Argument Recap: Graham v. Olson Woods Associates, Inc., SC 19626

The Supreme Court heard oral argument last week in Graham v. Olson Woods Associates, Inc., SC 19626.  The question before the court is whether an insurer that is dismissed from a case after a formal hearing on an unopposed motion to dismiss may be cited back into the case at a later date. This case has implications to employers, insurers and claimants alike.  A decision permitting the insurer to be cited back (effectively holding that a motion to dismiss is never final) means that employers and insurers will be forced to incur legal fees for attorney appearances at all hearings (informal and formal) through the end of the case (whatever and whenever that is) regardless of whether there is evidence to implicate the employer/insurer.  On the other hand, a decision in the insurer’s favor would appear to elevate form over substance, where there may be no actual prejudice to the insurer in reversing the initial ruling.

The case is further complicated by its context. This particular claim arises from the “mystifying place” called the asbestos docket: the Eighth District of the Workers’ Compensation Commission.  Asbestos claims often stay on the docket for years before they ever reach a conclusion and therefore, the cost to employers/insurers is not insignificant.

The underlying claim concerned the appellant’s liability under Conn. Gen. Stat. § 31-299(b).  That statute provides that for conditions caused by an occupational disease, the employer/insurer for the last period of exposure is responsible for paying the workers’ compensation benefits.  The lead employer/insurer may later obtain contribution from prior employers or insurers for their proportionate shares of the compensation.

The appellant’s motion to dismiss was not contested at a January 26, 2011 formal hearing by any party, including claimant’s counsel who stated on the record that he had no objection to the motion.  The trial Commissioner granted the motion five months later in a May 25, 2011 Finding and Decision, dismissing the appellant from the litigation.

A party may appeal decision a within 20 days after entry of the award If no appeal is taken within that time frame, “such award shall be final and may be enforced in the same manner as a judgment of the Superior Court.” No party appealed the trial Commissioner’s Finding and Decision.

Approximately two years after the Finding and Decision, the claimant moved to cite the appellant back into the case as the lead employer/insurer, based upon evidence allegedly suggesting that the appellant was the last carrier on the risk during the last period of exposure.  The trial Commissioner granted the claimant’s motion and the CRB affirmed.

The appellant argues that the dismissal and failure to appeal renders its release from the case as a final judgment. The appellees’ principal arguments are that (1) there have been factual and legal changes that warranted reinstating CIGA as a party to the litigation; and (2) the decision is not a final judgment.

At oral argument, the Court did not appear to be receptive to the appellee’s “change in facts” argument. In responding to Justice McDonald’s inquiry regarding possible prejudice to the appellant, it was noted that all evidence was preserved and produced to the respondents.  It further noted that the possibility of new evidence was “theoretical”.

The Court will need to decide whether to inject some form of order into the process.  The appellant urges the court to hold that such a rule already exists:  Pursuant Conn. Gen. Stat. §31-315, a trial Commissioner may reopen or modify any award when it appears to the Commissioner that changed conditions of fact have arisen which necessitate a change of the award. The appellant argues that even if the Court were to conclude that 31-315 is the proper process by which a party may be cited back in, the court should rule in its favor because “the only thing new here, is somebody changed their mind.”

The final judgment question may turn on the unique informality of workers compensation proceedings. Many of the inquiries from the bench pertained to the remedial and informal nature of these proceedings, citing Conn. Gen. Stat. § 31-298, which provides that no formal pleadings shall be required.  Appellees argue that the trial Commissioner’s decision is not final without a formal evidentiary hearing.  Justice Espinosa noted that no evidence was entered at the formal hearing because the appellees consented to the motion. However, it was noted that it was not the typical course of conduct by practitioners to make such an objection.

It appears to this author that the Court might use this case to bless the use of dispositive motions in the workers compensation arena and hold that (a) failure to object amounts to a waiver; and (b) the decision is final unless it can be modified for one of the reasons set forth in Conn. Gen. Stat. §31-315.  It is clear from prior cases that the Court is not gun shy about setting standards that may have a preclusive effect.

We will continue to monitor this case and provide updates on any developments.