Missouri Claimants Not Entitled to Statutory “Enhanced Benefit” for Worker’s Mesothelioma

In Missouri, where employers have elected to accept mesothelioma liability pursuant to a special provision of the state Act — Mo. Rev. Stat. § 287.200.4(3)(a)(2013) — the employer becomes liable for an additional amount of compensation equal to 300 percent of the state’s average weekly wage for 200 weeks. If it does not so elect to accept such liability, the exclusive remedy protections do not apply [Mo. Rev. Stat. § 287.200.4(3)(b)(2013). The Supreme Court of Missouri, in a divided decision, held that where an employer ceased operations 16 years before the legislature created the enhanced benefit, it could not “elect to accept such liability;” claimants in the instant case were accordingly not entitled to that enhanced benefit [Hegger v. Valley Farm Dairy Co., 2020 Mo. LEXIS 55 (Feb. 19, 2020)].

Background

Hegger worked for Valley Farm Dairy Company (“the employer”) from 1968 until 1984. His work duties mostly consisted of servicing industrial machinery. Hegger’s work exposed him to asbestos gaskets, asbestos insulation, and other products capable of producing inhalable asbestos fibers. Hegger was diagnosed in 2014 with mesothelioma caused by toxic exposure to asbestos during his employment with the employer. He died from the disease in 2015. Prior to his death, Hegger and his two adult children filed a claim for workers’ compensation benefits. They specifically sought enhanced benefits under § 287.200.4(3)(a).

Following a hearing, an ALJ denied the claim. Claimants appealed to the labor and industrial relations commission, which affirmed the denial. The commission held an employer that ceased operations 16 years before § 287.200.4(3)(a) took effect could not have elected to accept enhanced liability under that section. Claimants appealed to the court of appeals and the Supreme Court granted transfer under Rule 83.04.

Majority Opinion

The majority initially noted that prior to 2014, there was confusion among the courts as to whether the exclusivity provisions of the workers’ compensation law also applied to occupational diseases. In 2013, the general assembly amended the state’s Workers’ Compensation Act to provide the exclusive remedy for occupational diseases caused by toxic exposure in the workplace in some instances [see § 287.200.4(3)(b)]. The majority continued that the issue at hand was whether a now-defunct employer could “elect to accept mesothelioma liability” under a statute that did not take effect until 16 years after the company ceased operations.

Insuring an Employer’s Liability

Claimants argued the commission erred in determining the employer did not elect to accept liability for the enhanced benefit. They pointed to § 287.200.4(3)(a), which provides that employers may elect to accept enhanced mesothelioma liability by “insuring their liability.” Claimants — joined by the dissenting judge — argued that, because the employer maintained an insurance policy that insured its entire workers’ compensation liability during the time it employed Hegger, then the employer elected to accept mesothelioma liability under the plain language of the statute.

The majority observed that the commission rejected this argument, finding that electing to accept enhanced liability under the statute required employers to take affirmative action with respect to the enhanced benefit. Simply maintaining a workers’ compensation insurance policy, particularly one that was secured prior to 2014 (the effective date of the legislation) was insufficient.

“Elect” Not Defined in the Act

Observing further that the term “elect” had not been defined in the Act, the majority indicated it would give the term its “plain and ordinary meaning as derived from the dictionary” [quoting Missouri Pub. Serv. Comm’n v. Union Elec. Co., 552 S.W.3d 532, 541 (Mo. banc 2018)]. Utilizing that definition, the majority said “elect” meant “to make a selection” or “to choose.” Both selecting and choosing required an affirmative act by the one making the selection or doing the choosing, said the majority. The majority concluded that it was “axiomatic that a business entity that no longer exists cannot affirmatively select or choose to do anything” [Opinion, pp. 7-8]. Moreover, now-defunct employers were not deemed to have elected to accept enhanced liability solely by virtue of having workers’ compensation insurance at the time of an employee’s last exposure to asbestos.

Dissenting Opinion

Judge Draper dissented. He stressed that the employer had made an affirmative decision to purchase workers’ compensation insurance, which, as a matter of law, covered future occupational injuries such as that contracted by Hegger. The employer purchased coverage for its “entire liability.” Judge Draper noted that while Hegger’s date of last exposure to asbestos at the employer was not in the record, it was undeniable that his date of injury was in 2014, when he was diagnosed with mesothelioma. Stressing that compensation under the workers’ compensation law was not made when a claimant was last exposed to asbestos, but rather when the claimant had been injured and when that injury was diagnosed, the judge argued that Hegger should be provided the compensation for which he was statutorily entitled at the time of his injury.