W.Va. high court: Employer's insurance doesn't cover non-employee killed in mining accident
The W.Va. Supreme Court ruled that a circuit court erred in concluding that a policy's employer's liability exclusion was applicable in a wrongful death claim.
The West Virginia Supreme Court sided with an insurance company last week, finding a circuit court erred in concluding the policy’s “employer’s liability exclusion” was inapplicable to a wrongful death action filed against Dana Mining Co. of Pennsylvania because the decedent was not an employee of the mining company.
In January 2016, Jeremy Neice of West Virginia was killed while working in an underground coal mine in southwestern Pennsylvania that was owned by Dana Mining, a wholly owned subsidiary of Mepco Holdings. Jeremy Neice was an employee of Mepco LLC, and Mepco was insured under a “mining industries” insurance policy issued by Federal at the time of the accident, according to the state high court’s unanimous opinion filed March 3, 2023.
Jenny M. Neice, the Administratrix of the Estate of Jeremy R. Neice, filed a wrongful death action in Monongalia County Circuit Court against Dana Mining as the owner/operator of the mine. Dana Mining sought defense and indemnity from Federal Insurance, which denied coverage based, in part, on the policy’s employer’s liability exclusion (ELE), which excluded coverage for claims or damages sustained by “any employee” arising out of his or her employment with “any insured.”
Dana Mining filed a third-party complaint against Federal in the wrongful death action, seeking declaratory judgment that Federal was required to defend and indemnify under the policy, and Neice joined in the request.
“Federal contended that since Mr. Neice’s accident arose out of his employment with Mepco, LLC, a named insured, there was no coverage for Neice’s claim against insured Dana Mining,” the opinion said.
Judge Phillip D. Gaujot reasoned in March 2020 that, under applicable Pennsylvania law, the language of the ELE did not operate to preclude coverage when read in conjunction with the “Separation of Insureds” provision, which states: “‘[T]his insurance applies[] as if each named insured were the only named insured; and separately to each insured against whom claim is made or suit is brought,’” the opinion said.
The circuit court had found, by application of the “Separation of Insureds” provision, the subject ELE is inapplicable where the employee asserting the claim is not an employee of the insured seeking coverage. Federal claims this was an error because “the unambiguous language of the ELE plainly evidences an intent to exclude coverage for claims or suit brought by ‘any employee’ against ‘any’ of the insureds, regardless of whether he or she was an employee of the specific insured seeking coverage,” the opinion said.
After the circuit court granted Neice summary judgment on Federal’s duty to indemnify Dana Mining for damages arising from her wrongful death claim, the insurance company appealed.
The West Virginia Supreme Court reversed and remanded the case, finding the “[r]espondents offer this court essentially no authority upon which we could conclude a Pennsylvania court would find the ELE as crafted in this case inapplicable, even if we were to agree with their policy-based arguments or the minority viewpoint,” Justice William R. Wooton wrote on behalf of the West Virginia Supreme Court.
The circuit court relied almost exclusively on language and reasoning from a case from Pennsylvania’s intermediate appellate court — Mutual Benefit Insurance Company v. Politopoulos (2013) (Politsopoulos I) and Mut. Benefit Ins. Co. v. Politsopoulos (2015) (Politsopoulos II), but such reliance on “to render the ELE at bar inapplicable reflects a gross misunderstanding of the significance of both the policy language and the issue presented as a whole,” the opinion said.
“In Politsopoulos I, the plaintiff/employee of a property lessee file a negligent action against the lessor/owner under a premises liability theory. The insurer denied coverage on the basis of an ELE that excluded coverage for claims by ‘[a]n ‘employee’ of the insured arising out of and in the course of[] … [e]mployment by the insured[.]‘ … The trial court found that because the coinsured lessor/owner was an insured under the policy, it qualified as ‘the insured’ for purposes of triggering the ELE even though it was not the plaintiff’s actual employer,” the opinion said.
The Superior Court reversed, finding the “Separation of Insured” provision required it to read the ELE as though the insured seeking coverage was the only insured under the policy.
In Politsopoulos II, the Pennsylvania Supreme Court found that the ELE used the phrase “the insured” was ambiguous, particularly when construed with the “Separation of Insureds” provision, so it carved out an “any insured” exclusionary provision for its analysis.
“Therefore, not only does the Politsopoulos case involve meaningfully different policy language, but the Pennsylvania Supreme Court examined and cited numerous authorities which embody Federal’s position in this matter: that ‘any insured’ is to be literally construed and that the ‘Separation of Insureds’ provision does not alter the scope of an exclusion using that term,” Wooton wrote.
“Respondents off this Court essentially no authority upon which we could conclude a Pennsylvania court would find the ELE as crafted in this case inapplicable, even if we were to agree with their policy-based arguments or the minority viewpoint,” he continued. “We therefore conclude that the circuit court erred in finding the ELE inapplicable to Neice’s action against Dana Mining. Under the language of the applicable ELE endorsement, we find that Neice’s claim arises out of Mr. Neice’s employment with ‘any insured,’ i.e., Mepco LLC, and the policy therefore excludes coverage for Neice’s action against Dana Mining.”
Ronald P. Schiller and Bonnie M. Hoffman of Hangley Aronchick Segal Pudlin & Schiller in Philadelphia, as well as Charles R. Bailey of Bailey & Wyant in Charleston, West Virginia, represented Federal Insurance.
Scott S. Segal and Jason P. Foster, both of The Segal Law Firm in Charleston, represented Neice.
Charleston-based Pullin, Fowler, Flanagan, Brown & Poe attorneys, Tiffany R. Durst and Nathaniel D. Griffith, represented Dana Mining.
Messages seeking comment from the attorneys were not immediately returned.
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