Graef v. Cont'l Indem. Co.

• Decision Date: 20 May 2021
• Docket Number: No. 2018AP1782,2018AP1782
• Citation: 2021 WI 45,397 Wis.2d 75,959 N.W.2d 628
• Parties: Francis G. GRAEF, Plaintiff-Respondent-Petitioner, v. CONTINENTAL INDEMNITY COMPANY, Defendant-Appellant, ABC Insurance Company, Defendant. Francis G. Graef, Plaintiff-Respondent-Petitioner, v. Applied Underwriters, Inc., Defendant-Appellant, ABC Insurance Company, Defendant.
• Court: Wisconsin Supreme Court

397 Wis.2d 75

959 N.W.2d 628

2021 WI 45

Francis G. GRAEF, Plaintiff-Respondent-Petitioner,

v.CONTINENTAL INDEMNITY COMPANY, Defendant-Appellant,ABC Insurance Company, Defendant.

Francis G. Graef, Plaintiff-Respondent-Petitioner,

v.Applied Underwriters, Inc., Defendant-Appellant,ABC Insurance Company, Defendant.

No. 2018AP1782

Supreme Court of Wisconsin.

Oral Argument: January 19, 2021

Opinion Filed: May 20, 2021

For the plaintiff-respondent-petitioner, there were briefs filed by George Burnett and Conway, Olejniczak & Jerry, S.C., Green Bay. There was an oral argument by George Burnett.

For the defendant-appellant, there was a brief filed by Dustin T. Woehl and Kasdorf Lewis & Swietlik, SC, Milwaukee. There was an oral argument by Dustin T. Woehl.

KAROFSKY, J., delivered the majority opinion of the Court, in which ZIEGLER, C.J., ANN WALSH BRADLEY, ROGGENSACK, DALLET, and HAGEDORN, JJ., joined. REBECCA GRASSL BRADLEY, J., filed a dissenting opinion.

JILL J. KAROFSKY, J.

¶1 In this case, we must determine whether the exclusive-remedy provision of the Wisconsin Worker's Compensation Act (the "Act"), Wis. Stat. § 102.03(2) (2017-18),¹ bars the tort action filed by the petitioner, Francis Graef.

¶2 In 2017, Graef filed a tort action in circuit court against Continental Indemnity Company ("Continental"), his employer's worker's compensation insurance carrier, alleging that his self-inflicted gunshot wound was the result of Continental's negligence. More specifically, Graef alleged that Continental was negligent in failing to approve payment for a refill of his antidepressant medication—prescribed after a workplace injury—and as result of that negligence, Graef attempted suicide. Continental moved for summary judgment, arguing that Wis. Stat. § 102.03(2) barred Graef's tort action because the Act provides the exclusive remedy for his injuries. The circuit court concluded that the exclusive-remedy provision of the Act did not bar Graef's action.² The court of appeals reversed, concluding that the Act provides Graef's exclusive remedy and that to recover for his injuries, Graef must file a worker's compensation claim with the Department of Workforce Development (DWD).³

¶3 We affirm the decision of the court of appeals, conclude that the Act provides Graef's exclusive remedy for the injuries alleged in his complaint, and remand the cause to the circuit court with directions to grant summary judgment to Continental on Graef's negligence claim.

I. FACTUAL BACKGROUND AND PROCEDURAL POSTURE

¶4 On November 1, 2012, Graef was working in the livestock yard at Equity Livestock when a bull gored him, causing both physical injuries and depression. A doctor prescribed the antidepressant duloxetine

to treat Graef's depression, and Equity Livestock's worker's compensation insurance carrier, Continental, bore the responsibility of authorizing and paying for the medication.

¶5 On May 12, 2015, Graef went to his pharmacy to refill the duloxetine prescription. Continental initially rejected the pharmacy's request for payment, but then approved the request after the pharmacy called Continental and requested payment a second time. On June 23, 2015, Graef returned to the pharmacy for another refill of duloxetine. Continental once again denied the pharmacy's initial request for payment, and Graef left the pharmacy without his medication because he could not afford to purchase the medication on his own.⁴ Less than two months later, on August 9, 2015, Graef attempted suicide with a firearm and suffered a gunshot injury.

¶6 Two years later, Graef filed a tort action in circuit court, alleging that Continental was "negligent in failing to continue to authorize and pay for" the June 2015 duloxetine refill.⁵ Graef additionally claimed that Continental "by Wisconsin Statute [ch.] 102 was responsible for paying and authorizing worker's compensation medical, prescription and indemnity payments to [Graef] for injuries sustained on November 1, 2012." According to Graef, the self-inflicted gunshot injury "would not have occurred had [Continental] approved and paid for the prescription." Graef sought to recover compensatory damages associated with his suicide attempt, including "past and future medical expenses, personal injuries, pain, suffering, [and] disability."

¶7 Continental moved for summary judgment, asserting that Graef brought his claim in the wrong forum because the Act provides his exclusive remedy.

The circuit court denied Continental's motion, refusing to apply the exclusive-remedy provision because Continental would not concede that Graef's claim would prevail if filed as a worker's compensation claim.⁶ The court of appeals reversed the circuit court and remanded with directions to grant summary judgment to Continental.⁷ Graef petitioned this court for review, which we granted.

II. STANDARD OF REVIEW

¶8 "We review a grant of summary judgment independently, applying the same methodology as the circuit court." Pinter v. Village of Stetsonville, 2019 WI 74, ¶26, 387 Wis. 2d 475, 929 N.W.2d 547. Summary judgment shall be granted where the record demonstrates "that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Wis. Stat. § 802.08(2). The facts on appeal are undisputed. The question before us is whether the Act's exclusive-remedy provision prohibits Graef from filing this tort action in circuit court, which is a question of law that we review independently. See Ehr v. West Bend Mut. Ins. Co., 2018 WI App 14, ¶7, 380 Wis. 2d 138, 908 N.W.2d 486.

III. ANALYSIS

¶9 We first provide some background regarding Wisconsin's worker's compensation laws and then outline the relevant provisions. Next, we examine Graef's pleadings and determine whether the facts in the complaint, as alleged, meet the conditions of liability under Wis. Stat. § 102.03(1) and consequently, whether the Act provides Graef's exclusive remedy. Finally, we address Graef's remaining arguments that: (1) we should create an exception for the negligent denial of worker's compensation claims; and (2) Continental improperly failed to concede that Graef's worker's compensation claim would succeed.

A. Wisconsin's Worker's Compensation Laws

¶10 In 1911, Wisconsin became the first state to enact a broad, constitutionally valid worker's compensation system. Byers v. LIRC, 208 Wis. 2d 388, 395, 561 N.W.2d 678 (1997) ; 17 Thomas M. Domer & Charles F. Domer, Wisconsin Practice Series: Workers Compensation Law § 2:1 (2017-18). Worker's compensation laws are considered "the grand bargain" "under which workers, in exchange for compensation for work-related injuries regardless of fault, ... relinquish the right to sue employers and ... accept smaller but more certain recoveries than might be available in a tort action."

County of La Crosse v. WERC, 182 Wis. 2d 15, 30, 513 N.W.2d 579 (1994). In exchange for receiving immunity from tort liability, employers must provide benefits regardless of fault. Guse v. A.O. Smith Corp., 260 Wis. 403, 406-07, 51 N.W.2d 24 (1952). In other words, the worker's compensation laws "are basically economic regulations by which the legislature, as a matter of public policy, has balanced competing societal interests." Mulder v. Acme-Cleveland Corp., 95 Wis. 2d 173, 180, 290 N.W.2d 276 (1980) ; see Jenkins v. Sabourin, 104 Wis. 2d 309, 322, 311 N.W.2d 600 (1981) (describing the worker's compensation provisions as "the result of decades of debate prior to [their] passage" and a representation of the "delicate balancing of the interests represented in our industrial society").

¶11 Today, worker's compensation benefits are primarily governed by Wisconsin Stat. ch. 102, the Act, which is administered by DWD. See Wis. Stat. § 102.14(1) ; Mireles v. LIRC, 2000 WI 96, ¶6, 237 Wis. 2d 69, 613 N.W.2d 875. Wisconsin Stat. § 102.03 sets forth the basic requirements for a compensable injury under the Act. Section 102.03(1) provides a list of conditions that impose liability under the Act against an "employer, any other employee of the same employer and the worker's compensation insurance carrier." § 102.03(2). Generally, an employer and an employer's insurance carrier's obligations to pay worker's compensation accrue under the Act when all of the following conditions are present:

• the employee sustains an injury;

• at the time of the injury, both the employer and the employee are subject to the Act;

• at the time of the injury, the employee is performing service growing out of and incidental to his or her employment;

• the injury is not intentionally self-inflicted; and • the accident or disease causing injury arises out of the employment.

Wis. Stat. § 102.03(1)(a)-(e).⁸

¶12 The Act also covers a second or subsequent injury that stems from the first work-related injury, as case law has made clear: "[W]hen an employee is treated for a work-related injury and incurs an additional injury during the course of treatment, the second injury is deemed as one growing out of, and incidental to, employment in the sense that the employer [or insurance carrier], by virtue of the Act, becomes liable for the augmented injury." Jenkins, 104 Wis. 2d at 316, 311 N.W.2d 600. In other words, employers and worker's compensation insurance carriers have a duty to pay for a subsequent injury that naturally flows from a covered workplace injury, including any injury caused or worsened by the treatment, or lack of treatment, of the original work-related injury.

¶13 Pursuant to Wis. Stat. § 102.03(2), when the conditions of liability in § 102.03(1) are satisfied, the Act provides the exclusive remedy: "Where such conditions exist the right to the recovery of compensation under this chapter shall be the exclusive remedy against the employer, any other employee of the same employer and the worker's compensation insurance carrier."⁹ We have referred to this exclusive-remedy provision as "an integral feature of the compromise between the interest of...