In re Michael Dufresne's Case2/27/2001
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The judge of the Superior Court endorsed his approval of the agreement on May 17, 1991: "After hearing, the petition is allowed and the settlement is approved. Plaintiff's award of $100,000 to be made after the carrier's lien of $106,321 has been offset and, thereby, extinguished." Wausau was a party to the petition for the approval of the agreement. The judge's approval became a final judgment; no notice of appeal was filed.
We now summarize the subsequent events which gave rise to the controversy before us. The employee filed a claim for G. L. c. 152, ? 35, benefits (temporary, partial incapacity) from October 31, 1993, and continuing. After the entry of an order in 1994 awarding ? 35 benefits, Wausau began paying benefits and medical bills, but unilaterally retained a Hunter offset, see note 2, supra, against the net proceeds of the settlement.
In September, 1994, the employee developed blisters on his residual limb, which led to the an application for G. L. c. 152, ? 34, benefits (temporary, total incapacity) for this period ending December, 1994.
The administrative judge conducted hearings on the employee's claims for ?? 34 and 35 compensation, as well as ?? 13 and 30 medical benefits. Wausau claimed the application of G. L. c. 152, ? 35B (described below), as well as its entitlement to the Hunter offset. The administrative judge issued his decision on August 25, 1995. He found that the employee's injuries and the ensuing impairment were causally related to his September 12, 1986, injury. Compensation orders were entered, the details of which need not be recited. He also concluded that the employee's worsened condition, which commenced in September, 1994, constituted a "subsequent injury" under G. L. c. 152, ? 35B (an employee who is subsequently injured after receiving compensation and having returned to work is entitled to be paid compensation at the rate in effect at the time of the subsequent injury). This resulted in a reduced rate of payment to the employee.
The judge also authorized a continuing Hunter offset by Wausau against the compensation payment ordered, but exclusive of the consortium claim. Cross appeals followed. The employee argued that the judge erred in authorizing the offset and in applying ? 35B to lower his rate of compensation. Wausau disputed the benefits awarded to the employee.
On appeal, the board, relying on both CNA Ins. Cos. v. Semedo-Anacleto, 39 Mass. App. Ct. 271, 274-276 (1995), and Ferrari v. Toto, 9 Mass. App. Ct. 483, 486 (1980), S.C., 383 Mass. 36 (1981) (where the court agreed "with the Appeals Court's reasoning and conclusion"), held on June 30, 1998, that the Hunter offset against "ongoing compensation benefits" was unavailable to Wausau because there was "no valid distinction between excluding the insurer's lien for workers' compensation payments from direct indemnity . . . [as Wausau acknowledged in the 1991 settlement agreement which 'extinguished' its lien], and the insurer's gaining the indirect benefit of that recovery by way of an offset credit under G. L. c. 152, ? 15 continuing into the future." The board adhered closely to the definition of a "covered claim" in G. L. c. 175D, ? 1, see note 5, supra, so as to preclude both a direct and an indirect benefit to an insurer from monies provided by the Fund.
We agree with the board that Wausau may not recover from the employee by way of an offset.
The offset made its first appearance in Richard v. Arsenault, 349 Mass. 521 (1965) -- G. L. c. 152, ? 15, makes no mention of the offset -- and appears later in Hunter v. Midwest Coast Transp., Inc. 400 Mass. 779 (1987) (thus the phrase Hunter offset). See note 2, sup
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