Missouri: Survivors May Proceed in Tort Against Uninsured Employer After Recovering Workers’ Compensation Benefits From Statutory Employer–No Election of Remedies Problem

In a 4–3 decision, the Supreme Court of Missouri recently reversed the decision of a state trial court that earlier had held a workers’ compensation award against a statutory employer barred a wrongful death claim against the deceased employee’s uninsured employer [Lewis v. Gilmore, 2012 Mo. LEXIS 109 (June 12, 2012)]. Finding that deceased employee’s survivors had not made an election of remedies when they obtained the workers’ compensation award against the statutory employer, the majority of the state high court held that the plain language of Mo. Rev. Stat. § 287.280.1 allowed an injured party or his or her dependents to proceed in a civil action against the uninsured employer. Nor was there any issue of an impermissible double recovery because any recovery by the survivors in the civil action was subject to the statutory employer’s subrogation rights.  Background

Lewis died when the tractor trailer in which he was a passenger overturned. The driver of the truck, Gilmore, was operating the tractor trailer in the course of his employment with Buddy Freeman, d/b/a R&F Trucking. Freeman operated his tractor trailer pursuant to a contract with DOT Transportation. Freeman did not carry workers’ compensation insurance. DOT did carry workers’ compensation insurance. Lewis’ widow and other survivors filed a claim for workers’ compensation against both Freeman and DOT. They also filed a wrongful death action against Freeman and Gilmore. The circuit court stayed the wrongful death action until a determination was made by the state Department of Labor and Industrial Relations as to whether Lewis’ death occurred out of and in the course of his employment.

The ALJ found that Lewis was an employee of Freeman, that Freeman did not carry the required workers’ compensation insurance and that DOT Transportation was Lewis’ statutory employer. The ALJ ordered DOT to pay death and funeral benefits. After the entry of the workers’ compensation award, DOT intervened in the Lewises’ wrongful death action. The trial court granted summary judgment in favor of Gilmore and Freeman, finding that the wrongful death action was barred because the Lewises had made an election of remedies when they obtained a workers’ compensation award against DOT. The Lewises and DOT appealed.

Majority’s Analysis

The majority indicated that it was undisputed that Freeman and DOT Transportation were separate entities and that each had the responsibility to secure workers’ compensation insurance. The majority continued that the plain language of § 287.280.1 provided that the consequence for an employer’s failure to secure workers’ compensation insurance was that the employee or his dependents could file a civil action against the employer and this was exactly what the Lewises had done. The majority reasoned that to hold that the Lewises could not file a civil action would take away one of the options that the General Assembly have given employees to seek redress against employers who had failed to secure workers’ compensation insurance for their employees.

The employer, Freeman, countered that § 287.280.1 must be interpreted in accordance with the election of remedies doctrine, that “if there are two or more inconsistent remedies available, the election to pursue the one is a bar to any suit based upon the other.” Freeman argued that as a result, the wrongful death action against Freeman was barred by the Lewises receipt of a workers’ compensation award against DOT.

The majority indicated that first, the plain language of the statute provided that the Lewises “may elect” to file a civil suit against an uninsured employer such as Freeman. That is what the Lewises had done in this case. Second, the employee or dependents filed a workers’ compensation claim and a civil action against a single uninsured employer. Consistent with the plain language of § 287.280.1, the employee or his dependents “may elect” either a workers’ compensation claim or a civil suit but cannot recover on both claims against the same uninsured employer. There was no issue of an impermissible double recovery because any recovery by the Lewises in the civil action would be subject to DOT’s subrogation rights.

Finally, the majority indicated that adopting Freeman’s argument would require the Court to rewrite § 287.280.1 to permit Freeman to avoid the statutory requirement that he carry workers’ compensation insurance while also evading financial responsibility for his employee’s injury. The majority said, “That is not the law.”

Dissent

Judge Russell, joined by Judges Breckenridge and Price, dissented, stating that the majority’s opinion wrongly permitted the Lewises two remedies for a single injury by allowing that they could obtain a workers’ compensation award against the insured statutory employer and also pursue a civil action against the uninsured immediate employer. Judge Russell indicated that the election of remedies doctrine, a doctrine of estoppel, originated upon the theory that where a party had the right to pursue one of two inconsistent remedies and he or she made the election, institutes suit, and prosecutes it to final judgment, the party could not thereafter pursue another and inconsistent remedy. Judge Russell continued that unlike the majority, the judge did not find that § 287.280.1 could be interpreted without consideration of the election of remedies doctrine.