Dodge v. Precision Construction Products, Inc.

Dodge v. Precision Construction Products, Inc. (2001-525); 175 Vt. 101; 
820 A.2d 207

2003 VT 11

[Filed 14-Feb-2003]


       NOTICE:  This opinion is subject to motions for reargument under
  V.R.A.P. 40 as well as formal revision before publication in the Vermont
  Reports.  Readers are requested to notify the Reporter of Decisions,
  Vermont Supreme Court, 109 State Street, Montpelier, Vermont 05609-0801 of
  any errors in order that corrections may be made before this opinion goes
  to press.


                                 2003 VT 11

                                No. 2001-525


  Harold Dodge	                                 Supreme Court

                                                 On Appeal from
       v.	                                 Commissioner of Labor and 
                                                 Industry

  Precision Construction Products, Inc.	         October Term, 2002


  R. Tasha Wallis, Commissioner

  Karl C. Anderson of Anderson & Eaton, P.C., Rutland, for
    Plaintiff-Appellee.

  Eric A. Johnson and Nicole Reuschel-Vincent of McCormick, Fitzpatrick,
    Kasper & Burchard, P.C., Burlington, for Defendant-Appellant.
                     

  PRESENT:  Amestoy, C.J., Dooley, Morse,(FN1)  Johnson and Skoglund, JJ.

        
       ¶  1.  DOOLEY, J.   The main issue raised by this appeal is whether
  an action brought under the Vermont Workers' Compensation Act, 21 V.S.A. §§
  601-710, that is awaiting a formal hearing, survives the death of the
  claimant who had no dependents and whose death was unrelated to work. 
  Precision Construction Products, Inc. (Precision) appeals from a decision
  of the Commissioner of the Department of Labor and Industry (commissioner)
  granting a motion to substitute parties made by the co-administrators of
  the estate of claimant Harold Dodge, Jr. (administrators) and denying
  Precision's motion to dismiss.  Precision argues that claimant's workers'
  compensation claim does not survive his death.  We agree with the
  Commissioner that the claim survives, and affirm the denial of the motion
  to dismiss.

       ¶  2.  Claimant was employed by Precision from April 4, 1995, until he
  was terminated for performance issues on or about September 19, 2000.  In
  October 2000, he filed a workers' compensation claim for an alleged
  work-related injury that occurred on or before September 1, 2000.  Hartford
  Insurance Company, Precision's workers' compensation insurer, denied the
  claim on the ground that claimant had not alleged any injuries prior to
  being terminated.  Claimant appealed the denial, see 21 V.S.A. § 663, and
  requested interim benefits pursuant to 21 V.S.A. § 662(b).  The request for
  interim benefits, and a later request for reconsideration, were denied.

       ¶  3.  On April 29, 2001, while the workers' compensation claim
  awaited hearing pursuant to § 663, claimant died from causes unrelated to
  his alleged work-related injury. (FN2)  At the time of his death, claimant
  was not married and was without children or other dependents.  The
  administrators of claimant's estate moved pursuant to V.R.C.P. 25(a)(1) to
  substitute as claimants in the workers' compensation proceeding before the
  commissioner.  Precision opposed the motion and moved to dismiss the claim,
  arguing that it did not survive claimant's death.  The commissioner denied
  Precision's motion to dismiss and granted the administrators' motion to
  substitute parties.  Precision appeals these decisions. (FN3)

       ¶  4.  The precise issue on appeal, as expressed by the commissioner
  in her certified question to this Court, is as follows: "Does the contested
  workers' compensation action survive the death of the claimant who had no
  dependants and whose death was unrelated to work?"  Precision argues that
  claimant's claim is abated, and thus the administrators' claim for
  substitution fails, because neither the Vermont's Workers' Compensation Act
  (the "Act"), nor the general survival statutes, provide for the survival of
  a claim when a claimant with no dependents dies of nonwork-related causes
  prior to the adjudication of his claim.  We conclude that the Act does
  provide for the survival of the claim, in part, and that the remainder
  survives under the general survival statute, 14 V.S.A. § 1451, because it
  has vested.
   
       ¶  5.  The Vermont Rules of Civil Procedure apply to contested
  workers' compensation proceedings before the commissioner.  See Vermont
  Workers Compensation Rule 7.100 (2001).  Under V.R.C.P. 25(a)(1), "[i]f a
  party dies and the claim is not thereby extinguished, the court may order
  substitution of the proper parties."  Thus, V.R.C.P. 25(a)(1) has two
  requirements: (1) the claim must survive the death of the party, and (2)
  the party sought to be substituted must be a proper party.  State v.
  Therrien, 161 Vt. 26, 29, 633 A.2d 272, 274 (1993).  The administrators, as
  claimant's personal representatives, are the proper parties.  See 14 V.S.A.
  § 1401 (administrator may prosecute "in the right of the deceased" actions
  that survive).  The only remaining question, therefore, is whether the
  particular workers' compensation claim in the present case survives the
  death of claimant.

       ¶  6.  It is important at the outset to break down the elements of a
  workers' compensation claim.  If the claim goes to hearing and is
  successful, it typically contains two major parts: (1) retroactive
  compensation back to the statutory commencement date, see 21 V.S.A. §§ 642
  (total disability compensation after three days of disability from the date
  of the accident), 646 (partial disability compensation beginning on the
  eighth day of disability), 664 (commissioner's award specifies commencement
  date and includes interest on past due amount); and (2) prospective
  compensation.  Although the administrators have not appeared here, their
  claim below was exclusively for compensation from the commencement of the
  loss on September 19, 2000 to claimant's death on April 29, 2001.  They
  argued that this retroactive compensation should go to claimant's estate.
   
       ¶  7.  Precision's first argument is based on the fact that the
  Vermont Workers' Compensation Act contains a specific survival statute
  applicable where the claimant dies from causes other than the workplace
  accident.  See 21 V.S.A. § 639.  Precision argues that this specific
  survival statute does not apply because the claimant was not found by the
  commissioner to be entitled to compensation before he died, and, in any
  event, he left no dependents.  Because the statute does not apply,
  Precision argues, the Legislature must have intended that the claimant's
  claim should not survive his death.  Although Precision raises two grounds
  why the statute does not apply, the second - that the claimant had no
  dependents - goes only to the amount of benefits that the statute provides
  and does not, therefore, support the motion to dismiss.  Thus, we need
  consider only its first ground - that the statute does not allow an
  unadjudicated claim to survive.


       ¶  8.  We start with the wording of the statute:

    § 639. -Death, payment to dependents

         In cases of the death of a person from any cause other than
    the accident during the period of payments for disability or for
    the permanent injury, the remaining payments for disability then
    due or for the permanent injury shall be made to the person's
    dependents according to the provisions of sections 635 and 636 of
    this title, or if there are none, the remaining amount due, but
    not exceeding $5,500.00 for burial and funeral expenses and
    expenses for out-of-state transportation of the decedent to the
    place of burial not to exceed $1,000.00, shall be paid in a lump
    sum to the proper person.

  Precision bases its argument against survivability on specific words in the
  statute - that the death of the worker must occur "during the period of
  payments" and the statute specifies how the "remaining amount due" is to be
  distributed.  Precision argues that in the absence of a preexisting
  determination of entitlement for compensation there were no "payments" or
  "remaining amount due" on the day claimant died, and the statute does not
  apply.  We find this an overly-narrow construction of the statute,
  particularly since we must construe it liberally in favor of coverage.  See
  Grather v. Gables Inn, Ltd., 170 Vt. 377, 383, 751 A.2d 762, 767 (2000). 
  As we held in Laird v. State Highway Dep't, 112 Vt. 67, 80, 20 A.2d 555,
  562 (1941), "[t]he employee's rights are based entirely on the injury and
  spring into being as soon as it is received."  Precision's argument
  confuses the employee's right to payment with the adjudication of that
  right.
        
       ¶  9.  We are aided in our conclusion by decisions from other states. 
  The majority of courts, in construing statutes like § 639, have concluded
  that the rights of dependents or the estate do not abate if the claimant
  dies before the worker's compensation claim is adjudicated.  See generally
  4 A. Larson, Larson's Workers' Compensation Law § 89.05, at 89-5 (2002);
  see Ala. Dry Dock v. Dir., Office of Workers' Comp., 804 F.2d 1558, 1561
  (11th Cir. 1986); Reed v. Indus. Comm'n, 454 P.2d 157, 162 (Ariz. 1969);
  Estate of Huey v. J.C. Trucking, Inc., 837 P.2d 1218, 1221-22 (Colo. 1992);
  Estate of Peterson v. J.R. Simplot Co., 358 P.2d 587, 589 (Idaho 1961);
  State Dep't of Motor Vehicles v. Richardson, 197 A.2d 428, 431 (Md. 1964);
  Cureton v. Joma Plumbing & Heating Co., 184 A.2d 644, 647-48 (N.J. 1962);
  Powell v. Dep't of Labor & Indus., 485 P.2d 990, 995 (Wash. 1971).

       ¶  10.  Three decisions are particularly instructive.  The first is
  Cureton v. Joma Plumbing & Heating Co., a factually similar New Jersey
  Supreme Court case decided under a virtually identical New Jersey statute. 
  The court addressed the argument that there must be a preexisting
  adjudication of eligibility for compensation prior to the claimant's death
  as follows:

         The fact that the workman had neither received the
    compensation payments to which he was entitled during his
    lifetime, nor even had an award entered in his favor, does not
    alter this result.  The law regards done what ought to be done,
    and will not permit those who are obligated and should have paid
    the compensation to obtain advantage of the fortuitous
    circumstances of the workman's death.  Any other result would
    permit the employer or his insurance carrier to gain an undeserved
    windfall.  Moreover, as stated [in an earlier opinion]: "Such a
    rule would put a premium upon delay in discharging the statutory
    obligation . . . ."

  184 A.2d  at 649-50 (citations omitted) (quoting King v. W. Elec. Co., 5 A.2d 490, 494 (N.J. Sup. Ct. 1939)); see also Warrick v. Cheatham County
  Highway Dep't, 60 S.W.3d 815, 819 (Tenn. 2001) (elaborating on policy
  reasons in support of rule that does not require a prior adjudication of
  eligibility).
   
       ¶  11.  The second is State Dep't of Motor Vehicles v. Richardson,
  decided under a statute similar to 21 V.S.A. § 639.  The Maryland statute
  used the terms "right to any compensation payable" and "unpaid," and the
  employer made the same argument that it required a prior adjudication of
  eligibility.  The Maryland Court of Appeals rejected this construction,
  first endorsing the reasoning of Cureton and noting that "[t]he wording of
  our statute does not support an inference that it was intended to make the
  survival of benefits depend upon the condition of the Commission's hearing
  docket, or its promptness in concluding cases." 197 A.2d  at 431.  It went
  on to deal specifically with the statutory language:


    It is significant that the Legislature did not include a positive
    provision terminating the right to compensation if an award is not
    made before death.  Nor did the Legislature say "the right to any
    compensation awarded," but said "payable."  We believe that
    "payable" is not limited to mean payable because of an award, but
    instead means legally payable under the Act due to the occurrence
    of a compensable injury resulting in permanent partial disability. 
    As soon as an employee sustains an injury arising out of and in
    the course of his employment for which our statute authorizes
    compensation, such is "payable" within the meaning of Sec.
    36(4)(c).  Any other construction would be harsh and unreasonable
    . . . .

  Id.

       ¶  12.  The third is Estate of Huey v. J.C. Trucking, Inc., also
  decided under a similar statute providing that, upon the death of the
  employee, the "accrued and unpaid portion of the compensation" goes to
  dependents.  The Colorado Supreme Court reasoned that accrued meant to come
  into existence as an enforceable claim or vest as a right, and the statute
  provided that the right to compensation came into existence when the
  statutory eligibility requirements were met.  837 P.2d  at 1221.  The court
  noted: "[t]here is no language in ... [the statute] which indicates that
  there must be an award entered before the right to compensation under the
  Act comes into existence."  Id.
   
       ¶  13.  We agree with the reasoning of Cureton, Richardson, and
  Estate of Huey and hold that, to the extent that the administrators may
  have a claim to compensation under § 639, such a claim survives the death
  of the claimant despite the fact that the claimant's claim for compensation
  had not been adjudicated by the commissioner prior to the claimant's death.

       ¶  14.  Our resolution of the above question, however, does not fully
  resolve the matter before us.  The administrators sought the compensation
  amounts the claimant would have received had he been found eligible prior
  to his death, and § 639 does not necessarily address that compensation. 
  Thus we must decide whether § 639 provides for all of the compensation the
  administrators can receive if they prove the claimant was eligible, and, if
  not, whether a claim for other compensation, such as that sought by the
  administrators here, survives the death of the claimant.  The commissioner
  has decided at least part of the underlying issues, and Precision has
  briefed them here.

       ¶  15.  We turn again to § 639.  Because claimant left no dependents,
  § 639 caps "the remaining amount due" to the administrators at $5,500 plus
  $1,000 if claimant was buried out of state.  If "the remaining amount due"
  includes the compensation that claimant would have received had he been
  found eligible prior to his death, the administrators can recover only so
  much of that compensation as falls within the $6,500 cap after burial
  expenses are paid.  We reject that interpretation because it is
  inconsistent with how the statute treats dependents in cases where they
  exist.
   
       ¶  16.  In cases where the claimant was disabled or had a permanent
  injury, § 639 treats dependents as if the employee had died from a
  compensable injury.  That effect is apparent from its requirement that
  compensation be paid according to "sections 635 and 636 of this title," the
  sections that set the periods of compensation for dependents of an employee
  who dies from a compensable injury.  See 21 V.S.A. §§ 635, 636. 
  Originally, if there was a gap between the injury and the employee's death,
  and the employee received compensation for the injury during that period,
  that compensation was deducted from the payments available to the
  dependents.  See 21 V.S.A. § 638 (repealed).  That offset provision was
  repealed by 1977, No. 182 (Adj. Sess.), § 22, and, as a result, the
  dependents' payments reflect only the future compensation that would have
  been paid to the employee if he or she had not died.  In effect, they
  replace the employee's income that would have supported the dependents had
  the employee not died.

       ¶  17.  Applying the statutory meaning to cases where there are no
  dependents, we conclude that the effect is the same.  That is, "the
  remaining amount due" refers to the future payments that claimant would
  have received had he not died, and not to the payments that would have been
  made to him during his life had he been found eligible earlier.  Thus, the
  statutory payments to the administrators under § 639 are for future
  compensation that would have gone to the claimant if he had been found
  eligible and not died, and not for the accrued compensation between the
  date of his eligibility and the date of payment.

       ¶  18.  This is the construction of the virtually-identical New Jersey
  statute reached by the court in Cureton v. Joma Plumbing & Heating Co.  In
  Cureton, the lower court held that the claimant's personal representative
  could obtain compensation, on proof that the claimant was eligible, but the
  total amount would be limited to the statutory cap applicable where the
  claimant died from nonwork-related causes, then $400 in New Jersey.  After
  examining the history of the statute, the New Jersey Supreme Court
  disagreed, holding:
          
         We believe the Appellate Division failed to appreciate that
    this amendment to the original Workmen's Compensation Act was not
    intended to affect the right of the workman himself, or his
    personal representative, to compensation payments which accrued
    and should have been paid to him while he was living.  Rather, it
    was intended to create rights in the dependents to take effect
    upon the death of the workman, which they did not have under the
    original act.

         The language of the amendment supports this conclusion.  The
    reference to the workman's death "during the period of payments
    for permanent injury" implicitly presumes that the workman had
    been receiving all that was due him up to the time of his death. 
    On this premise, it follows that "remaining payments" and
    "remaining amount due" were intended to refer to that part of the
    award accruing after the workman's death.

  184 A.2d  at 649.  We find Cureton persuasive.

       ¶  19.  Having determined that § 639 does not give the administrators
  the compensation for the period between the date of claimant's injury, if
  any, and the date of his death, we must decide whether the administrators
  are otherwise entitled to that compensation if they prove the claimant's
  eligibility.  Claimant would, of course, have been entitled to receive
  these retroactive benefits if he had remained alive and prevailed in
  showing eligibility.  The administrators argued, and the commissioner
  agreed, that because of claimant's death, those payments should go to the
  estate.

       ¶  20.  Precision responds that the claim for this compensation abated
  with claimant's death because it is recognized neither by the specific
  survival statute, § 639, nor by the general survival statutes, 14 V.S.A. §§
  1451-53.  We do not agree.
   
       ¶  21.  Under 14 V.S.A. § 1451, the general survival statute, actions
  that "survive by common law" survive under the statute and "may be
  commenced and prosecuted by the executor or administrator."  At common law,
  actions based on contract or property rights, for which injuries to the
  person were merely incidental, survived.  See Layne v. Int'l Bhd. of Elec.
  Workers, 418 F. Supp. 964, 965-66 (D.S.C. 1976); Creighton v. Pope County,
  54 N.E.2d 543, 547 (Ill. 1944).  Based on this principal in the workers'
  compensation context, as Professor Larson states, "[a]ccrued but unpaid
  installments are, of course, an asset of the estate, like any other debt." 
  4 A. Larson, Larson's Workers' Compensation Law, §§ 89.02 (2002) (citing
  cases).

       ¶  22.  As with the other issues in this case, we find that this issue
  was resolved persuasively in Cureton v. Joma Plumbing & Heating Co.  The
  New Jersey Supreme Court reasoned:

         The workman's right to the compensation benefits which he has
    "earned" come from his employment contract, whose terms include
    the provisions of the Workmen's Compensation Act. . . . When he
    has sustained a work-connected injury within the terms of that
    contract and the waiting period has passed, he immediately becomes
    entitled to compensation, subject only to determination as to
    amount and duration. . . .

         . . . In . . . case [of death], the right to the payments
    which would have accrued after the workman's death dies with him
    in the absence of a specific statute preserving such a right. . .
    .  However, a claim for compensation payments which accrued but
    were not paid at the time of the workman's death is a vested right
    which he has earned, and therefore it becomes an asset of his
    estate.


       184 A.2d at 647-48; see also Parker v. Indus. Comm'n, 50 P.2d 278,
  279-80 (Utah 1935) (reviewing cases and holding that accrued payments are
  earned and vested and part of employee's estate).
   
       ¶  23.  Our characterization of workers' compensation benefits in
  Vermont is consistent with the Cureton analysis.  A worker's right to
  compensation benefits stems from his employment contract: once employment
  begins, the Act becomes a part of the contract.  Morrisseau v. Legac, 123
  Vt. 70, 76, 181 A.2d 53, 58 (1962); see also Hartman v. Ouellette Plumbing
  & Heating Corp., 146 Vt. 443, 445, 507 A.2d 952, 953 (1985) ("any
  proceeding for worker's compensation benefits is an action in contract"). 
  Under this contract, as construed to include the provisions of the Act, a
  worker is entitled to compensation if he is injured by an accident in the
  course of his employment.  21 V.S.A. § 618.  The purpose of this
  compensation is to make the employee injured on the job whole by replacing
  lost earnings.  Hodgeman v. Jard Co., 157 Vt. 461, 464, 599 A.2d 1371, 1373
  (1991).

       ¶  24.  We also disagree with Precision's related argument that
  because the Act specifically makes workers' compensation claims
  unassignable, see 21 V.S.A. § 681, the claims cannot survive the death of
  claimant.  The statute makes it clear that the non-assignability provision
  is primarily designed to protect the claims against creditors of the
  claimant.  See 21 V.S.A. § 681 ("Claims for compensation under the
  provisions of this chapter shall not be assignable.  Compensation and
  claims therefor shall be exempt from all claims of creditors . . ."); see
  also Cureton, 184 A.2d  at 648 ("statutory prohibition against assignments
  was intended solely for the protection of beneficiaries").  Although we
  recognize that claims that are not assignable are generally not survivable,
  this is not always the case.  Thus, where compensation claims are
  nonassignable to protect beneficiaries, assignability does not determine
  survivability.  See Heuchert v. State Indus. Acc. Comm'n, 121 P.2d 453, 453
  (Or. 1942); Employers' Mut. Liab. Ins. Co. v. Empire Nat'l Bank & Trust
  Co., 256 N.W. 663, 665 (Minn. 1934) ("where a statute for some special
  purpose forbids assignment, survivability of the right is not thereby
  affected"); Monson v. Battelle, 170 P. 801, 802 (Kan. 1918) (same).
   
       ¶  25.  Finally, we address Precision's argument that any decision
  finding that the claim at issue survives should be applied only
  prospectively.  Judicial decisions, in general, are applied
  retrospectively.  Marsicovetere v . Dep't of Motor Vehicles, 172 Vt. 562,
  565, 772 A.2d 540, 543 (2001) (mem.).  "In civil cases, we will apply a
  ruling prospectively only if (1) we overrule past precedent or decide an
  issue of first impression whose resolution was not clearly foreshadowed,
  and (2) retroactive application would be inequitable."  Vt. Accident Ins.
  Co. v. Howland, 160 Vt. 611, 612, 648 A.2d 819, 820 (1993) (mem.) (internal
  quotations omitted).  Precision argues that allowing the claim to survive
  in this case would be inequitable because "the law has long been
  established that claims such as this do not survive."  As our analysis
  discloses, there is no established law that claims like that before us do
  not survive.  Indeed, to the extent that the law was established from the
  decisions in other jurisdictions, it was directly opposed to Precision's
  position.  It is not inequitable to apply the law announced in this
  decision to Precision.

       ¶  26.  In summary, we hold that the commissioner properly denied the
  motion to dismiss.  The administrators may proceed and attempt to prove
  that the claimant was eligible for workers' compensation payments based on
  the alleged injury on or before September 1, 2000.  If the administrators
  establish eligibility, they are entitled to the payments claimant would
  have received from the date of eligibility until the date of his death, as
  well as payments under 21 V.S.A. § 639.

       Affirmed and remanded for proceedings consistent with this opinion.


                                       FOR THE COURT:


                                       _______________________________________
                                       Associate Justice



------------------------------------------------------------------------------
                                  Footnotes


FN1.  Justice Morse sat for oral argument but did not participate in this
  decision.

FN2.  The administrators argued to the commissioner that the examination of
  claimant's cause of death was still pending since the final results of the
  autopsy had yet to be received.  The commissioner, however, found that the
  administrators had offered no evidence to refute Precision's position that
  the cause of death was pneumonia.  This Court will not overturn factual
  findings of the commissioner unless they have no evidentiary support in the
  record.  Grather v. Gables Inn, Ltd., 170 Vt. 377, 383, 751 A.2d 762, 767
  (2000).  In any event, since the finding governs only with respect to the
  motion to dismiss, and we are affirming the denial of that motion, the
  administrators are free to offer evidence of a different cause of death on
  remand.

FN3.  Precision filed both a notice of appeal and a request for an
  interlocutory appeal.  The commissioner did not address the interlocutory
  appeal request, but did certify a question to this Court pursuant to 21
  V.S.A. § 672.  Because the administrators have not appeared in this Court,
  the briefing has not addressed whether we have jurisdiction to review the
  denial of a motion to dismiss, at least without granting permission for an
  interlocutory appeal.  Thus, we do not decide the jurisdictional issue.  To
  the extent the case should have proceeded to this Court as an interlocutory
  appeal, we grant permission for such an appeal