Insurer, Not Employer, on Hook for Fatality

     DALLAS (CN) – Parents of a temporary worker who died in his third day on the job must sue the workers’ comp insurer – not the employer – the Texas Supreme Court ruled, reversing a $2.6 million judgment for the deceased worker’s parents.



     The parents of the late Rafael Casados sued Port-Elevator-Brownsville after their son died while working for two employers that both had workers’ compensation coverage.
     “The principal issue in this case is whether workers’ compensation was the exclusive remedy to Casados’s parents, which would bar their suit against Port Elevator,” Justice Eva Guzman wrote for the court. “The court of appeals held that the policy at issue did not cover Casados because he was a temporary worker and affirmed the judgment Casados’s parents obtained against Port Elevator. We have long held that the Labor Code and the rule against split workforces require employers to elect workers’ compensation coverage for all employees-except for limited statutory and common-law exceptions that do not apply here. Because Port Elevator had a workers’ compensation policy, Casados was an employee, he suffered a work-related injury, and the jury failed to find Port Elevator grossly negligent, the Texas Workers’ Compensation Act (TWCA) provides that the exclusive remedy is against the employer’s insurer-not the employer. Accordingly, the claim at issue in this appeal is barred, we reverse the judgment of the court of appeals, and render judgment for Port Elevator.” (Citation omitted.)
     The ruling added: “An employer may not choose to exclude certain employees from coverage unless a statutory or common-law exception to the rule against split workforces applies. A key purpose of the rule against split workforces is that employees know whether they have the protections of workers’ compensation coverage. Allowing employers to select which employees to cover would not only violate our long-standing rule against split workforces but would also be in tension with our decision to liberally construe the TWCA to find coverage for employees. We see no compelling reason to so significantly alter the rule against split workforces by adopting Casados’s parents’ position.” (Citation omitted.)
     Rafael Casados worked for a temporary staffing agency that sent him to do general labor for Port Elevator-Brownsville at its grain storage facility in April 2005. He was killed on his third day on the job.
     Both the staffing agency and Port Elevator carried workers’ compensation insurance – Staff Force’s carrier was Dallas Fire Insurance Company and Port Elevator’s carrier was Texas Mutual Insurance.
     Dallas Fire offered to reimburse Casados’ parents up to the statutory amount for burial expenses and also paid the required $56,238 into the subsequent injury fund. Port Elevator reported the injury to Texas Mutual, but Texas Mutual denied coverage, claiming that Casados was a Staff Force employee and not a Port Elevator employee. Rather than sue Texas Mutual or appeal its denial of coverage, Casados’ parents sued Port Elevator for negligence and gross negligence, among other things.
     At trial, Port Elevator raised the affirmative defense that workers’ compensation was the plaintiffs’ exclusive remedy.
     A jury found the company negligent, but not grossly negligent, and awarded $2.6 million in damages for mental anguish and loss of companionship.
     The 13th Court of Appeals in Corpus Christi affirmed, ruling that the policy at issue did not cover Casados because he was a temporary worker.
     In its 12-page ruling, the Texas Supreme Court said that because Port Elevator had a workers’ compensation policy, Casados being an employee who suffered a work-related injury, and the jury failing to find Port Elevator grossly negligent, under the Texas Workers’ Compensation Act the only remedy is against the employer’s insurer – not the employer. Therefore, the claim is barred, and judgment reversed.
     The court found that even if Port Elevator did not pay Texas Mutual policy premiums specifically for temporary hires, the insurer would still be required to cover them.
     “If Port Elevator’s policy had set out certain premiums solely for temporary workers and Port Elevator had not paid those premiums, Casados would still have been covered under the policy and the failure to pay premiums would be an issue between Port Elevator and Texas Mutual,” Garza wrote.

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