RB&F COAL, INCORPORATED; OLD REPUBLIC INSURANCE COMPANY v. DELORIS J. MULLINS, o/b/o and Widow of Turl Mullins; DIRECTOR, OFFICE OF WORKERS’ COMPENSATION PROGRAMS, UNITED STATES DEPARTMENT OF LABOR
No. 15-1656
UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT
November 18, 2016
PUBLISHED. Argued: September 21, 2016
Before WILKINSON and FLOYD, Circuit Judges, and Irene M. KEELEY, United States District Judge for the Northern District of West Virginia, sitting by designation.
Affirmed by published opinion. Judge Floyd wrote the opinion, in which Judge Wilkinson and Judge Keeley joined
FLOYD, Circuit Judge:
RB & F Coal Inc., and Old Republic Insurance Company (collectively, “RB&F“) seek relief from an order of the Department of Labor‘s (DOL) Benefits Review Board (BRB) holding RB&F responsible for the payment of benefits to a coal miner, Turl Mullins, and survivor‘s benefits to his widow, Deloris Mullins, under the Black Lung Benefits Act, (BLBA),
I.
Before discussing the undisputed facts of this case, it is helpful to understand the statutory schemes at issue. The BLBA provides benefits to miners who are disabled by pneumoconiosis.
The “responsible operator“--the operator ultimately found liable for the BLBA claim--is the most recent company to employ the miner, so long as that employer qualifies as a “potentially liable operator.”
The DOL bears the initial burden of proving that the operator it designates as responsible is a “potentially liable operator”
The Virginia Property and Casualty Insurance Guaranty Association (VPCIGA), is a state chartered non-profit association established by the legislature to “provide prompt payment of covered claims to reduce financial loss to claimants or policyholders resulting from the insolvency of an insurer.”
When a member insurer becomes insolvent, the VPCIGA takes on liability for some, but not all, of its obligations. See
II.
Turning now to the facts of this appeal, Turl Mullins worked as a coal miner for several years including stints with RB&F between 1985 and 1986 and Wilder Coal (“Wilder“) between 1986 and 1988.4 Mullins was diagnosed with pneumoconiosis in 2009, and filed a claim for benefits under the BLBA in that same year. As discussed above, under DOL regulations, liability for those benefits falls to the mine operator that most recently employed the miner for at least a year, so long as that employer is financially capable of assuming liability for the claim.
A DOL district director found that Mullins was entitled to benefits and that RB&F was the responsible operator. Contesting
The ALJ concluded that the district director gave a valid reason for not naming the more recent employer, Wilder, as the responsible operator. First, Wilder was out of business. Second, Wilder‘s insurer, Rockwood, was insolvent. And third, the VPCIGA was not liable for the claim because the August 26, 1992 bar date to file claims against Rockwood had passed. The ALJ then determined that, according to DOL regulations, the burden shifted to RB&F to show that Wilder was in fact financially capable of assuming liability.
The ALJ then found that RB&F had failed to show either that (1) Wilder or Rockwood was capable of assuming liability for Mullins‘s claim; or (2) the claim qualified as a “covered claim” under the Guaranty Act obligating the VPCIGA to assume liability for the claim. The ALJ also found that because this was not a “covered claim,” the district director had no duty to notify the VPCIGA or name it as a party. The ALJ concluded that RB&F was properly named as the responsible operator and was liable for Mullins‘s claim.
RB&F appealed the ALJ‘s determination to the BRB arguing that the ALJ incorrectly found that RB&F was the responsible operator.5 RB&F also argued that to the extent that the Guaranty Act prevents the VPCIGA from assuming liability for Mullins‘s claim, it violates
III.
This Court reviews the legal conclusions of the BRB and the ALJ de novo to determine whether those conclusions are rational and consistent with applicable law. Westmoreland Coal Co. v. Cox, 602 F.3d 276, 282 (4th Cir. 2010) (quoting Milburn Colliery Co. v. Hicks, 138 F.3d 524, 528 (4th Cir. 1998)).
RB&F challenges the BRB‘s determination that Wilder was incapable of assuming its liability for Mullins‘s claim. RB&F claims that since Wilder‘s liability was fully covered by Rockwood, which was a member of the VPCIGA, then it cannot be found to be incapable of assuming liability because the VPCIGA is now obligated to pay the claim. For the reasons below, we disagree.
A.
Wilder is not a “responsible operator” for the purposes of the BLBA. A mine operator cannot be the “responsible operator” if it is financially incapable of assuming liability.
It is undisputed that Wilder is bankrupt and is itself incapable of assuming liability. It is also undisputed that Wilder‘s insurance company, Rockwood, is insolvent and is incapable of assuming liability. According to DOL regulations, an operator‘s insurance policy “shall not be considered
As discussed above, the final date for filing claims against Rockwood was August 26, 1992. Mullins‘s claim was filed in 2009, seventeen years after the final date to file his claim against Rockwood had passed. J.A. 12, 31. As such, this is not a “covered claim” under the Guaranty Act, and the VPCIGA is under no obligation to pay it. See Mounts, 484 S.E.2d at 144 (holding that VPCIGA‘s liability was limited to “covered claims” and that claims filed against Rockwood after August 26, 1992 were not “covered claims“).
RB&F contends that the August 1992 bar date for filing claims against Rockwood is void based on our decision in Boyd & Stevenson, which it argues was based on “general principles of insurance law, that where the law establishes a condition of insurance that is impossible for a claimant to perform, it is ineffectual and void.” Pets.’ Br. at 15. Thus, RB&F claims that because Mullins could not have filed his claim before the 1992 bar date, the bar date creates a condition impossible and must be void. RB&F‘s reliance on Boyd & Stevenson is misplaced.
In Boyd & Stevenson, we determined that a notice provision sent to Rockwood‘s claimants after Rockwood‘s insolvency was capable of two interpretations: (1) that a claim for survivor‘s benefits was a separate claim that must be independently filed with the VPCIGA; or (2) that a claim for survivor‘s benefits was derivative of the original claim and did not require filing with the VPCIGA. 407 F.3d at 668-69. We then looked to the “general principle of contract law that exclusionary language in a contract will be construed against an insurer,” and “adopt[ed] an interpretation which recognizes that a survivor‘s claim is part of a miner‘s original claim for filing purposes.” Id. Then, we explicitly distinguished Mounts, stating in no uncertain terms that the matter in Boyd & Stevenson “is distinguishable from the Virginia Court of Appeals decision in Mounts.” Id. at 669. In Mounts, just as in this case, the miner was diagnosed with pneumoconiosis after the deadline for filing claims against Rockwood had passed, yet the Virginia court held that state law prevented the VPCIGA from assuming liability for the claim. 484 S.E.2d at 144. The “condition impossible” in this case is materially indistinguishable from the facts in Mounts. As such, Boyd & Stevenson does not apply.
B.
RB&F contends that even if Virginia law limits the VPCIGA‘s liability, to the extent that the Guaranty Act limits liability for black lung claims, it is preempted by the BLBA. This argument centers on RB&F‘s assumption that the VPCIGA is an insurer for the purposes of the BLBA. If that were the case, the Guaranty Act‘s limitation might be preempted and the VPCIGA may be obligated to cover Mullins‘s claim. See Lovilia Coal Co. v. Williams, 143 F.3d 317, 325 (7th Cir. 1998) (holding that a state law in conflict with the BLBA was preempted). We do not have to reach the preemption question, however, because the VPCIGA is not an insurer for this claim and is thus not covered by the BLBA.
The BLBA requires employers to secure their liability for the payment of benefits by either self-insuring, or purchasing
[E]ach operator of a coal mine . . . shall secure the payment of benefits for which he is liable under section 932 of this title by (1) qualifying as a self-insurer in accordance with regulations prescribed by the Secretary, or (2) insuring and keeping insured the payment of such benefits with any stock company or mutual company or association, or with any other person or fund, including any State fund, while such company, association, person or fund is authorized under the laws of any State to insure workmen‘s compensation.
[E]very policy or contract of insurance must contain -- (1) a provision to pay benefits required under section 932 of this title, notwithstanding the provisions of the State workmen‘s compensation law which may provide for lesser payments; (2) a provision that insolvency or bankruptcy of the operator or discharge therein (or both) shall not relieve the carrier from liability for such payments; and (3) such other provisions as the Secretary, by regulation, may require.
Therefore, the BLBA squarely puts the obligation to provide insurance on the mine operator and the insurance company writing the provision. It is clear that mine operators must be insured, even in the case of their own insolvency, and that any insurance carrier who writes insurance under the BLBA is bound to the full liability of the covered operator. The issue in this case, then, is whether the VPCIGA is an insurer under the BLBA.
Under DOL regulations implementing the BLBA, “[i]nsurer or carrier means any . . . fund, including any State fund, authorized under the laws of a State to insure employers’ liability under workers’ compensation laws.”
The VPCIGA, however, is not an insurer in the traditional sense. As its name suggests, it is a state guaranty association; it only “steps into the shoes” of the insolvent insurance company for “covered claims.”
The [Guaranty] Act, considered as a whole, clearly indicates that the General Assembly did not intend that the Association merely “step into the shoes” of the insolvent insurer. Establishment of the [VPCIGA] affords a mechanism for the timely payment of appropriate claims to avoid financial loss to certain classes of people. But it is not merely a solvent substitute for an insolvent insurance company.
Va. Prop. & Cas. Ins. Guar. Ass‘n v. Int‘l Ins. Co. (Foster), 385 S.E.2d 614, 616 (Va. 1989).7
Specifically, with regards to Rockwood‘s insolvency, the Virginia courts have further made it clear that VPCIGA was not intended to cover claims against Rockwood after August 26, 1992. Mounts, 484 S.E.2d at 144. In Mounts, the court held that because the claim in question was filed after the 1992 cutoff date, “the [VPCIGA] was barred by statute from considering Mounts’ claim to be ‘a covered claim,’ . . . and was not authorized to pay benefits.”
To the extent that a state guaranty association steps into the prior insurer‘s shoes as to the particular claim, and “insure[s] employers’ liability under workers’ compensation laws,” that guaranty association is an insurer under the BLBA.
RB&F is correct in pointing out that insurers that cover an operator‘s BLBA claims are not permitted to provide partial liability for those claims. See Tazco, 895 F.2d at 951.9 The VCPIGA, however, is not providing partial liability for Wilder/Rockwood‘s BLBA claims, but is rather assuming full liability of a subset of Rockwood‘s claims. See Mounts, 484 S.E.2d at 144 (noting that the VPCIGA assumed full liability for “covered claims,“--claims made before August 26, 1992--but was barred by statute from assuming liability for non-covered claims--claims made after August 26, 1992). In Tazco, we held that the insurance carrier was properly identified as the party in interest because “the carrier takes on all the employer‘s responsibilities in connection with insured claims.” Id. at 951 (emphasis added). Under state law, however, the VPCIGA was barred from taking on all of Rockwood‘s claims. See Mounts, 484 S.E.2d at 144. Indeed, it was barred from taking on this claim.
In order to comply with the BLBA, it is clear that Wilder and Rockwood were required to cover all future BLBA claims against Wilder. See
Mullins‘s claim falls to the “potentially liable operator” that most recently employed the miner.
C.
RB&F additionally argues that the regulatory burden-shifting analysis applied by the ALJ violated the APA and Director, Office of Workers’ Compensation Programs, Department of Labor v. Greenwich Collieries, 512 U.S. 267 (1994). But we need not answer this question here; the burden of
IV.
For the foregoing reasons, the decision of the Benefits Review Board is
AFFIRMED.