What If? Workers’ Comp and Earthquakes

What If? Workers’ Comp and Earthquakes

The video we've been seeing coming out of Japan's earthquake ravaged region is some of the most spectacularly disturbing ever seen.

The Hollywood spectacles like Independence Day and Deep Impact were really on to something, as we see humankind and its constructions tossed around like crumbs.

From the blog's mailbag comes a question: what about earthquakes and workers' comp? If someone is hurt at work during a California earthquake is that covered under California workers' comp?

In the event of a catastrophic earthquake, would California employers and insurers face astronomical liability? Sitting here in a home near the Hayward Fault, it's a question of more than passing interest for this blogger.

Does an injury at work during an earthquake meet the legal definition of "arise out of" and "in the course of employment (AOE/COE)?

It's a subject that has concerned some in the industry. For example, this analysis, "Assessing Catastrophic Exposures in Workers' Compensation Insurance" by Art Cadorine in ISO Review:

http://www.iso.com/Research-and-Analyse ... rance.html

But there's been surprisingly little litigation over earthquake-connected injuries in California. Work injuries during the Bay Area Loma Prieta earthquake or the Northridge earthquake have not resulted in published case law.

The issue actually arose years ago, in a 1927 California Supreme Court case, the Mostiero case (actually known as London Guarantee and Accident Company v. Industrial Accident Commission (Mostiero), 202 Cal. 239 (1927).

Mrs. Mostiero's husband was killed in 1925 when walls collapsed at a reinforced concrete building in Santa Barbara during an earthquake. Mr. Mostiero was performing services in the building as a janitor at the time.

The court noted that "There must be some connection between the injury and the employment other than the mere fact that the employment brought the injured party to the place of injury. There must be a causal connection between the employment and the injury which had its origin in a risk connected with the employment, and flowed from that source as a rational and natural consequence".

The court noted the concept of "force majeure". That's the Act of God concept, where, as a general rule employers are not responsible for lightning, storms, floods, tornados and the like.

But in Mostiero's case the Supreme Court was asked to review a finding by the Industrial Accident Commission that ruled the death compensable.

The finding of industrial causation was supported by evidence that established that the building had defective construction "which would not have fallen from the effect of the shock of the earthquake had it not been constructed of inferior materials". Although many local buildings had been destroyed or severely damaged, apparently other buildings in the nearby vicinity that were similar in character to where Mosteiro died had only slight damage.

On the other hand, there was evidence that the building's construction "was in accordance with the accepted standards and methods in use at the time it was built".

Mostiero produced engineering testimony questioning the quality of the concrete. A safety engineer testified that failure to tie the building together with structural steel, beams and girders contributed to the building's failure.

After wrestling with this evidence, the California Supreme Court noted:

"There can be no question in this case that the deceased by being compelled to perform his work in a building defective in construction was exposed to a risk of being injured in an earthquake which was greater than that to which the public generally in that vicinity was subject. It follows, therefore, that the injury received by him was one arising from his employment.

While the earthquake, an act of God, may have contributed to the injury, yet it was not the sole cause of such injury, and except for the intervention of some human agency might not have produced any injury whatever...."

Concluding, the court noted that:

"The destruction of the building in part having been contributed to by its defective construction, the whole occurrence was thereby humanized, and in fixing the liability of the parties hereto the part attributed to the earthquake must be eliminated as a contributing cause of the building's downfall."

Decided at the same time as Mostiero was the Wilson case, actually known as Enterprise Dairy Company v. IAC (Wilson) (1927), 202 Cal. 247.

Mr. Wilson, a truck driver for a dairy, had driven his vehicle into the employer's garage to pick up a load of milk. During the loading an earthquake occurred, and a brick wall of an adjoining building fell through the employer's roof. Wilson's injuries were lacerations from broken glass from the milk bottles he was loading.

The California Supreme Court found the injury compensable under workers' comp, reasoning that:

"...in the course of Wilson's employment he was subject to risks different from and in addition to those to which other persons were exposed who were within the area affected by the earthquake in question. His injuries from the broken bottle, therefore, arose out of employment. Within the meaning of the Workmen's Compensation Act, he was injured by the broken glass and not by the earthquake..."

OK. So not everyone who happens to be at work and is injured during a destructive temblor will be covered. But many will, particularly if the earthquake is just the start of a chain reaction that then involves injury from their tools or equipment.

But how is this to be sorted out?

For example, Boxer & Gerson LLP offices are in a restored Oakland downtown Beaux Arts building that was damaged in the Loma Prieta quake. FEMA money was used to restore and retrofit the structure, a former department store.

Should California eventually experience a massively destructive earthquake, we'll likely see a huge amount of litigation over individualized circumstances. Did the nature of the work make earthquake injury more likely? Were the unbolted file cabinets a factor? Was the building up to code? What if the building fails even after a retrofit?

The litigation possibilites would be endless. Comp lawyers could become construction lawyers.

How the industry evaluates these risks and prices in these risks is beyond the scope of this post.

One thing is for sure. Should there ever be a quake of this magnitude, workers' comp will be a battleground.

Julius Young
www.boxerlaw.com
www.thecompguys.org

   This blog originally appeared on WorkersComp Zone. Reprinted with permission.

 

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