Garien v. Schneider, 95-237
| Citation | 546 N.W.2d 606 |
| Decision Date | 17 April 1996 |
| Docket Number | No. 95-237,95-237 |
| Parties | Alan GARIEN and Leanda Garien, Individually, and as Parents and Next Friends of Daniel J. Garien and Catherine R. Garien, Minors, Appellees, v. William SCHNEIDER and Dahlen Transport of Iowa, Inc., Appellants. |
| Court | United States State Supreme Court of Iowa |
Mark A. Woollums and Jean Dickson Feeney of Betty, Neuman & McMahon, Davenport, for appellants.
Christopher L. Farwell and James D. Bruhn of Farwell & Bruhn, Clinton, for appellees.
Considered by McGIVERIN, C.J., and HARRIS, LARSON, CARTER, and TERNUS, JJ.
This appeal concerns the right of an employee whose employer was not insured for workers' compensation liability to bring an action at law for injuries received in the workplace. Plaintiff Alan Garien sustained substantial personal injuries while working in the employ of the defendant. The employer did not carry workers' compensation insurance.
Relying on Iowa Code section 87.21 (1993), Alan brought an action at law against his employer. Loss-of-consortium claims on behalf of Alan's wife and children were joined with his action. In addition, both Alan and the consortium claimants made a negligence claim against a coemployee, defendant William Schneider.
Following the filing of motions for summary judgment, the district court ruled that, because the defendant employer had not insured against workers' compensation liability and was not self-insured, an election existed on plaintiffs' part to bring an action at law. The court also ruled that Alan had not elected an inconsistent remedy by accepting proffered payments of workers' compensation benefits from the employer. After reviewing the record and considering the arguments presented, we affirm the district court's ruling that the employer was neither insured nor self-insured, thus providing plaintiffs an election to sue at law. On the matter of the alleged inconsistent election arising from the employee's acceptance of proffered workers' compensation payments, we find that a genuine issue of material fact has been presented that precludes summary adjudication of that issue. The judgment of the district court is thus affirmed in part, reversed in part, and remanded for further proceedings.
We first consider the legal consequences of the employers being uninsured against workers' compensation liability. Section 87.21 deals with this issue and provides as follows:
Any employer, except an employer with respect to an exempt employee under section 85.1, who has failed to insure the employer's liability in one of the ways provided in this chapter, unless relieved from carrying such insurance as provided in section 87.11, is liable to an employee for a personal injury in the course of and arising out of the employment, and the employee may enforce the liability by an action at law for damages, or may collect compensation as provided in chapters 85, 85A, 85B, and 86.
It is undisputed that the defendant employer did not insure against workers' compensation liability. The employer argues, however, that it was the substantial equivalent of a self-insured employer under section 87.10. It bases this claim on the fact that, prior to Alan's injury, it had made arrangements with an independent workers' compensation administrator to administer its workers' compensation claims on a self-insured basis in several states, including Iowa. Following Alan's injury, that independent administrator filed a first report of injury with the Iowa Industrial Commissioner, computed temporary total disability benefits, and issued payments of those benefits that were accepted by Alan. In addition, it made payments to medical suppliers on Alan's behalf.
Although the acts of the independent administrator may be significant in deciding the second issue on appeal involving election of remedies, those actions fall short of qualifying the employer for self-insured status. As we observed in Reedy v. White Consolidated Industries, Inc., 503 N.W.2d 601 (Iowa 1993),
[a] self-insured employer under the Workers' Compensation Act is not an employer who fails to secure insurance against workers' compensation liability. Without more, an employer who fails to secure insurance against such claims merely waives the protection of the act against common-law claims.... To be a qualified self-insured employer under the act, it is necessary to voluntarily assume a recognized status under the workers' compensation laws as an insurer.
Id. at 603 (citing Iowa Code § 87.4 (1987)). Among other requirements necessary to gain self-insured status under the act, an employer must file proof of financial ability and furnish a bond approved by the industrial commissioner. Iowa Code § 87.11 (1993). The employer's failure to do this defeats any right to claim self-insured status for purposes of precluding the employee's election under section 87.21. The district court's ruling on this issue was correct.
Our inquiry does not end with a determination that the employer was neither insured nor self-insured. The employer has asserted that Alan elected against an action at law under section 87.21 by accepting workers' compensation benefits paid by the independent administrator after first notice of injury was filed with the Iowa Industrial Commissioner. In Stroup v. Reno, 530 N.W.2d 441 (Iowa 1995), we determined that an employee elects against a right to workers' compensation benefits by pursuing an action at law. We are convinced that the converse is true and that an employee may irreversibly elect against an action at law by the acceptance of workers' compensation benefits.
The district court summarily adjudicated this issue against defendants. We find that a sufficient factual issue exists to preclude the affirmance of that ruling. This action was commenced on June 16, 1994. As of September 1, 1994, approximately $119,181 in medical benefits had been paid to medical suppliers on Alan's behalf by his employer. More significant perhaps is the fact that, as of September 1, 1994, approximately $15,797 in temporary...
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