Massachusetts Supreme Court Holds Suffering and Pain Damages Exempt from Insurers’ Lien

Pursuant to Massachusetts law, individuals who obtain workers’ compensation are prohibited from suing their bosses for the same injuries. However, employees may sue other parties for damages. When an individual receives damages from another party, the insurer is permitted to put a lien on these damages for the total of what the insurer compensated the employee in benefits. Last month in two consolidated cases, the Massachusetts Supreme Court determined the scope of this lien and whether it applies to damages paid by another party to redress employees’ suffering and pain.The cases involved two men – DiCarlo and Martin – who were injured at their respective jobs. They each received workers’ compensation and obtained settlement agreements with separate parties. These settlements included damages for suffering and pain. DiCarlo and Martin had the same insurer, who sought to be reimbursed under Massachusetts law for the men’s recoveries.

In DiCarlo’s suit, the lower court rejected the settlement agreement that provided that the insurer was not entitled to a lien on the damages for suffering and pain. The judge instead concluded that the insurer’s lien affixed to DiCarlo’s total recovery. On appeal, DiCarlo cited a Massachusetts appellate case, which held that an insurer’s lien doesn’t affix to damages for suffering and pain because workers’ compensation doesn’t redress these issues. In Martin’s suit, a the lower court judge approved an almost identical settlement agreement to that rebuffed by the judge in DiCarlo’s case.

Relying on an appellate case cited by DiCarlo, the intermediate court in both cases held that the individuals’ awards for suffering and pain were immune from the insurer’s liens. The Massachusetts high court accepted review.

Massachusetts law provides that when an individual obtains workers’ compensation and then receives damages for an identical injury, the amount obtained in damages shall benefit the workers’ compensation insurer. The statute defines “sum” as “the gross sum received in payment for the injury.” The case therefore hinged on the meaning of this phrase, specifically the word “injury.”

The employees argued that “injury” should be interpreted narrowly to include only injuries for which workers’ compensation benefits are payable, thus removing damages for suffering and pain from an insurer’s reach.  The insurer, by contrast, argued for a broader construction, contending that “injury” included suffering and pain. Under this view, all damages awarded to the employee would be liable to the insurer’s lien.

The court concluded that both legislative intent and statutory construction supported the narrower definition of “injury,” and that therefore damages for suffering and pain should be excluded from the the insurer’s lien. In so holding, the court employed the rule that when the legislature uses the same term multiple times within a section, it should mean the same thing throughout. Applying that rule, the court reasoned that because the first sentence of the statute uses the word “injury” in the “definite sense” (“injury for which [workers’] compensation is payable”), it should therefore be given the same meaning in the phrase at issue. The court also found support for its interpretation in the following: “the amount, if any, to which the insurer is entitled out of [an employee’s recovery] by way of reimbursement.” A statute must be interpreted so that nothing is gratuitous; therefore, the “if any” language must have meaning. The court’s interpretation made this possible in accounting for the rare occurrence where an award is apportioned wholly to suffering and pain, resulting in its exception from the insurer’s lien.

The court also found its construction to be in keeping with the legislative intent behind the statute. While the workers’ compensation statute is meant to protect injured workers, the section at issue additionally aims to reimburse the workers’ compensation insurer and prevent the employee’s double recovery. Here, employees received both workers’ compensation benefits and damages for suffering and pain, but did not receive the “double recovery” prohibited by the statute. The purpose of § 15, the court reasoned, is not to restore to the insurer the entire amount paid to an employee, but instead to prevent an employee from collecting benefits and damages for the same injury. Here, the employees recovered independently for two distinct harms: (1) workers’ compensation benefits from the insurer for lost wages and medical expenses; and (2) damages for suffering and pain from the third-party defendants.

For these reasons, the Massachusetts Supreme Court reversed and remanded the judgment denying the settlement appeal in DiCarlo’s case, and affirmed the judgment approving the settlement in Martin’s case.

If you have been injured by another’s negligence, you may face significant medical bills and time off work, and you may need the assistance of a personal injury lawyer to redress your injuries. At the Neumann Law Group, our personal injury attorneys provide trustworthy legal representation to accident victims all over the state of Massachusetts. Contact us toll-free at 800-525-NEUMANN or use our online form to set up a free consultation.

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