Graham v. Latco Contractors, Inc.

• Decision Date: 07 April 2015
• Docket Number: No. SD33332,No. SD33337,SD33332,SD33337
• Parties: ROBERT GRAHAM, Employee-Appellant/Cross-Respondent, v. LATCO CONTRACTORS, INC., Employer-Respondent/Cross-Appellant, and LEGION INSURANCE CO. (In Liquidation)/MISSOURI PROPERTY & CASUALTY INSURANCE GUARANTY ASSOCIATION Insurer-Respondent/Cross-Appellant, and TREASURER OF THE STATE OF MISSOURI AS CUSTODIAN OF THE SECOND INJURY FUND, Additional Party-Respondent.
• Court: Missouri Court of Appeals

ROBERT GRAHAM, Employee-Appellant/Cross-Respondent,
v.
LATCO CONTRACTORS, INC., Employer-Respondent/Cross-Appellant,
and LEGION INSURANCE CO. (In Liquidation)/MISSOURI PROPERTY & CASUALTY INSURANCE GUARANTY ASSOCIATION Insurer-Respondent/Cross-Appellant,
and TREASURER OF THE STATE OF MISSOURI AS CUSTODIAN OF THE SECOND INJURY FUND, Additional Party-Respondent.

No. SD33332
No. SD33337

Missouri Court of Appeals Southern District Division One

April 7, 2015

APPEAL FROM THE LABOR AND INDUSTRIAL RELATIONS COMMISSION

AFFIRMED IN PART , REVERSED IN PART AND REMANDED

This appeal arises from an adjudication by the Labor and Industrial Relations Commission (Commission) of a dispute concerning a § 287.150.3 subrogation claim.¹

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Under the very unusual circumstances presented by this case, the Commission exceeded its powers by deciding that controversy in this administrative worker's compensation proceeding. Therefore, we reverse that portion of the final award of compensation and remand for further proceedings consistent with this opinion.

In 1995, Robert Graham (Employee) began working for Latco Contractors, Inc. (Employer). Employee built and maintained chicken houses where he was routinely exposed to chemicals and wastes incidental to poultry farming. As a result of this exposure, Employee began to experience respiratory problems in late 1996 or early 1997. He also developed a nervous system disorder in which he became hypersensitive to a wide variety of distinct smells. When exposed to perfume or gasoline fumes, for example, Employee would lose consciousness due to insufficient oxygenation to his brain. His respiratory problems and nervous system disorder worsened over time. He developed memory problems and an inability to control his temper, exhibiting angry outbursts from time to time. By 2000, Employee was unable to continue working for Employer. At the time, Employee was approximately 41 years old. He resided with his wife (Wife) and their two young sons, who were then ages 4 and 5.

In July 2000, Employee filed a worker's compensation claim seeking permanent and total disability due to occupational disease diagnosed on July 5, 2000. Employer was then insured by Legion Insurance Co. (Legion). Although Employer and Legion denied the claim, Legion paid some of Employee's medical bills. Legion became insolvent in April 2002. Missouri Property & Casualty Insurance Guaranty Association (MIGA) then became obligated to provide statutory coverage, but it did not pay any of Employee's

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medical bills or any other worker's compensation benefits. Employee sought medical treatment on his own and went to see doctors at the Veterans Administration.

In 2002, Employee and Wife filed a lawsuit against Tyson Foods for Employee's personal injuries and Wife's separate claim for loss of consortium. In September 2005, Employee and Wife settled their claims for a total of $730,000. Their share of the settlement included a check made payable to both Employee and Wife in the amount of $313,712.90.

In April 2012, a hearing was held on Employee's worker's compensation claim by an administrative law judge (ALJ). At the hearing, Employee and Wife testified that they shared the net recovery from the Tyson lawsuit equally. Wife testified that she and Employee used the funds to buy their home and to "pay back money that we had to borrow for the six years we had no income[.]" She also provided extensive testimony concerning the ways in which Employee's injury caused a loss of consortium to Wife. The documentary evidence adduced at the hearing included an affidavit from Employee's attorney, detailing the amounts dispersed in the third-party settlement.² The attorney testified, inter alia, that Employee and Wife's settlement check "represented both [Employee's] share of the proceeds ... for his personal injuries and [Wife's] share of the proceeds ... for her loss of consortium claim[.]"

In April 2013, the ALJ determined, inter alia, that Employee was permanently and totally disabled from the July 5, 2000 occupational disease alone.³ The ALJ made

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two rulings relevant to the subrogation issue: (1) the entire net recovery from the Tyson lawsuit was subject to the § 287.150.3 subrogation lien; and (2) because "MIGA stands in the shoes of Legion[,]" MIGA was entitled to be reimbursed $41,293.40 for medical bills paid by Legion. On review, the Commission decided that MIGA was not entitled to recover medical payments made by Legion. The Commission adopted the ALJ's decision on all other issues. This appeal by Employee and cross-appeal by MIGA followed.

One ground for reversal of a decision by the Commission is that it acted without or in excess of its powers. See § 287.495.1(1). Additionally, we independently review Commission...