Lead Opinion
Ruth Mendenhall appeals a summary judgment in favor of Property and Casualty Insurance Company of Hartford (Hartford) on her equitable garnishment claim seeking insurance coverage for the death of her husband, Len Mendenhall. The trial court’s judgment was premised on the conclusion that Mr. Mendenhall was an “employee” under the terms of the Hartford policy and, therefore, was excluded from coverage. The judgment is reversed because Mr. Mendenhall was a not an “employee” but was instead a “temporary worker” subject to coverage under the terms of the Hartford policy.
FACTS
In May 2006, Mr. Mendenhall interviewed for a job with the Family Center of Farmington, Inc. (Family Center). The Family Center did not hire Mr. Menden-hall. However, the person who interviewed Mr. Mendenhall for the Family Center informed Jay Walker, the owner of the Family Center, that Mr. Mendenhall would be a good candidate for a job. Based on the Family Center’s recommendation, Mr. Walker hired Mr. Mendenhall to work for him personally at the cattle farm (farm) that Mr. Walker eo-owned with his wife.
Mr. Mendenhall worked at the farm on an as-needed basis. Although Mr. Men-denhall was always paid by the farm, Mr. Walker occasionally asked Mr. Mendenhall to perform tasks for the Family Center. Mr. Walker also permitted Mr. Menden-hall to use a truck and trailer owned by the Family Center. This truck and trailer was covered under a business automobile liability policy (the Hartford policy) provided by Hartford and issued to the Family Center.
On March 8, 2007, Mr. Mendenhall was using the Family Center’s truck and trailer to haul rock for Mr. Walker at the farm. Mr. Mendenhall was killed when the truck overturned as he was unloading the rock.
Mrs. Mendenhall filed a wrongful death suit against the Family Center and the Walkers.
Mrs. Mendenhall then filed the underlying action for equitable garnishment to satisfy the $840,000 judgment under the coverage provided by the Family Center’s Hartford policy. The Hartford policy contains an exclusion from liability coverage for employees of the insured. The definition of “employee” specifically includes a “leased worker” but does not include a “temporary worker.” These two terms are defined in the Hartford policy:
“Leased worker” means a person leased to you by a labor leasing firm under anagreement between you and the labor leasing firm, to perform duties related to the conduct of your business. “Leased worker” does not include a “temporary worker.”
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“Temporary worker” means a person who is furnished to you to substitute for a permanent “employee” on leave or to meet seasonal or short-term workload conditions.
This policy language means that the dis-positive issue is whether Len Mendenhall was an “employee” or a “temporary worker.” If Mr. Mendenhall was an “employee,” there is no insurance coverage. If he was a “temporary worker,” there is insurance coverage.
The trial court entered summary judgment for Hartford. The court concluded that Mr. Mendenhall was excluded from coverage because he was Mr. Walker’s “employee.” The trial court found that Mr. Mendenhall was not a covered “temporary worker” because he was not “furnished to” Mr. Walker by an employment service or similar organization. Mrs. Men-denhall appeals.
ANALYSIS
“The interpretation of an insurance policy, and the determination whether coverage and exclusion provisions are ambiguous, are questions of law that this Court reviews de novo.” Bums v. Smith,
Ambiguities in the meaning of an insurance policy are resolved in favor of the insured, and exclusionary clauses are strictly construed against the drafter. Bums,
The parties agree that Mr. Mendenhall worked for Mr. Walker to meet seasonal or short-term workload conditions and that temporary workers are covered by the Hartford policy. There is also no dispute that the phrase “furnished to” requires the involvement of a third party. See Gavan v. Bituminous Cas. Corp.,
The term “furnished to” is not defined in the policy. When interpreting insurance policy language, courts give a term its ordinary meaning unless it plainly appears that a technical meaning was intended. Farmland Indus., Inc. v. Republic Ins. Co.,
In the context of this case, neither the word “furnish” nor its synonyms “provide” and “supply” necessarily require the Family Center and Mr. Mendenhall to have an employment or agency relationship to support a finding that the Family Center furnished Mr. Mendenhall to work for Mr. Walker. The proposition that the phrase “furnished to” does not necessarily require an agency or employment relationship between the third party and the prospective worker can be tested by assuming, for the sake of argument, that the Family Center was an employment agency acting on behalf of Mr. Mendenhall. If that were the case, the fact remains that Mr. Mendenhall simply could have declined the job working for Mr. Walker. Therefore, the existence of an agency relationship between the Family Center and Mr. Mendenhall is not a necessary or even a practically useful focal point for determining whether the Family Center furnished Mr. Mendenhall to Mr. Walker.
The more relevant consideration is the undisputed fact that Mr. Walker did not interview Mr. Mendenhall and relied solely on the Family Center’s referral in making his decision to hire Mr. Mendenhall. The Family Center’s referral supplied and provided Mr. Walker with the information he used to hire Mr. Mendenhall on an as-needed basis. Without the information furnished by the Family Center, a business owned solely by Mr. Walker, Mr. Walker would not have hired Mr. Menden-hall. It was through the Family Center’s referral that Mr. Mendenhall was “furnished to” Walker as a temporary worker. The existence of an agency relationship between Mr. Mendenhall and the Family Center was wholly irrelevant to Mr. Walker’s decision to hire Mr. Mendenhall and, therefore, is not necessary to show that the Family Center furnished Mr. Menden-hall to work for Mr. Walker. As such, the plain language meaning of the phrase “furnished to” plausibly can be interpreted to include situations such as this, where the employment decision is based solely on the third party referral.
The ambiguity is illustrated further by the Hartford policy’s definition of “leased worker,” which, unlike the “temporary worker” definition, specifies a particular third party. The definition specifically states that a “leased worker” is a person “leased to you by a labor leasing firm.... ” In contrast, the definition of “temporary worker” is not qualified by the existence of any agency or employment relationship. Hartford argues that an express reference to an agency or employment relationship is unnecessary because of the clear definition of “furnish,” yet, as established above, the phrase “furnished to” does not necessarily require the furnisher to be an employment agency. Therefore, the difference in the level of specificity between the two definitions is a relevant consideration. See Nick’s Brick Oven Pizza, Inc. v. Excelsior Ins. Co.,
The dissent asserts that providing coverage in this case is tantamount to a holding that one who recommends a potential employee to another must be considered to have furnished the employee. The issue is not whether the phrase “furnished to” necessarily includes referrals or recommendations. Instead, the issue is whether the average consumer would conclude that the phrase “furnished to” precluded coverage under the circumstance of this case. As established above, under the facts of this case, the phrase “furnished to” is susceptible to plausible, alternative interpretations, and this ambiguity is resolved in favor of the insured. Therefore, the judgment is reversed, and the case is remanded.
Notes
. Because Mr. Mendenhall was employed in farm labor at the time of his death, he was not covered by workers' compensation. Section 287.090.1(1), RSMo Supp.2008.
Dissenting Opinion
I respectfully dissent. The dispositive issue in this case is whether a third party can “furnish” an employee to an employer by merely recommending or referring him to the employer. In Gavan v. Bituminous Cas. Corp.,
The majority correctly defines “furnish” as to provide or supply. But the majority incorrectly finds that when an employee of the Family Center called Mr. Walker and recommended him as a seemingly good potential farm employee, the Family Center thereby “furnished” Mr. Mendenhall to Mr. Walker.
Conflating recommending an employee with “furnishing” him is simply incorrect. The majority cites no case law, statute or dictionary that uses or defines “furnish” as recommending or referring someone or something. That is because the words have different meanings. “Furnish” is synonymous with supply and provide. One cannot provide or supply a product one does not have. Similarly, one cannot provide or supply a person to an employer
The majority cites Nick’s Brick Oven Pizza, Inc. v. Excelsior Ins. Co.,
“Furnish” properly defined does not include merely recommending or referring a person to an employer. This means that the “temporary worker” exception to the employee exclusion in Hartford’s policy does not apply here, as it applies only to “furnished” workers; it does not say it applies to recommended workers.
It is unfortunate that Mrs. Mendenhall and Mr. Walker agreed that the judgment against Mr. Walker would be satisfied only from the proceeds of that policy because Mrs. Mendenhall will not recover fully for her loss. But, as the old adage goes, bad facts can make bad law. The agreement between Mrs. Mendenhall and Mr. Walker, while unwise, should not form the basis for a change in the legal meaning of the word “furnish.” This Court “is not permitted to create an ambiguity in order to distort the language of an unambiguous policy, or, in order to enforce a particular construction which it might feel is more appropriate.” Rodriguez v. Gen. Acc. Ins. Co. of Am.,
Further, although the majority’s construction of the word “furnish” will permit recovery here, it could have the unintended and potentially drastic consequence of denying workers’ compensation coverage to scores of other workers who otherwise would have been covered as employees under the workers’ compensation act. Under the majority’s approach, any part-time or seasonal workers who are recommended or referred to their employer are temporary workers, not employees, and, therefore, are not covered by their employers’ workers’ compensation insurance. If their employer has no private insurance, as often will be the case, then they will have no source of recovery.
As Gavan explained, the word “furnish” is given the same meaning in a commercial liability insurance policy and in the workers’ compensation act because employee exclusion clauses in standard commercial business insurance policies intentionally are written in parallel fashion to the act so as to provide coverage for the public under commercial insurance policies without duplicating the coverage given to employees under the act. Gavan,
“ ‘[T]o draw a sharp line between employees and members of the general public.’ This line exists ... because ‘the Workers’ Compensation Act constitutes the full extent of an employer’s liability for any injuries sustained by its employees ... in the course of their employment,’ while commercial general liability policies are designed to protect against injuries caused to the public or the public’s property.”
As explained above, “temporary workers” are granted coverage under the commercial automobile liability policy at issue in this case, but under the workers’ compensation act, “temporary workers” are not covered by their employers’ workers’ compensation insurance. Because the “temporary worker” clauses in the policy at issue here and the Missouri workers’ compensation act are nearly identical and both require that a worker be “furnished” to an employer, they should be interpreted the same way.
Here, the majority’s interpretation that a third party “furnishes” a worker to an employer by recommending or referring
Based on the plain meaning of the word “furnish” and concerns about the interplay between “temporary worker” exceptions in commercial liability policies and workers’ compensation acts, a number of courts also have concluded that a third party must have some ability to direct the actions of a person in order to “furnish” him or her to an employer. Empire Fire & Marine Ins. Co. v. Jones,
As here, the dispositive issue in Empire was whether a third party’s recommendation or referral of a prospective employee to an employer meant that the third party “furnished” the worker. Empire held that a referral did not constitute “furnishing” an employee, stating:
[The Kalmans] gave Jones a referral to Drumheiser, and Jones contacted Drum-heiser himself to set up the terms of Drumheiser’s employment with Jones ... the Kalmans ultimately had no power to set the conditions of Drumheiser’s employment with Jones, nor could they recall Drumheiser from that employment without his consent. Mr. Kal-man’s understandable desire to share the fruits of a person he considered to be an excellent part-time worker does not transform Drumheiser into a ‘Temporary worker,’ as set forth in the exclusion.
Id. at 754.
In AMCO Ins. Co. v. Dorpinghaus, No. 05-1296,
Similarly, Brown v. Ind. Ins. Co.,
In this case, as in those discussed above, the Family Center simply recommended Mr. Mendenhall to Mr. Walker as a potential hire, and three days later, Mr. Walker hired him for part-time work. The Family Center had no authority over Mr. Menden-hall. Mr. Mendenhall did not need permission from the Family Center to work for Mr. Walker, and Mr. Walker did not need approval from the Family Center to hire him. As a result, Mr. Mendenhall was not “furnished” to Mr. Walker by the Family Center; instead the Family Center merely “furnished” him with a recommendation for employment with Mr. Walker.
Because Mr. Mendenhall was not “furnished” to Mr. Walker, the trial court’s grant of summary judgment to Hartford should be affirmed.
. In 1993, the year after Missouri and many other states adopted this distinction between "leased workers” and "temporary workers,” the standard Insurance Services Office Inc. ("ISO”) commercial liability policy, which forms the template used by insurers such as Hartford, was changed to include a distinction between "leased workers” and “temporary workers.” Tickle,
. This dichotomy also explains why "leased workers” are excluded from coverage under commercial insurance policies such as the one at issue here while "temporary workers” are granted coverage. To prevent employers from avoiding their workers’ compensation obligations by leasing employees technically working for third parties, Missouri’s workers’ compensation act was amended in 1992 to obligate employers to purchase workers’ compensation insurance for employees obtained "through an employee leasing arrangement.” § 287.282; see also Tickle,
But the amendment specified that such arrangements "shall not include temporary help service arrangements which assign their [own] employees to clients for a finite period of time to support or supplement the client’s work force in special work situations, such as employee absences, temporary skill shortages and seasonal workloads....” § 287.282. Regulations promulgated under this provision define a “temporary worker” as a "worker who is furnished to an entity to substitute for a permanent employee on leave or to meet seasonal or short-term workload conditions.” 20 CSR 500-6.800.
In other words, leased workers are covered by their employer's workers’ compensation insurance; temporary workers are not. It avoids duplication of coverage, therefore, for commercial insurance policies to exclude leased employees but to provide coverage for "temporary workers” who otherwise would not have any coverage. Tickle,99 S.W.3d at 29-30 ; accord, Brown v. Ind. Ins. Co.,184 S.W.3d 528 , 537 (Ky.2006) ("The reason the ‘employee’ exclusions apply to leased workers but not to temporary workers 'furnished to you' is that the lessee of a leased employee is required to provide workers' compensation insurance coverage for that employee, whereas a temporary worker remains the employee of die temporary help service that furnished the worker.”).
. Other courts have used a similar analysis to reject arguments that one can furnish oneself or that the word ''furnish” is ambiguous and might include something less than providing or supplying. Northland Cas. Co. v. Meeks,