Typically in the event of a work-related accident, a worker’s only recompense is workers’ compensation. There is an exception if there is third-party liability (i.e., someone other than the employer was at-fault). But if the work-related injury was the result of a motor vehicle accident and if the employer paid for auto insurance coverage, it is possible employees might also be able to pursue a claim from that insurer for the injuries. It will depend heavily on the terms of the policy.
Recently in a case decided by the Oklahoma Supreme Court, the question was whether an employer’s uninsured motorist carrier is entitled to subrogation on an under-insured (third-party) at-fault driver’s assets – including excess insurance coverage – for the amount previously paid to the injured party. The court answered no.
The case illustrates how complex these claims can be when they involve commercial vehicles (which tend to cause more damage, and thus, more severe injuries) and large companies.
Here’s what happened:
In July 2012, Employee 1 was driving a vehicle owned an insured by his employer, a seed company. His co-worker was in the passenger seat of that vehicle. The seed company had a commercial auto insurance policy which provided uninsured/ underinsured coverage of up to $1 million per accident.
Meanwhile, an employee of an energy company was traveling on that same road. The energy company had a primary auto liability policy of $1 million, but also another $40 million in excess liability coverage.
The energy company driver was operating an oil tanker truck, owned by his employer. He attempted to turn in front of the seed company truck. The two trucks collided, and there as an explosion as a result of the trucking accident. The seed company driver was killed. His co-worker/ passenger suffered severe and permanent injuries.
That passenger qualified as an insured under the seed company’s uninsured motorist claim, which was reported to the company.Several days later, the injured worker filed a lawsuit against the oil truck driver and the driver’s employee. The seed company’s UM insurer investigated the claim and paid $500,000 each to both the injured employee, as well as the survivors of decedent.
Subsequently, the seed company’s UM insurer filed a motion to intervene on the pending civil litigation brought by the surviving seed company worker against the oil tanker driver and his employer. That motion to intervene was granted. The UM insurer argued it had a right to collect the $500,000 it paid to seed company employee insured from whatever he received from his pending lawsuit.
The pending litigation between injured worker and the defendants was mediated with UM insurer present. Plaintiff disputed that UM carrier had any subrogation rights, but defendants refused to settle unless the amount of the settlement included the subrogation claim. They struck a deal for a confidential sum that was greater the amount of the primary insurance liability ($1 million) but less than the excess policy ($40 million), minus the $500,000 that was in dispute over subrogation rights. The $500,000 was held by the court until it could be sorted who had rights to the money.
The trial court determined the UM insurer was entitled to subrogation for the full $500,000, and this order was affirmed by the appellate court. However, the state supreme court reversed. The state supreme court ruled that, contrary to UM insurer’s claims, plaintiff was not receiving a windfall here. The insurer was paid a premium for UM protection – and injured worker received that amount. It did not cover all of his damages. He also recovered from the defendants’ asserts that, when combined with the UM funds he received, did cover his damages. The court ruled it would not be just to permit the UM insurer to avoid liability.
Call Associates and Bruce L. Scheiner, Attorneys for the Injured, at 1-800-646-1210.
Raymond v. Taylor, Oct. 10, 2017, Oklahoma Supreme Court
More Blog Entries:
Establishing Vicarious Liability for Crash on Theory of Respondeat Superior, Oct. 21, 2017, Fort Myers Car Accident Lawyer Blog