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Lane v. Plymouth Restaurant Group12/4/2003
Plymouth
October 7, 2003
Workers' Compensation Act, Settlement agreement, Action against third person. Statute, Construction.
General Laws c. 152, § 15, requires a hearing and court approval of any settlement of a third-party tort action in which a workers' compensation insurer has a lien. In this case, we are asked to decide whether, at such a hearing, a judge must allow a workers' compensation insurer to present evidence regarding the fair allocation of settlement proceeds among the insurance beneficiaries. A Superior Court judge approved the settlement after denying Managed Comp Insurance Company an opportunity to cross-examine the plaintiffs and present evidence regarding the allocation in the settlement petition. Managed Comp appealed from the judge's decision, and we transferred the case to this court on our own motion. We conclude that the judge erred. We vacate and remand the case to the Superior Court for further proceedings.
The facts underlying the claim are not in dispute. Delores Lane (Delores), a visiting nurse, was killed by a driver operating while under the influence of alcohol in an automobile accident as she was leaving a client's home. Her husband, Eugene T. Lane (Lane), received $81,335 in death benefits and continues to receive $316.62 weekly from Managed Comp, Delores's workers' compensation insurer. Lane, as executor of Delores's estate, brought a civil action for wrongful death against the driver, Robert B. Senior, and the bar who served him, Plymouth Restaurant Group, doing business as Handlebar Harry's. More than four years after filing the wrongful death action and on the day trial was set to begin (after three prior trial dates), Lane amended his complaint, adding his four sons as plaintiffs. The amended complaint also included two counts of negligent infliction of emotional distress for each of the now five plaintiffs.
Two months later, the parties agreed to settle the lawsuit for $237,500 and submitted a proposed settlement for court approval pursuant to G. L. c. 152, § 15. The settlement petition divided the proceeds equally among the five plaintiffs, twenty per cent each. Each plaintiff's portion was equally allocated between the wrongful death and the negligent infliction of emotional distress claims. According to the parties, this apportionment of the proceeds made only ten per cent of the total settlement amount, $14,904.90, representing Lane's damages for wrongful death, available to reimburse Managed Comp. (The damages allocated to the four sons and the damages attributable to Lane's emotional distress claim were not subject to the insurer's lien.) Managed Comp opposed the settlement and claimed that the allocation was an attempt to defeat its lien. (The sum of $14,904.90 was less than eighteen per cent of the lien.)
At the settlement hearing, Lane testified that the allocation was fair because he and each of his sons suffered equally from Delores's death. Managed Comp requested to cross-examine Lane and to question his sons and proffered the type of questions it sought to pose Lane. However, the judge did not allow Managed Comp to cross-examine Lane or to present other evidence. The judge stated that, given the small amount of proceeds available, each plaintiff would be receiving only a fraction of the actual loss suffered. The judge found that the settlement allocation was fair and approved the settlement.
Managed Comp claims that the judge's approval of the settlement violated G. L. c. 152, § 15, because it was denied the opportunity to cross-examine Lane and to present evidence regarding the fairness of the settlement allocation. We agree that the judge erred in this regard.
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