Brickstreet Mut. Ins. Co. v. Zurich Am. Ins. Co.
Citation | 813 S.E.2d 67 |
Decision Date | 05 April 2018 |
Docket Number | No. 17-0592,17-0592 |
Court | Supreme Court of West Virginia |
Parties | BRICKSTREET MUTUAL INSURANCE COMPANY, Petitioner v. ZURICH AMERICAN INSURANCE COMPANY, Respondent |
Don C.A. Parker, Spilman Thomas & Battle, PLLC, Charleston, West Virginia, Attorney for the Petitioner
Philip J. Sbrolla, Jeffrey B. Brannon, Cipriani & Werner, PC, Wheeling, West Virginia, Attorneys for the Respondent
Trevor K. Taylor, Taylor Law Office, Morgantown, West Virginia, Attorney for Amicus Curiae, American Insurance Association
This Court is herein presented with three certified questions from the United States Court of Appeals for the Fourth Circuit. The underlying action is a dispute between two insurance companies, petitioner BrickStreet Mutual Insurance Company ("BrickStreet") and respondent Zurich American Insurance Company ("Zurich"), over whether both companies should contribute to the payment of workers' compensation benefits arising from a single uncontested work-related injury. The subject injury was to an employee who had been hired by BrickStreet's insured, Employers' Innovative Network, LLC ("EIN"), a professional employer organization ("PEO"), and assigned by EIN to work for Zurich's insured, Taggart Site Services Group ("Taggart"). Our resolution of this matter necessitates that we answer only two of the questions certified:1
(Footnote defining "covered employee" omitted).
We reformulate the first question and answer it in the negative, finding that the Workers' Compensation Office of Judges does not have jurisdiction over a declaratory judgment action such as the one underlying the instant proceeding. We answer the second question in the affirmative, and conclude that, pursuant to W. Va. Code § 33-46A-7(a) (2008) (Repl. Vol. 2011), parties to a professional employer agreement must designate either the professional employer organization or the client-employer as the responsible party for obtaining workers' compensation insurance coverage for covered employees. Moreover, pursuant to W. Va. Code § 33-46A-7(b), and W. Va. C.S.R. § 85-31-6.3, when parties to a professional employer agreement designate the PEO as the responsible party for obtaining workers' compensation insurance coverage for covered employees, the policy obtained by the PEO is primary over a policy obtained by a client-employer. Therefore, coverage under a workers' compensation policy purchased by the client-employer is triggered only if the PEO or its carrier default on their obligation to provide workers' compensation coverage.2
In 2010, EIN executed a professional employer agreement (sometimes referred to as a "PEO agreement") with Taggart "to provide professional employer organization services at [Taggart's] workplace(s) through the assignment to [Taggart's] workplace(s) of qualified EIN employees ('Worksite Employees'), including supervisory personnel." (Emphasis added).3
EIN and other PEOs in this State are governed by W. Va. Code § 33-46A-1 et seq . With respect to workers' compensation, the West Virginia Code requires, in relevant part:
W. Va. Code § 33-46A-7 (footnotes and emphasis added). Accordingly, and of particular relevance to the instant dispute, the professional employer agreement between EIN and Taggart expressly required that
In compliance with the foregoing agreement, EIN secured workers' compensation coverage through a multiple coordinated policy issued by BrickStreet.6 The BrickStreet policy names Taggart as an insured and provides that BrickStreet "will pay promptly when due the benefits required of you by the workers [sic] compensation law."
Likewise, Taggart had workers' compensation coverage through a policy issued by Zurich. The policy was issued to Taggart's parent company and listed Taggart as a named insured. Thus, by virtue of this policy, Taggart complied with both its obligation imposed by W. Va. Code § 33-46A-7 to "remain ultimately liable under chapter twenty-three [§ 23-1-1 et seq.] of this code to provide workers' compensation coverage for its covered employees," and its obligation under the professional employer agreement with EIN to "maintain its status as a complying employer with its current insurance carrier. ..."
Jonathan Gutierrez ("Mr. Gutierrez") was hired by EIN and assigned to work at a Taggart workplace. In January 2012, during the coverage periods of the two aforementioned workers' compensation policies, Mr. Gutierrez sustained serious injuries in the course of and resulting from his employment. Mr. Gutierrez filed a claim for workers' compensation benefits with EIN. He did not file a claim with Taggart. Mr. Gutierrez's claim was submitted to BrickStreet. BrickStreet determined Mr. Gutierrez's claim was compensable, and this decision was not protested. Accordingly, BrickStreet began paying Mr. Gutierrez's workers' compensation benefits.
BrickStreet explains that it learned of the Zurich policy through a deliberate intent action filed by Mr. Gutierrez against Taggart in relation to the injuries he sustained in January 2012.7 Accordingly, in December 2014, BrickStreet sought contribution from Zurich toward the substantial workers' compensation benefits it had paid to or on behalf of Mr. Gutierrez.8 Zurich refused, and, on May 13, 2015, BrickStreet filed a declaratory judgment action against Zurich in the United States District Court for the Southern District of West Virginia. Zurich filed a motion to dismiss that was denied. Thereafter, both parties moved for summary judgment. By order entered September 15, 2016, the district court granted summary judgment to BrickStreet and denied Zurich's summary judgment motion. The district court concluded that Zurich was obligated to reimburse BrickStreet for half of all past and future benefits paid to or on behalf of Mr. Gutierrez. Zurich appealed the decision to the United States Court of Appeals for the Fourth Circuit. The Fourth Circuit then certified three questions to this Court. The two dispositive questions are:9
(Footnote defining "covered employee" omitted). By corrected order10 entered August 30, 2017, this Court accepted the certified questions. Having considered the parties' briefs, the brief of Amicus Curiae,11 the relevant authorities, and the oral arguments presented, we now answer the first certified question in the negative, and the second certified question...
To continue reading
Request your trial- State v. Thompson
-
State v. Tusing
...intent will not be interpreted by the courts but will be given full force and effect."). Brickstreet Mut. Ins. Co. v. Zurich Am. Ins. Co. , 240 W. Va. 414, 423, 813 S.E.2d 67, 76 (2018). The problem with this argument is that the State's factual premise is fatally flawed in multiple respect......
-
Pajak v. Under Armour, Inc.
...W. Va. Code § 5-11-9(7) (emphasis added). The disjunctive term "or" indicates alternatives. See Brickstreet Mut. Ins. Co. v. Zurich Am. Ins. Co. , 240 W. Va. 414, 423, 813 S.E.2d 67, 76 (2018) (stating that use of "or" in statute "plainly commands a choice of either one or the other"); Stat......
-
State ex rel. 3C LLC v. O'Briant
...resisting a forum-selection clause can overcome the presumption of its enforceability.28 See Brickstreet Mut. Ins. Co. v. Zurich Am. Ins. Co. , 240 W. Va. 414, 423-24, 813 S.E.2d 67, 76-77 (2018) (stating word "or" ordinarily connotes an alternative between the two clauses it connects).29 A......