Larson’s Spotlight on Recent Workers’ Comp Cases: Self-Insured Gets Hit in Blind Spot With Liability for Uninsured Motorist Benefits

Larson’s Spotlight on Recent Workers’ Comp Cases: Self-Insured Gets Hit in Blind Spot With Liability for Uninsured Motorist Benefits

Larson's Spotlight on Uninsured Motorist, Dual Persona, Compulsory Coverage, and Misrepresentation Defense. Larson's surveys the latest case developments that you need to know about. Thomas A. Robinson, the staff writer for Larson's Workers' Compensation Law, has compiled the list below.

NY: Worker May Go After Uninsured Motorist Coverage Benefits From Self-Insured Employer

The Court of Appeals of New York recently held that a self-insured employer, whose employee was involved in a work-related automobile accident, may be liable to that employee for uninsured motorist benefits, notwithstanding the exclusivity provision of the Workers' Compensation Law. 

Exum was an employee of Elrac, Inc. (a subsidiary of Enterprise Rent-A-Car Company). While driving one of his employer's cars in the course of his employment, Exum was involved in an accident with another car, driven by a person without liability insurance.  Elrac was legally self-insured for Vehicle and Traffic Law purposes and, therefore, had not obtained an insurance policy to cover the car Exum was driving.   Exum sought uninsured motorist benefits from Elrac, contending in relevant part that had Elrac purchased an auto policy to cover the Elrac vehicle, Exum would have been entitled to the statutory uninsured motorist benefits and that his rights should not be diminished merely because Elrac chose to self-insure its vehicles.

Elrac countered that the exclusive remedy provisions of the New York Workers' Compensation Law were quite clear, that:

The liability of an employer [for workers' compensation benefits] . . . shall be exclusive and in place of any other liability whatsoever, to such employee, his or her personal representatives, spouse, parents, dependents, distributees, or any per-son otherwise entitled to recover dam-ages, contribution or indemnity, at common law or otherwise, on account of such injury or death or liability arising therefrom.

N.Y. Work. Comp. § 11.

The court acknowledged that the words "any other liability whatsoever" seemed all-inclusive, but citing Billy v Consolidated Mach. Tool Corp., 51 NY2d 152, 412 N.E.2d 934, 432 N.Y.S.2d 879 (1980), indicated that there are cases-and this was one-in which the words could not be taken literally, that to do so would mean that if an employer agreed, for example, in a contract to provide life insurance or medical insurance to an employee and then breached that agreement, an action to recover damages for the breach would be barred, since the action might literally be "on account of . . . injury or death."  An action against an employer who was self-insured for motor vehicle law purposes was essentially a breach of contract action. The situation was as though the employer had written an insurance policy "to itself," including the statutorily-required provision for uninsured motorist coverage. The action was, therefore, not barred by N.Y. Work. Comp. Law § 11.

FREE VERSION: Access the case on lexisONE free case law. Click on tab for Free Case Law. Click on the radio button for Search by Citation. Enter this citation: 2011 N.Y. LEXIS 3565. Then click on the red button Search for Free. Note: If you haven't registered for free at lexisONE, you will be prompted to do so in order to access the free case law.

FULLY FEATURED VERSION: Lexis.com subscribers can read the fully featured case here. See generally Larson's Workers' Compensation Law, § 110.05.

PA: Worker is Unsuccessful in Suing Employer Under "Dual Persona" Theory

An employer may become a third person, vulnerable to tort suit by an employee, if it possesses a second "persona" so completely independent from and unrelated to its status as employer that by established standards the law recognizes that "persona" as a separate legal person.  In a recent case from Pennsylvania, a worker unsuccessfully sought to sue his employer in tort for injuries sustained due to the alleged defect of a cracker cutting machine that had been designed and manufactured, for internal use only, by the worker's former employer.  That former employer was acquired, through a merger, by the worker's current employer and the worker contended that the current employer could be held liable under a products liability theory.

FREE VERSION: Access the case on lexisONE free case law. Click on tab for Free Case Law. Click on the radio button for Search by Citation. Enter this citation: 2011 Pa. Super. LEXIS 3753. Then click on the red button Search for Free. Note: If you haven't registered for free at lexisONE, you will be prompted to do so in order to access the free case law.

FULLY FEATURED VERSION: Lexis.com subscribers can read the fully featured case here. See generally Larson's Workers' Compensation Law, § 113.01.

VA: Day and one-half of Labor by Worker Is Insufficient to Put Employer "Over" the Minimum Number of Employees to Require Compulsory Coverage

In all states but Texas, employers and employees are conclusively presumed to have accepted the provisions of the state's workers' compensation act.  In many states, however, a special exception is made for the employer who has a small number of workers.  For example, in Virginia, if an employer has fewer than three employees "regularly in service," it is not subject to the Act and has no obligation to provide its employees with workers' compensation benefits [see Va. Code § 65.2-101.  A recent Virginia case construes the meaning of "regularly in service," holding that the employment of an "extra" person for a day and one-half did not bring the employer within the coverage of the Act.

FREE VERSION: Access the case on lexisONE free case law. Click on tab for Free Case Law. Click on the radio button for Search by Citation. Enter this citation: 2011 Va. App. LEXIS 396. Then click on the red button Search for Free. Note: If you haven't registered for free at lexisONE, you will be prompted to do so in order to access the free case law.

FULLY FEATURED VERSION: Lexis.com subscribers can read the fully featured case here. See generally Larson's Workers' Compensation Law, § 74.02.

NE: Employee/Applicant Misrepresentation Defense Disallowed

In a tough labor market, such as that which is being experienced throughout most of the United States, an applicant is tempted to "paper over" a past injury-jobs are difficult enough to find, the applicant doesn't want to be immediately disqualified from the applicant pool.  If the applicant is hired and subsequently sustains a work-related injury-and the employer then discovers the misrepresentation-is the claim for benefits barred?  The dominant rule is to follow the "Larson rule" (see Larson's Workers' Compensation Law,  § 66.04), that the claim is barred only if there is a direct causal relationship between the misrepresentation and the subsequent injury.  A recent Nebraska decision breaks that pattern, overrules an earlier state supreme court case, and holds that the misrepresentation defense must be created legislatively, not by the court. Read more about this case at WorkCompWriter.com, a new law blog by Thomas A. Robinson.

FREE VERSION: Access the case on lexisONE free case law. Click on tab for Free Case Law. Click on the radio button for Search by Citation. Enter this citation: 2011 Neb. LEXIS 132. Then click on the red button Search for Free. Note: If you haven't registered for free at lexisONE, you will be prompted to do so in order to access the free case law.

FULLY FEATURED VERSION: Lexis.com subscribers can read the fully featured case here. See generally Larson's Workers' Compensation Law, § 66.04.

Source: Larson's Workers' Compensation Law, the nation's leading authority on workers' compensation law

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