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Missouri: Claimant Entitled to Pre-judgment Interest Against Second Injury Fund

May 24, 2012 (2 min read)

A claimant may recover pre-judgment interest against the second injury fund under "liberal" construction for unpaid bills of an uninsured employer, according the western court of appeals, reversing the Commission which found interest owed only after an award.  Eason v Treasurer of Mo., 2012 Mo. App. Lexis 711 (May 22, 2012). Interest begins to accrue potentially once the claimant adds the Fund as a party while the case remains pending.

Judge Welsch noted that the worker's compensation statute did not expressly prohibit interest.  The court applied the general interest statute and cases addressing interest against employers.  Claimant must satisfy the three-prong test of McCormack v. Stewart Enterprises, 956 S.W.2d 310 (Mo. App. 1997), which allowed interest in some cases against employers.  The expenses must have been due at the time of the demand, the amount of the expenses must have been readily ascertainable, and payment must have been demanded.

In order to prove that expenses were "due" at the time of the demand, Eason must prove that he "paid the expenses, his providers were demanding interest of him, or he suffered a loss by the delay in payment." The Fund did not dispute claimant had a "loss", which was the first prong.  The court noted that at oral argument the parties were unable to explain the "loss" required to otherwise prove  this element and failed to "see how a claimant in a workers' compensation case may establish that he is entitled to prejudgment interest by proving that he suffered a loss from the delay in payment."

The court declined to address whether strict construction mandated by statutory reform would produce a different result.

Claimant fell about 15 feet off of a car carrier and required ORIF for a tibia fracture, resulting in $46,802 in medical bills.  The employer went into bankruptcy.  The employer's Oklahoma insurance policy did not cover the accident which occurred in Missouri.  The administrative law judge found the second injury fund liable for unpaid bills pursuant to 287.220(5) because the employer was uninsured.  The administrative law judge awarded the medical bills with open medical but denied interest, a decision affirmed unanimously by the Commission.

Source: Martin Klug, Huck, Howe & Tobin. Read Martin Klug's Mo. Workers' Comp Alerts.

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