Hurt at Work by Someone Who Isn't a Co-Worker? Your Employer's Auto Policy May Pay (Goodell v. Motorists)

Published November 21, 2017 · Ohio Appeals Courts

Brian Goodell was a mechanic doing what mechanics do: working on one of his employer's trucks in the shop. A friend of the owner, who hung around the shop daily and had permission to drive the company trucks but was not an employee, put that truck in gear. It struck Goodell and seriously injured him. Workers' compensation paid his medical bills and part of his wages, and then, as workers' compensation always does, it stopped well short of making him whole.

What happened next is the reason for this post. Goodell sued the friend, won a judgment, and then collected that judgment from his own employer's business auto policy and umbrella policy. The insurer fought him all the way to the court of appeals, arguing that policies bought by an employer never pay for an employee's on-the-job injury. On November 3, the Sixth District disagreed. Goodell v. Motorists Mut. Ins. Co., 2017-Ohio-8425, is a good decision for injured workers, and it illustrates a path to recovery that most people, and many lawyers, never think to look for.

The two-track system, briefly

We have written before about the two-track recovery available when someone is hurt at work by a person other than the employer. Workers' compensation covers the injury regardless of fault, but in exchange the worker generally cannot sue the employer or a co-worker for negligence. A third party who caused the injury, a careless driver, a contractor, an equipment manufacturer, or a visitor to the shop, enjoys no such immunity and can be sued for the full measure of damages, including pain and suffering, that workers' compensation never pays.

The hard part is usually not proving the third party's fault. It is finding insurance to pay the judgment. A friend who hangs around a repair shop rarely has a liability policy of his own worth pursuing. Goodell shows where else to look.

How the case unfolded

The friend, Shawn Pasquale, did not defend the lawsuit, and the Wood County trial court entered a default judgment against him. That judgment was worth nothing unless an insurance company stood behind it. Goodell then used R.C. 3929.06, which allows a person who has won a judgment against an insured defendant to file a "supplemental complaint" directly against the defendant's liability insurer if the insurer has not paid within thirty days.

The insurer here was Motorists Mutual, which had sold Goodell's employer, Wylie & Sons, a commercial general liability policy, a business auto policy, and an umbrella policy. Goodell's argument was that Pasquale, as someone using a company truck with the owner's permission, was an "insured" under the auto policy, and that the policy therefore had to pay Pasquale's judgment.

The trial court agreed as to the auto and umbrella policies, and the Sixth District affirmed.

Why the exclusions did not apply

Motorists made the argument every insurer makes in this situation: the auto policy contained a workers' compensation exclusion and an employer's liability exclusion, both of which remove coverage for bodily injury to an employee of "the insured" arising out of employment. Goodell was an employee of Wylie & Sons, he was injured on the job, and he collected workers' compensation. Case closed, said the insurer.

The court of appeals read the policy more carefully. The auto policy defined "insured" to include not only the named insured, Wylie & Sons, but also "[a]nyone else while using with your permission a covered 'auto' you own." Pasquale fit that definition. The policy also contained a severability clause providing that coverage "applies separately to each insured" against whom a claim is brought.

Put those two provisions together, and the exclusions have to be applied to each insured individually. Goodell was an employee of Wylie & Sons, but he was not an employee of Pasquale. Pasquale was not Goodell's employer, could not be liable under the workers' compensation laws, and was not running a business in which Goodell was working. As the court summarized the policy, coverage is barred "only when an injured employee sues his employer." Goodell had sued the friend, not his employer, so neither exclusion applied to the friend's liability.

The court also rejected the insurer's argument that the result was unfair because it gave a permissive driver broader coverage than the employer who paid the premium. The answer was simple: Motorists wrote the policy, and a court applies unambiguous policy language as written. If an insurer wants its exclusions to reach every insured, it can draft them that way.

Why this matters more than it looks

The facts in Goodell are specific, but the principle is broad. Business auto policies routinely cover anyone using a company vehicle with permission. Umbrella policies typically follow the same definition of insured. That means an injured worker's search for coverage should not stop at the person who hurt him. It should include every policy under which that person might qualify as an insured, including policies bought by the worker's own employer.

Consider the situations in which this comes up around Dayton:

• A delivery driver is hurt in the yard when a vendor's employee moves a company van without looking.
• A landscaper is struck by a company truck driven by the owner's son, who is not on the payroll.
• A warehouse worker is injured when a customer, allowed to move his own trailer with a company tractor, backs into him.
• A technician riding in a company vehicle driven by a temporary worker from another agency is hurt in a crash.

In each case the person at fault is not a co-worker, so there is a third-party claim, and in each case the employer's auto policy may be the deepest and most collectible source of payment. Whether it responds depends on the exact policy language, which is why we obtain and read every policy, as we described in finding every available dollar of coverage.

Two cautions

First, workers' compensation does not simply go away when a third-party claim succeeds. The Bureau of Workers' Compensation has a statutory right to be reimbursed from a third-party recovery for what it paid, and that right must be addressed in any settlement, as we explained in why the BWC lien can follow you. The Sixth District rejected Motorists' attempt to use that reimbursement right as a reason to deny coverage, but the lien itself still has to be handled.

Second, the exclusions in Goodell did apply to the commercial general liability policy, and that ruling was not appealed. Coverage lived in the auto and umbrella policies because of the way "insured" was defined there. The result turns on the language of each policy, not on a general rule that employers' insurance pays for workplace injuries.

What this means for you

If you were hurt on the job by someone who was not your co-worker, you likely have a claim beyond workers' compensation, and the insurance to pay it may be sitting in your employer's own file cabinet. The claim must be pursued correctly: a judgment against the responsible person, then a supplemental complaint against the insurer under R.C. 3929.06, with the policy language analyzed insured-by-insured. This is not something to attempt with a form letter to an adjuster. It is also time-sensitive, because the third-party claim carries its own deadline that runs regardless of how long your workers' compensation claim stays open.

Earlier this year we wrote about a $28 million verdict for the family of a lineman killed because an inspection contractor skipped a rotten pole. The scale is different, but the lesson is the same: when a workplace injury has a cause outside the employer, look past the comp claim.