813 S.E.2d 67
W. Va.2018Background
- Employee Jonathan Gutierrez was hired by PEO Employers’ Innovative Network, LLC (EIN) and assigned to work at Taggart Site Services Group (Taggart); he suffered a compensable on-the-job injury in Jan. 2012.
- EIN (the PEO) obtained workers’ compensation coverage via a multiple coordinated policy issued to/through BrickStreet; Taggart separately maintained a direct-purchase Zurich policy.
- BrickStreet accepted and paid Gutierrez’s compensable claim; later sought contribution from Zurich for benefits paid.
- BrickStreet sued Zurich in federal district court for declaratory relief and contribution; the district court awarded BrickStreet 50% contribution; Zurich appealed to the Fourth Circuit, which certified questions to the West Virginia Supreme Court.
- The certified questions: (1) whether the Workers’ Compensation Office of Judges (OOJ) has exclusive jurisdiction over carrier disputes about responsibility for a workers’ compensation claim; and (2) whether WV Code §33-46A-7 and WV C.S.R. §85-31-6.3 make the PEO’s policy primary (and the client-employer’s policy secondary, triggered only on PEO/default).
Issues
| Issue | Plaintiff's Argument (BrickStreet) | Defendant's Argument (Zurich) | Held |
|---|---|---|---|
| OOJ jurisdiction over carrier declaratory actions | OOJ lacks jurisdiction; coverage disputes are not disputes between claimant and employer | OOJ (per §23-5-1 and appeal rules) is exclusive forum for workers’ compensation-related disputes | Held: OOJ does not have jurisdiction over a carrier-initiated declaratory action determining whether a second policy must contribute; such disputes are not contested claims between claimant and employer before the OOJ |
| Priority of coverage when PEO designated to provide WC | Client-employer remains “ultimately liable,” so client’s insurer must share contribution despite PEO designation | Statute and Insurance Commissioner rule require that, when PEO is designated, the PEO policy is primary and client policy is secondary (triggered on default) | Held: §33-46A-7(a)/(b) and W. Va. C.S.R. §85-31-6.3 require parties to designate either PEO or client; if PEO is designated, the PEO’s policy is primary and client’s policy is triggered only upon PEO or carrier default |
Key Cases Cited
- Bower v. Westinghouse Elec. Corp., 206 W. Va. 133, 522 S.E.2d 424 (W. Va. 1999) (plenary review for certified questions)
- Kincaid v. Mangum, 189 W. Va. 404, 432 S.E.2d 74 (W. Va. 1993) (Court may reformulate certified questions)
- Dunlap v. State Comp. Dir., 149 W. Va. 266, 140 S.E.2d 448 (W. Va. 1965) (workers’ compensation rights are statutory)
- Simpson v. West Virginia Office of Ins. Comm’r, 223 W. Va. 495, 678 S.E.2d 1 (W. Va. 2009) (deference to administrative rules and scope of WC scheme)
- Ebbert v. Tucker, 123 W. Va. 385, 15 S.E.2d 583 (W. Va. 1941) (avoid statutory constructions that create irreconcilable conflicts)