Thomas v. Omega Re-Bar, Inc.

• Decision Date: 16 February 1990
• Docket Number: No. 89-052,RE-BA,INC,89-052
• Citation: 451 N.W.2d 396,234 Neb. 449
• Parties: Sherman E. THOMAS, Jr., Appellee, Cross-Appellant, and Cross-Appellee, v. OMEGA, Appellant and Cross-Appellee, Employers Casualty Company and Texas Employers Insurance Association, Appellees, Cross-Appellants, and Cross-Appellees.
• Court: Nebraska Supreme Court

Page 396

451 N.W.2d 396

234 Neb. 449

Sherman E. THOMAS, Jr., Appellee, Cross-Appellant, and Cross-Appellee, v. OMEGA RE-BAR, INC., Appellant and Cross-Appellee Employers Casualty Company and Texas Employers Insurance Association, Appellees, Cross-Appellants, and Cross-Appellees.

No. 89-052.

Supreme Court of Nebraska.

Feb. 16, 1990.

Syllabus by the Court

1. Workers' Compensation: Insurance: Jurisdiction. The Workers' Compensation Court has no jurisdiction to determine

workers' compensation insurance coverage disputes.

2. Courts: Jurisdiction. Parties cannot confer subject matter jurisdiction upon a judicial tribunal by either consent or acquiescence.

3. Workers' Compensation: Jurisdiction. The Workers' Compensation Court is a tribunal of limited and special jurisdiction and has only such authority as has been conferred on it by statute.

Norman Denenberg, Omaha, for appellant.

Walter E. Zink II, of Baylor, Evnen, Curtiss, Grimit & Witt, Lincoln, for appellees Employers Cas. and Texas Employers Ins.

James E. Harris, of Harris, Feldman Law Offices, Omaha, for appellee Thomas.

HASTINGS, C.J., and BOSLAUGH, WHITE, CAPORALE, SHANAHAN, GRANT, and FAHRNBRUCH, JJ.

PER CURIAM.

Omega Re-Bar, Inc. (Omega), appeals the majority decision of a three-judge Nebraska Workers' Compensation Court panel finding that Omega has no insurance to cover job-related injuries received by one of its employees in Omaha.

Even though the compensation panel majority held for them on the merits, the appellees Employers Casualty Company (Employers Casualty) and Texas Employers Insurance Association (Texas Employers) cross-appeal, claiming that the Workers' Compensation Court lacks jurisdiction under the Nebraska Workers' Compensation Act to determine insurance coverage issues as between insurers and employers.

In his appellee's brief, Sherman E. Thomas, Jr., Omega's injured employee, joins in and adopts the positions set forth in Omega's brief. In his cross-appeal, Thomas, a Nebraska resident, claims he is entitled to attorney fees and a penalty which he claims should be assessed against Texas Employers and Employers Casualty.

In this case of first impression, in which no party has raised any constitutional or common-law rights, we agree that the Workers' Compensation Court has no jurisdiction to determine workers' compensation insurance coverage disputes. We affirm the workers' compensation court panel's judgment against Omega in which Thomas was awarded workers' compensation benefits, attorney fees, and the penalty provided in Neb.Rev.Stat. § 48-125(1) (Reissue 1988). We find that Thomas is also entitled to attorney fees to be paid by Omega for services in this court and interest on the award. In view of our holdings, the appeal by Omega and the cross-appeal by Thomas must be dismissed.

It is undisputed that when Thomas was injured he was employed as an ironworker by Omega, a subcontractor performing re-bar work on a waste water treatment plant in Omaha. It is also undisputed that the injuries Thomas received arose out of and in the course of his employment on August 27, 1987, when he fell and a re-bar he was carrying struck his shoulder and back.

On September 8, 1987, Omega notified Texas Employers of Thomas' accident. Texas Employers denied coverage, claiming Omega's workers' compensation policy covered "Texas employees hired, working and living in Texas only." Omega had its principal place of business in Texas. It hired Thomas in Omaha to work in Nebraska, and that is where Thomas was injured.

As of October 27, 1987, Thomas, having received no compensation for his injuries from Omega, filed a petition in the Workers' Compensation Court against his employer. Upon Omega's request, that court added Employers Casualty as a party defendant. After a hearing, a single judge of the Workers' Compensation Court determined that Thomas was entitled to compensation benefits. The judge also determined that Employers Casualty provided workers' compensation insurance coverage for the injuries sustained by Thomas.

The case was appealed to a three-judge panel of the Workers' Compensation Court. During the appeal, Texas Employers voluntarily became an additional party defendant. On rehearing, the three-judge panel held that it had jurisdiction to determine whether Employers Casualty or Texas Employers or both provided workers' compensation insurance coverage to Omega for the Omaha project. A majority of the panel ruled that neither Texas Employers nor Employers Casualty provided Omega with workers' compensation coverage in regard to Thomas' accident. At the time of the rehearing, Thomas still was unable to work. The Workers' Compensation Court panel found that Thomas was temporarily totally disabled. It ordered Omega to pay Thomas' past and future medical and hospital bills and provide Thomas workers' compensation benefits from the time of his injuries. Omega was allowed a credit of $3,000 which it had previously paid to Thomas. A waiting time penalty, together with $2,500 in attorney fees, was also awarded Thomas.

We reiterate that none of the parties dispute that Thomas' injuries arose out of and in the course of his employment with Omega. Similarly, none of the parties, including Thomas, contest the extent and amount of the compensation benefits awarded Thomas by the workers' compensation court.

In their cross-appeal, Texas Employers and Employers Casualty challenge whether the Workers' Compensation Court has subject matter jurisdiction to resolve a workers' compensation insurance coverage dispute. They argue that the Workers' Compensation Act only addresses workers' entitlement to benefits and employers' liability for those benefits. They are correct in contending that any potential liability of Texas Employers or Employers Casualty under Omega's workers' compensation policy does not affect the compensability of Thomas' claim or the liability of Omega.

Omega asserts that because the question relating to insurance coverage is ancillary to Thomas' right to compensation, the Workers' Compensation Court has jurisdiction to resolve the coverage dispute. Omega contends that this assertion is in harmony with the concept that workers' compensation insurance is something more than an independent contractual matter between an employer and its insurance carrier.

It is initially noted that the parties cannot confer subject matter jurisdiction upon a judicial tribunal by either consent or acquiescence. Black v. Sioux City Foundry Co., 224 Neb. 824, 401 N.W.2d 679 (1987).

The Workers' Compensation Court is a tribunal of limited and special jurisdiction and has only such authority as has been conferred on it by statute. Smith v. Fremont Contract Carriers, 218 Neb. 652, 358 N.W.2d 211 (1984). Omega directs this court's attention to a number of statutes within the Nebraska Workers' Compensation Act which Omega contends provide the Workers' Compensation Court with jurisdiction to determine the question at hand, specifically, Neb.Rev.Stat. §§ 48-146, 48-146.02, 48-161, and 48-178.01 (Reissue 1988).

Section 48-146 provides that all policies insuring the payment of compensation under the Nebraska Workers' Compensation Act must contain a clause to the effect that jurisdiction of the insured for the purpose of the act is jurisdiction of the insurer and that the insurer is bound by the awards, judgments, or decrees rendered against its insured. The section merely requires the insertion of such a clause in the insurer's policy. It is not a grant of subject matter jurisdiction over insurance coverage disputes. The section's intent is to bind insurers to judgments rendered against their insureds.

There is nothing in § 48-146.02 which provides authority for the compensation court to resolve insurance coverage disputes. The statute simply authorizes the compensation court to conduct hearings to determine whether an insurance organization has failed to comply with obligations imposed by the Nebraska Workers' Compensation Act.

Section 48-161 provides that "[a]ll disputed claims for workers' compensation shall be submitted to the Nebraska Workers' Compensation Court for a finding award, order, or judgment." This section begs the instant question, i.e., is a dispute over insurance coverage a "disputed claim for workers' compensation"?

The compensation court relied upon § 48-178.01 in finding that there was subject matter jurisdiction to resolve insurance coverage issues. That section provides that whenever any petition is filed and the claimant's right to compensation is not in issue, but the issue of liability is raised between an employer and its carrier, the compensation court may order payment of compensation to be made immediately by the employer or carrier. Section 48-178.01 further provides that when the issue is finally resolved, the employer or carrier held not liable shall be reimbursed by the employer or carrier held liable. It appears that the intent of this section is to prevent a situation in which an injured worker or his or her survivors are not compensated for several months or even years due to the length of time it may take to resolve collateral insurance coverage disputes. There is no specific grant of authority to the Workers' Compensation Court to determine insurance coverage disputes.

Each of the statutes upon which Omega relies shares the same infirmity. None of them explicitly provide the compensation court with subject matter jurisdiction to hear insurance coverage disputes. When the right of an employee to an award is not at stake, many tribunals disavow jurisdiction, and this may occur when the insured and the insurer have some dispute entirely between themselves about the validity or coverage of the policy. 4 A. Larson, The Law of Workmen's Compensation § 92.42 (1989). Since there is no express grant of statutory authority, we hold that the Nebraska Workers' Compensation Court does not possess subject matter...