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Travelers Insurance Co. v. Henry6/24/2005
ue here should be considered a "third-party recovery" subject to its first-dollar reimbursement right, and not a "first-party recovery" to which its right to reimbursement attaches only to prevent a double recovery. In support of this assertion, Travelers relies on Travelers Cos., 164 Vt. at 372-73, 670 A.2d at 829, and Colwell v. Allstate Ins. Co., 2003 VT 5, 25-26, 175 Vt. 61, 819 A.2d 727.
14. We reject this argument because it disregards the plain language of the statute. The Legislature amended the statute to specifically exclude "first party insurance payments or benefits" from the carrier's right to first-dollar reimbursement. The UIM proceeds at issue here clearly fall within this category. Henry has a first-party claim as a covered insured under the automobile policy purchased by his employer. See, e.g., Reese v. State Farm Mut. Auto. Ins. Co., 403 A.2d 1229, 1231-32 (Md. 1979) (explaining that uninsured motorist coverage reflects the defendant-insurer's direct promise to pay the insured-plaintiff under certain conditions). As the Reese court explained, " ecause it is a promise by the insurer to pay its own insured, rather than a promise to its insured to pay some third party, the uninsured motorist coverage is in insurance parlance 'first party coverage' like collision, comprehensive, medical payments or personal injury protection, and not 'third party coverage' such as personal injury or property damage liability insurance." Id. As an insured under his employer's policy, Henry has a contractual right to receive benefits directly from his employer's insurer. It is Henry's direct right to claim UIM benefits, as an insured under the employer-purchased policy, that confers first-party status to him respecting such benefits. It is precisely this contractual relationship to UIM proceeds that the amended legislation addresses.
15. Neither Travelers Cos. nor Colwell support Travelers' assertion that Henry's UIM recovery should not be considered a "first party payment or benefit" under § 624(e). Our decision in Travelers Cos., which held that UIM proceeds recovered under an employer-purchased liability policy fell within the reimbursement statute, preceded the Legislature's amendment of § 624(e), and it offers little support for Travelers' argument here. Colwell is equally unhelpful. In that case, we considered whether a self-insured employer could be considered a "third party" subject to UIM liability under 21 V.S.A. § 624(a). 2003 VT 5, 25. We applied the dual capacity doctrine and held that the employer was responsible for paying both workers' compensation benefits and UIM benefits to the injured employee. Our recognition that an employer can be a third party under the statute does not support Travelers' assertion that an employee's claim against his employer's UIM policy must be characterized as a "third-party claim," and his recovery of proceeds from that policy must therefore be a "third-party recovery" to which Travelers' first-dollar reimbursement right attaches. This argument ignores the insurance contract that is the source of Traveler's obligation as well as the plain language of the amended statute. While the amount and scope of Henry's recovery may be characterized as a third-party recovery because it is defined by the tortfeasor's liability for Henry's damages, Henry's relationship by contract to the UIM insurer defines a first-party right. The UIM proceeds that Henry recovers under his employer's policy are plainly "first party benefits or payments" under the ordinary meaning of these terms. See Brown v. Roadway Express, Inc., 169 Vt. 633, 634, 740 A.2d 352, 354 (1999) (mem.) ("We enforce the plain, ordinary meaning of language used by the Legislature.").
16.
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