Mr. Casey was diagnosed with mesothelioma in the fall of 2014. He filed a claim for workers' compensation benefits against Cody in February 2015. At the time he filed that claim, Cody was covered under an insurance policy it had purchased from Accident Fund National Insurance Company.

The policy included an endorsement entitled “Missouri Notification of Additional Mesothelioma Benefits Endorsement” that provided:

Section 287.200.4, subdivision (3), of the Missouri Revised Statutes provides additional benefits in the case of occupational diseases due to toxic exposure that are diagnosed to be mesothelioma and result in permanent total disability or death. Your policy provides insurance for these additional benefits.

Mr. Casey passed away while his claim was still pending and his widow, Dolores Murphy, was substituted as the claimant.

The administrative law judge (“ALJ”) found Cody liable and awarded Section 287.200.4's enhanced mesothelioma benefits to Ms. Murphy and Mr. Casey's eight children.

The Missouri Labor and Industrial Relations Commission largely affirmed, and the dispute reached the Supreme Court of Missouri.

There, Accident Fund contended that it could not be held liable for Ms. Murphy's claim because it had not insured Mr. Casey at the time of his last exposure. In the alternative, Accident Fund argued that Section 287.200.4 violated Article I, Section 13, of the Missouri constitution, which prohibits retrospective laws.

The Missouri Supreme Court's Decision

The court affirmed the award.

In its decision, the court explained that Missouri's workers' compensation law was amended in 2014 to provide enhanced compensation for individuals diagnosed with occupational diseases such as mesothelioma. Under the amended law, the court continued, coverage is provided for “all claims filed on or after January 1, 2014, for occupational diseases due to toxic exposure which result in a permanent total disability or death.” Employers either may accept or reject liability for mesothelioma, the court noted. It added that if an employer elected to accept liability, it had to insure its “entire liability” under the act, including accepting all of the act's provisions. In other words, the court stated, an insurer could not avoid certain liabilities by constructing its policy to exclude certain provisions of the workers' compensation statute and cover only the provisions it preferred.

Here, the court observed, Cody elected to accept mesothelioma liability under Section 287.200.4 and purchased a policy from Accident Fund to cover these “additional benefits” by selecting a policy that explicitly contemplated enhanced compensation for mesothelioma claims filed on or after January 1, 2014. The court added that the triggering occurrence – the event commencing liability coverage – was the filing of a claim.

The court then rejected Accident Fund's argument that it could not be held liable for the award of compensation because it had not insured Cody in 1990 – when Mr. Casey was last exposed to asbestos. The court noted that Section 287.063.2, deemed the “last exposure rule,” provides that the “employer liable for [workers' compensation benefits] shall be the employer in whose employment the employee was last exposed to the hazard of the occupational disease.”

Moreover, the court said, Accident Fund's policy contained a mesothelioma endorsement that adopted Section 287.200.4 and, as a result, that adopted that section's provision of enhanced benefits for occupational disease claims filed on or after January 1, 2014. The court added that the last exposure rule was “immaterial” in this case because the Accident Fund policy purchased by Cody “explicitly cover[ed] the benefits proffered by [S]ection 287.200.4,” contained “no qualifying language as to the date of last exposure or injury,” and limited coverage “only by way of conditioning it on the filing of a claim after January 1, 2014.”

Through this policy, the court decided, Cody accepted, and Accident Fund provided, liability insurance for the enhanced benefits – the only benefits sought by Mr. Casey and Ms. Murphy.

The court added that if recovery under Section 287.200.4 were limited to individuals who were last exposed to asbestos during the policy period, the mesothelioma endorsement to the Accident Fund policy – “and similar provisions in countless other insurance policies” – would be “rendered essentially worthless” because individuals were “no longer regularly exposed to asbestos in the workplace.”

The court also ruled that Section 287.200.4 was constitutional, finding that it was not a “retrospective law” because Accident Fund had “affirmatively assented to providing these enhanced benefits.”

The court pointed out that it was not until after the amendments went into effect that Accident Fund and Cody had contracted for coverage, and it was only after they had entered into the contract that Mr. Casey filed his claim seeking workers' compensation benefits under the new statutory provisions. That certain facts, such as Mr. Casey's exposure, were antecedent to the amendments did “not render the law retrospective,” the court concluded.

The case is Accident Fund Ins. Co. v. Casey, No. SC96899 (Mo. May 22, 2018).