BWG May 2011 Lawyer Alert: Supreme Judicial Court Denies Immunity to General Contractor
Ruling Confirms Rights of Injured Workers to Bring Third Party Claims Against General Contractor after Receiving Workers' Compensation Insurance
The Supreme Judicial Court today affirmed the right of an employee of an uninsured subcontractor to bring third party claims against the general contractor, even if the general contractor has made workers' compensation payments pursuant to G.L. c. 152, § 18. The case was an important victory for injured workers.
The case arose from a construction accident on a residential construction site. An explosion at the site killed one worker and seriously injured his son, another worker at the site. Both men were employed by Great Green Barrier Co., which was a subcontractor on the job site. Although it was required by Massachusetts law to have workers’ compensation insurance, Great Green failed to have or maintain that insurance policy.
Henry C. Becker Custom Building Ltd., was the general contractor on the jobsite, and therefore it was required to make sure that every subcontractor it employed on the site had a current policy of workers’ compensation insurance. Since Great Green did not have a valid insurance policy, the general contractor, Becker, was liable for the workers' compensation obligations pursuant to M.G.L. c. 152, § 18. This obligation arises under the policy in Massachusetts that a general contractor is responsible to hire only subcontractors which have workers' compensation insurance available for their employees.
Ordinarily, if an employee is injured at work he or she cannot make a negligence claim against the employer, because the employer provides workers’ compensation insurance. The general contractor tried to stretch this immunity, provided under M.G.L. c. 152, § 23, to prevent the plaintiffs from making third party claims once they had accepted lump sum workers' compensation settlements. While this argument had persuaded the trial court, which granted summary judgment for the defendant, the ruling had been overturned by the Appeals Court. Wentworth v. Henry C. Becker Custom Bldg. Ltd, 76 Mass.App.Ct. 507 (2010). The SJC granted further appellate review.
The SJC made short work of the defendant's arguments: "We need not belabor the reasons we are unpersuaded. It suffices to say that the [defendant's] arguments ignore the plain language of the relevant statutory provisions..." The court found no reason to reward the general contractor for violating the law by either willfully or negligently hiring an uninsured contractor.
The court provided a clear reason for this important policy. "Our interpretation instead gives a general contractor strong incentive to retain subcontractors who have workers' compensation insurance because it otherwise has to pay the workers' compensation benefits and is liable for any common-law damages; it implements the Legislature's intention fully to protect workers by allowing recovery from third parties, including general contractors who are not the injured workers' direct employer; and it gives meaning to the statute's intent that workers' compensation carriers be reimbursed by liable third parties."
The matter was remanded to the Superior Court for further proceedings.
The case is Wentworth v. Henry C. Becker Custom Building Ltd., SJC-10806 (May 23, 2011).