Articles & Updates

MO WC ALERT! – Mesothelioma Liability, Round Two

by James B. Kennedy

It has been over four years since the 2013 occupational disease amendments went into effect on January 1, 2014 and yet prior to May 21, 2019, only one “toxic exposure occupational disease” claim had been decided by an appellate court. Now there is a second case, Hegger v. Valley Farm Diary, which the Court of Appeals, Eastern District issued on May 21, 12019.

Facts:

-Hegger worked for Valley Farm from 1968 to 1984.

-Hegger was last exposed to asbestos during that employment. He was diagnosed with mesothelioma on in March 2014, filed a Claim for Compensation that same month, and died of the disease on June 17, 2015.

-Two insurers had coverage for Valley Farm for portions of 1984, but the exact date of Hegger’s last employment is not in the record.

-Valley Farm went out of business after Hegger’s employment ended, and before the 2013 occupational disease amendments became effective on January 1, 2014.

-The Claim was limited to an attempt to recover the “enhanced benefit” for mesothelioma created by the 2103 amendments.

-Since the employee was defunct by 2014, Valley Farm had no workers’ compensation policy in force, and could not have accepted or rejected mesothelioma liability.

-The claimant was Hegger’s son.

[NOTE: Under the Missouri Supreme Court’s holding in Accident Fund v. Case, decided in May 2018, the insurer for the employer on the date on which the Claim is filed is liable for the enhanced benefit, at least where the policy contains a mesothelioma endorsement.]


The Administrative Law Judge’s Ruling:

-The ALJ ruled that the insurer on the risk on the date of last exposure could not be held liable for the enhanced benefit under Section 287.200.4(3).

-The ALJ’s reasoning was that the employer was not in existence on the effective date of the statute so could not have accepted or rejected mesothelioma liability, having, of course, no post-January 1, 2014 policy.

 

The LIRC’s Ruling:

-In a separate decision, the Commission affirmed the denial of benefits.

-The Commission also reasoned that since the employee no longer existed, the employer could not take an affirmative action to accept or reject mesothelioma liability.

 

The Court of Appeals Decision:

-The decision of the majority (two of the three Judges on the panel) was clearly influenced by their belief that the historical “bargain” between employers and employees would be preserved only if the new benefit was awarded to the Hegger’s son.

-The holding was also strongly influenced by the Court’s recognition of the seriousness of the disease.

-The Court felt that any insurer in 1984 would have known and accepted the risk that an occupational disease would not become manifest for many years after the policy period ended.

-The majority pointed out that an employer must insure, and all insurers must insure, an employer’s entire liability under the Law.

-The Court emphasized that the version of the law which applied was that in effect on the date of injury, which here was Hegger’s March 2014 date of diagnosis.

-The Court pointed out that for the other diseases due to toxic exposure, other than mesothelioma, the employee would be eligible for benefits, even if the employer was no longer viable [Which benefits?].

-The Court also found that if the employer was out of business, the employee wouldn’t likely have a civil remedy either [but still could sue any non-employer manufactures, suppliers, etc.]

-The case was remanded to the Commission for the determination of which, of the two insurers, was liable for the enhanced benefit.

 

The Dissent:

-One of the three Judges wrote a strong lengthy dissent, taking the majority to task on many grounds.

-He felt that the majority haphazardly and indiscriminately applied the rules of statutory interpretation to avoid a harsh result. [That of denying the claimant the benefit of the 2013 amendments.]

-He noted that the 2013 amendments were an effort to remedy the confusion caused by the wording and interpretation of the 2005 amendments relating to occupational disease.

-He asserted that the holding in Accident Fund v. Casey was not instructive, since in that case, the employer had a current insurer and a policy containing a mesothelioma endorsement, whereas herein there is no viable employer, and thus no current policy.

-He particularly disagreed with the majority’s determination that the present tense phrase “electing to accept” (mesothelioma liability) can be interpreted to read “having elected to accept” or “having insured”, “having qualified”, or “having become (a member of a group insurance pool)”, past tense phrases intended to refer to the employer having insured their liability in the past (at the time of last exposure).

-He also pointed out the problems which the majority’s ruling causes when considered in the context of an employer’s exposure to civil liability.

The Eastern District’s decision remains subject to a motion for rehearing by the court en banc, or a motion to transfer to the Supreme Court. Should neither of these motions succeed, a motion to transfer can be filed directly with the Supreme Court.

This holding is extremely problematical on several levels, too complex to address here. Please address any questions and comments to: Jkennedy@evans-dixon.com | 314-552-4020.

 

 

Copyright: Evans & Dixon LLC, 2019