Liberty Mutual may have to defend in heroin overdosePosted On: Feb. 21, 2019 2:36 PM CST
Liberty Mutual may be required to defend two seafood companies from negligence claims filed by an employee who sustained injuries after a heroin overdose at work.
In True North Maine Inc. v. Liberty Mutual Insurance Co., the U.S. District Court for the District of Maine held on Tuesday that True North Maine Inc., of Machiasport, Maine, and its parent company, Cooke Aquaculture Inc., of St. John, New Brunswick, could continue with their claims asserting that their U.S. liability policy did not contain an exclusion that would preclude its insurer from defending them against the worker’s claims.
On Aug. 11, 2017, Brian Taylor, an employee of True North, filed a complaint against True North and Cooke, alleging that on Nov. 25, 2016, he purchased heroin from a coworker at the worksite, ingested it, then fell while trying to put on his rubber work boots, striking his head and losing consciousness. He claimed that his co-workers notified a supervisor, then moved him to a shower stall under a stream of water and left him in his unconscious state for more than four hours before summoning help. Mr. Taylor claimed that he received care for a heroin overdose and hypothermia and sustained serious and permanent injuries "as a direct and proximate result of his co-workers' failure to furnish appropriate medical and related assistance."
His complaint against the seafood companies assert claims for a negligent failure to render aid, as well as premises liability and a negligent failure to furnish a reasonably safe workplace arising from the company’s alleged failure to enforce its alcohol and drug policy.
True North and Cooke were insured by Liberty Mutual Insurance Co. of Boston with both Canadian and U.S. commercial general liability policies and an umbrella liability policy.
True North notified Liberty Mutual of the lawsuit, and on Aug. 18, 2017, Liberty denied a defense against his claims on the basis that the policies specifically excluded “claims for bodily injury to employees.”
The seafood companies filed a lawsuit against Liberty in Washington County Superior Court in Machias, Maine, for breach of contract and violation of Maine’s Unfair Claims Settlement Practices Act after the insurer refused to defend and indemnify them. They also argued that Liberty Mutual "refused to properly investigate the claim or to perform a proper comparison test as required by law."
Liberty removed the suit to the U.S. District Court for the District of Maine and moved for dismissal.
The district court granted Liberty Mutual’s motion in part. The court held that companies’ Canadian general liability and umbrella policies excluded coverage for incidents involving non-Canadian workers, and granted dismissal to Liberty for breach of contract on those two policies. However, the court held that True North and Cooke alleged a plausible basis for coverage under the U.S. liability policy.
While the policy contained an exclusion for bodily injuries sustained by employees "arising out of and in the course of" either employment or "performing duties related to the conduct of the insured's business," the court held that a factfinder could determine that Mr. Taylor’s alleged purchase and ingestion of heroin and cocaine and his subsequent fall and injury fell outside the scope of his duties and the course of his employment.
Although Liberty contended that because Mr. Taylor filed a workers compensation claim that the exclusion barred coverage, the district court found that given the workplace’s drug prohibition and Mr. Taylor’s extended period of unconsciousness, that the seafood companies may have alleged “a plausible theory that might elude the Workers Comp Exclusion.”
The court also dismissed Liberty’s argument that because Mr. Taylor’s complain was “replete with allegations regarding True North’s enforcement” of its alcohol and drug policy that it falls within the scope of the exclusion. The court found that a question remains as to whether the company’s alleged failure to enforce its drug policy was sufficiently similar to the examples of employment-related practices provided in the insurance policy for the exclusion to apply.
The court also held that the seafood companies’ claims under the Maine Unfair Claims Settlement Practices Act “should be assessed with the benefit of discovery.”
None of their companies nor their attorneys immediately responded to calls for comment.