Injured Worker Seeks Compensation from Coworker

Paul Orris was seriously injured in an auto accident when a truck, driven by a co-worker, Lingley, crashed. Orris filed a lawsuit against Lingley's estate, but the trial court ruled in a summary judgment for the estate. Orris appealed. This case is Orris v. The Estate of Matthew Arnold Lingley, 2012 WL 5923240.

Orris and Lingley were both employees of Caliber Concrete Construction. While driving back from a work site, an auto accident occurred. Lingley, the driver, was killed and Orris was seriously injured. Orris sought industrial insurance benefits (WC) and was granted medical and time loss benefits. Orris then sued Lingley's estate, claiming that Lingley's negligence caused the accident. The estate moved for summary judgment and the trial court granted it. Orris appealed.

Orris argued that there are genuine issues of material fact as to whether he or Lingley were acting in the course of employment when the car crash occurred. Lingley's estate countered that Orris's receipt of benefits under the industrial insurance act makes such benefits his exclusive remedy, precluding a lawsuit against a co-worker's estate. The appeals court agreed with Orris.

The court noted that the industrial insurance act allows an injured worker to bring an action against a third person not in a worker's same employ to recover for injuries for which the worker has received benefits under the act. Because Orris and Lingley were in the same employ, Orris would ordinarily be unable to bring a third party action against Lingley. However, if both employees have a common employer, but the negligent employee is not acting in the course of his employment at the time the injury occurs, the negligent employee is not immune from lawsuit by the injured employee. So, the court said, the material question is whether Lingley was acting in the course of employment when the crash occurred. If not, the industrial insurance act would allow Orris to maintain a third party action against Lingley's estate. There was speculation as to whether Lingley was intoxicated to the extent that he abandoned his employment; the death investigation toxicology report was inconclusive on this point. As such, the court of appeals found that there was a genuine issue of material fact whether Lingley had abandoned the course of employment by becoming intoxicated before the crash occurred.

Moreover, Orris argued that an employee commuting to and from work is generally acting outside the course of employment, and that is what Lingley was doing at the time of the accident. The record indicated that the employer allowed Lingley to drive its truck for his convenience because Lingley's expected carpool was not available. However, the record was silent on whether Lingley was acting in furtherance of Caliber's business by driving the truck, which would have established the point that Lingley was in the course of employment. So, this created another issue of material fact as to whether Lingley was acting in the course of employment.

In sum, the court said, there were genuine issues of material fact and these factual issues must be resolved to determine whether Orris may maintain his lawsuit against Lingley. The court reversed the summary judgment in part on this basis.

As to whether Orris was acting in the course of employment at the time of his injuries, the court found no genuine issue of material fact. Orris received workers compensation benefits and the workers comp statute's strong and unequivocal language forecloses Orris from bringing a tort lawsuit premised on the argument that he was outside the course of employment. Orris argued that he was not entitled to the industrial insurance benefits he received so he was thus allowed to maintain a tort action. The court said that if Orris had repudiated and repaid or attempted to repay the benefits, it might be tempted to agree. But, Orris accepted the benefits without voicing any misgivings and the statute mandated the exclusive remedy under such circumstances.

Because Orris's acceptance of industrial insurance benefits precludes all remedies except those specifically authorized, the court ruled that Orris cannot recover from Lingley by showing that Orris himself was acting outside the course of employment. Orris was limited to the claim authorized by the act: his third party claim premised on the argument that Lingley was acting outside the course of employment.

The ruling of the trial court was reversed in part and affirmed in part.

Editor's Note: The Court of Appeals, Division II, Washington, basically faced the question of whether an injured worker can receive workers compensation benefits and then file a lawsuit against a third party in order to receive more compensation. The state industrial insurance act did allow an injured worker to file third party lawsuits under certain circumstances. Since there was a question of material fact as to whether one of those circumstances existed in this instance, the trial court's issuance of a summary judgment was not allowed to stand.

Fifth Circuit Discusses Meaning of Property Damage

PPI Technology Services sought coverage from its insurer, Liberty Mutual, for a lawsuit alleging negligence in locating and drilling an oil and gas well in an incorrect location. This case is PPI Technology Services v. Liberty Mutual Insurance Company, 2012 WL 5950943.

PPI was retained to assist in well-planning and oversee the drilling of wells for oil and gas operations. One well was supposed to be drilled on lease 18891. This resulted in a dry hole, which was then plugged and abandoned. It was later determined that the well had been drilled on lease 18892 instead of lease 18891. Royal Production Company, the lessor and operator of leases, filed a lawsuit against PPI, seeking to compel arbitration regarding its claim that PPI's negligence caused the drilling rig to be towed to the wrong location, resulting in a dry hole and property damage. PPI tendered the case to Liberty Mutual for defense and indemnification. Liberty denied coverage and PPI filed a lawsuit against the insurer.

The district court granted Liberty Mutual's motion for summary judgment and PIP appealed.

PPI argued that Liberty Mutual breached its contract by neglecting its duties to defend and indemnify. The Fifth Circuit disagreed. The court stated that the allegations against PPI are either purely economic, and thus not covered, or are purely legal conclusions, rather than factual allegations as required.

The court saw the issue as whether the underlying lawsuits against PPI raised factual allegations that come within the coverage of the policy. The policy defined property damage as physical injury to tangible property, including the loss of use of that property, or the loss of use of tangible property that is not physically injured. Royal did allege property damage as defined, but the appeals court would not consider the mere use of the phrase “property damage” as sufficient factual allegations. The court said that none of the assertions of property damage in the underlying lawsuits are accompanied by facts illustrating specific harm or damage to tangible property. As examples, there was no claim that the land was damaged, no claim about destruction from penetration or scorching from a blowout or fire. Moreover, there was no mention of specific loss of use of tangible property.

The court also noted that PPI stated in its brief that “there could have been damage to the well pad,” and “there could have been other property that was damaged”. In other words, PPI provided clear examples of what a factual allegation of property damage would be, but such hypothetical harms were not alleged and thus, cannot be considered by the court.

Because the court found no factual allegation of property damage, the ruling of the district court was affirmed.

Editor's Note: This is a classic example of the fact that the insuring agreement of a liability policy has to be met before any discussion of coverage or exclusions need occur. The U.S. Circuit Court of Appeals said that the policy insuring agreement applied to property damage caused by an occurrence. Property damage was defined in the policy and the allegations against the insured in this instance did not match the definition.

It was true that the claims against the insured alleged property damage, but there were no facts to illustrate such damage, and the court would not consider the mere use of the phrase “property damage” as sufficient factual allegations. As the court said, permitting such a course “would permit plaintiffs to trigger coverage in almost any case by making general assertions that just copy the language of the policy”. The court said that such a consequence should be avoided.

Underinsured Motorist Coverage

The auto insurer brought an action for a declaratory judgment that it had no obligation to provide underinsured (UIM) motorist coverage to the insured and her two daughters, who lived with the insured, for injuries in an accident involving a vehicle owned and operated by the insured's daughter, and which was covered under the daughter's separate policy that did not provide for UIM benefits. This case is Nationwide Mutual Insurance Company v. Rhoden, 728 S.E.2d 477 (S.C. 2012).

Rhoden and her daughters were involved in a motor vehicle accident while riding in a car owned and operated by one of the daughters (Arrieta). Both daughters are resident relatives of Rhoden. Rhoden owned two vehicles that she insured through Nationwide under a policy that provided UIM coverage. The policy provided primary insurance when the covered vehicle was involved and excess coverage when the involved vehicle was not the covered vehicle but was owned by a resident relative.

After the accident, Nationwide brought a declaratory judgment action seeking a determination that UIM coverage was not available to any of the three women under Rhoden's policy. The insurer contended that because Arrieta's policy had no UIM coverage, the portability limitation clause in Rhoden's policy prevents any of the women from recovering under the Nationwide policy. The trial court held that the women did have UIM coverage because such coverage is personal and portable. The appeals court affirmed the ruling with regard to Rhoden and her daughter Emerlynn but held that Arrieta was not covered. The South Carolina Supreme Court granted certiorari to review the ruling.

The Supreme Court said that the issue is whether public policy is offended by a portability limitation clause preventing nonowner resident relatives from importing UIM coverage from an at-home vehicle's policy when the involved vehicle lacks UIM coverage. In its decision, the court agreed with the court of appeals.

The court noted that the state's well-settled public policy is that UIM coverage is personal and portable. Limitations placed on the portability of UIM coverage contravened the broad coverage required by statute. Moreover, as a general proposition, UIM coverage follows the individual insured rather than the vehicle insured, so UIM coverage (like UM coverage) is personal and portable. The court decided that the state's well-settled public policy that UIM coverage is personal and portable entitles Rhoden and Emerlynn to UIM coverage, notwithstanding the portability limitation contained in Rhoden's auto policy. However, the denial of coverage to Arrieta, consistent with the insurance contract's portability limitation, does not violate public policy given that Arrieta chose not to purchase UIM coverage for her vehicle.

The ruling of the appeals court was affirmed.

Editor's Note: This opinion of the South Carolina Supreme Court is presented to note that state's position on UIM coverage. Rhoden purchased UIM coverage and so, the coverage followed her even though she was injured while riding in a car not listed on her policy. Arrieta chose not to purchase UIM coverage under her auto policy and this meant she did not have the coverage when she was involved in an accident while driving her car. UIM coverage was held to be personal and portable, but only for those who purchase the coverage.

Marijuana Use Does Not Rule Out Workers Compensation Benefits

The Supreme Court of Montana received a workers compensation benefits appeal pertaining to a worker being injured by bears. One of the main issues in the appeal was whether the worker was entitled to workers comp (WC) benefits since he was injured after smoking marijuana. This case is Hopkins v. Uninsured Employers' Fund, 2011 WL 1002746 ( Mont. ).

Kilpatrick appealed the decision of the state workers compensation court that concluded that Hopkins was employed by Kilpatrick and was acting in the course and scope of employment at the time of his injuries. Hopkins worked at a nature park owned and operated by Kilpatrick and one of his tasks over the years was to feed the bears. In November, 2007, Hopkins traveled to work at the park and on the way, he smoked marijuana. After he got to work, Hopkins entered the bears' pen and began to place food out. He was attacked by two bears and suffered severe injuries.

Kilpatrick did not carry workers compensation insurance. Hopkins petitioned the state workers comp court for WC benefits from the uninsured employers' fund. Both the fund and Kilpatrick opposed Hopkins' petition. The comp court ruled in favor of Hopkins and the ruling was appealed. Kilpatrick raised four issues on appeal: whether Hopkins was employed by Kilpatrick at the time of the accident; whether Hopkins was in the course and scope of employment at the time of his injuries; whether marijuana use was the major contributing cause of the injuries; and whether Hopkins was performing service for Kilpatrick in return for aid or sustenance only.

The Supreme Court of Montana, after reviewing the facts of the case concluded that Kilpatrick unquestionably controlled the details of Hopkins' work at the park. Hopkins had worked at the park since 2002, received regular payments from Kilpatrick, and engaged in tasks at Kilpatrick's command; Hopkins was definitely employed by Kilpatrick.

As to whether Hopkins was in the scope and course of employment at the time of his injuries, the court considered four factors in its analysis: whether the activity was undertaken at the employer's request; whether the employer directly or indirectly compelled the employee's attendance at the activity; whether the employer controlled or participated in the activity; and whether the employer and the employee mutually benefited from the activity. After again reviewing the facts, the court said that Kilpatrick compelled Hopkins to work at the park, feeding the bears was one of Hopkins' regular employment duties, feeding the bears was not a personal activity severed from the employment-related duties at the park, and Kilpatrick benefitted from the care and feeding of the bears since presumably, customers would not be willing to pay cash to see dead or emaciated bears. Hopkins was acting in the course and scope of his employment at the time of his injuries.

The court then addressed the use of marijuana by Hopkins. The court said that non-prescription drug consumption will preclude an injured employee's benefits if consumption was the leading cause contributing to the result, when compared to all others. No evidence was presented here regarding Hopkins' level of impairment and the court found that bears are equal opportunity maulers without regard to marijuana consumption. So, the use of marijuana was not the major contributing cause of Hopkins' injuries.

The last appeal issue was whether Hopkins' services were in exchange for aid or sustenance only; if this were shown to be true, such employment is not covered by the state WC law. However, the Supreme Court agreed with the workers compensation court that found that Kilpatrick's testimony that he gave money to Hopkins not as wages, but rather out of his heart, to be without any credibility. The Supreme Court said that the trier of fact is in the best position to weigh the credibility of witnesses, so the court agreed with the trial court.

For these reasons, the Supreme Court affirmed the finding of the workers compensation court and said Hopkins was entitled to WC benefits.

Editor's Note: Standing alone, alcohol or drug consumption is not typically sufficient to defeat recovery of workers compensation benefits if the user is injured at work. However, individual states may have statutory standards establishing when drug or alcohol use does preclude the receipt of WC benefits. In this instance, the Montana Supreme Court found that while drug consumption may preclude WC benefits if it is the leading cause contributing to the injury, there was no evidence to show that Hopkins' use of marijuana was such a major contributing cause of his injuries. As the court noted, bears are equal opportunity maulers and while Hopkins' actions may have been “mind-bogglingly stupid” (the court's words), the bears did not attack because of the marijuana use by Hopkins. Hopkins was injured in the course of his employment and was entitled to WC benefits.