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A dispute between two insurers about shared responsibility for workers compensation payments has been forwarded to the Supreme Court of Appeals of West Virginia for further guidance, according to an order issued Wednesday.
Jonathan Gutierrez was seriously injured in January 2012 while working at Tunnel Ridge Mine River Load-Out, operated in West Virginia by Canonsburg, Pennsylvania-based Taggart Site Services Group L.L.C. Mr. Gutierrez filed a claim for workers comp benefits with Employer’s Innovative Network L.L.C., a professional employer organization that had hired Mr. Gutierrez and assigned him to work with Taggart, according to court records in BrickStreet Mutual Insurance Co. v. Zurich American Insurance Co.
Charleston, West Virginia-based BrickStreet Mutual, EIN’s workers comp insurer, determined Mr. Gutierrez’s injury was compensable and has paid more than $2 million in comp benefits on the claim, which could ultimately exceed $4 million, court documents show. The facts of the incident were not disputed.
BrickStreet filed a lawsuit against Zurich American, which had issued a workers comp policy to Taggart, in U.S. District Court in Charleston alleging that Zurich was obligated to pay half of Mr. Gutierrez’s workers comp benefits. Zurich filed a motion to dismiss the lawsuit, saying the court lacked jurisdiction and BrickStreet should have resolved the claim through West Virginia’s workers comp administrative process. The District Court denied this motion.
Both insurers filed for summary judgement, which the District Court granted in favor of BrickStreet, saying Zurich was obligated to pay a portion of Mr. Gutierrez’s comp benefits.
Zurich appealed the decision to the 4th U.S. Circuit Court of Appeals in Richmond, Virginia, saying the District Court lacked jurisdiction, that state statutes establish EIN’s insurer as the responsible party for comp benefits, and that a provision in BrickStreet’s comp policy referring to “other insurance” did not require Zurich to share in payment of comp benefits.
A three-judge panel of the appeals court certified each of the three questions to the Supreme Court of Appeals of West Virginia for further guidance. The panel asked the state high court to comment on whether jurisdiction lies exclusively with the West Virginia Workers’ Compensation Office of Judges to hear disputes between insurers; whether West Virginia comp laws require a professional employer agreement to designate the professional employment organization or the client-employer as responsible for obtaining workers comp coverage; and whether the “other insurance” clause in a professional employment organization’s insurance policy can require the client-employer’s insurer to pay a portion of benefits when the professional employment organization is not an insured party under the client-employer’s policy.
“In our view, there is no controlling appellate decision, constitutional provision, or statute of West Virginia that answers these questions,” the panel said in an unpublished order that has no precedential control. “Accordingly, we conclude that the questions are appropriate for certification.”
A bill under consideration in West Virginia would reduce enforcement of state coal mining safety regulations.