PACIFIC INSURANCE COMPANY, LTD, A WRITING COMPANY et al. v. CHAMPION STEEL, LLC, et al., SC 19402/19403

Judicial District of Hartford

 Insurance; Subrogation; Whether Workers’ Compensation Insurance Carrier has Standing to Bring Common-Law Equitable Subrogation Action Against Third Party Tortfeasor to Recover Workers' Compensation Benefits Paid to Employee.  Pacific Insurance Company (Pacific) is the workers' compensation insurance carrier for employer Connecticut Reliable Welding (Reliable).  Pacific brought this action sounding in equitable subrogation to recover workers’ compensation benefits paid to a Reliable employee for injuries sustained at work.  Pacific alleged that the injuries were caused by the negligence of the defendants, Champion Steel, Shepard Steel, and Dimeo Construction Company, and that it was subrogated to the rights of its insured under the terms of the workers' compensation insurance policy.  The defendants moved to dismiss the action, claiming that Pacific lacked standing to sue because it is not an employer and because General Statutes § 31-293 provides the exclusive right of recovery for employers and employees against third party tortfeasors for workplace injuries.  Pacific responded by filing a motion to substitute pursuant to General Statutes § 52-109, claiming that the action had mistakenly been commenced in the name of the wrong plaintiff and seeking that Reliable be substituted as plaintiff.  Reliable filed a motion to intervene and an intervening complaint pursuant to § 31-293.  The trial court denied the motion to substitute on finding that the action was not brought in the name of the wrong person by mistake and that the proposed substitution was not necessary for the determination of the real matter in dispute, as required by § 52-109.  The court explained that Reliable was not the real party in interest with standing to pursue a common-law equitable subrogation claim because its exclusive remedy as an employer was under § 31-293.  The trial court then granted the motion to dismiss, finding that it lacked subject matter jurisdiction over the action because neither Pacific nor Reliable had standing to assert a common-law equitable subrogation claim against a third party tortfeasor in the workers' compensation context.  The trial court found that, while Connecticut has recognized the viability of common-law equitable subrogation claims in the context of uninsured motorist coverage, there was no authority permitting an insurer to seek equitable subrogation from a third party tortfeasor for workers' compensation benefits paid to its insured outside the scheme set out in § 31-293.  The court stated that it would not expand an insurer’s right of common-law subrogation to permit an insurer to assume an employer’s § 31-293 right to recover from third party tortfeasors because such an expansion would impermissibly modify the comprehensive statutory scheme that governs workers’ compensation.  The trial court then dismissed Reliable’s motion to intervene was moot.  These are Pacific’s and Reliable’s appeals.  Pacific claims that the trial court erred in ruling that it lacked standing to assert its equitable subrogation claim, that the workers’ compensation act does not abrogate an insurer’s common-law right to equitable subrogation, and that, if it cannot seek common-law equitable subrogation, it should be permitted to amend its complaint to assert statutory subrogation claims under § 31-293.  Reliable claims that the trial court wrongly determined that it did not have standing and that, if Pacific cannot bring its subrogation claim in its own name, Reliable should be substituted as plaintiff.  Finally, Reliable claims that the court wrongly dismissed its motion to intervene and thereby denied it its § 31-293 right to intervene and recover from the third party tortfeasors.