis supplied). The insurer here urges that we

interpret this phrase in light of other uses of the term

"injury" in G. L. c. 152, the workers' compensation act, where

the word often appears to refer to the totality of harm suffered

by a worker, including pain and suffering. See Randall's Case,

331 Mass. 383, 386 (1954) ("if reasonably practicable, words

used in one place in a statute with a plain meaning are given

the same meaning when found in other parts of the same

statute"). See, e.g., G. L. c. 152, § 1 (using "compensable

injury" to describe subset of injuries for which compensation

may be paid); G. L. c. 152, § 29 (using word "injury" to refer

to noncompensable damage -- i.e., that "which does not

incapacitate the employee"). See also Crowley's Case, 287 Mass.

367, 374 (1934) (defining "injury" in workers' compensation

statute to include "pain"). Such a reading would lead to the

conclusion that a lien on a payment for "the injury" attaches to
 10

all damages paid to the employee, including those for pain and

suffering.

Such an interpretation, however, would require the word

"injury" to take on two different meanings within § 15. In the

section's opening phrase, "injury" is used narrowly to refer to

"the injury for which [workers'] compensation is payable."

G. L. c. 152, § 15. The insurer proposes that, three sentences

later, where the provision speaks of the "gross sum received in

payment for the injury," the word "injury" be read expansively

to refer to all harms suffered by the worker, including those

not covered by workers' compensation. Id. We cannot indorse

this construction, which "would require us to attribute

different meanings to the same words in the same paragraph."

Bilodeau v. Lumbermens Mut. Cas. Co., 392 Mass. 537, 543 (1984).

See 2B N.J. Singer & J.D. Shambie Singer, Statutes and Statutory

Construction § 51:2 (7th ed. 2012), quoting Commissioner of

Internal Revenue v. Ridgeway's Estate, 291 F.2d 257, 259 (3d

Cir. 1961) ("the need for uniformity [in interpreting statutory

language] becomes more imperative where . . . a word is used

more than once in the same section"). See also Burke v.

Atlantic Research Corp., 18 Mass. App. Ct. 497, 500-501 (1984),

S.C., 395 Mass. 1009 (1985) (applying this canon to G. L.

c. 152, § 15).
 11

Instead, we interpret the phrase "gross sum received in

payment for the injury" in light of the rule that, "[w]hen the

Legislature uses the same term in the same section . . . , the

term should be given a consistent meaning throughout."

Commonwealth v. Hilaire, 437 Mass. 809, 816 (2002). See R.D. v.

A.H., 454 Mass. 706, 714 (2009), quoting Beeler v. Downey, 387

Mass. 609, 617 (1982) ("where words are used in one part of a

statute in a definite sense, they should be given the same

meaning in another part of the statute"). Here, the first

sentence of § 15 uses the word "injury" in the "definite sense,"

see R.D. v. A.H., supra, of "injury for which [workers']

compensation is payable." G. L. c. 152, § 15. Therefore, three

sentences later, when the word "injury" is used as part of the

phrase "gross sum received in payment for the injury," it

"should be given the same meaning." See R.D. v. A.H., supra.

Construing the word "injury" consistently throughout § 15

comports with our view in Eisner v. Hertz Corp., 381 Mass. 127,

132 (1980) (Eisner), quoting G. L. c. 152, § 15, that "[f]or the

insurer's right to reimbursement to attach, the injury must be

one 'for which compensation is payable.'" As a result, "[§] 15

does not require reimbursement for an injury not compensable

under c. 152." Eisner, supra at 133. Similarly, in Bruso's

Case, 295 Mass. 531, 532 (1936), we indicated that only where

third-party damages "are part of the compensation benefits to
 12

which the employee is entitled under the [workers'] compensation

act [is] the insurer . . . entitled to recover the amount from

the proceeds of the settlement with the third person." 9

We find further support for this interpretation later in

§ 15, where the statutory language contemplates an employee's

receiving an award of damages from which an insurer has no right

to recover. That provision references "the amount, if any, to

which the insurer is entitled out of [an employee's recovery] by

way of reimbursement" (emphasis added). See G. L. c. 152, § 15.

Given that "a statute must be construed so that . . . no part

will be inoperative or superfluous" (quotation and citation

omitted), Bankers Life & Cas. Co. v. Commissioner of Ins., 427

Mass. 136, 140 (1998), the "if any" language must have

9
Our statement in Rhode v. Beacon Sales Co., 416 Mass. 14,
19 (1993), that, "[u]ntil an 'excess' recovery exists, the
entire recovery is for the insurer," is not to the contrary.
The statement could not have been meant literally, given that
G. L. c. 152, § 15, itself now expressly provides for an
exemption for loss of consortium damages beyond that for excess
recovery. See note 8, supra. Nor does this statement mean that
all exemptions from the insurer's lien need be stated explicitly
in the statute. Our cases have not read § 15 as containing an
exhaustive list of what is and is not covered by the insurer's
lien. See Bongiorno v. Liberty Mut. Ins. Co., 417 Mass. 396,
402 (1994) (employee's legal malpractice recovery subject to
insurer's lien even though statute does not explicitly so
provide); Hunter v. Midwest Coast Transp., Inc., 400 Mass. 779,
782 (1987) (excess third-party damages retained by employee
reduce insurer's future obligations even though "[§] 15 makes no
express provision regarding an insurer's right to offset any
part of such an 'excess'"); Eisner v. Hertz Corp., 381 Mass.
127, 133-134 (1980) (concluding that statute includes exemption
for loss of consortium damages, eleven years before that
exemption was codified in St. 1991, c. 398, § 39).
 13

cognizable meaning. Our holding makes this possible, allowing

the words to account for the rare instance where an award is

allocated entirely to pain and suffering, resulting in its

complete exemption from the insurer's lien.

The insurer contends that this exemption is not necessary

to give effect to the words in question. Rather, the insurer

says, the "if any" language accounts for a situation of no

relevance here: one where the award is allocated entirely to

damages for loss of consortium, which the statute expressly

exempts from the lien. See Hultin v. Francis Harvey & Sons,

Inc., 40 Mass. App. Ct. 692, 698 (1996). This, however, could

not have been the situation contemplated by the Legislature in

1939, when the statute was amended to include the "if any"

language, well before Massachusetts recognized a cause of action

for loss of consortium. See Diaz v. Eli Lilly & Co., 364 Mass.

153, 157-159 (1973) (recognizing loss of consortium claims and

overruling 1909 case that disallowed such claims); St. 1939,

c. 401 (adding provision regarding "amount, if any, to which the

insurer is entitled"). By contrast, at that time, Massachusetts

law had long recognized claims for pain and suffering and also

had made use of special verdicts, which allow explicit

allocations to pain and suffering. See Reporter's Note to

Rule 49 [1973], Mass. Ann. Laws Court Rules, Rules of Civil

Procedure, at 793-794 (LexisNexis 2015-2016) (discussing
 14

rule 49's provision for special verdict and citing to early

cases); Pressey v. Wirth, 3 Allen 191, 191 (1861) (mentioning

damages for pain and suffering).

The insurer also urges us to consider cases construing

similar statutes, to apply the insurer's lien to damages for

pain and suffering. See United States v. Lorenzetti, 467 U.S.

167, 174 (1984) (discussing Federal Employees' Compensation

Act); Hendry v. Industrial Comm'n, 112 Ariz. 108, 109 (1975),

cert. denied, 424 U.S. 923 (1976); Dearing v. Perry, 499 N.E.2d

268, 270 (Ind. App. Ct. 1986); Perry v. Hartford Acc. & Indem.

Co., 481 A.2d 133, 137-138 (Me. 1984); Tarr v. Republic Corp.,

116 N.H. 99, 103-105 (1976); Bello v. Commissioner of the Dep't

of Labor & Indus., 56 N.J. 41, 44-45 (1970). The analysis in

each of those cases, however, is compelled by the particular

language of the statutes at issue, which are not identical to

§ 15 in material respects. In particular, unlike G. L. c. 152,

§ 15, none of the statutes in the cited out-of-State cases

limits both the meaning of "injury" to "injury for which

compensation is payable" and the insurer's lien to "payment for

the injury." 10 Our conclusion, no less than those in the cited

cases, is compelled by the statutory text.

10
See 5 U.S.C. § 8132 (2012) (describing "injury or death
for which compensation is payable" but requiring that employee
"shall refund to the United States the amount of compensation
paid by the United States" without using term injury); Ariz.
 15

The view we take of the statutory language is also

"consistent with the intent of the Legislature" in enacting the

"workers' compensation" scheme. See Neff v. Commissioner of

Dep't of Indus. Accs., 421 Mass. 70, 76 (1995). In this regard,

we are mindful that, while G. L. c. 152 is meant "to protect

injured workers," see Spaniol's Case, 466 Mass. 102, 109 (2013),

§ 15 has the additional aim of "reimburs[ing] the workers'

compensation insurer and . . . prevent[ing] the employee's

double recovery." See Lane v. Plymouth Rest. Group, 440 Mass.

469, 472 (2003), citing Rhode v. Beacon Sales Co., 416 Mass. 14,

17 (1993), Eisner, supra at 131, and Richard v. Arsenault, 349

Mass. 521, 524 (1965). Our construction of § 15 as excluding

damages for pain and suffering from the insurer's lien neither

Rev. Stat. § 23-1023 (2015) (insurer "shall have a lien on the
amount actually collectible from such other person to the extent
of such compensation . . . paid"); Ind. Code § 22-3-2-13
(describing "injury or death, for which compensation is
payable," but stating that "from the amount received by the
employee or dependents there shall be paid to the
[insurer] . . . the amount of compensation paid to the employee
or dependents" without using term injury); Me. Rev. Stat. Ann.
tit. 39, § 68 (repealed 1993) (insurer shall have "a lien for
the value of compensation paid on any damages subsequently
recovered against the third person liable for the injury";
language currently in Me. Rev. Stat. Ann. tit. 39-A, § 107
[2015]); N.H. Rev. Stat. Ann. § 281:14 (repealed 1989)
(describing "an injury for which compensation is payable," but
requiring that insurer shall have "a lien on the amount of
damages . . . recovered by the employee" without using term
injury; language currently in N.H. Rev. Stat. Ann. § 281-A:13
[2015]); N.J. Stat. Ann. § 34:15-40(b)-(c) (2015) (insurer
"shall be entitled to be reimbursed . . . for the medical
expenses incurred and compensation payments theretofore paid to
the injured employee").
 16

impinges on the insurer's right to "reimbursement" nor permits

employees a double recovery.

An insurer "cannot be reimbursed for something that it did

not pay" (emphasis added). Vellucci v. Miller, 989 F. Supp. 2d

211, 215 (D.R.I. 2013) (citing Massachusetts workers'

compensation statute to support conclusion that, under similarly

worded Rhode Island workers' compensation statute, insurer

cannot recover from employee's pain and suffering award). See

G. L. c. 152, § 15 ("insurer is entitled [to lien on] settlement

by way of reimbursement" [emphasis supplied]). The insurer here

did not compensate the employees for their pain and suffering,

and so cannot seek "reimbursement" from damages paid for those

harms. Cf. Oliveira v. Pereira, 414 Mass. 66, 73-74 (1992)

(noting, in context of different statute, that "to be

reimbursed, the plaintiff must have paid the sum due"). On the

other hand, the insurer may -- and, pursuant to the settlements

at issue here, will -- recover payments for harms that are

covered by the workers' compensation statute, such as lost wages

and medical expenses.

That the employees will receive both workers' compensation

benefits and damages for pain and suffering does not constitute

a proscribed "double recovery." See Lane v. Plymouth Rest.

Group, supra at 472. "In determining whether an employee has

received double recovery, we do not focus on the dollar amounts
 17

recovered, but upon the nature of the injury asserted." Eisner,

supra at 132. In other words, the goal of § 15 is not to return

to the insurer the full dollar amount paid to an employee, but,

rather, to avoid having an employee collect both benefits and

damages for the same harm. Here, the employees recovered

separately for two separate harms: from the insurer, workers'

compensation benefits covering lost wages and medical expenses;

and from the third-party defendants, damages for pain and

suffering.

We also note that, like G. L. 152 as a whole, § 15 is

designed to minimize tort litigation, see Estate of Moulton v.

Puopolo, 467 Mass. 478, 483 (2014), and, thereby, to achieve

"certainty and relative administrative convenience." Bongiorno

v. Liberty Mut. Ins. Co., 417 Mass. 396, 402 (1994). Our

conclusion furthers this legislative goal by giving employees

incentive to compromise their claims even where they receive a

settlement offer that does not yield an "excess" recovery. See

G. L. c. 152, § 15 (exempting "excess" recovery from insurer's

lien).

Finally, we emphasize that this result will not deprive an

insurer of its reimbursement rights where an employee and a

third-party defendant reach a settlement that would "stack the

deck" against the insurer by inappropriately allocating the bulk

of damages to pain and suffering. Section 15 precludes such a
 18

result by requiring that all settlements be approved by the

board or reviewing board of the Department of Industrial

Accidents or by a judge after a hearing at which the insurer has

a right to participate. See G. L. c. 152, § 15. Moreover, a

settlement amount allocated entirely or in large part to pain

and suffering will "be eyed by the court with a healthy dose of

skepticism." Hultin v. Francis Harvey & Sons, Inc., 40 Mass.

App. Ct. 692, 699 (1996).

3. Conclusion. The judgment denying the appeal of the

settlement in DiCarlo's case is reversed, and the matter is

remanded to the Superior Court for further proceedings

consistent with this opinion. The judgment approving the

settlement in Martin's case is affirmed.

So ordered.