Workers' compensation insurers paying out benefits to employeeson an employer's behalf may sue the third party responsible for theinjuries in order to recover the loss, according to a ConnecticutSupreme Court ruling.

The ruling overturns a trial court decision that tossed alawsuit brought by Pacific Insurance Co., which sought to recovercompensation from those responsible for an employee's injuries.

"In sum, we conclude that, under the common law, an insurer thathas indemnified the loss of an insured under circumstances in whicha third party is legally liable for such loss, has the right to besubrogated to the insured's rights against the liable third party,"wrote Justice Peter Zarella in the unanimous ruling.

The ruling did not determine that Pacific was entitled torepayment, just that the company deserves the opportunity to bringtheir claim in court in an effort to be reimbursed for theirloss.

According to court documents, James Doughty worked as a welderfor Connecticut Reliable Welding. On May 17, 2011, Doughty wasworking at a construction site with employees and representativesof defendants Champion Steel, Shepard Steel Co., and the generalcontractor Dimeo Construction Co.

While working on an elevated platform, Doughty fell to theground and sustained severe injuries, which left him permanentlydisabled. Pacific, a subsidiary of The Hartford Financial ServicesGroup, paid workers' compensation benefits to Doughty on thewelding company's behalf.

A question of workplace safety

Pacific then later brought a lawsuit against Champion Steel,Shepard Steel and Dimeo, alleging that they negligently failed toprovide an adequate fall protection system and supplied defectivefall arrest gear to Doughty, and as such sought to recover themoney they paid out to Doughty.

The defendants all filed a motion to dismiss, arguing thatPacific did not have standing because a workers' compensationinsurance carrier cannot bring such a claim under Connecticutstatutes. They argued that it is up to the employer to bring such aclaim and not the insurance companies.

In 2014, Superior Court Judge Peter Wiese agreed with thedefendants and dismissed the case. Pacific then appealed and thestate Supreme Court agreed to take up the case and ultimatelyagreed with the insurer.

Pacific, through its lead attorney, Jonathan Freiman, of Wigginand Dana in New Haven, argued that the state's Workers'Compensation Act does not prevent an insurer's right to seekreimbursement from responsible third parties.

Freiman, who did not respond to an interview request by presstime, said in court documents that the effect of Wiese's ruling wasthat "the tortfeasors walk away scot-free, unjustly enriched by theamount of the benefits that Pacific paid to the employee."

Sylvia Ho, of Farmington, served as lead counsel for thedefendants. Although disappointed with the result, Ho said it wasthe justices' "prerogative" to decide.

Christian Nolan is a reporter for the Connecticut LawTribune. He can be reached at [email protected].