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A Connecticut workers compensation commissioner had authority to require Liberty Mutual Insurance Co. to reimburse another insurer for half of the workers comp benefits paid to an injured worker, the Connecticut Supreme Court has ruled.
Ronald F. Gill Jr. injured his left knee in 1997 while working for North Haven, Connecticut-based beverage distributor Brescome Barton Inc., court records show. Liberty Mutual was the company's workers comp insurer at that time.
Mr. Gill then suffered a compensable injury to his right knee in 2002 while working for Brescome Barton, which was insured for workers comp by Chubb Corp. at that time, court records show. The second knee injury was found to be unrelated to Mr. Gill's first injury.
Mr. Gill underwent bilateral knee replacement surgery in 2011, which Liberty Mutual and Chubb both agreed was a medically necessary treatment, according to court filings. The insurers entered into an agreement in 2010 saying that Chubb would administer payment for Mr. Gill's surgery and that Liberty Mutual would reimburse Chubb for 50% of the surgery costs and related expenses.
However, the insurers were not able to reach a similar agreement on paying Mr. Gill's temporary total disability workers comp benefits, which he was entitled to receive while recovering from knee surgery. While Liberty Mutual initially offered to reimburse Chubb for less than half of Mr. Gill's benefits, Chubb did not accept the offer.
A formal hearing was held in front of a Connecticut workers comp commissioner, who ruled in 2011 that Liberty Mutual should reimburse Chubb for 50% of the $692.75 in weekly TTD benefits to be paid to Mr. Gill, court filings show.
Liberty Mutual appealed, arguing that the workers comp commissioner did not correctly follow precedent for awarding apportionment in a comp case. But records show that the Connecticut Workers' Compensation Commission's Compensation Review Board and the Connecticut Appellate Court upheld the commissioner's ruling.
High court upholds apportionment ruling
The Connecticut Supreme Court also upheld the apportionment ruling in a unanimous decision Tuesday. The high court found that the workers comp commissioner had authority under Connecticut law to order Liberty Mutual to reimburse Chubb for 50% of Mr. Gill's TTD benefits.
“We can think of no logical reason why, if the commissioner was authorized under the literal language of the relapse statute to order either of the insurance carriers to make 100 percent of the claimant's temporary total disability payments, he would not also be authorized to order each of the insurances carriers to make, in effect, only 50 percent of such payments,” the rulings reads. “In our view, the claimant's bilateral knee replacement surgery presented the commissioner with a highly unusual dilemma … which he then necessarily resolved in a lawful and reasonable manner.”
The high court said that ordering each insurer to pay half of the TTD benefits would have amounted to a double award recovery for Mr. Gill, which is prohibited under Connecticut workers comp law. Requiring Liberty Mutual to reimburse Chubb for the disability payments was a “necessary and reasonable interim compromise” considering the unique fact that both insurers were liable for Mr. Gill's disability, according to the ruling.
Liberty Mutual Holding Co. reported $276 million in net income for the first quarter of 2015, a 4.2% increase over last year, despite increased catastrophe losses.