Bellerive v. Grotto, Inc. ( 2021 )

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LAUREL B. BELLERIVE v. THE
GROTTO, INC., ET AL.
(AC 44138)
Cradle, Suarez and Bear, Js.
Syllabus
The defendant employer G Co. appealed to this court from the decision of
the Compensation Review Board, which reversed the decision of the
Workers’ Compensation Commissioner concluding that G Co.’s workers’
compensation insurance policy, issued by the defendant L Co., was still
in effect on March 1, 2016, the date on which the plaintiff sustained a
compensable injury while at work. In September, 2015, L Co. issued G
Co. a workers’ compensation insurance policy. In October, 2015, L Co.
issued a cancellation notice with an effective cancellation date of Novem-
ber 3, 2015, and filed the cancellation notice with the National Council
on Compensation Insurance. In February, 2016, L Co. sent G Co. an
endorsement to the insurance policy. In April, 2016, G Co. was sent a
prorated portion of its previously paid premium. The plaintiff filed a
workers’ compensation claim against G Co. in May, 2016, and L Co.
denied coverage. After a hearing, the commissioner found that coverage
was in place on the date of the plaintiff’s injury and that the cancellation
notice did not comply with certain statutory (§ 31-321) requirements. L
Co. appealed to the board, which reversed the commissioner’s decision.
Held that the board properly determined that the insurance policy was
cancelled effectively on November 3, 2015, and that there was no insur-
ance coverage on the date of the plaintiff’s injury: L Co.’s electronic
notice of the cancellation to NCCI was sufficient to comply with the
requirements that insurance companies notify the chairman of the Work-
ers’ Compensation Commission of cancellations pursuant to statute
(§ 31-248), as § 31-248 authorized the commission to utilize NCCI to
collect notices electronically of policy cancellations and was what the
legislature intended when it amended § 31-248; moreover, the fact that
G Co. may have believed that it still had insurance because L Co. did
not refund the premium until after the date of the plaintiff’s injury and
sent inconsistent letters stating that the policy may be cancelled if it
did not receive certain information, did not support a conclusion that the
coverage under the policy continued notwithstanding the cancellation
notice, as an employer’s belief or understanding as to when coverage
is terminated is irrelevant, and the fact that an endorsement was issued
in February, 2016, was not inherently inconsistent with the termination
of coverage as of November 3, 2015, because coverage remained in effect
for any claims that may arise for injuries occurring prior to November
3, 2015.
Argued April 19—officially released August 10, 2021
Procedural History
Appeal from the decision of the Workers’ Compensa-
tion Commissioner for the Fifth District finding that a
certain insurance policy issued by the defendant Liberty
Mutual Insurance Company provided coverage for the
plaintiff’s compensable injury, brought to the Compen-
sation Review Board, which reversed the commission-
er’s decision, and the named defendant appealed to this
court. Affirmed.
James P. Brennan, for the appellant (named defen-
dant).
Christopher J. Powderly, for the appellee (defendant
Liberty Mutual Insurance Company).
Opinion
BEAR, J. In this workers’ compensation matter, the
defendant employer, The Grotto, Inc. (Grotto), appeals
from the finding and decision of the Compensation
Review Board (board), reversing the decision of the
Workers’ Compensation Commissioner (commis-
sioner), who had determined that Grotto’s workers’
compensation insurance policy, which was issued by
the defendant Liberty Mutual Insurance Company (Lib-
erty), was still in effect on March 1, 2016 (date of loss),
the date on which the plaintiff, Laurel B. Bellerive, an
employee of Grotto, sustained a compensable injury
while at work. On appeal, Grotto claims that (1) Liber-
ty’s notice of cancellation of the policy pursuant to
General Statutes § 31-3481 was ineffective because it
did not meet the requirements of General Statutes § 31-
321,2 (2) the board erred in its narrow reading of Yelunin
v. Royal Ride Transportation, 121 Conn. App. 144, 994
A.2d 305 (2010), by adopting the rule that, ‘‘after the
expiration of the fifteen day period following notice of
cancellation only unequivocal evidence of an intent to
continue or reinstate coverage would be sufficient to
support the commissioner’s conclusion that [Liberty’s]
coverage remained in force on March 1, 2016,’’ (3) the
commissioner concluded properly that he had the
authority to determine common-law issues when they
were incidentally necessary to the resolution of a claim
arising under the Workers’ Compensation Act (act),
General Statutes § 31-275 et seq.,3 and (4) common-
law principles including negligence, misrepresentation,
waiver, and estoppel, support the commissioner’s find-
ing that coverage was in place on the date of loss. We
conclude that the policy was effectively cancelled on
November 3, 2015, and, accordingly, we affirm the deci-
sion of the board.
The following undisputed facts are relevant to our
resolution of this matter. On or about September 15,
2015, Grotto and Liberty entered into a contract for
workers’ compensation insurance (policy 045), which
was scheduled to expire on August 20, 2016. Grotto
paid an estimated premium when the policy was issued.
On October 13, 2015, Liberty issued a cancellation
notice with an effective cancellation date of November
3, 2015, accounting for the fifteen day waiting period
required by § 31-348. Liberty’s stated reason for the
cancellation was Grotto’s failure to provide certain self-
audit materials. That cancellation notice was filed elec-
tronically with the National Council on Compensation
Insurance (NCCI).4 After the November 3, 2015 cancella-
tion date had passed, Liberty continued to send Grotto
letters requesting the audit materials that had been the
basis of the policy cancellation. Some of those letters
indicated that policy 045 ‘‘may’’ be cancelled if the audit
material was not promptly received, but others indi-
cated that policy 045 had been cancelled on November
3, 2015. Additionally, on February 18, 2016, Liberty
issued an endorsement to policy 045, noting that other
than the endorsement changes to policy 045, all other
terms and conditions of the policy remained
unchanged.
On the March 1, 2016 date of loss, the plaintiff suf-
fered a traumatic injury to her right hand that resulted
in the amputation of her index, middle, and ring fingers.
That injury was compensable and arose out of and in
the course of her employment with Grotto. Subsequent
to the claimant’s injury, Grotto forwarded incomplete
audit material to Liberty, which notified Grotto on
March 15, 2016, that the audit materials remained
incomplete. Thereafter, Grotto sent Liberty the rest of
the necessary audit documentation. Grotto was ulti-
mately sent a prorated portion of its previously paid
premium on April 5, 2016.
The plaintiff filed a workers’ compensation claim
against Grotto on May 6, 2016. Liberty denied coverage
for the March 1, 2016 date of loss on the basis of its
NCCI cancellation dated November 3, 2015. Grotto had
no other workers’ compensation insurance. The Second
Injury Fund (fund) was made a party to the claim pursu-
ant to General Statutes § 31-355. The commissioner held
a formal hearing and, by way of a finding and decision
dated May 24, 2019, found that Liberty had coverage in
place on the date of loss. The commissioner subse-
quently granted Grotto’s motion to correct, making an
additional finding that the cancellation notice to NCCI
had not been made in accordance with § 31-321, and
denied Liberty’s motion to correct.
Liberty appealed to the board, which, by way of a
June 10, 2020 decision, reversed the commissioner’s
decision, finding that there was no coverage in place
on the date of loss. Grotto filed a motion for articulation.
The board thereafter issued an articulation of its deci-
sion with an accompanying memorandum of law dated
August 26, 2020. Grotto appealed to this court, but the
fund did not appeal the board’s decision. Additional
facts will be set forth as necessary.
I
Grotto argues that Liberty’s notice of cancellation to
the NCCI pursuant to § 31-348 was ineffective because it
did not meet the requirements of § 31-321. Specifically,
Grotto argues that, although the board, in its memoran-
dum of law in support of its ruling on the motion for
articulation, ‘‘notes lengthy discussions by [the] Work-
ers’ Compensation Commission [commission] about
§ 31-348 . . . it does not state that any ‘rules prescribed
by the chairman’ were adopted. Since the chairman
prescribed no rule to overrule the § 31-321 service
requirements . . . the [board] erred in failing to hold
that the failure to send the notice of cancellation by
certified mail rendered the cancellation ineffective.’’ We
disagree.
‘‘As a threshold matter, we set forth the standard of
review applicable to workers’ compensation appeals.
The principles that govern our standard of review in
workers’ compensation appeals are well established.
The conclusions drawn by [the commissioner] from
the facts found must stand unless they result from an
incorrect application of the law to the subordinate facts
or from an inference illegally or unreasonably drawn
from them. . . . It is well established that [a]lthough
not dispositive, we accord great weight to the construc-
tion given to the workers’ compensation statutes by the
commissioner and [the] board. . . . A state agency is
not entitled, however, to special deference when its
determination of a question of law has not previously
been subject to judicial scrutiny.’’ (Internal quotation
marks omitted.) Yelunin v. Royal Ride Transportation,
supra, 121 Conn. App. 148.
In Yelunin, this court stated that ‘‘[c]ancellation of
a workers’ compensation insurance policy occurs in
accordance with § 31-348. Dengler v. Special Attention
Health Services, Inc., 62 Conn. App. 440, 459, 774 A.2d
992 (2001). Section 31-348 provides in relevant part
that ‘[t]he cancellation of any [workers’ compensation
insurance policy] shall not become effective until fifteen
days after notice of such cancellation has been filed
with the chairman [of the commission].’ The only pre-
condition to effective cancellation contained in § 31-348
is that an insurer provide notification to the chairman
of the . . . commission. Although notification to the
chairman is surely governed by the mandate of § 31-
321, there is no independent requirement within the
workers’ compensation statutory scheme that a work-
ers’ compensation insurer provide notification directly
to an insured that would serve to trigger the mandate
of § 31-321. Indeed, § 31-348 has been interpreted as
protecting employees or anyone examining coverage
records in the commissioner’s office. In that regard, an
employer’s understanding as to when coverage termi-
nated is largely irrelevant . . . . Dengler v. Special
Attention Health Services, Inc., supra, 461.’’ (Emphasis
omitted; internal quotation marks omitted.) Yelunin v.
Royal Ride Transportation, supra, 121 Conn. App. 149.
Because Liberty was not required to notify Grotto
before cancelling its workers’ compensation policy, the
only pertinent issue with respect to the effectiveness
of Liberty’s cancellation is whether Liberty’s electronic
notice to the NCCI pursuant to § 31-348 was sufficient
in light of the requirements of § 31-321. We conclude
that Liberty’s electronic notice to the NCCI was suffi-
cient.
In its memorandum of law in support of its ruling on
Grotto’s motion for articulation, the board provided a
detailed history of No. 90-116 of the 1990 Public Acts
(P.A. 90-116), which amended § 31-348 to address the
possibility of electronic reporting of policy initiation
and cancellation. The board found that it is clear from
the legislative history of P.A. 90-116, which was adopted
unanimously, that the commission may receive ‘‘certain
information from the companies and/or their duly
appointed agents by writing or other means which tech-
nically could mean electronic means, computer or oth-
erwise,’’ and that our legislature had the NCCI in mind
when it referenced ‘‘duly appointed agents’’ in § 31-348.
Indeed, the board noted that ‘‘[a] contract between the
commission and NCCI to ‘facilitate the exercise of its
responsibilities under [§] 31-348’ went into effect Sep-
tember 10, 1990,’’ that ‘‘[s]ection [two], subsection
[four] of this contract directed all insurers to provide
notice of policy coverage and termination required
under § 31-348 to NCCI, effective January 1, 1991, and
that such notice requirements could be met by submis-
sion of a computer tape.’’5
We agree with the board that ‘‘the commission’s long-
standing policy of utilization of NCCI to collect notices
electronically of compensation policy coverage and
cancellations is entirely authorized by statute and,
indeed, what the General Assembly voted unanimously
to have th[e] commission implement.’’ Grotto contends
that the policy cancellation in this case was ineffective
because there is no ‘‘rule prescribed by the chairman,’’
pursuant to § 31-348, that expressly authorizes elec-
tronic submission of policy coverage and termination
notices. We conclude that Grotto’s argument is incon-
sistent with the intended meaning of § 31-348 as demon-
strated by the legislative history set forth by the board.
Accordingly, the board properly determined that policy
045 was cancelled effectively on November 3, 2015, and
that there was no coverage in place on the date of loss.
II
Grotto argues both that the commissioner has
‘‘authority to determine a common-law issue when inci-
dentally necessary to the resolution of a claim arising
under the act,’’ and that common-law principles, includ-
ing negligence, misrepresentation, waiver, and estop-
pel, ‘‘support the commissioner’s finding that policy 045
was in effect on March 1, 2016.’’6 We conclude that
because policy 045 was cancelled effectively prior to
the date of loss, and because ‘‘an employer’s under-
standing as to when coverage terminated is largely irrel-
evant’’; (emphasis omitted; internal quotation marks
omitted) Yelunin v. Royal Ride Transportation, supra,
121 Conn. App. 149; common-law theories cannot sup-
port a finding that coverage was in place on the date
of loss under the facts of this case.7
The board noted in its memorandum of decision that
‘‘[t]he commissioner did not specifically articulate the
basis for his conclusion that the policy remained in
force. He did, however, cite several factors which we
must assume formed the factual basis for his conclu-
sion: (1) that [Liberty] did not return any of the premium
until after the work injury; (2) that [Liberty] issued an
endorsement in February, 2016; and (3) that [Liberty]
sent letters saying the policy ‘may’ be cancelled if
[Grotto] did not provide certain information.’’ We con-
clude that the board determined correctly that none of
those facts supports a finding that coverage remained
in place on the date of loss.
With respect to Liberty’s return of the premium after
the date of loss, the board stated that ‘‘for the failure
to refund the premium to be evidence that Liberty
intended its coverage to continue after November 3,
2015, the delay in making the refund would have to be
inherently inconsistent with the claimed cancellation.
We can find no evidence in the record to suggest that
[Liberty] had an obligation to return the unused portion
of the premium prior to completion of the various
audits.’’ We agree with the board and note that, although
the finding that Liberty did not return any portion of
the premium until after the date of loss could be relevant
to Grotto’s claim that it believed it still had insurance,
‘‘an employer’s understanding as to when coverage ter-
minated is largely irrelevant . . . .’’ (Emphasis omit-
ted; internal quotation marks omitted.) Yelunin v. Royal
Ride Transportation, supra, 121 Conn. App. 149.
With respect to the endorsement to the policy issued
on February 28, 2016, we likewise agree with the board
that, ‘‘[w]hile the receipt of an endorsement from [Lib-
erty] may well have supported the employer’s subjective
belief that the policy was still in force, it could only be
evidence that the policy actually was still in place if
the issuance of such an endorsement was logically or
legally inconsistent with the notion that the policy had
previously been cancelled. Since the cancellation of
this policy did not render it void ab initio, [Liberty’s]
coverage remains in force and effect for any claims that
might arise for injuries occurring prior to November 3,
2015. For the time prior to November 3, 2015, [Liberty]
and [Grotto] still have a contractual relationship, with
ongoing mutual obligations. As such, the mere fact an
endorsement was issued in February, 2016, is not inher-
ently inconsistent with termination of coverage as of
November 3, 2015.’’
Finally, we are not persuaded that the allegedly incon-
sistent letters sent by Liberty in the months following
the notice of cancellation could support a conclusion
that the coverage under the policy actually did continue,
notwithstanding the November cancellation notice.
Yelunin is clear that the employer’s subjective belief
is immaterial, and the record lacks sufficient evidence
that Liberty intended to continue or reinstate coverage
after November 3, 2015.8
The decision of the Compensation Review Board is
affirmed.
In this opinion the other judges concurred.
1
General Statutes § 31-348 provides in relevant part: ‘‘Every insurance
company writing compensation insurance or its duly appointed agent shall
report in writing or by other means to the chairman of the Workers’ Compen-
sation Commission, in accordance with rules prescribed by the chairman,
the name of the person or corporation insured, including the state, the day
on which the policy becomes effective and the date of its expiration, which
report shall be made within fifteen days from the date of the policy. The
cancellation of any policy so written and reported shall not become effective
until fifteen days after notice of such cancellation has been filed with the
chairman.’’
2
General Statutes § 31-321 provides in relevant part: ‘‘Unless otherwise
specifically provided, or unless the circumstances of the case or the rules
of the commission direct otherwise, any notice required under this chapter
to be served upon an employer, employee or commissioner shall be by
written or printed notice, service personally or by registered or certified
mail addressed to the person upon whom it is to be served at the person’s
last-known residence or place of business.’’
3
For the reasons set forth in part II of this opinion, we do not reach
this issue.
4
The NCCI acts as the insurer’s ‘‘duly appointed agent’’ pursuant to § 31-
348 for the purpose of notice to the chairman of the Workers’ Compensation
Commission of policy cancellations.
5
The board further noted that ‘‘[i]t is our understanding that NCCI has
subsequently modified the manner in which it receives electronic data to
conform with the advances in technology.’’
6
Additionally, Grotto argues that the commissioner had jurisdiction to
consider evidence outside the records kept pursuant to § 31-348 when
determining whether policy 045 was still in effect on the date of loss. That
argument responds to one made by Liberty during the proceedings before
the commissioner, but the board rejected Liberty’s argument, and Liberty
does not challenge that aspect of the board’s decision in this appeal. Accord-
ingly, we need not consider that claim.
7
With that conclusion in mind, we need not determine whether the com-
missioner had jurisdiction to determine common-law issues under the facts
of this case.
8
Grotto argues that the board erred by ‘‘adopting the rule’’ that ‘‘after the
expiration of the fifteen day period following notice of cancellation only
unequivocal evidence of an intent to continue or reinstate coverage would be
sufficient to support the commissioner’s conclusion that [Liberty’s] coverage
remained in force on March 1, 2016.’’ Grotto argues that ‘‘[t]he burden of
proof in workers’ compensation cases is a preponderance of the evidence,
not unequivocal evidence of intent.’’ We conclude that, in light of Yelunin,
Liberty’s conduct would not support a finding that coverage remained in
place on the date of loss even under the preponderance of the evidence stan-
dard.