On May 22, 2018 the Supreme Court finally put Casey v. E. J. Cody to rest, ending a great deal of angst over how the Court would deal with some of the issues created by the 2013 workers’ compensation occupational disease amendments.

The Facts:

Casey retired in 1990 after a career as a floor tile installer and Cody Co. was his last employer.

Casey was diagnosed with mesothelioma in 2014, a Claim was filed in 2014 and since Casey died pending trial, his spouse and adult children were substituted as claimants.

At trial, the claimants only pursued the enhanced benefit for mesothelioma, not the “traditional” benefits which remain available after the 2013 changes.

Accident Fund was Cody Co.’s insurer in 2014 and 2015 and the policy contained a mesothelioma endorsement.

Cody Co.’s insurer on the date of last exposure in 1990 had become insolvent.

At trial, the Administrative Law Judge (“ALJ”) found Accident Fund liable for the enhanced benefit and the employer and insurer appealed.

The Labor and Industrial Relations Commission (“LIRC”) modified the award but reached the same outcome.

Throughout the litigation the insurer argued against coverage and both defendants questioned the constitutionality of the 2013 amendments.

The Court of Appeal transferred the case to the Supreme Court after oral argument but before the Court issued an opinion.

The Supreme Court’s Decision:

The Court concluded that since the employer purchased a policy which was meant to cover all of the employer’s worker’s compensation liability, and which included a mesothelioma endorsement to cover all liability arising out of any mesothelioma claims filed on our after January 1, 2014, Accident Fund was liable for the enhanced benefit for mesothelioma.

The Court found that the standard policy provision which limits liability for exposure injuries to those which were caused by exposure during the policy period was modified by the addition of the mesothelioma endorsement.

The Court observed that to rule otherwise would make the mesothelioma endorsement “essentially worthless”.

The Court rejected the argument that all liability should follow the “last exposure rule” so should fall on the employer’s insurer on the date of last exposure.

The Court held that Section 287.200.4 was constitutional “as applied to this claim” even though the new benefit provisions were enacted subsequent to the last exposure.

The Takeaway:

We know for certain that:

For mesothelioma claims filed after January 1, 2014 that the current insurer is responsible for the enhanced benefit.

The application of the 2103 amendments to such a clam is constitutional.

In such cases, the last exposure rule doesn’t determine liability for the enhanced benefit except to identify the  correct employer.

But many issues remain:

Since the Court focused on the date on which the formal Claim was filed, what happens if there are different insurers on the date of diagnosis and the date of the Claim filing?

What if the date of diagnosis was before January 1, 2014 but the Claim was filed after that date?

The Court was very careful not to expand their holding beyond the needs of this specific case so we don’t know what will happen where the employer no longer existed on or after January 1, 2014 so could not have had a current policy with, or without, a mesothelioma endorsement.

COPYRIGHT: Evans & Dixon LLC, 2018