Opinion
No. X03 CV 98 4022074 S
July 13, 2006
MEMORANDUM OF DECISION
Statement of the Issue
In this case of first impression, two important legal principles collide. The first is that, generally, contractual rights are freely assignable. See Rumbin v. Utica Mutal Ins Co., 254 Conn. 259, 268, 757 A.2d 526 (2000). The second is that the Workers' Compensation Act (act), General Statutes § 31-275 et seq., is an injured employee's exclusive remedy against his employer for injuries that arise out of and in the course of employment. See Yuille v. Bridgeport Hospital, 89 Conn.App. 705, 706, 874 A.2d 844 (2005). More specifically, the issue is whether an employee who has received benefits under the act can lawfully assert an action against his employer pursuant to an assignment of indemnification rights that he received in lieu of money damages to settle the personal injury action he commenced against the responsible third-party tortfeasor under General Statutes § 31-293. The court concludes, in light of the facts of this case, that the exclusivity provision of the act and public policy prohibit an employee from recovering damages for personal injuries from his employer in addition to the benefits provided under the act. The court believes that both the act and its underlying public policy considerations require judgment to be rendered in favor of the employer. Although the employee in this action claims to stand in the shoes of the indemnitee, the court concludes that the employee brings the action to secure additional funds from his employer for his employment-related injuries in contravention of the exclusivity principle of our workers' compensation scheme. The court looks to the nature of the relief sought to determine the character of the action, not simply how it is characterized by the parties. See Gazo v. Stamford, 255 Conn. 245, 262, 765 A.2d 505 (2001); CT Page 15576 Bellemare v. Wachovia Mortgage Corp., 94 Conn.App. 593, 599, 894 A.2d 335 (2006). A judgment for the employee, in effect, would permit him to recover damages from his employer, who previously had provided him with benefits pursuant to the act.
The companion case of Schietinger v. Southern New England Telephone Co., Superior Court, judicial district of Hartford, Docket No. X03 CV 994022075 S (2006), concerns the same issue.
General Statutes (Rev. to 1991) § 31-284(a) as amended by No. 91-32, § 9, 91-191, § 2, of the 1991 Public Acts, provides in relevant part: "An employer shall not be liable to any action for damages on account of personal injury sustained by an employee arising out of and in the course of his employment . . . but an employer shall secure compensation for his employees as provided under this chapter . . . All rights and claims between employer and employees . . . arising out of personal injury . . . in the course of employment are abolished other than rights and claims given by this chapter . . ." (Emphasis added.)
General Statutes (Rev. to 1991) § 31-293(a), as amended by No. 91-32, § 9, No. 91-191, § 2, of the 1991 Public Acts, provides in relevant part: "When any injury for which compensation is payable under the provisions of this chapter has been sustained under circumstances creating in a third person other than the employer a legal liability to pay damages for the injury, the injured employee may claim compensation under the provisions of this chapter, but the payment or award of compensation shall not affect the claim or right of action of the injured employee against the third person, but the injured employee may proceed at law against the third person to recover damages for the injury; and any employer having paid, or having become obligated to pay, compensation under the provisions of this chapter may bring an action against the third person to recover any amount that he has paid or has become obligated to pay as compensation to the injured employee . . ."
Summary of Decision
It is undisputed that on July 2, 1992, Richard Schietinger, an employee of the defendant, Southern New England Telephone Company (employer), sustained serious personal injuries that arose out of and in the course of his employment for which he has received benefits under the act. Pursuant to § 31-293, the employee commenced an action (personal injury action) against the third parties whom he claimed were responsible for his injuries, the Connecticut Light and Power Company (power company) and CP Utilities Service Company (engineer). The employer intervened in the personal injury action, as provided by § 31-293, to enforce its workers' compensation lien against the proceeds of any recovery the employee received from the tortfeasors. Trial of the personal injury action commenced in late 1998. During the presentation of evidence, the power company and the engineer offered to stipulate to a judgment in favor of the employee. As more fully set forth in the facts section, the power company had a contractual agreement with the employer obligating the employer to indemnify it for certain losses. As consideration for the employee settling his claims against it, the power company agreed to pay the employee money damages and to assign to him its right to indemnification from the employer.
In the personal injury action, the employee also alleged claims against Environmental Construction Services, Inc. (contractor). Pursuant to the stipulated settlement, judgment was rendered in favor of the contractor, which is not a party to this litigation.
The issue presented is whether the employee, standing in the shoes of the power company, may lawfully assert indemnification rights against the employer to recover what is in essence a portion of the damages he received for settling the personal injury action and, as to the employer, are in addition to the benefits paid by the employer under the act. The court concludes that the employee may not assert the indemnification rights against his employer to satisfy the personal injury judgment because the indemnification action violates the exclusivity provision of the act and public policy. Accordingly, judgment may be rendered in favor of the employer, Southern New England Telephone Company.
Procedural History
After the employee commenced the personal injury action against the power company and the engineer, in June 1998, the power company commenced an action against the employer to assert its right to indemnification arising from an easement the employer granted the power company in 1969. The one-count revised complaint filed April 27, 1999, alleged that the employer had entered into an easement permitting the power company's predecessors in interest to construct and maintain an underground electrical distribution system on real property owned by the employer in Stamford. The employer agreed that "it would not excavate in the easement area or interfere with [the power company's] electrical distribution system without the [power company's] written permission." The revised complaint further alleged that on July 2, 1992, the employer excavated in the area of the easement, struck and damaged the power company's underground electrical distribution system. On that same day, the employee entered the excavation site and sustained injuries as the result of an electrical explosion. The revised complaint alleged that " [t]he conduct of [the employer] in failing to notify [the power company] in writing of its desire to excavate and/or interfere with [the power company's] facilities, constitutes a breach of its agreement with [the power company]." As a consequence of the employers alleged breach of the easement, the power company claims damages for the destruction of its electrical distribution facility, the cost of defending the personal injury action and the amount of judgment awarded the employee, if any.
The action subsequently was transferred to the complex litigation docket and assigned a new docket number.
In January 2000, the employer denied the material allegations of the revised complaint and alleged eleven special defenses, including among others, that the complaint fails to state a cause of action for which relief can be granted; the power company purported to assign the cause of action to the employee whose rights and claims against the employer were abolished by the act; by receiving benefits under the act the employee waived his right to receive additional money from the employer; and the employee failed to prove that the power company was liable to him.
Thereafter the employee and the employer filed cross motions for summary judgment. The court, Aurigemma, J., denied the cross motions for summary judgment by memorandum of decision dated February 14, 2002. The consolidated actions were tried to this court on December 14, 2005, after which the court ordered the parties to submit briefs and reply briefs. Thereafter the court ordered the parties to file supplemental briefs by June 15, 2006. CT Page 15578
The Facts
On the basis of the parties' stipulation to certain facts, the court finds the following relevant facts. A detailed recitation is required to place this court's decision in context. On March 14, 1969, the employer granted a utility easement to the power company's predecessor in interest Hartford Electric Light Company. The easement permitted the power company to install underground electrical equipment at 555 Main Street, Stamford (premises), which is owned by the employer. The easement provided in part that the employer not excavate the premises in any manner that interferes with the underground electrical equipment without the written permission of the power company and that in the event of any damage to the electrical equipment, the employer will pay the cost of repair.In 1992, the employer contemplated the removal and reinstallation of underground fuel tanks on the premises (excavation). In April 1992, the employer approved the excavation site plan that the engineer had prepared and, in May 1992, accepted a bid submitted by the engineer for the same. The employer and Environmental Construction Services, Inc. (contractor) agreed that the contractor would perform the excavation under the management of the engineer. On June 8, 1992, pursuant to General Statutes § 16-345 et seq., the engineer communicated with the "Call Before You Dig" clearinghouse regarding the excavation. A "Call Before You Dig" ticket was issued, stating that the excavation was to be conducted at the rear of the building on the premises. The power company received notice of the planned excavation by means of the ticket and twice sent a representative, Christopher Menard, to the premises where the contractor had marked the dimensions of the excavation. Menard understood that the excavation was to be relatively small and immediately adjacent to the rear of the building. On the basis of his understanding, Menard did not identify the location of the power company's underground electrical equipment that was thirty-five to forty feet from the building.
General Statutes § 16-346 provides "No person, public agency or public utility shall engage in excavation or discharge explosives at or near the location of a public utility underground facility or demolish a structure located at or near or containing a public utility facility without having first ascertained the location of all underground facilities or public utilities in the area of such excavation, discharge or demolition in the manner prescribed in this chapter and in such regulations as the department shall adopt pursuant to section 16-357."
On July 2, 1992, one of the contractor's employees who was operating a piece of equipment struck and damaged an underground concrete duct, containing two primary and one secondary electrical lines, that was within the boundary of the easement. After the power company was informed of the situation, it dispatched a repair crew to the premises. The repair crew found that there was electrical power in the employer's building and none of the circuit breakers or other devices indicated an electrical fault in the primary power system. On the basis of this information and because there had been a flash and arc of electricity to the contractor's piece of equipment, the repair crew concluded that the line that had been damaged was not a primary power line. The repair crew do-energized the secondary line and left the two primary power lines energized. The power company informed the engineer that the damaged power line had been de-energized when, in fact, one of the high voltage power lines within the excavation had been damaged but not de-energized.
The engineer placed orange mesh fencing and cones around the excavation, wired shut a gate and placed yellow caution tape on the ground. The engineer did not post written warnings or lock the gate to prevent access to the excavation from the employer's building. The engineer also left a voice mail message about the situation for the employer. After the power company, engineer and contractor personnel had left the excavation for the day, in response to the voice mail, the employee's supervisor directed him to investigate a report of an exposed power line in the excavation. While he was standing near the excavation, the employee was seriously injured by the arcing of electricity from the exposed cable.
As a result of the injuries he sustained, the employee applied for and received benefits from the employer under the act. In May 1993, he commenced the personal injury action. In June 1993, in accordance with § 31-293(a), the employer intervened in the personal injury action to assert its lien for the benefits it paid the employee. On April 30, 1996, the power company and the engineer entered into an agreement for strategic purposes, pursuant to which the power company assumed the defense of the employee's personal injury action against all defendants and agreed to indemnify the engineer. On June 3, 1998, the power company brought an action against the employer for breach of the easement agreement, seeking damages for the destruction of its equipment, the cost of defending the personal injury action and the amount of the judgment, if any.
This court finds, pursuant to the release, defense, indemnification, hold harmless and cooperation agreement, that the engineer paid the power company $37,000 in consideration for a defense and indemnification.
Trial in the personal injury action began in November 1998. Before the employee completed presentation of his evidence, counsel for the defendants approached the employee's counsel with a settlement offer of $2.3 million contingent upon the employer's waiving its workers' compensation lien. The employer refused to waive its lien and continued to demand full satisfaction. On December 9, 1998, the employee agreed to settle his claims against the power company and the engineer for $1.15 million each in exchange for an assignment of their indemnification rights against the employer. After the power company paid, on behalf of itself and the engineer, the employee $2.3 million, the employer settled its lien and withdrew its intervening complaint.
As part of the settlement the employee withdrew his claim against the contractor without payment.
The relevant portions of the settlement agreement concerning the assignment of indemnification rights stated in part:
5. As further consideration for having [the employee's] claims against it resolved, [the engineer] agrees to assign to [the power company] all rights, suits, actions, causes of action, claims or demands, in law or in equity that it ever had, now has or hereinafter can, shall or may have arising out of an incident involving [the employee] that occurred on or about July 2, 1992 and/or involving [the engineer's] agreement with [the employer] concerning the underground tank installation project at [the premises] that occurred during July 1992.
6. [The power company] agrees to assign to [the employee] the right to pursue and recover all rights, suits, actions, causes of action, claims or demands, in law or in equity which it ever had, now has or hereafter can, shall or may have arising out of an incident involving [the employee] the occurred on or about July 2, 1992, including but not limited to, the rights obtained under paragraph 5, hereof, and the right to pursue the matter captioned The Connecticut Light Power Company v. Southern New England Telephone Company . . . In exchange for this assignment of [the power company's] rights, including those obtained from [the engineer], as referenced in paragraph 5 above, [the employee] agrees to defend, indemnify and hold harmless [the power company and engineer] from and against any and all counterclaims, cross claims or actions filed in response to [the employee's] exercise of the rights assigned to him by this paragraph . . .
After settling the personal injury action, the employee assumed prosecution of the power company's contract action for indemnification. The case was tried to the court on December 14, 2005. Witnesses included Richard Bieder, who represented the employee in the personal injury action, and Maureen D. Cox, who represented the power company and the engineer in the personal injury action. The court found both witnesses to be credible.
In this action, the employee is represented by the same law firm that represented him in the personal injury action.
He also instituted a separate action against the employer to assert the indemnification rights of the engineer. See footnote 1. The two actions were consolidated for trial.
On the basis of the evidence presented at trial, the court makes the following additional findings of fact. As a result of an arc of electricity from a damaged power line at the excavation on July 2, 1992, the employee suffered second- and third-degree burns on his torso and left arm for which he received lengthy and extensive medical treatment. The employee instituted an action against the power company, engineer and contractor claiming damages for the injuries he suffered. Prior to trial, the power company undertook to defend all three defendants in the personal injury action and to indemnify them as well. The employer intervened in the personal injury action.
At trial, after the employee presented of medical testimony concerning his injuries, both Cox and Bieder were of the opinion that the defendants were exposed to significant verdicts in favor of the employee. Thereafter, with the assistance of the trial court, Skolnick, J., Bieder and Cox entered into settlement discussions. For purposes of settlement, Bieder apportioned liability for the employee's injuries equally between the power company and the engineer. Cox offered $2.3 million to settle the employee's claims conditioned on the employer's releasing its workers' compensation lien. The proposed settlement was agreeable to the employee. Bieder, therefore, approached counsel for the employer, David A. Reif, to negotiate a waiver of the employer's lien. The employer refused to compromise its lien. Bieder then proposed to the employee that he accept the cash settlement offered plus an assignment of the contractual indemnification rights of the power company and engineer. The employee, power company and engineer agreed to Bieder's proposal. Judge Skolnick accepted the parties' stipulated judgment. Thereafter, the employee satisfied the employer's lien from the liquidated portion of the settlement, that is, the $2.3 million money damages paid by the power company, and proceeded against the employer to collect the unliquidated portion of the settlement, that is, the indemnification rights assigned to him by the power company and the engineer.
At the time of those discussions, Bieder had not yet offered the testimony of the expert who would opine as to the liability of the power company and the engineer. The deposition of the expert, Steven Estrin, had been taken, however, prior to trial. Bieder was prepared, therefore, to offer Estrin's expert testimony that there were four causes of the employee's injuries, two of them due to the negligence of the power company and two due to the negligence of the engineer. The power company failed to mark the location of the underground electrical equipment at the premises and to de-energize the damaged high power line. The engineer failed to secure the excavation after the underground electrical equipment had been damaged and left only a voice mail message for the employer stating that the power company had been to the excavation, would return after the Fourth of July holiday to replace the damaged line and that there was no need for the employer to send anyone to the excavation. The message did not make clear to the employer what had happened. According to Bieder, had the engineer spoken to a human being, rather than leaving a voice mail message, the employee would not have been sent to the excavation to investigate.
The court finds that the indemnification rights assigned to the employee are in the nature of unliquidated damages given in partial satisfaction of the employee's agreeing to settle the personal injury action. Furthermore, under the terms of the easement, the employer was to secure the written permission of the power company before excavating on the easement. The court concludes that the employer's failure to secure the written permission of the power company to excavate on the easement was not the proximate cause of the employee's injuries or the power company's losses. While the employer failed to secure the written permission of the power company, the power company knew of the employer's intention to excavate in the easement. Pursuant to § 16-345, the "Call Before You Dig" statute, the power company sent a representative to the premises to identify the location of the power company's equipment. On July 2, 1992, the power company's underground equipment was damaged by the contractor because the power company failed to identify the location of its equipment as required by our statutes. On that same date, the employee was injured because the power company failed to de-energize the damaged high-power line and the engineer failed to communicate adequately with the employer.
DISCUSSION
Failure to State a Claim
In this case, the employee has alleged breach of contract against his employer. In its answer, the employer alleged numerous special defenses, including, in essence, that the employee had failed to state a claim upon which relief can be granted because he surrendered his right to bring an action against the employer by accepting benefits under the act, which is his exclusive remedy. See General Statutes (Rev. to 1991) § 31-284(a) as amended by No. 91-32, § 9, 91-191, § 2, of the 1991 Public Acts. "[W]hether an assignment is barred as matter of public policy is an issue of law." Gurski v. Rosenblum Filan, LLC, 276 Conn. 257, 266, 885 A.2d 163 (2005). The court notes that a claim that a complaint fails to state a cause of action for which relief can be granted is usually decided pursuant to a motion to strike. See Practice Book § 10-39. Given the procedural posture of this case, however, the court will address the issue in the context of the special defense that has been asserted.
The employee's position is that pursuant to the indemnification rights that were assigned to him, he stands in the shoes of the power company and consequently, he asserts he is entitled to receive damages from the employer for the unliquidated portion of the settlement of the personal injury action that equals the cost of replacing the damaged electrical equipment and the expenses incurred by the power company in defending and settling the personal injury action, namely, the judgment plus attorneys fees and costs. He argues that the only way the employer can defeat his claim is if the employer proves by clear and convincing evidence that the stipulated judgment was obtained by collusion. The employee acknowledges that a claim for indemnification can be defeated by bad faith or collusion, or an unreasonable settlement reached with the injured party. See Black v. Goodwin, Loomis Britton, Inc., 239 Conn. 144, 154, 681 A.2d 293 (1996) (case dealing with insurer's failure to defend). The evidence does not persuade the court that the value of the stipulated settlement of the personal injury action constituted fraud or collusion. The court concludes, however, that the employee may not assert the assigned contractual rights at issue in this case in light of the exclusivity provision of our workers' compensation law, § 31-284 (a), and public policy.
Our Supreme Court has stated generally with respect to the assignment of contract claims, "the modern approach to contracts reject[ing] traditional common-law restrictions on the alienability of contract rights in favor of free assignability of contracts. . . . Common-law restrictions on assignment were abandoned when courts recognized the necessity of permitting the transfer of contract rights. The force[s] of human convenience and business practice [were] too strong for the common-law doctrine that [intangible contract rights] are not assignable." (Citations omitted; internal quotation marks omitted.) Gurski v. Rosenblum Filan, LLC, supra, 276 Conn. 266. "The assignee of a chose in action stands in the shoes of the assignor." Mall v. LaBow, 33 Conn.App. 359, 362, 635 A.2d 871 (1993), cert. denied, CT Page 15583 229 Conn. 912, 642 A.2d 1208 (1994). The most common "type of right subject to assignment is one for the payment of money." (Internal quotation marks omitted.) Bouchard v. People's Bank, 219 Conn. 465, 472, 594 A.2d 1 (1991).
"Generally, to constitute an assignment there must be a purpose to assign or transfer the whole or a part of some particular thing, debt, or chose in action, and the subject matter of the assignment must be described with such particularity as to render it capable of identification." (Internal quotation marks omitted.) Schoonmaker v. Lawrence Brunoli, Inc., 265 Conn. 210, 227, 828 A.2d 64 (2003). "Once a party to a contract has performed [its] obligations under the contract so that the contract is no longer executory, [its] right to enforce the other party's liability under the contract may be assigned without the other party's consent . . . If the contract has been fully executed and nothing remains to be done except to pay money, the claim becomes a chose in action, which is assignable . . ." 6A C.J.S. 415, Assignments § 31 (2004).
"Any right of action arising out of contract may be assigned, unless assignment is prohibited by statute, public policy, or a contractual prohibition . . ." (Emphasis added.) 6A C.J.S. 431, Assignments, § 46 (2004). "Only those assignments that are not contrary to express law, public policy, or good morals are valid; an assignment is invalid if it is against public policy." 6 Am.Jur.2d 156, Assignments § 8 (1999). "As a general rule, if the assignment in question is otherwise valid, the motives that prompted the assignor to make the transfer are immaterial and constitute no defense to an action by the assignee." Id., § 10 p. 157. "(2) A contractual right can be assigned unless (a) the substitution of a right of the assignee for the right of the assignor would materially change the duty of the obligor, or materially increase the burden or risk imposed on him by his contract, or materially impair his chance of obtaining return performance, or materially reduce its value to him, or (b) the assignment is forbidden by statute or is otherwise inoperative on grounds of public policy, or (c) assignment is validly precluded by contract." 3 Restatement (Second), Contracts § 317, p. 15 (1981). See also Rumbin v. Utica Mutual Ins. Co., supra, 254 Conn. 267-68 (discussing assignability of contracts).
Our Supreme Court has noted, however, that "[u]nder common law a cause of action for personal injuries cannot be assigned, and in the absence of a statutory provision to the contrary a right of action for personal injuries resulting from negligence is not assignable before judgment." (Internal quotation marks omitted.) Dodd v. Middlesex Mutual Assurance Co., 242 Conn. 375, 382, 698 A.2d 859 (1997). The court also has held that, for reasons of public policy, neither legal malpractice claims nor the proceeds from such a claim are assignable to the adverse party in the litigation that gave rise to the alleged malpractice. Gurski v. Rosenblum Filan, LLC, supra, 276 Conn. 259-60.
In view of these general principles of the law of assignment, the question before this court is whether this action by the employee, undertaken pursuant to an assignment as partial payment of damages to settle the personal injury action, violates § 31-284(a) or the public policy on which it is founded. Our Supreme Court has addressed the competing interests of assignment and the exclusivity provision of the act, but never under the factual circumstances presented here. The employee relies heavily on the case of Ferryman v. Groton, 212 Conn. 138, 561 A.2d 432 (1989), to support his claim that he is entitled to assert the indemnification agreement that was assigned to him against the employer. The court reads Ferryman differently.
In Ferryman, the plaintiff's decedent was an employee of the Electric Boat Division of General Dynamics Corporation who was electrocuted when he entered an electrical substation owned by the city of Groton to cut the grass. Id., 139-40. The plaintiff commenced a wrongful death action against Groton, which in turn sought to implead Electric Boat, alleging that Groton merely owned the transformers and metering equipment and that Electric Boat owned, operated, maintained and controlled the substation. One of Electric Boat's employees granted the plaintiff's decedent access to the enclosed substation. The third-party complaint was grounded in the doctrine of active-passive negligence as articulated in Kaplan v. Merberg Wrecking Corp., 152 Conn. 405, 415, 207 A.2d 732 (1965). Electric Boat filed a motion to strike the third-party complaint relying on the exclusivity provision of the act, which motion the trial court granted. Judgment was rendered on the motion to strike. On appeal, our Supreme Court reversed the judgment of the trial court, concluding that Electric Boat owed Groton an independent legal duty not to be negligent.
"When the third party, in a suit by the employee, seeks recovery over against a contributorily negligent employer, contribution [or indemnification] is ordinarily denied on the ground that the employer cannot be said to be jointly liable in tort to the employee because the operation of the exclusive-remedy clause. But if the employer can be said to have breached an independent duty toward the third party, if there is a basis for finding an implied promise of indemnity, recovery in the form of indemnity may be allowed. The right to indemnity is clear when the obligation springs from a separate contractual relation, such as an employer-tenant's express agreement to hold the third-party landlord harmless, or a bailee's obligation to indemnify a bailor, or a contractor's obligation to perform his work with due care . . ." (Emphasis added; internal quotation marks omitted.) Id., 144-45. Here, the employee asserts that, as the assignee, his claim arises out of the separate contractual relationship between his employer and the power company. See footnote 10.
Ferryman factually is distinguishable from the case before this court. In Ferryman, the city of Groton asserted an indemnification claim on its own behalf against Electric Boat on a legal basis independent of the wrongful death action. Here, while the employee is correct that the assignment places him in the shoes of the power company, in reality, he is seeking to have his employer pay a portion of the damages awarded to him as part of the stipulated judgment. The damages the power company agreed to pay the employee to settle the personal injury action were $2.3 million plus the unliquidated value of the indemnification rights of both the power company and the engineer. This action represents the employee's effort to liquidate the indemnification rights he was assigned. In other words, the employee is asking the employer to pay the outstanding balance of the damages owed to the employee by the power company pursuant to the stipulated judgment in the personal injury action. Most significantly, the employee's personal injuries arose from and were sustained in the course of employment.
Our Supreme Court has made it clear that it is the nature of the relief sought that determines the character of the action. See Bellemare v. Wachovia Mortgage Corp., supra, 94 Conn.App. 598. The leading workers' compensation treatise distinguishes the two types of actions against an employer of an injured employee, i.e., by a third party owed an independent duty or the injured employee, on the basis of the language of the controlling statute. In the Ferryman situation, "the immunity conferred is only against actions for damages on account of the employee's injury; a third party's action for indemnity is not exactly for damages but for reimbursement, and it is not on account of the employee's injury but on account of breach of an independent duty owed by the employer to the third party." (Emphasis added.) 6 A. Larson L. Larson, Workmen's Compensation (1996) § 74.41.
There are further distinctions between the two types of actions. Assume that A is obligated to indemnify B for damages paid to C. B pays C damages in the sum of X. Under Ferryman, B may bring an action against A for X. The situation here is that B pays damages to C in the sum of X, but B also assigns to C its indemnification rights against A. If C were to bring an action pursuant to the indemnification agreement against A and prevail, the total value of C's damages would be two times X.
The relevant portion of the act provides: "An employer shall not be liable to any action for damages on account of personal injury sustained by an employee arising out of and in the course of his employment . . . All rights and claims between employer and employee . . . arising out of personal injury . . . sustained in the course of employment are abolished other than rights and claims given by this chapter . . ." (Emphasis added.) General Statutes (Rev. to 1991) § 31-284(a), as amended by No. 91-32, § 9, 91-191, § 2, of the 1991 Public Acts.
The issue in this case involves a question of statutory interpretation. "When construing a statute, [the] fundamental objective is to ascertain and give effect to the apparent intent of the legislature . . . In other words . . . to determine, in a reasoned manner, the meaning of the statutory language as applied to the facts of [the] case, including the question of whether the language actually does apply." (Citation omitted; internal quotation marks omitted.) Cogan v. Chase Manhattan Auto Financial Corp., 276 Conn. 1, 7, 882 A.2d 597 (2005). The court also considers General Statutes § 1-2z, which provides: "The meaning of a statute shall, in the first instance, be ascertained from the text of the statute itself and its relationship to other statutes. If, after examining such text and considering such relationships, the meaning of such text is plain and unambiguous and does not yield absurd or unworkable results, extratextual evidence of the meaning of the statute shall not be considered." "[S]tatutes must be construed, if possible, such that no clause, sentence or word shall be superfluous, void or insignificant . . ." (Internal quotation marks omitted.) Nizzardo v. State Traffic Commission, 259 Conn. 131, 158, 788 A.2d 1158 (2002).
The language of § 31-284(a) is exceedingly broad in scope. It frees an employer from " any action for damages on account of personal injury sustained by an employee arising out of and in the course of his employment" and " [a]ll rights and claims between employer and employees . . . arising out of personal injury . . . in the course of employment are abolished other than rights and claims given by this chapter." (Emphasis added.) Pursuant to the statute, an employer is immune from any type of action by an employee on account of the employee's injury sustained during the course of and arising out of employment, except those provided by the act.
In this case, boiled down to its essence, the employee is seeking money damages from his employer on account of his personal injury that are in addition to the benefits he received under the act. The employee settled the personal injury action for $2.3 million plus an assignment of the power company's right to indemnification. The judgment the employee seeks in this action is to collect on the indemnification provision of the easement. He claims money damages paid by the power company pursuant to the settlement agreement plus attorneys fees and litigation costs. Theoretically, the employee seeks more in money damages in this action than the power company actually paid him as compensation for the injuries he sustained in the July 2, 1992 incident. It is undisputed that the employer has provided the employee with the benefits to which he is entitled under the act. The employer, therefore, is under no legal obligation to pay money damages on account of the employee's injury that fall outside the scope of the act. The court concludes that the act bars the employee from asserting a claim against the employer pursuant to the assignment he received from the power company.
With respect to public policy, the purpose of our workers' compensation scheme, including the exclusivity provision contained in § 31-284(a), is remedial. Gomes v. Massachusetts Bay Ins. Co., 87 Conn.App. 416, 426, 866 A.2d 704, cert. denied, 273 Conn. 925, 871 A.2d 1031 (2005). "The Workers' Compensation Act . . . provides the sole remedy for employees and their dependents for work-related injuries and death . . . Its purpose is to provide a prompt, efficient, simple and inexpensive procedure for obtaining benefits related to employment." (Internal quotation marks omitted.) Id. "Under the Workers' Compensation Act both the employer and the employee have relinquished certain rights to obtain other advantages. The employee no longer has to prove negligence on the part of the employer, but, in return, he has to accept a limited, although certain, recovery . . . The employer, in turn guarantees compensation to an injured employee in return for the exclusivity of the workers' compensation liability to its employees." (Emphasis added; internal quotation marks omitted.) Barry v. Quality Steel Products, Inc., 263 Conn. 424, 451, 820 A.2d 258 (2003). "In return for the attempt to guarantee, through workers' compensation insurance, that the injured worker will continue to receive enough income and medical care to enable the injured worker to exist without being a burden to others, the insured employer is released from [other rights and] claims of . . . liability pursuant to [§]31-284(a). A. Sevarino, Connecticut Workers' Compensation After Reforms (3d Ed. 2002) § 1.03, p. 14. The exclusivity provision contained in § 3-31-284(a) manifests a legislative policy decision that a limitation on remedies is an appropriate trade-off for the benefits provided by workers' compensation." (Internal quotation marks omitted.) Gomes v. Massachusetts Bay Ins. Co., supra, 427.
In this case, the employer complied with the requirements of the act and the employee benefited from the remedial purpose of the act. In exchange for the guaranteed benefits, the employee must be deemed to have agreed that the act was his exclusive remedy against his employer. The court must presume, in light of the act, that the employee understood this when he accepted the assignment of indemnification from the power company as partial settlement of his personal injury claim.
In light of the exclusivity provision contained in § 31-284(a), the employee cannot assert a claim against the employer for damages related to the personal injuries he sustained on July 2, 1992, no matter in whose shoes he claims to stand. When the employer paid the employee benefits under the act, it reasonably may have concluded that it had met its statutory and financial obligation to the employee. It would undermine the plain language of § 31-284(a) and the public policy underlying the act to permit the employee to seek money damages from his employer on account of his employment-related injury. In light of the broad language of § 31-284(a), and the centrality of the exclusivity principle in our workers' compensation scheme, the court concludes that the act and the public policy it embodies prohibit the employee from succeeding on his claim.
The Merits: Contractual Claim for Indemnification
Although the court has concluded that the complaint fails to state a cause of action, given the possibility of an appeal, in the interest of judicial economy and for the benefit of the parties, the court will address the merits of the employee's contractual claim for indemnification. The court concludes, as a basis separate and independent from its holding that the complaint fails to state a cause of action, that the employee has failed to prove essential elements of his cause of action and, therefore, judgment is rendered in favor of the employer.
The decision of the court is controlled by the allegations of the complaint. "It is fundamental in our law that the right of a plaintiff to recover is limited to the allegations of [his] complaint." (Internal quotation marks omitted.) McCann Real Equities Series XXII, LLC v. David McDermott Chevrolet Inc., 93 Conn.App. 486, 490, 890 A.2d 140, cert. denied, 277 Conn. 928, 895 A.2d 798 (2006). The interpretation of the pleadings is a question of law. Boone v. William W. Backus Hospital, 272 Conn. 551, 559, 864 A.2d 1 (2005). "[T]he complaint must be read in its entirety in such a way as to give effect to the pleading with reference to the general theory upon which it proceeded, and do substantial justice between the parties." (Internal quotation marks omitted.) Bross v. Hillside Acres, Inc., 92 Conn.App. 773, 778-79, 887 A.2d 420 (2006).
The employee's one-count revised complaint sounds in breach of contract, seeking to prevail on the indemnification provision of an easement granted the power company by the employer in 1969. The revised complaint alleges, in relevant part, "[t]he conduct of [the employer] in failing to notify [the power company] in writing of its desire to excavate and/or interfere with [the power company's] facilities, constitutes a breach of its agreement with the [power company]." The employee asserts the power company's indemnification rights for losses associated with the incident that occurred on July 2, 1992, specifically, reimbursement for property damage and the cost of the stipulated judgment, attorneys fees and the costs associated with the defense of the personal injury action.
"An action in contract is for the breach of a duty arising out of a contract." (Internal quotation marks omitted.) Gazo v. Stamford, supra, 255 Conn. 263. To prevail on a breach of contract claim, the plaintiff must prove the formation of an agreement, performance by one party, breach of the agreement by the opposing party, proximate cause and damages. McCann Real Equities Series XXII, LLC v. David McDermott Chevrolet, Inc., supra, 93 Conn.App. 503-04. "While a plaintiff is entitled to every favorable inference that may be legitimately drawn from the evidence, and has the same right to submit a weak case as a strong one, the plaintiff must still sustain the burden of proof on the contested issues in the complaint . . . The general burden of proof in civil actions is on the plaintiff, who must prove all the essential allegations of the complaint." (Citation omitted.) CT Page 15590 Gulycz v. Stop Shop Cos., 29 Conn.App. 519, 523, 615 A.2d 1087, cert. denied, 224 Conn. 923, 618 A.2d 527 (1992).
The parties stipulated to the language of the easement, and the court finds by a preponderance of the evidence that the employer agreed that it would not excavate on the easement "without the written permission of the power company." Furthermore, the easement provides that "in the event of damage or destruction of any said facilities of the [power company] by the [employer], its agents or employees" the cost of replacement or repair will be borne by the employer. The language of the complaint does not allege what was agreed to in the easement. The employee alleged that the employer was to give written notice of its desire to excavate in the easement. The relevant and material issue of fact is that which is alleged in the complaint. The agreement did not require the employer to give the power company written notice, but to receive written permission. Nonetheless, contrary to the allegations of the complaint, the evidence demonstrates that the power company received written notice of the employer's intention to excavate on the easement in the form of a ticket issued by "Call Before You Dig." In fact, the power company sent one of its agents to the site to mark the location of its underground equipment, but the agent failed to establish the locus of the equipment or to identify it for the contractor.
In their briefs, the parties debate the purpose of the written permission provision of the easement. The employer contends that the purpose of the provision is to provide notice to the power company, so that its equipment can be protected. It further argues that the "Call Before You Dig" statute supersedes and supplants the need for written permission. The court need not and will not decide that question. The court finds, however, that the power company knew of the planned excavation and twice sent Menard to the premises to identify the location of its underground equipment.
Furthermore, the court concludes that the employee cannot prevail because he also failed to prove that the alleged breach was the proximate cause of the property damage or his injuries. "One who violates his contract with another is liable for all the direct and proximate damages which result for the violation . . . Causation is an essential element of damages in a breach of contract action; and as in tort, a plaintiff must prove that a defendant's breach directly and proximately caused his or her damages . . . Damages for breach of contract must be such only as actually follow or may follow from the breach of contract . . . Moreover, damages may be so remote as not to be directly traceable to the breach, or they may be the result of other intervening causes, and then they cannot be allowed." (Citations omitted; emphasis in the original; internal quotation marks omitted.) National Market Share, Inc. v. Sterling National Bank, 392 F.3d 520, 525-26 (2d Cir. 2004).
To prevail, the employee must establish that the employer's conduct legally caused the losses alleged. "The first component of legal cause is causation in fact. Causation in fact is the purest legal application of . . . legal cause. The test for cause in fact is, simply, would the injury have occurred were it not for the actor's conduct . . . The second component of legal cause is proximate cause . . . [T]he test of proximate cause is whether the defendant's conduct is a substantial factor in bringing about the plaintiff's injuries . . . Further, it is the plaintiff who bears the burden to prove an unbroken sequence of events that tied his injuries to the [defendant's conduct] . . . The existence of the proximate cause of an injury is determined by looking from the injury to the . . . act complained of for the necessary causal connection . . . This causal connection must be based on more than conjecture and surmise." Gurguis v. Frankel, 93 Conn.App. 162, 167-68, 888 A.2d 1083, cert. denied, 277 Conn. 916, 895 A.2d 789 (2006). Proximate cause is a question of fact; id., 168; and the employee bears the burden of proof by a preponderance of the evidence.
As noted, Bieder, the employee's counsel in the personal injury action, testified before this court that, during the personal injury trial, he was prepared to offer testimony from the expert, Estrin, that there were four causes of the employee's injuries: the power company's failure to mark the location of the underground electrical equipment and to de-energize the damaged high power line, and the engineer's failure to secure the excavation and to convey the situation through a human being, rather than by voice mail. None of these causes was related in any way to the employer's failure to obtain the written permission of the power company before excavating the premises or, as alleged, the employer's failure give written notice of its intent to excavate on the easement to the power company. The power company knew of the proposed excavation and failed to locate and mark its underground equipment that led to the contractors damaging the equipment. Consequently, the court also finds that the employee's injuries were not linked directly to the damage to the underground equipment but instead to the failure of the power company to deactivate the damaged line. The employee's injuries were not proximate in time to the damage to the underground equipment but occurred several hours later. The court therefore finds that the proximate cause of the damage to the underground equipment was the power company's failure to identify the location of its equipment in response to the "Call Before You Dig" ticket and that the proximate cause of the employee's injuries was the power company's failure to de-energize the damaged power line. On the basis of the stipulated facts submitted by the parties as to what transpired on July 2, 1992, the testimony at trial and in light of the full record, the court concludes that the employee has failed to prove by a preponderance of the evidence that the breach of contract alleged in the complaint was the proximate cause of the employee's injuries or the power company's losses. Although the excavation of the easement may have been a cause in fact of the damaged to the power company's equipment and the employee's injuries, it was not the proximate cause of those losses. Even if the employee had alleged a claim for which relief can be granted, he cannot prevail on the contractual claim for indemnification because he failed to prove by a preponderance of the evidence that the employer's alleged breach was the proximate cause of the power company's losses.
Judgment, for the reasons stated, may enter in favor of the defendant, Southern New England Telephone Company. It is so ordered.
In light of this ruling, the court need not address other arguments raised by the parties.