Even If You Win, Will Anyone Pay? Hoyle v. DTJ and Insurance for Workplace Intentional Torts

Published March 20, 2015 · Ohio Supreme Court

Duane Hoyle was a carpenter. On March 25, 2008, he was working on a ladder-jack scaffold, a platform supported by brackets that hook onto two extension ladders. The brackets are supposed to be bolted to the ladders. Hoyle says the job superintendent kept the bolts in his office and told the crew they did not need them because they took too much time. When Hoyle stepped onto the end of the platform, the unsecured bracket on the other end lifted off its ladder. He fell about fourteen feet onto a concrete pad.

He sued his employers for an employer intentional tort. Their insurance company, Cincinnati Insurance, stepped into the case and asked the court to declare that even if Hoyle won, the company would not have to pay the judgment. On March 12, 2015, the Ohio Supreme Court agreed with the insurer. The case is Hoyle v. DTJ Enterprises, Inc., 143 Ohio St.3d 197, 2015-Ohio-843.

For injured workers, this is a decision about the difference between winning a case and collecting on it. It is an important distinction, and the two are not the same thing.

A quick refresher: why most workplace injuries never reach a jury

Ohio's workers' compensation system is the exclusive remedy for nearly every on-the-job injury. You get medical bills and a portion of lost wages without proving fault, and in exchange you cannot sue your employer for negligence. The narrow exception is the employer intentional tort, a claim that the employer did not merely act carelessly but intended to hurt you.

Since April 2005, that claim has been governed by R.C. 2745.01. The statute says an employer is liable only if it acted "with the intent to injure another or with the belief that the injury was substantially certain to occur," and then defines "substantially certain" to mean "deliberate intent" to cause injury. As the Supreme Court acknowledged in Hoyle, quoting a federal court, what looks like two ways to prove the claim is really one: deliberate intent. The Court upheld that statute in 2010, which I wrote about in Ohio Supreme Court Upholds Employer Intentional-Tort Law.

The one shortcut the statute offers is R.C. 2745.01(C): if the employer deliberately removed an equipment safety guard and an injury resulted, the law presumes intent to injure, and the employer must rebut that presumption. Just three months ago, in Pixley v. Pro-Pak, the Court read that provision narrowly, as I explained in Injured by Unsafe Equipment at Work. Hoyle's case was proceeding under exactly that presumption: the trial court found a genuine question whether the missing bolts were a safety guard the employer deliberately removed.

The insurance policy

Hoyle's employers had bought a commercial general liability policy from Cincinnati Insurance. That policy, like nearly all of them, excludes injuries to employees and injuries the insured expected or intended. But the employers had also paid an extra premium for an endorsement called "Employers Liability Coverage Form: Ohio." That endorsement promised to cover damages for an employee's bodily injury "caused by an 'intentional act,'" defined as an act "substantially certain to cause 'bodily injury.'"

In other words, the employers had bought coverage specifically for substantial-certainty intentional torts. That made sense under the law as it existed before 2005, when Ohio courts let workers prove intent by showing the employer knew harm was substantially certain. But the same endorsement excluded "liability for acts committed by or at the direction of an insured with the deliberate intent to injure."

The problem should be apparent. Under R.C. 2745.01, "substantially certain" now means "deliberate intent." The coverage grant and the exclusion collapsed into each other.

What the Court held

The Court held that every employer intentional tort under R.C. 2745.01 requires a finding that the employer intended to injure the worker. It does not matter whether the worker proves that intent with direct evidence under division (A) or with the safety-guard presumption under division (C). If the employer fails to rebut the presumption, the legal result is a finding of intent to injure. And because the endorsement excluded liability for acts committed with deliberate intent to injure, there was, in the Court's words, "no set of facts" under which Hoyle's employers could be liable to him within the policy's coverage.

The practical result: Hoyle may still win his case. If he proves the bolts were a safety guard, deliberately withheld, and that his injuries followed, he will be entitled to a judgment against his employers. Cincinnati Insurance will not have to pay a dime of it. The insurer will defend the case, because the duty to defend is broader than the duty to pay, but when the verdict comes in, the employers are on their own.

The Court declined to decide two broader questions: whether Ohio public policy now forbids any insurance for employer intentional torts, and whether the employers' endorsement was so empty of value that it was "illusory." The employers had not raised the illusory-coverage argument below, so the Court would not reach it. Two justices dissented.

Why this is bad for workers, and why it matters

An intentional-tort case against an employer is already among the hardest cases in Ohio law. Pixley made the safety-guard presumption narrow. Hoyle now tells the worker who clears that bar that the employer's insurance policy may not be there at the end. A small contractor with no insurance behind it may be unable to pay a serious-injury verdict, or may file for bankruptcy. The risk falls, as it so often does, on the person who was hurt.

I want to be careful not to overstate the decision. Hoyle turned on the specific language of one endorsement. Other policies are written differently, and a worker's lawyer must obtain and read every policy the employer carries before deciding how to proceed. Some employers also have assets. And a judgment is still a judgment.

But the decision reinforces something I have told injured workers for years: the employer is rarely the best defendant.

The better path: third parties

Workers' compensation immunity protects your employer. It does not protect anyone else whose negligence contributed to your injury. On a construction site, that can include the general contractor, other subcontractors, the owner of the property, the company that rented the scaffold, and the manufacturer of defective equipment. On the road, it is the other driver, as I explained in Crash in a Work Vehicle. These third-party defendants are sued for ordinary negligence, not deliberate intent, and their insurance policies cover negligence.

A third-party claim is also where the full measure of a worker's damages can be recovered. Workers' compensation pays no money for pain, suffering, or the loss of the life you had before the injury. A negligence claim does. The Bureau of Workers' Compensation has a right to be repaid from that recovery, so the two claims must be coordinated, but the net result for a seriously injured worker is almost always better than workers' compensation alone.

Public employees face a different set of rules under Ohio's immunity statute, which I addressed in Injured on the Job by a Government Employer's Intentional Conduct?.

What this means for you

If you were seriously hurt at work because a guard was missing, a safety device was disabled, or a supervisor told you to do something you knew was dangerous, you may have an intentional-tort claim against your employer. Pursue it with your eyes open: it is a difficult claim, and after Hoyle, collecting on it may be harder still. At the same time, make sure every other responsible company has been identified. That investigation needs to happen while the site is unchanged, the equipment is available, and the witnesses still work there.