PFL Life Ins. Co. v. Franklin
| Decision Date | 14 April 1998 |
| Docket Number | No. 86950,86950 |
| Citation | 958 P.2d 156,1998 OK 32 |
| Parties | PFL LIFE INSURANCE COMPANY, Petitioner, and Mark Stevens Industries, Employer, v. Tammy FRANKLIN and the Workers' Compensation Court, Respondents. |
| Court | Oklahoma Supreme Court |
Bradley J. McClure, Oklahoma City, for Petitioner.
Roger B. Hale and Philip D. Ryan, Boettcher, Ryan & Martin, Oklahoma City, for Respondents.
¶1 The dispositive issues tendered on certiorari are: (1) May the Workers' Compensation Court [WCC] affect in whole or in part, directly or obliquely, the compensation-payment liability of an absent earlier insurance carrier of the respondent-employer? and if not (2) Is the trial tribunal's award of medical expenses and temporary total disability, which is to be paid by the current rather than by the earlier insurer, supported by competent evidence? We answer the first question in the negative and the second in the affirmative.
¶2 Tammy Franklin [Franklin or claimant] sought compensation from her employer Mark Stevens Industries [employer] for injury affecting her hands and arms. PFL Life Insurance Company [PFL], qua employer's then-current insurer, denied liability and argued that the case presented nothing more than a "reopening" of an earlier claim for which the former insurer, State Insurance Fund [Fund], stood solely responsible. Though targeted by the three-judge panel for allocation of liability, Fund, employer's former insurer, was not a party to the claim now on review. The trial judge found claimant temporarily totally disabled, allowed compensation against employer and PFL and ruled that she was entitled to medical expenses. It "reserved ... for future hearing" a determination of permanent disability. The three-judge panel modified the trial judge's order by "reserving " the right of all parties to "apportion future awards of liability, including permanent partial disability, ... [between] additional parties ..., which hereafter may be joined." 1 The Court of Civil Appeals sustained the panel's order.
¶3 We hold that the panel's attempted "reservation" with respect to an absent insurer's potential responsibility for a future award is an impermissible forecast and hence a legal nullity. A non-party's legal responsibility presents no adjudicatory issue. 2 The WCC was powerless to entertain an inquiry into the carriers' liability inter se. When only one of two successive employer's carriers stands before the court and the absent insurer lacks an opportunity to defend its interests, no legal effect may be ascribed to a tribunal's statement that "reserves" the absent insurer's potential liability. Since the reserved issue was never tendered and the earlier carrier was not a party, the "reservation" was both gratuitous and impermissible.
¶4 Franklin had been employed by Mark Stevens Industries for almost three years. Her tasks, which related to assembly-line operations, required repetitive hand movements. Carpal tunnel syndrome in the right hand was her September 1994 diagnosis. She underwent surgery for this condition. Employer's then-insurer was the State Insurance Fund. Franklin returned to work in November 1994. PFL became the employer's insurer on March 1, 1995. In a March 17, 1995 hearing, conducted in an earlier claim, the WCC found permanent partial disability in her right hand. The record before us does not reveal which of the two successive carriers paid that award.
¶5 Franklin's second claim--now on review--was brought by her June 26, 1995. It alleges cumulative-trauma injuries to both hands and arms. She listed June 22, 1995 as the "date of last exposure." Claimant's testimony concerning the time she first noticed the symptoms in both hands was not entirely consistent. PFL argued that (a) Franklin's deteriorating condition began before PFL became employer's insurer and (b) solely the Fund should be held liable for the currently pressed impairments. Fund was not a party in the proceeding. The trial judge allowed claimant compensation for temporary total disability to both hands (with medical expenses) and reserved for a future hearing consideration of permanent disability. The three-judge panel "modified" that order by adding a "reservation" of apportionable liability if additional parties "may hereafter be joined." Fund was specifically mentioned as the "future" party. 3
¶6 The Court of Civil Appeals sustained the panel's order. On certiorari granted upon PFL's petition, the issue urged here is that, under this court's "awareness" doctrine applicable to cumulative-trauma injury cases, 4 (1) Franklin was aware of her injury and (2) before PFL's coverage period began, she knew that it was employment-related. The proof of these two awareness-doctrine prongs, it is urged, exculpate PFL from all liability for the award under review and place sole responsibility for its payment upon the earlier carrier. We vacate today the Court of Civil Appeals' opinion and the panel's order but sustain the trial judge's award.
¶7 THE WORKERS' COMPENSATION COURT LACKS ADJUDICATIVE AUTHORITY TO FORECAST OR OTHERWISE AFFECT THE COMPENSATION LIABILITY OF AN EMPLOYER'S ABSENT INSURER
¶9 The Constitution inexorably commands no one's rights are to be adversely affected by judicial process that occurs in the absence of notice and (full and fair) opportunity to defend. 5 A compensation decision may not affect the interest of one who was not sufficiently identified--for delivery of the claim's notice--by papers filed in court. 6 At a bare minimum, legal notice must inform one of the antagonist's pressed demands and apprise one of the result consequent on default. 7
¶10 Each of several successive carriers sought to be implicated in liability for a compensation claim is entitled to a constitutionally protected opportunity to participate in all proceedings that might culminate in allocation of all or some liability to any one insurer. 8 Liability allocated to a non-party risk carrier without that carrier's participation in the judicial process in which it was imposed will not pass muster when challenged by the minimum standards of due process.
¶11 The compensation claim under review here began with the filing of a prescribed form that named the responsible employer. 9 The WCC then gave the employer's current insurer (PFL) the required notice. 10 Fund, the earlier insurer, was neither named in the claim form nor joined later. PFL stood before the court as the employer's sole risk carrier. The panel's attempted "reservation" of Fund's potential liability clearly was an impermissible and gratuitous forecast of an absent carrier's potential exposure to possible future allocation of employer's liability for an award not yet made against any entity. It was impermissible ¶12 The panel was utterly without power to affect the rights of a stranger to the claim. Its allusion to Fund's potential co-liability, which clearly contravenes the fundamental law's standards and is unsupported by the record, facially and plainly offends due process. The panel's "reservation" which affects the vital interests of an earlier insurer is hence a legal nullity. 11
because Fund was not before the tribunal; it was gratuitous because PFL pressed not for co-allocation of liability but for its total exoneration by shifting to the absent carrier all responsibility for the claim. PFL's effort to saddle a non-party with total liability ignored Fund's fundamental right to receive advance notice of the claim and to an opportunity to defend against PFL's demands
¶13 An Adjudicated Employer's Liability In Workers' Compensation Is Always An Indivisible Integrity, Though It Might Be Judicially Allocable Severally To Successive Carriers For The Same Employer Who Are Found To Be Responsible For Different Time Stages of The Same Accidental Injury
¶14 For every industrial accident the law recognizes but one claim--the worker's claim against her employer. 12 The liability adjudged in a compensation case is an indivisible integrity owed by the employer to the claimant. Whenever two or more carriers may be implicated, the WCC must first decide the employer's liability for the claim and then, if necessary, allocate it among the responsible risk carriers. Responsibility for compensable harm from the same injury may be allocable to successive insurers, if it is limited by the period of coverage during which the harm is found to have developed. 13 Successive risk carriers for the same injury, to whom liability is to be allocated, must be joined in the single claim. Though apportionable, their pro tanto liability is co-extensive with that of the employer. 14 Compensation responsibility of successive risk carriers for the same employer is several, rather than joint or collective. For satisfaction of the entire liability, claimant looks primarily to the employer. 15
¶15 The Ghost Tortfeasor Rule Is Antithetical To The Concept Of Apportioned Carrier's Liability In Workers' Compensation
¶16 "Apportionment" of liability award between two successive insurers of the same employer is unlike that a jury would make in a "ghost tortfeasor" case. 16
In compensation law the term apportionment 17 (more accurately to be described as allocation) means a division between carriers of a single employer's liability. It is to be based on the percentage of harm occurring during the period for which each of several carriers may be found responsible. The concept differs from tort law where the same term denotes a percentage of liability to be attributed to each of several tortfeasors in the action. 18 The tort's comparative negligence
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