Workers’ Compensation Insurer Was Not Entitled to Subrogation of Pain and Suffering Award in Worker’s Claim Against Third-Party Tortfeasor – DiCarlo v. Suffolk Construction Co.

Trial judges can sometimes reach different outcomes in cases involving similar issues, such as those involving workers’ compensation disputes and subrogation liens filed by insurance companies.

In a recent case, the state’s highest court was faced with two cases in which trial judges had rendered very different decisions in cases involving basically the same issue. It was up to the high court to reconcile the lower courts’ decisions and provide guidance to those facing similar issues in the future.

Facts of the Cases

In the case of DiCarlo v. Suffolk Construction Co., the Supreme Judicial Court of Massachusetts was called upon to review two companion cases, one of which originally arose due to on-the-job injuries sustained by a man in 2004. He suffered a back injury while working as an electrician on a construction site. The workers’ compensation insurer for the man’s employer paid out medical expenses and lost wage benefits, totaling about $282,000. The man and his wife filed a tort action against the construction site owner and managing contractor, which in turn filed third-party complaints seeking indemnification from an apparent subcontractor. A tentative agreement was reached, but the trial judge refused to approve a settlement that would have allocated 35% of the settlement to the man’s pain and suffering and would have prevented the insurer’s lien from attaching to this part of the award. The court of appeals reversed.

In the companion case, a second man was injured in 2010, also while working at a construction site. The insurer paid out over $566,000 in workers’ compensation benefits on the second man’s behalf. As in the first case, the second man and his wife filed a tort case against the general contractor and subcontractor of the construction site where he was injured and reached a tentative settlement. A different superior court judge approved the settlement, which, as in the first case, allocated a percentage of the award toward pain and suffering over the insurer’s objection that this should be included in its lien. The court of appeals affirmed.

The Supreme Judicial Court’s Decision

The court reversed the trial court’s denial of settlement approval in the first man’s case and affirmed the trial court’s approval of the settlement in the second man’s case. The court acknowledged that Mass. Gen. Laws ch. 152, § 15 generally provides that a workers’ compensation insurer may benefit from an employee’s recovery from a third-party tortfeasor, but it found that there was a dispute about the meaning of the phrase “gross sum received in payment for the injury” as applied to the cases at bar.

Since pain and suffering are not “injuries” for which workers’ compensation insurers must pay benefits to injured workers, recovery for them from a third-party tortfeasor does not require reimbursement to the insurer. In so holding, the court rejected the insurers’ arguments that injured workers would receive a double recovery, and it emphasized that its decision would not deprive an insurer of reimbursement in situations in which third-party settlement agreements inappropriately allocated the bulk of the damages to pain and suffering.

For Help with a Construction Accident Case

If you or a family member has been hurt in a construction accident and need to speak to an experienced Cape Cod work injury attorney, call the Law Offices of John C. Manoog, III, at (888) 262-6664 and ask for a free case evaluation. We have offices in both Hyannis and Plymouth, and we can serve clients anywhere in Massachusetts. Nos Falamos Portugues!

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