Opinion
BOARD No. 0298391, 05952491
Filed: June 30, 1995
REVIEWING BOARD:
Judges Kirby, Maze-Rothstein, and Smith.
APPEARANCES:
Joseph Callahen, Esq., for the employee.
Thomas Brophy, Esq., for the insurer.
William J. Gately, Jr., Esq., for the employer.
Janice K. Biederman, Esq., for the Workers' Compensation Trust Fund, amicus curiae.
This case involves the applicability of 1991 amendments to G.L.c. 152, § 65B. Section 65B governs the cancellation of workers' compensation insurance policies. The judge applied the amended version of § 65B and decided that, by Quintal's date of injury, Liberty Mutual had effectively cancelled its insurance policy with Michael Berube d/b/a M. Berube Construction Co. We agree with the employer and the trust fund that the judge's application of the 1991 version of § 65B was legally erroneous and that the policy was still in effect when Quintal was allegedly injured. We therefore vacate the decision and remand for a hearing on the merits of Quintal's claim.
Procedural History
Jason Quintal allegedly sustained a back injury on January 14, 1991 for which he filed a claim for compensation on February 7, 1991. A conference was held on October 29, 1991, at which time it was found that a primary issue would be the employer's insurance coverage. (Dec. 3.) The judge bifurcated the proceedings hearing the coverage issue first, leaving hearing on the merits for a subsequent date. The decision on the issue of coverage is the subject of this appeal.
Facts
Michael K. Berube, doing business as M. Berube Construction, contacted the Anthony Cordeiro Insurance Agency to obtain a workers' compensation insurance policy. Upon request, he gave Mr. Cordeiro a check in the amount of $3468.50. Within a month he received a policy from Liberty Mutual Insurance at 59 Keene Street, Fall River, Ma., the address listed in the policy. The policy's information page reflected a policy period of August 4, 1990 to August 4, 1991, a total estimated annual premium of $6766 with adjustments to be made quarterly, and a premium deposit of $3461.00. (Employer Ex 2.)
Liberty sent an additional bill for $32.50 in early September. Berube moved in September and allegedly did not promptly receive this bill. On October 1, 1990, because of non-payment of the $32.50 bill, Liberty's computer generated a cancellation notice giving a cancellation date of October 21, 1990. Berube claims that he never received this cancellation notice. A month later, on November 7, 1990, Liberty prepared a notice to the Department of Industrial Accidents of the policy's cancellation; the notice was received by the Department on November 13, 1990. (Insurer Ex 3.) The department took no action on this filing.
Berube claims he received the original bill in November and denies ever receiving an overdue notice. He put the bill aside and did not promptly pay it. Finally, on November 10, 1990, Berube sent a $32.50 check to Liberty, drawn on another account to which he had access. The check drawn on Patel Cleaners referenced the policy number for M. Berube Construction's policy. (Employer Exhibit 3.) Liberty cashed the check on November 15, 1990. In response to the payment, Liberty sent a certified letter to Berube at the policy address where he no longer resided, stating that the policy had been cancelled and would not be reinstated. The letter was returned unclaimed.
Issues
The narrow issue presented is whether the insurer's attempted cancellation was effective. The insurer argues that because the employer failed to object to the cancellation of its policy within ten days of the date of the notice of such cancellation, the insurer was within its contractual rights to cancel the policy. Furthermore, the insurer takes the position that once it had properly notified both the employer and the Department of the cancellation of the policy, the burden of proof regarding the coverage shifted to the employer.
The employer counters that no evidence was introduced to suggest that approval of the Department was obtained by the insurer. It maintains that without cancellation approval by the Department, the insurer could not have effectuated cancellation.
The insurer responds that the administrative judge properly gave retroactive effect to the 1991 changes to Section 65B, which eliminated the need for Departmental approval of the cancellation of workers' compensation insurance policies, and therefore all of the elements requisite for cancellation of policies were satisfied by the date of Quintal's injury.
We therefore must decide which version of § 65B should be applied. If the earliest version requiring departmental approval is applied, the insurer will be liable for any compensation judged to be forthcoming. If, on the other hand, a later version of § 65B, not requiring departmental approval, is applied, the insurer effectively cancelled its policy with the employer.
Legal Discussion
We begin our analysis with a chronological review of three relevant versions of § 65B. Chapter 152, § 65B, enacted December 29, 1986, stated in pertinent part:
If, after the issuance of a policy under section sixty-five A, it shall appear that the employer to whom the policy was issued is not or has ceased to be entitled to such insurance, the insurer, with the approval of the department, may cancel such policy in the manner provided in this chapter; provided that any insurer desiring to cancel such a policy shall give notice in writing to the department and the insured of its intention to cancel same. The department may approve such cancellation unless the employer shall within ten days after the receipt of such notice file with the department objections thereto, and, if such objections are filed, a member of the department shall hear and decide the case within a reasonable time thereafter, subject to review as provided where a claim for review referred to in section eight is filed. [emphasis supplied]
St. 1986, c. 662, § 45. The 1986 version required insurers to provide written notice to both the insured employer and the Department of the insurer's desire to cancel any assigned risk policy. It also required Department approval of any desired cancellation.
In July 1991, the Legislature modified § 65B. Statute 1991, c. 132 provided:
Section 2: Said chapter 152 is hereby further amended by striking out section 65B, as so appearing, and inserting in place thereof the following section: —
Section 65B. If, after the issuance of a policy under section sixty-five A, it shall appear that the employer to whom the policy was issued is not or has ceased to be entitled to such insurance, the insurer may cancel such policy in the manner provided in this chapter; provided, however, that any insurer desiring to cancel such a policy shall give notice in writing to the rating organization and the insured of its desire to cancel the same. Such cancellation shall be effective unless the employer shall within ten days after the receipt of such notice file with the department and the rating organization objections thereto, and, if such objections are filed, a member of the department shall hear and decide the case within a reasonable time thereafter, subject to review as provided where a claim for review referred to in section eleven C is filed.
Section 3. This act shall be deemed substantive pursuant to section two A of chapter one hundred and fifty-two of the General laws and shall apply to policies issued on and after the effective date of this act. St. 1991, c. 132, § 2, approved July 9, 1991. [emphasis supplied]
Under this version, insurers were required to give written notice to the insurance rating organization and the insured employer. No departmental notice or approval was required. This Act was specifically deemed applicable only to policies issued after its effective date. St. 1991, c. 132, § 3.
Finally, in December 1991, the Legislature again amended § 65B. Statute 1991, c. 398, § 90A provides:
Chapter 152 of the general laws is hereby amended by striking out section 65B, as so appearing, and inserting in place thereof the following section:
Section 65B. If, after the issuance of a policy under section sixty-five A, it shall appear that the employer to whom the policy was issued is not or has ceased to be entitled to such insurance, the insurer may cancel or otherwise terminate such policy in the manner provided in this chapter; provided, however, that any insurer desiring to cancel or otherwise terminate such a policy shall give notice in writing to the rating organization and the insurer of its desire to cancel or terminate the same. Such cancellation or terminations shall be effective unless the employer, within ten days after receipt of said notice, files with the department's office of insurance objections thereof, and, if such objections are filed, the commissioner, or his designee shall hear and decide the case within a reasonable time thereafter. Further appeal of the decision of the department may be taken to the superior court for the county of Suffolk. [emphasis supplied]
In the earlier version in July 1991, the word "insure r" appears as "insure d," which appears to make more sense in the context of the section. However, the term appears as listed above, "insure r," in the Official Edition prepared under the direction of the General court and published by the Lawyers Co-operative Publishing Co.
This amendment made the cancellation procedure applicable to terminations as well as cancellations and provided a different hearing mechanism for objections.
The Legislature did not designate § 90A as a substantive provision in §§ 103 to 106 of St. 1991, c. 398. Section 107 of St. 1991, c. 398 provides: "Except as specifically provided by [§§ 103-106], inclusive, of this act, all sections of this act shall, for purposes of [G.L.c. 152, § 2A], be deemed to be procedural in character." Therefore the plain language of § 107 indicates that the Legislature intended § 90A to be a procedural provision. As a procedural provision, § 90A has "application to personal injuries irrespective of the date of their occurrence." G.L.c. 152, § 2A. See Connolly's Case, 418 Mass. 848, 850 (1994) (procedural character of amendment to G.L.c. 152, § (2)(j) established by St. 1991, c. 398, § 107).
The question then becomes: How did the December 1991 amendment affect the prior law enacted in July, 1991? The insurer contends that it changed prospective character of the July 1991 amendment by impliedly repealing St. 1991, c. 132, § 3. We disagree.
To determine the proper interrelation of the two statutes, we interpret each statute according to the intent of the Legislature ascertained from all its words construed by the ordinary and approved usage of the language, considered in connection with the cause of its enactment, the mischief or imperfection sought to be remedied and the main object to be accomplished, to the effect that the purpose of its framers may be effectuated. St. Germaine v. Pendergast, 411 Mass. 615, 626 (1992).
An interpretation that the July 1991 amendment applied to all pending cases regardless of policy date would greatly expand the trust fund's potential liability. The elimination of the requirement of department approval would cure previously defective cancellation attempts, making more cancellations effective, thereby creating more uninsured employers. Yet we know from other legislative action that legislature was concerned about trust fund insolvency and took steps to limit the trust fund's exposure. See St. 1989, c. 565 (limiting trust fund coverage of uninsured employees to injuries occurring on and after December 10, 1985); for the history of trust fund protection for uninsured employees see dissent in Rich v. Air Temp. Eng., 7 Mass. Workers' Comp. Rep. 351, 360-368 (1993); appeal pending, Mass. App. Ct. doc. no 941-J-28. The legislative policy expressed in other 1991 amendments was to decrease the number of uninsured injuries. See St. 1991, c. 398, §§ 45-45B (stop work orders). A retroactive application of the July amendment would run counter to this policy.
In Sutcliffe v. Brayman Automotive, consolidated by the reviewing board with Lanoue v. Fernandes Supermarket and Vivace v. Acme Concrete Corp., 7 Mass. Workers' Comp. Rep. 298 (1993), consolidated on appeal with Shelby Mut. Ins. Co. v. Commonwealth, 36 Mass. App. Ct. 317 (1994), reversed, 420 Mass. 251 (1995), the reviewing board and courts confronted a similar issue of implied repeal of applicability provisions of trust fund law. In each of these cases, the answer is driven by the stage of proceedings.
An analogous series of amendments occurred in Quintal and the Shelby constellation. The original statutes in both this case and the Shelby constellation did not contain specific outside sections directing their application. Their application was therefore governed by the general applicability provision of G.L.c. 152, § 2A. In both this case and the Shelby constellation, the legislature then passed a specific applicability provision which directed substantive effect and therefore prospective application. In our case, the application instruction was to make the amendment substantive under § 2A and therefore prospective only; in the Shelby constellation the 1990 amendment attempted to override § 2A's procedural direction and made the application substantive and prospective only. In other words, the legislative direction in both cases was the same. Then in December 1991, the legislature further amended the applicable sections and made specific applicability designations. See St. 1991, c. 398, §§ 71 and 106 (amendment to § 37 in Shelby) and §§ 90A and 107 (amendment to § 65B in Quintal).
In Shelby the insurer unsuccessfully argued that the limitation on its recovery against the trust fund enacted in 1989 began only in 1991 and not at an earlier date, because of the direction in St. 1991, c. 398, § 106, that the amendment to G.L.c. 152, § 65 was substantive and therefore prospective only.
We follow the Shelby analysis and reach the same conclusion that there was no implied repeal of the prior applicability provision. See Sutcliffe, 7 Mass. Workers' Comp. at 302 and 319; Shelby Mut. Ins. Co. v. Commonwealth, 36 Mass. App. Ct. at 322-323, reasoning referred to unchanged by reversal, 420 Mass. 251 (1995). Statute 1991, c. 398, § 107, did not require a retroactive reach of the prior amendment of July 1991.
Where two statutes are allegedly inconsistent, we construe them in a manner which gives reasonable effect to both statutes and creates a consistent body of law. We will find an implied repeal of one statute by another only when the prior statute is so repugnant to and inconsistent with the later enactment that both cannot stand. St. Germaine v. Pendergast, 411 Mass. 615, 626 (1992). We find no repugnancy here.
Looking to the provisions of St. 1991, c. 398, to find a rational legislative scheme it may be seen that there is no inconsistency between the two versions of § 65B requirements for insurance cancellation provisions in the July and December versions of § 65B. They are substantially the same. The December amendment makes no substantial change in the July requirements. On the other hand, since the December amendment substantially changed the § 65B method for an insured employer to secure review of a proposed cancellation, the legislative purpose in making the December amendment retroactive had the beneficial result of making the appeal process uniform for all cancellations made after the July amendment.
Providing a uniform appeal process is the obvious reason why legislature made the review provisions retroactive. The December amendment did not change the cancellation process enacted in July. Considered in context with the Legislature's careful denoting of the cancellation provisions in the July act to have prospective effect only, a rational legislative intent of the December amendment comes into view, that only the new language added by the December amendment has a retroactive effect. This view is consistent with the legislative provisions regarding the applicability of the July change. We conclude therefore that the legislative intent in the December amendment was to maintain the prospective operation of the change in cancellation procedure created by the July amendment.
The Legislature knows how to overrule prior applicability provisions when it chooses to do so by explicitly directing application "notwithstanding" other provisions. See, e.g. St. 1991, c. 398, §§ 103-105. There is no reference in the December 1991 amendment to the July applicability instruction. The legislature clearly and unequivocally stated its intent to have the July amendment apply prospectively. We assume, as we must, that the Legislature was aware of the July applicability instructions when it enacted the December changes. See Hadley v. Amherst, 372 Mass. 46, 51 (1977). We are loathe to find that the July applicability section has been superceded in the absence of express words to that effect or by clear implication. See Dedham Water Company v. Dedham, 395 Mass. 510, 518 (1985). See also Sutherland Stat. Const. § 22.13 (5th Ed. 1991).
As the Shelby court eloquently quoted: "Unless the legislative intent is unequivocally clear to the contrary, a statute operates prospectively, not retroactively." Sentry Fed. Sav. Bank v. Co-operative Cent. Bank, 406 Mass. 412, 414 (1990). "It is only statutes regulating practice, procedure and evidence, in short, those relating to remedies and not affecting substantive rights, that are commonly treated as operating retroactively, and as applying to pending actions or causes of actions." Hein-Weiner Corp. v. Jackson Indus., 364 Mass. 523, 525 (1974), and cases cited. When, as clearly is the situation here, the statute extinguishes substantive rights, it will not be applied retroactively to pending claims "unless the Legislature has stated the contrary explicitly." Austin v. Boston Univ. Hosp., 372 Mass. 654, 657 (1977)." Following Shelby's reasoning, we conclude that the legislature has not "stated the contrary explicitly" in the December amendment, St. 1991, c. 398, §§ 90A and 107.
The July amendment changed the procedure necessary for effective cancellation of assigned risk policies and specifically stated that it was applicable only to policies issued on or after its effective date. The December 1991 amendment did not alter the notice requirements for cancellation of assigned risk policies. It merely made that notice applicable to terminations as well as cancellations and changed the hearing procedures where objections were filed.
The fact that both statutes have applicability provisions which overlap does not without more make them conflicting. There is no inconsistency between the legislative instructions regarding the application of the July and December versions of § 65B if one makes the changes in July 1991 prospective and the changes in December to the July version of the statute retroactive. In other words, the December 1991 hearing procedure in cases of objections would govern all hearings occurring after its effective date, but the standards for proper cancellation would be governed by the law in effect at the time of policy issuance. Such interpretation effectuates the legislative intent regarding the applicability of each statutory change.
The October 1990 alleged cancellation of the policy was invalid at the time it was attempted because it did not comply with the applicable law set forth in G.L.c. 152, § 65B, enacted December 29, 1986 by St. 1986, c. 662, § 45. The July 1991 amendment to the cancellation procedure was explicitly deemed prospective, i.e., applicable only to policies issued on and after its effective date in 1991. St. 1991, c. 132, § 3. There was no explicit repeal of § 3, the applicability provision, which would permit the July 1991 amendment, St. 1991, c. 132, § 2 to effect the cancellation of previously issued policies. By the explicit language of § 3, the changes wrought by St. 1991, c. 132, were applicable prospectively only to policies issued after October 7, 1991, the effective date of that chapter.
In order to extinguish the substantive rights of the parties to this policy, such retroactive application had to be directly expressed; we will not imply it. Shelby Mutual Insurance Co. v. Commonwealth, 420 Mass. 251, 257 (1995). There was no such explicit direction in the subsequent legislation. Its application was directed by the same provision as governed the application of the amendments in Shelby Mutual, to wit: St. 1991, c. 398, § 107. Therefore, we reach the same applicability conclusion as did the court in Shelby Mutual.
This policy was issued in August 1990 prior to the effective dates of both 1991 amendments to § 65B. Therefore the 1991 amendments were inapplicable. The law in effect at the time of the issuance of the employer's policy was the proper law to be applied. The insurer did not effectively cancel its policy as it did not obtain the required department approval for the cancellation.
Conclusion
We hold that Liberty Mutual provided insurance coverage for Quintal's date of injury. The judge erred as a matter of law in ruling that it did not. We therefore vacate and reverse the coverage decision, and remand for a hearing on the merits of the employee's claim for compensation. Because the employee has received no compensation due to the dispute over insurance coverage, justice requires that as the first step in the remand process a conference be scheduled and a new conference order pursuant to c. 152, § 10A issued prior to scheduling a hearing pursuant to c. 152, § 11. Pursuant to G.L.c. 23E, 6 (vii) and c. 152, § 15A, the case shall receive an expedited conference and hearing. As the judge who rendered the current decision is no longer with the department, we return the case to the senior judge for reassignment.
So ordered.
Judge Kirby concurs.
I can only concur with the outcome the majority reaches. There is no aspect of the reasoning with which I can agree. It is one thing to have clear legislative intent. It is quite another to devise clarity where it does not exist. In fact, insofar as clear legislative intent can be divined, the December 1991 enactment dictates an outcome contrary to that of the majority.
The majority adroitly points out that the "Legislature knows how to overrule prior applicability provisions" by explicitly directing application of an enactment "notwithstanding" other provisions. To support this proposition, reference is made to St. 1991 c. 398, §§ 103-106. But the very next provision, § 107 of c. 398 ("outside § 107"), plainly refers to all the remaining provisions of c. 152 and is exactly the "notwithstanding" type of language that the Legislature "knows how to" use. It states:
Except as specifically provided by [§§ 103-106], inclusive, of this act, all sections of this act shall, for purposes of [G.L.c. 152, § 2A] be deemed to be procedural in character. St. 1991, c. 398, § 107.
Assuming as we must, that the Legislature was aware of its own enactments, we must also assume it intended the listing of provisions to receive substantive treatment in §§ 103-106, and with knowledge stated in § 107, for purposes of § 2A, that all other sections were to be treated procedurally. Given the explicit legislative directive in § 107, the majority's reliance on the law of "implied" repeal must yield and is inapposite. To rule otherwise requires circular reasoning.
Section 2A generally defines substantive amendments and provides for their prospective application. The hearing took place and the decision was filed after the December 23, 1991 effective date of the Amendment to 2A which reads as follows:
Every act, in amendment of this chapter, in effect on the effective date of this section or thereafter becoming effective which increases or decreases the amount or amounts of compensation payable to an injured employee or his dependents including amounts deducted for legal fees shall, for the purposes of this chapter, be deemed to be substantive in character and shall apply only to personal injuries occurring on and after the effective date of such act, unless otherwise expressly provided. Every act, in amendment of this chapter, in effect on the effective date of this section or thereafter becoming effective which is not deemed to be substantive in character within the meaning of this section shall be deemed to be procedural or remedial only, in character, and shall have application to personal injuries irrespective of the date of their occurrence, unless otherwise expressly provided.
Amended by St. 1991, c. 398, 16.
The explicit nature of the language in § 107 handily overcame the otherwise truly substantive character of § 8(2)(j) and § 35E. Connolly's Case, 418 Mass. 848, 850 (1994); Tobin v. Town of Stoughton, 9 Mass. Workers' Comp. Rep. 118 (1995) appeal pending on other grounds No. 95-J-292 (Mass.App.Ct.). Thus, any possible impairment of substantive rights to employers who now finance the Trust Fund, which fund bears the burden of uninsured claims, would likewise be overcome by the procedural directive of outside § 107.
Further, the most recent two revisions of § 65B (July 1991 and December 1991) both appear procedural because each enactment merely addresses the mechanism for effectuation of an insurance cancellation and/or termination. To counter § 65B's obvious procedural character, in the July 1991 version, the Legislature provided subsection 3 of c. 132, which states:
This act [§ 65B] shall be deemed substantive pursuant to [§ 2A] of [c. 152] of the General Laws and shall apply to notices issued on or after the effective date of this act. Subsection 3 of St. 1991, c. 132.
Not five months later in December 1991, the Legislature in outside § 107, explicitly countermanded all prior substantively related provisions. St. 1991, c. 398, 107 (see text above).
Suggesting in effect that the Legislature did not mean what it said, the majority finds that the July 1991 c. 132, subsection 3 substantive directive, survives despite the subsequent language of the December 1991 c. 398, § 107. The majority premises this survival on a lack of an explicit contrary statutory prescriptive. This is an inescapably circular argument because outside § 107 specifically deemed that all other c. 152 provisions, save those listed in §§ 103 to 106, are to be treated procedurally with retroactive effect. The specificity of the "notwithstanding" language yearned for is clearly stated in § 107.
In the December 1991 enactment of § 65B, the Legislature omitted reference to the substantive treatment provision of c. 132, subsection 3. Nor did the Legislature include § 65B in the designated substantive sections of c. 398, §§ 103 to 106. It provided neither of these safeguards, despite its awareness of the § 107 procedural pronouncement for all other provisions.
Certainly from the vantage point of insurance and contract law a procedural treatment of § 65B seems inappropriate. Generally workers' compensation insurance contracts are subject to the same rules of construction as any other form of insurance contract. 10 Anderson, Couch's Cyclopedia of Insurance Law § 44.27 (2d ed. 1962 1994 supp). Workers' compensation insurance contracts are most often interpreted in harmony with the practical construction and obligations made by the parties. Id. at 216. Where a policy is undertaken pursuant to a compensation act it should be construed in the light of the statute existing at its inception. Id. at 225.
With these principles as guidance, it certainly would seem an exercise in absurdity to legislatively inform insurers that they needn't worry about how a policy was cancelled today, because when the law is changed, today's defective cancellation may be tomorrow's effective cancellation.
The foregoing seems to argue the legislature may have simply erred in deleting any reference to substantive treatment in the December, 1991 enactment of § 65B, while at the same time subjecting it to outside § 107's undeviating procedural treatment. Further, it would not be the first time that the Legislature had erred in its enactments. See Rivera v. H.B. Smith Company, Inc., 8 Mass. Workers' Comp Rep. 430, 431 (1994).
Given the nature of and the temporal proximity between the July and December 1991 § 65B amendments, it could be that the Legislature believed it was clarifying rather than changing the existing law. See, DiMarzo v. American Mutual Ins. Co., 398 Mass. 85, 103 (1983). But were the December amendment merely a clarification of 65B's July rendition, that does not appear to resolve its interplay with the pervasive procedural edict of outside § 107.
Legislative problems in enacting attorney fee provisions under G.L.c. 152, § 13A eventually had to be addressed by a governor's emergency declaration.
The former § 12A of G.L.c. 152 which governed payment of attorney's fees was repealed by St. 1985, c. 572, § 27. It was replaced with § 13A(7). General Laws c. 152, § 13A(7) became G.L.c. 152, § 13A(9) by St. 1991, c. 398, § 35. Section 103 of St. 1991, c. 398 provides that § 13A(9) applies to services rendered after the effective date of the Act. St. 1991 was approved on December 23, 1991, and by § 111 made effective upon passage. An emergency declaration was filed by the governor on January 24, 1991.
Let us assume for a moment that instead of a legislative mistake, the conundrum this case presents is due to a gap that occurred during the 1991 Legislative overhaul of the statute. See Abrogast's Case, 26 Mass. App. Ct. 719, 722 (1988). It has been noted where a statute has been comprehensively amended and reorganized, gaps in the continuity of the old and new statutory schemes may be anticipated and where the courts are called upon to fill those gaps, they should give effect to the apparent legislative purpose of continuity. Daly v. Commonwealth, 29 Mass. App. Ct. 100, 104 (1990). For purpose and policy considerations, the majority points to the Legislature's concern about the Trust Fund's insolvency causing it to take steps to limit the Fund's exposure. However, a competing legislative concern in 1991 was keeping both insurance and employer business in the state. These policy concerns are in turn supported by the longstanding policy and complex statutory scheme designed to spread the risk of claims over the entire community of worker's compensation insurers and employers. It is anybody's guess which of these important policies the Legislature had in mind at the time that it, via outside § 107, apparently explicitly deemed the § 65B methods of termination and cancellation procedural.
If the outcome of the procedural treatment of § 65B was to make certain historic cancellations valid, the Trust Fund would be responsible for the "uncovered" claims. Before December 10, 1985, the effective date of St. 1985, c. 572, § 55, the Trust Fund — then known as the "Second Injury Fund" was totally financed by assessments on workers' compensation insurers and self-insurers. Statute 1985, c. 572, § 55, however, rewrote G.L.c. 152, § 65, dividing the Fund in two components, now totally financed by assessments on employers. Like much of statutory scheme, by way of its financing, the Trust Fund merely spreads risk throughout industry.
Moreover, this is not an instance where our practice in equity empowers us to supply a remedy because there is in fact no "gap in the statute." Utica Mutual Ins. Co. v. Liberty Mutual Ins. Co., 19 Mass. App. Ct. 262, 267 (1985) and authorities cited. For purposes of the 1991 overhaul c. 398, §§ 103 to 106 and § 107 gave clear and unequivocal direction on issues of procedural and substantive treatment of all c. 152's provisions.
The majority's reliance on Shelby is misplaced. Shelby involved the interplay of a 1985 enactment of § 65(2) with the 1946 version of § 2A that until February 27, 1990 had no explicit outside section directing its substantive treatment for certain dates of injury. For the time frame up to the 1990 effective date of the outside section, treatment of the 1985 § 65 amendment was procedural via § 2A. Id. at 257. The 1989 explicitly-prospective outside section governed claims filed after its 1990 effective date. Id. at 256.
The majority is right Shelby is a "stage of the proceedings" case. As such, to make Shelby a perfect fit, we would have to look at the date the Quintal claims were filed, not to the date of policy cancellation. The "stage of the proceedings" can only commence with the actual litigious proceedings marked by the filing of a claim. A policy cancellation date is not part of "the proceedings" at the Department. Following Shelby to the letter would both help and confuse the case at bar. On the one hand since both claims were filed prior to the effective date of § 107, it seems the case has escaped its procedural rigors. Yet the confusion amasses when contemplating the fact that one claim was filed prior to the October 1991 effective date of the July 1991 substantive directive and the other was filed after. Thus, under a true "stage of the proceedings" analysis, one claim should have conformed to the 1986 cancellation methodology and the other claim should have followed the July 1991 cancellation methodology. Fine — but we are talking about only one policy and only one cancellation. The two differing statutory directives could not have been followed. To actually solve the overall statutory problems the Quintal type of situation presents, Shelby is of weak assistance.
One claim was filed on February 7, 1991 and one claim was filed on November 11, 1991. The § 107 procedural edict was effective December 23, 1991. The earlier 1991 c. 132 substantive directive was effective on October 7, 1995.
This case boils down to a question of who pays (i.e., insurer or the Trust Fund) if the employee's injuries are found compensable. It appears through outside § 107 the Legislature intended to change the mechanism for cancellations and terminations procedurally reaching back in time thereby redirecting some of the industry-wide risk spreading through the Trust Fund. Where the Legislature's procedural directives are clear, we are bound to follow them. If an oversight lurks beneath the seemingly clear surface of Legislative instruction, then the teachings of cases such as Abrogast, supra allow for us to effect its repair. Moreover, if the Legislature feels the December 1991 enactment of § 65B should have substantive effect, it can speak. Therefore, while judicial correction of this apparent legislative oversight may be possible, I can concur only with the outcome the majority reaches because I do not see that the statutory route taken by the majority as a valid path to the conclusion reached.
The probability of a mistake in the vast legislative overhaul of c. 152 is brought into even bolder relief by the clear typographical error in the December 1991 enactment of § 65B. It reads, ". . . that any insurer desiring to cancel . . . shall give notice to . . . the insurer of its desire. . . ." Certainly, what is meant is the "insured" not the "insurer" at the tail end of the phrase.
The Abrogast court only applied a subsequent correction to cases that arose prior to enactment of the correction. Id. at 722 to 723. For the circumstances to be identical here, the Legislature would first have to correct the outcome of § 107's effect on § 65B. This has yet to occur.
Finally, as a practical matter, the 1991 amendments to § 65B include a new requirement that the rate setting organization be notified of the cancellation or termination. Thus, if retroactive application of the December 1991 § 65B amendment, through outside § 107, procedurally cured any ostensible lack of notice to the Department, the insurer — who could not anticipate the change in entities to be notified — would not have effectively cancelled its policy under the new provisions either.