Hawkes v. Commercial Union Ins. Co.
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MAINE SUPREME JUDICIAL COURT					Reporter of Decisions
Decision:	2001 ME 8
Docket: 	Cum-00-229
Argued:	September 8, 2000
Decided:	January 16, 2001

Panel: 	WATHEN, C.J., and CLIFFORD, RUDMAN, DANA, SAUFLEY, ALEXANDER, and
CALKINS, JJ.

KARL HAWKES

v.

COMMERCIAL UNION INSURANCE COMPANY

CALKINS, J.

	[¶1]  Commercial Union Insurance Company appeals from a judgment
entered in the Superior Court (Cumberland County, Warren, J.) denying its
motion for summary judgment.  Commercial Union argues that Karl Hawkes'
claims are barred by the immunity and exclusivity provisions of the
Workers' Compensation Act, 39-A M.R.S.A. §§ 104, 408 (Pamph. 2000), or,
alternatively, by settlement documents.  We agree with the Superior Court
that the Workers' Compensation Act does not foreclose Hawkes' tort claims
against Commercial Union.  We also affirm that portion of the Superior
Court's order denying summary judgment on the basis of the settlement
documents, because we agree that the three documents, read together, are
ambiguous.
	[¶2]  Hawkes brought this action against Commercial Union, Private
Investigation Services of Maine and New England, Inc., (PIS), and Steven
Handcock.  Commercial Union was the workers' compensation insurer for
Hawkes' former employer, Giberson Buick-Pontiac. Hawkes suffered a
workplace injury to his back on April 16, 1984, and Commercial Union paid
weekly workers' compensation benefits to Hawkes from 1984 until 1996. 
In 1997 Hawkes settled his workers' compensation claim against
Commercial Union and Giberson Buick-Pontiac and received a lump sum
payment.  
	[¶3]  In 1992, while Hawkes was receiving weekly workers'
compensation benefits, Commercial Union hired PIS to investigate Hawkes'
continuing incapacity.  Steven Handcock was a private investigator assigned
by PIS to investigate Hawkes.  Handcock visited Hawkes' home under false
pretenses on two occasions in 1992.  During the first visit, Handcock said
he was building a house and was interested in the layout of Hawkes' home. 
Hawkes gave Handcock a tour of the house, and Handcock asked if he could
return at a later date and bring his wife.  Handcock returned later with a
woman.  Hawkes invited the couple into his house and showed them
receipts from contractors who had worked on his house.  Handcock learned
that Hawkes had hired contractors to construct his home, but had planted
some trees and bushes on his own.  In May 1993, Handcock observed and
videotaped Hawkes painting, shoveling manure, and mowing his lawn with a
riding lawnmower. Hawkes did not learn that he had been under
investigation until 1994 when Commercial Union sent surveillance photos
and documents to his attorney prior to a workers' compensation hearing. 
Hawkes alleges that he continues to be stalked by Commercial Union and
that the surveillance activities caused him to suffer from various symptoms
and from a delusional disorder which significantly impairs his enjoyment of
life.
	[¶4]  On June 5, 1997, Hawkes signed a lump sum settlement
document, a release and resignation document, and an affidavit regarding
the settlement.  The lump sum settlement document, referring to the
April 1984 back injury, states in pertinent part:

When I receive the amount shown above and this settlement is
approved by the hearing officer, I release the employer and
insurer named above from all further liability for this injury.

The release and resignation document provides in relevant part:

I, Karl Hawkes, for the sole consideration of $179,000.00 . . .
release and forever discharge . . . [Commercial Union] . . . from all
claims . . . under the Workers' Compensation Act . . . which I now
have or which may hereafter accrue, on account of all injuries,
personal or otherwise, resulting from my employment with
Giberson Buick at any time, including, but not limited to, any
claims resulting from an injury on or about April 16, 1984, or any
other gradual or specific injury date on which my employer was
insured by [Commercial Union] . . . .

Hawkes' affidavit, consisting of twelve paragraphs, states that he makes the
affidavit in support of his petition for the lump sum settlement and:

I further understand that upon approval of this lump sum
settlement, I will have no further right to make any claims for
wage compensation, for medical or medically related expenses,
for permanent impairment, for vocational rehabilitation, for
discrimination, or any other claim under the Workers'
Compensation Act.

Hawkes also states in his affidavit:

I . . . fully understand, that upon approval of my lump sum
petition by the Workers' Compensation Commission, I will no
longer be able to make any claim against . . . [Commercial Union].

Commercial Union promptly paid the settlement amount.
	[¶5]  Hawkes alleges that the three defendants intruded on his
privacy, committed trespass, and intentionally inflicted emotional distress.{1} 
Commercial Union moved for summary judgment contending that it is
immune from suit because of the exclusivity and immunity provisions of the
Workers' Compensation Act.  See 39-A M.R.S.A. §§ 104, 408.  It also argued
that it is entitled to summary judgment because Hawkes released it from all
liability in the lump sum settlement.  The Superior Court denied summary
judgment determining that the Workers' Compensation Act does not bar
Hawkes' claims against Commercial Union.  The court also held that the
three lump sum settlement documents are ambiguous and do not appear to
cover common law claims.  Commercial Union appeals from the denial of
summary judgment.{2}

I.  APPLICABILITY OF FINAL JUDGMENT RULE TO WORKERS'
COMPENSATION IMMUNITY AND EXCLUSIVITY DEFENSE

	[¶6]  The first issue is whether Commercial Union may appeal from
the denial of its summary judgment motion.  We have held that the denial of
an employer's motion for summary judgment, based on a claim of immunity
pursuant to the exclusivity portion of the Workers' Compensation Act, is
immediately reviewable.  See Hebert v. Int'l Paper Co., 638 A.2d 1161, 1162
(Me. 1994).  The immunity provision of the Workers' Compensation Act
confers immunity from suit which "is effectively lost if a case is erroneously
permitted to go to trial."  Smith v. Yankee Constr. Corp., 625 A.2d 904, 906
(Me. 1993) (citation and quotation omitted).  Commercial Union is in the
same position in this case as the employer was in the Hebert case, and we
conclude that Commercial Union is entitled to appeal immediately from the
denial of its summary judgment motion with regard to its claim of immunity
and exclusivity pursuant to the Workers' Compensation Act. 

II. IMMUNITY AND EXCLUSIVITY PROVISIONS
OF WORKERS' COMPENSATION ACT

	[¶7]  The immunity and exclusivity provisions of the Workers'
Compensation Act generally provide that employers are exempt from civil
actions for "personal injuries sustained by an employee arising out of and in
the course of employment," 39-A M.R.S.A. § 104, and that employees who
have secured compensation under the Act are deemed to have waived any
common law action against the employer, 39-A M.R.S.A. § 408.{3}  The
former provision is considered to be the immunity provision, and the latter
is the exclusivity provision.  Because of the cross-reference in section 408
to section 104, the provisions are interrelated and, for the purposes of this
case, coextensive.  In the context of this case the term "employer" includes
the insurer.  See 39-A M.R.S.A. § 102(12) (Pamph. 2000).{4}  
	[¶8]  When we examine whether the defense of immunity is available
to an employer or an insurer, "we look to the gist of the action and the
nature of the damages sought to determine whether the claim for injury is
excluded" by the exclusivity provision.  Cole v. Chandler, 2000 ME 104,
¶ 13, 752 A.2d 1189, 1196.  Personal injuries that arise out of and in the
course of employment are covered by the Workers' Compensation Act, and
insurers are immune from liability for such injuries.  See id. ¶ 9, 752 A.2d
at 1195.  To come within the coverage of the Act, an injury must be
"sufficiently work-related, so it can be said to have been suffered both while
and because the employee was at work."  Knox v. Combined Ins. Co. of Am.,
542 A.2d 363, 366 (Me. 1988) (citation, quotation, and emphasis omitted).
  
A.	Nature of the Injury

	[¶9]  Because only personal injuries come within the Act, we first look
to the nature of the injury suffered by Hawkes to determine if it is a
personal injury.  Following the trial court's decision on summary judgment,
the claims remaining against Commercial Union are trespass to property,
intrusion of privacy, and intentional infliction of emotional distress.  The
last claim is for a personal injury.  In Cole we noted that we have previously
held that mental injuries are personal injuries.  See Cole, 2000 ME 104,
¶ 13, 752 A.2d at 1196.  
	[¶10]  Trespass, however, is not a personal injury; rather, an action for
trespass seeks recompense for damages to property.  "Trespass protects
possession of land."  Jack H. Simmons, et al., Maine Tort Law 77 (1999).  The
Workers' Compensation Act is not applicable to Hawkes' trespass claim.
	[¶11]  Intrusion of privacy, a tort which we adopted in Estate of
Berthiaume v. Pratt, 365 A.2d 792, 794-95 (Me. 1976), is a claim that is
"broad enough to include recovery for economic injuries, as well as mental
or physical injuries."  Cole, 2000 ME 104, ¶ 13, 752 A.2d at 1196.   Insofar
as it covers economic injuries, intrusion of privacy is not a personal injury
and not within the ambit of the Workers' Compensation Act.  Because
neither trespass nor economic injuries from intrusion of privacy are
personal injuries, Hawkes' action for damages for these two torts is not
barred by the exclusivity provision of the Workers' Compensation Act.

B.	Arising out of and in the Course of the Employment
 
	[¶12]  Next, we must address whether the claimed personal injury,
that is, the intentional infliction of emotional distress as well as any
personal injury Hawkes claims from the intrusion of privacy, arose out of
and in the course of his employment.  The requirement that the personal
injury arise out of and in the course of employment is in the conjunctive
and, therefore, the personal injury must both arise "out of" and "in the
course of."  Considering first, the "arising out of" prong, we have said that
"[a]n injury arises out of employment when, in some proximate way, it has
its origin, its source, or its cause in the employment."  Li v. C.N. Brown Co.,
645 A.2d 606, 609 n.2 (Me. 1994).  "Arising out of employment" means
that the injury must have a causal connection to the employment.  See
Comeau v. Maine Coastal Servs., 449 A.2d 362, 365 (Me. 1982).  The only
tie between Giberson Buick and these claims is that the alleged torts were
committed by Giberson Buick's insurance carrier and arose from
surveillance activities in which the insurer was attempting to determine if
Hawkes was still incapacitated.  Although the causal link is remote, we
cannot say that the claims did not originate or have their source in Hawkes'
employment.  Therefore, the personal injury claims meet the "arising out
of" prong.
	[¶13]  Going on to the final step in the analysis, we determine
whether the personal injury claims arose in the course of Hawkes'
employment.  "Arising in the course of employment" means that the injury
must have a relationship in time and location with the employment.  See
Hebert v. Int'l Paper Co., 638 A.2d 1161, 1162 (Me. 1994).  In Hebert, the
plaintiff's mental distress injury was caused by signs posted at his place of
employment which demeaned the plaintiff who was at home recuperating
from a work-related accident.  Id. at 1162-63.  We held that the exclusivity
provision of the Act was not applicable because even though the mental
distress injury may have arisen out of the employment, it did not arise in
the course of employment.  Id. at 1162.  Arising in the course of
employment requires focusing on the "temporal and spatial circumstance of
the worker's sustaining of injury."  Id.  Hawkes' injuries caused by the
surveillance actions of Commercial Union did not arise in the course of his
employment because the injury was not related in either time or space to
his employment.  His employment ended in 1984, eight years before these
claims are alleged to have arisen.  These torts occurred at and near his
home; they did not occur at Giberson Buick's place of business; and they did
not occur in furtherance of the business of Giberson Buick.  Thus, Hawkes'
injury did not occur in the course of his employment.
	[¶14]  Because the economic injuries suffered by Hawkes are not
personal injuries and because the personal injury claims against Commercial
Union did not arise in the course of his employment, the immunity and
exclusivity provisions of the Workers' Compensation Act do not apply, and
Commercial Union is not entitled to summary judgment on this ground.

C.	Gibson, Procise, and Lavoie

	[¶15]  In their arguments the parties have relied on a trio of cases
involving suits against employers and/or insurers by employees whose
receipt of workers' compensation benefits was delayed, reduced, or denied
and in which we have arrived at differing results.  The first is Gibson v. Nat'l
Ben Franklin Ins. Co., 387 A.2d 220, 223 (Me. 1978), where we held that an
insurer who wrongfully withheld workers' compensation benefits was not
immune from liability in tort to the injured employee.  We found that the
case did not arise out of the employment relationship "but out of [the
employee's] relationship to the insurance carrier after her basic remedies
as an injured employee had been settled through procedures provided by
the Act."  Id. at 222.  
	[¶16]  In Procise v. Elec. Mut. Liab. Ins. Co., 494 A.2d 1375, 1382 (Me.
1985), however, we held that an insurer was immune from a suit for fraud,
bad faith, and other claims in which the employee's basic contention was
that he was wrongfully denied workers' compensation benefits.  Procise
claimed that his employer had persuaded him to apply for disability benefits
instead of workers' compensation benefits and to state that his injury was
not caused by a work accident.  Id. at 1378.  When he later applied for
workers' compensation benefits, he settled his claim.  Id.  In his tort action
he asserted that he had been denied workers' compensation benefits to
which he was entitled by the actions of his employer, its insurer, and their
agents.  Id. at 1378-79.  We noted that the Workers' Compensation Act
contains a procedure to set aside a settlement agreement when there is a
mistake of fact or fraud, but that Procise had not taken advantage of that
procedure.  Id. at 1382.  We distinguished Gibson by stating that Gibson's
claim arose not from her employment but from her relationship with the
insurer after her workers' compensation claim had been settled, whereas
Procise's claims arose from the initial handling of his workers'
compensation claim.{5}  Id. at 1382-83.
	[¶17]  In Lavoie v. Gervais, 1998 ME 158, ¶ 11, 713 A.2d 335, 337,
we held that an employer and its insurer were immune from suit where the
employee alleged that he had been denied workers' compensation benefits
because of fraud committed during the workers' compensation proceedings.
Lavoie contended that the defendants and others had conspired to hide the
true identity of the employer.  Id. ¶ 5, 713 A.2d at 336.  We held that the
Act itself contains the exclusive remedy for fraud occurring during the
course of the proceedings for benefits.  Id. ¶ 13, 713 A.2d at 338; see 39-A
M.R.S.A. § 321 (Pamph. 2000).  We cited Procise for the proposition that
when the tort action is based on a claim of wrongful denial of workers'
compensation benefits, the Workers' Compensation Act provides the
exclusive remedy.  Lavoie, 1998 ME 158, ¶ 13, 713 A.2d at 338.
	[¶18]  We need not attempt to harmonize these cases, because they
differ significantly from the instant case.{6}  The injuries alleged in the three
cases arose from the denial or delay of workers' compensation benefits. 
Hawkes, unlike the three plaintiffs in Gibson, Procise, and Lavoie, is not
claiming that he is entitled to more workers' compensation benefits or that
his receipt of benefits was interfered with or delayed.  He does not
complain about his benefits; he does not contend that they were delayed,
denied, or reduced because of the actions of the tortfeasors.  This is in
sharp contrast to the gravamen of the complaints in Gibson, Procise, and
Lavoie.  For this reason, the holdings of Gibson, Procise, and Lavoie are
inapplicable to this case.{7}

III.  THE LUMP SUM SETTLEMENT DOCUMENTS

	[¶19]  Commercial Union also appeals the denial of its summary
judgment motion on the issue of whether, by signing the settlement
documents, Hawkes released Commercial Union from all liability. 
Ordinarily the denial of a summary judgment motion on this issue would not
be immediately appealable.  See, e.g., Chaput v. Unisys Corp., 964 F.2d
1299, 1302 (2d Cir. 1992) (holding denial of summary judgment based on
defense of release not immediately appealable).  However, the case is
properly before us on the issue of Commercial Union's immunity under the
Workers' Compensation Act, and the parties have fully briefed and argued
the issue of the settlement documents.  Therefore, in the interests of
judicial economy, we may address this issue because if we were to
determine that Hawkes released Commercial Union from all liability, the
entire case against Commercial Union would be ended.  See Struck v.
Hackett, 668 A.2d 411, 419 (Me. 1995); Ryan v. City of Augusta, 622 A.2d
74, 76-77 (Me. 1993).
	[¶20]  The Superior Court found that the settlement documents
signed by Hawkes are ambiguous.  While the interpretation of unambiguous
contracts is a matter of law, the interpretation of ambiguous contracts is a
matter of fact.  Spottiswoode v. Levine, 1999 ME 79, ¶ 16, 730 A.2d 166,
172.  For this reason, the Superior Court denied summary judgment.
	[¶21]  The three documents signed by Hawkes, which were executed
at the time of the lump sum settlement, must be read together.  Hilltop
Cmty. Sports Ctr., Inc. v. Hoffman, 2000 ME 130, ¶ 16, 755 A.2d 1058,
1062.  Principles of contract govern the interpretation of lump sum
settlement agreements.  Soucy v. Sullivan & Merritt, 1999 ME 1, ¶ 7, 722
A.2d 361, 363.  Unless a workers' compensation settlement agreement
explicitly waives the right of the claimant to bring another type of claim
against the insurer or the employer, such a waiver will not be implied in the
absence of evidence of the intent of the parties at the time of contracting to
create the waiver.  Id.
	[¶22]  There is one sentence in Hawkes' affidavit that, when taken by
itself, would seem to release Commercial Union from all claims against it. 
That sentence is that Hawkes fully understands that he will no longer be
able to make any claims against Commercial Union if his lump sum petition
is granted by the Workers' Compensation Commission.  However, the
remainder of the two-page affidavit concerns Hawkes' understanding of the
meaning of the lump sum settlement and that he is giving up the ability to
make any claim under the Workers' Compensation Act arising out of his
1984 injury.  Likewise, the other two documents clearly state that
Commercial Union is being released only for claims arising out of Hawkes'
employment with Giberson Buick-Pontiac and for claims stemming from the
1984 injury.  Thus, most of the affidavit and the other two documents
unambiguously indicate that the sole liability under consideration was that of
Commercial Union and Giberson Buick for the 1984 injury and
compensation under the Workers' Compensation Act.  An ambiguity arises,
however, because of the one sentence, referred to above, in the affidavit. 
That ambiguity is whether the three documents taken together release
Commercial Union for liability stemming only from the injury sustained by
Hawkes at Giberson Buick, or whether they also bar Hawkes' claim for
damages caused by Commercial Union's investigation.  Because there is an
ambiguity and the meaning of the documents is disputed, summary
judgment is inappropriate.  See Tondreau v. Sherwin-Williams Co., 638 A.2d
728, 730-31 (Me. 1994) (holding summary judgment inappropriate when
contract is ambiguous and undisputed facts do not determine intent of
parties).
	The entry is:
Order denying summary judgment affirmed. 

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