Title: Accident Fund Insurance Co. v. Casey

State: missouri

Issuer: Missouri Supreme Court

Document:

SUPREME COURT OF MISSOURI 
en banc 
ACCIDENT FUND INSURANCE 
  ) 
COMPANY; E.J. CODY COMPANY,   ) 
INC., 
  ) 
  ) 
Respondents-Appellants, 
  ) 
  ) 
v. 
  ) 
No. SC96899 
  ) 
ROBERT CASEY, EMPLOYEE/ 
  ) 
DOLORES MURPHY, 
 
  ) 
  ) 
Appellant-Respondent. 
  ) 
APPEAL FROM THE LABOR AND INDUSTRIAL RELATIONS COMMISSION 
Robert Casey died from mesothelioma caused by repeated exposure to asbestos in 
the workplace.  Before his death, Mr. Casey filed a claim for workers’ compensation 
benefits, with which his widow, Dolores Murphy, proceeded following his death.  The 
Labor and Industrial Relations Commission determined that because Mr. Casey’s 
exposure to asbestos occurred while he was employed by E.J. Cody Company, Inc. 
(“Employer”), its insurer, Accident Fund National Insurance Company (“Insurer”), was 
liable to Ms. Murphy for benefits under section 287.200.4, RSMo 2014.1  All parties 
1 Unless otherwise specified, all additional statutory references are to RSMo 2014. 
Opinion issued May 22, 2018
2 
 
appealed.2  Insurer and Employer argue, among other things, that section 287.200.4 
violates article I, section 13 of the Missouri Constitution, which prohibits retrospective 
laws.  Ms. Murphy contends the Commission erred by failing to include Mr. Casey’s 
eight adult children as beneficiaries of the award.  For the following reasons, the 
Commission’s decision is affirmed as modified by this opinion to include Mr. Casey’s 
eight children in the final award.  Rule 84.14. 
Background 
 
Mr. Casey spent his career working as a floor tile installer for several different 
companies.  He last worked for Employer, a construction contractor in the business of 
installing acoustical ceilings and floor tiles.  Mr. Casey began in 1984 in a part-time 
capacity but advanced to full-time employment in 1987.  He continued working for 
Employer until his retirement in 1990.3   
In his trade, Mr. Casey worked closely with asbestos-laden materials, primarily 
vinyl asbestos tile (“VAT”).  Employer became aware of the dangers of asbestos in “the 
mid-1980s” and later discontinued its use of VAT in new projects.  Asbestos exposure 
persisted for Mr. Casey, however, as he was frequently tasked with removing existing 
VAT when installing new, asbestos-free floor tiles.  This practice required cutting, 
scraping, and sweeping asbestos tiles and cutback, which produced a dust containing 
                                              
2 The court of appeals transferred the case to this Court upon finding a “real and substantial” 
constitutional question invoking this Court’s exclusive appellate jurisdiction under article V, 
section 3 of the Missouri Constitution. 
3 At the time of Mr. Casey’s last employment, Employer was insured by the now-defunct 
California Compensation Insurance Company.   
3 
 
asbestos fibers Mr. Casey regularly inhaled.  He performed this work without the 
protection of an asbestos abatement suit or mask.   
Due to his extensive asbestos exposure, Mr. Casey was diagnosed with 
mesothelioma in the fall of 2014.  He filed a claim for workers’ compensation benefits 
against Employer in February 2015.  At the time he filed the claim, Employer was 
covered under an insurance policy purchased from Insurer.  The policy included an 
endorsement titled “Missouri Notification of Additional Mesothelioma Benefits 
Endorsement,” providing in pertinent part: 
Section 287.200.4, subdivision (3), of the Missouri Revised Statutes provides 
additional benefits in the case of occupational diseases due to toxic exposure 
that are diagnosed to be mesothelioma and result in permanent total disability 
or death.  Your policy provides insurance for these additional benefits. 
 
By accepting this policy, Employer opted in to liability coverage for the additional 
mesothelioma benefits provided by section 287.200.4, which allows for enhanced 
compensation for “all [mesothelioma] claims filed on or after January 1, 2014.” 
Mr. Casey passed away from his mesothelioma while his claim was still pending.  
An amended claim for compensation was filed thereafter, naming Ms. Murphy and 
Mr. Casey’s eight children as claimants.  During a hearing held in front of an 
administrative law judge (“ALJ”), an oral motion to substitute Ms. Murphy as the 
claimant was sustained.  The ALJ found Employer liable under Missouri’s last exposure 
4 
 
rule,4 awarding section 287.200.4’s enhanced mesothelioma benefits to Ms. Murphy and 
Mr. Casey’s eight children. 
Employer and Insurer both appealed to the Commission.  The Commission largely 
affirmed the ALJ’s decision but did so on alternative grounds, finding the last exposure 
rule did not apply to claims made under section 287.200.4.  It also limited recovery to 
Ms. Murphy.  The Commission determined Ms. Murphy to be the sole proper claimant 
because the amended claim “did not identify employee’s children as dependents or 
claimants, nor is there any motion on the record before us to include these individuals as 
parties to any award in this matter.”  All parties appeal this decision.  
Standard of Review 
 
This Court reviews the Commission’s decision to determine whether it is 
supported by competent and substantial evidence.  Mo. Const. art. V, sec. 18.  A decision 
of the Commission will be disturbed only if (1) the Commission acted without authority 
or in excess of its authority; (2) the award was procured by fraud; (3) the facts do not 
support the award; or (4) there was not sufficient, competent evidence to justify the 
award.  Section 287.495.1.  Questions of law, including those involving statutory 
interpretation, are reviewed de novo.  White v. ConAgra Packaged Foods, LLC, 535 
S.W.3d 336, 338 (Mo. banc 2017).   
 
                                              
4 Section 287.063.2 provides the “employer liable for the compensation in this section shall be 
the employer in whose employment the employee was last exposed to the hazard of the 
occupational disease prior to evidence of disability, regardless of the length of time of such last 
exposure.” 
5 
 
Analysis 
 
All three parties raise arguments on appeal.  Insurer asserts it cannot be liable for 
Ms. Murphy’s claim of benefits because it did not insure Employer at the time of 
Mr. Casey’s last exposure.  In the alternative, it argues section 287.200.4 violates the 
Missouri Constitution’s prohibition against retrospective laws and also contends the 
Commission erred by substituting Ms. Murphy for Mr. Casey as a claimant.  Employer 
echoes Insurer’s constitutional argument and further asserts the Commission’s award was 
not supported by sufficient evidence.  Ms. Murphy, meanwhile, posits the Commission 
erred in excluding Mr. Casey’s eight adult children from the final award of benefits.  
These arguments are addressed in turn. 
I. 
Insurer is Liable for the Enhanced Mesothelioma Benefits 
Missouri’s workers’ compensation law was amended in 2014 to provide enhanced 
compensation for individuals diagnosed with occupational diseases such as 
mesothelioma.  Section 287.200.4(3).  Coverage is provided for “all claims filed on or 
after January 1, 2014, for occupational diseases due to toxic exposure which result in a 
permanent total disability or death.”  Section 287.200.4.  Employers may either accept or 
reject liability for mesothelioma.  If an employer elects to accept liability, it must insure 
its “entire liability” under the act, which includes accepting all of the act’s provisions.  
Section 287.280.1; Allen v. Raftery, 174 S.W.2d 345, 350 (Mo. App. 1943).  In other 
words, an insurer cannot avoid certain liabilities by constructing its policy to exclude 
certain provisions of the workers’ compensation statute and cover only the provisions it 
prefers.   
6 
 
 
Employer elected to accept mesothelioma liability under section 287.200.4 and 
purchased a policy from Insurer to cover these “additional benefits” by selecting a policy 
that explicitly contemplated enhanced compensation for mesothelioma claims filed on or 
after January 1, 2014.  The triggering occurrence – the event commencing liability 
coverage – is the filing of a claim.  This Court gives the language in an insurance policy 
its plain meaning, “or the meaning that would be attached by an ordinary purchaser of 
insurance.”  Doe Run Res. Corp. v. Am. Guar. & Liab. Ins., 531 S.W.3d 508, 511 (Mo. 
banc 2017).  An ordinary purchaser of insurance would understand, per its own policy, 
Insurer covered Employer for all liabilities arising out of all mesothelioma claims filed on 
or after January 1, 2014 – including Mr. Casey’s claim, which was filed in February 
2015.   
Insurer nevertheless argues that, irrespective of the plain policy language, it cannot 
be held liable for the award of compensation because it did not insure Employer in 
1990 – when Mr. Casey was last exposed to asbestos.  Section 287.063.2, deemed the 
“last exposure rule,” provides the “employer liable for [workers’ compensation benefits] 
shall be the employer in whose employment the employee was last exposed to the hazard 
of the occupational disease.”  Insurer’s policy itself contains similar limitations, stating 
the “employee’s last day of last exposure to the conditions causing or aggravating [the 
occupational disease] must occur during the policy period.”   
Insurer’s policy also states its terms may not be changed “except by endorsement 
issued by us to be part of this policy.”  The mesothelioma endorsement adopts section 
287.200.4 and, as a result, adopts that section’s provision of enhanced benefits for 
7 
 
occupational disease claims filed on or after January 1, 2014 – modifying the policy with 
respect to these additional mesothelioma benefits.  In addition, the policy provides the 
“terms of this insurance that conflict with the workers[’] compensation law are changed 
to conform to that law.”  Accordingly, any policy provision purporting to contravene 
section 287.200.4 or Insurer’s acceptance of it is of no effect. 
Further, the last exposure rule is immaterial here.  The policy Employer purchased 
explicitly covers the benefits proffered by section 287.200.4, which contains no 
qualifying language as to the date of last exposure or injury and limits coverage only by 
way of conditioning it on the filing of a claim after January 1, 2014.  Through this policy, 
Employer accepted, and Insurer provided, liability insurance for the enhanced benefits – 
the only benefits Mr. Casey sought (and Ms. Murphy now seeks).  The relevant inquiry in 
this matter is not under whose employment Mr. Casey was last exposed, but whether the 
terms of Employer’s policy provide coverage.  The answer is clear.  Insurer provided 
coverage to Employer by expressly adopting section 287.200.4 into its endorsement.   
 
If recovery under section 287.200.4 were limited to individuals who were last 
exposed to asbestos during the policy period, this policy’s mesothelioma endorsement – 
and similar provisions in countless other insurance policies – would be rendered 
essentially worthless.5  It would allow insurance companies to provide illusory, hollow 
policies.  Because individuals are no longer regularly exposed to asbestos in the 
workplace, the pool of individuals who were last exposed to asbestos in 2015 is 
                                              
5 In construing a contract, meaning is given to all provisions.  Martin v. U.S. Fid. and Guar. Co., 
996 S.W.2d 506, 511 (Mo. banc 1999).   
8 
 
miniscule, if any.  Further, if an individual was last exposed to asbestos on or after 
January 1, 2014, it is quite possible that, due to the long latency period of the disease, 
mesothelioma symptoms would not manifest until long after the enhanced benefits 
provided under section 287.200.4 have expired.  The Commission’s decision finding the 
claim originally filed by Mr. Casey and succeeded by Ms. Murphy was covered under the 
policy is supported by competent and substantial evidence.  
II. 
Section 287.200 is Constitutional as Applied  
Insurer and Employer argue section 287.200.4 is unconstitutional as applied to this 
case because it allowed Mr. Casey to retrospectively recover for a disease caused by 
asbestos exposure that last occurred decades before the filing of his claim.6  A 
retrospective law “impair[s] vested rights acquired under existing laws.”  State ex rel. 
Schottel v. Harman, 208 S.W.3d 889, 892 (Mo. banc 2006).  If a law “creates a new 
obligation, imposes a new duty, or attaches a new disability with respect to transactions 
or considerations already past” or “[gives] to something already done a different effect 
from that which it had when it transpired,” it is a retrospective law.  Id.  A law is not 
retrospective merely because it “relates to prior facts or transactions but does not change 
                                              
6 Ms. Murphy posits this constitutional argument was not properly preserved for appellate review 
because Insurer and Employer did not raise any retrospectivity issue in their initial answers.  But 
it was not necessary for either party to raise the issue at the ALJ level or before the Commission 
to raise it on appeal.  A constitutional challenge must be raised at the first available opportunity.  
Mayes v. Saint Luke’s Hosp. of Kansas City, 430 S.W.3d 260, 266 (Mo. banc 2014).  Because 
the Commission had no authority to make constitutional findings on this issue, the parties were 
not required to raise the retrospectivity issue at the administrative level to preserve it for appeal.  
Thompson v. ICI Am. Holding, 347 S.W.3d 624, 634 n.6 (Mo. App. 2011).  Regardless, it was 
raised before the Commission: Insurer alleged the ALJ retrospectively applied section 287.200.4, 
in violation of the Missouri Constitution.  The Commission correctly declined to address the 
issue, noting it had been preserved for appeal.   
9 
 
their legal effect, or because some of the requisites for its action are drawn from a time 
antecedent to its passage, or because it fixes the status of an entity for the purpose of its 
operation.”  Id.   
Statutes are presumed valid and will not be found unconstitutional unless they 
clearly violate a constitutional provision.  Id.  Absent evidence of clear legislative intent 
to the contrary, this Court presumes all statutes operate prospectively, not retrospectively.  
Id.   
Section 287.200.4 is not a retrospective law.  Because Insurer affirmatively 
assented to providing these enhanced benefits, the new law does not impair any vested 
right Employer or Insurer once held.  Furthermore, section 287.200 does not create any 
new duty or obligation with regard to past transactions or give any past transaction a new 
legal effect.  Insurer provided, and Employer accepted, coverage “for … additional 
benefits [provided by section 287.200.4(3)],” and, in turn, they provided and accepted 
coverage for Mr. Casey’s claim, filed February 2015.   
Further, this statute does not transform past occurrences into cognizable claims, 
but provides additional benefits for new claims filed under the new law.  It was not until 
after the amendments went into effect that Insurer and Employer contracted for coverage, 
and it was only after they entered into the contract that Mr. Casey filed his claim seeking 
workers’ compensation benefits under the new statutory provisions.  That certain facts, 
such as Mr. Casey’s exposure, are antecedent to the amendments does not render the law 
retrospective.  Because this case operates entirely on facts subsequent to the 2014 
amendments, section 287.200 is not a retrospective law as applied to this claim.   
10 
 
III. 
Proper Claimants  
All parties raise concerns as to the propriety of the claimants in this case.  Insurer 
argues the Commission improperly allowed the substitution of Ms. Murphy as a claimant 
because she failed to file a formal suggestion of Mr. Casey’s death or a written motion 
for substitution.  Ms. Murphy argues the Commission erred by mistakenly omitting 
Mr. Casey’s eight adult children from the final award of compensation benefits.  
Employer, meanwhile, posits the statute improperly extends liability benefits to non-
dependent children. 
The substitution of Ms. Murphy for Mr. Casey was not improper.  If a workers’ 
compensation claimant dies while the claim is pending, “the same shall not abate, but on 
notice to the parties may be revived and proceed in favor of the successor to the rights or 
against the personal representative of the party liable, in like manner as in civil actions.”  
Section 287.580.  In civil actions, substitution is achieved by filing a suggestion of death 
and then, within 90 days, filing a motion to substitute.  Rule 52.13.  But “[a]s a general 
proposition, the Missouri Rules of Civil Procedure, including its pleading requirements, 
do not apply to workers’ compensation actions, unless the statute implicates the 
application of a specific rule.”  U.S. Dep’t of Veterans Affairs v. Boresi, 396 S.W.3d 356, 
363 (Mo. banc 2013) (internal quotation omitted).  “Chapter 287 has minimal 
requirements for its pleadings or motions.”  Id. at 362.  Workers’ compensation 
proceedings are “simple, informal, and summary.”  Section 287.550. 
Ms. Murphy filed an amended claim on October 28, 2015, naming herself and Mr. 
Casey’s children as claimants and notifying the other parties by letter of her intent to 
11 
 
proceed.  Because the amended claim notified all other parties of the original claimant’s 
death, it was a de facto suggestion of death.  Indeed, Insurer and Employer were clearly 
on notice of the substitution, as both parties filed answers to the amended claim. 
Moreover, Ms. Murphy made an oral motion for substitution of parties at the 
outset of the ALJ hearing on January 7, 2016 – within the 90-day window for such a 
motion under Rule 52.13.  Though the Missouri Rules of Civil Procedure are not 
mandatory in workers’ compensation actions, the substitution of Ms. Murphy 
substantially tracked the procedural rules and was “in like manner as in civil actions” as 
required under section 287.580.  The procedure here was sufficient to properly substitute 
Ms. Murphy for Mr. Casey. 
In her amended claim, Ms. Murphy listed Mr. Casey’s eight adult children as 
eligible claimants for the workers’ compensation benefits, but the Commission excluded 
the children from the award.  Based on the Commission’s written decision, Ms. Murphy 
infers this exclusion was inadvertent.  The Commission stated in a footnote: “the 
amended claim for compensation, filed October 28, 2015, did not identify employee’s 
children as dependents or claimants, nor is there any motion on the record before us to 
include these individuals as parties to any award in this matter.  For this reason, we have 
identified Dolores Murphy as the sole claimant herein.”  Ms. Murphy concludes the 
Commission likely overlooked a separate third document attached to the amended claim, 
which listed all eight individuals as eligible claimants.7  Ms. Murphy requests this Court 
                                              
7 Ms. Murphy further alleges the Commission’s secretary, when notified of the mistake, 
requested she file a motion to correct the award.  Though timely filed, Insurer filed a notice of 
12 
 
add the children to the Commission’s award or, in the alternative, remand the case to the 
Commission so it can correct the error.  
Employer argues the amended statute improperly allows Mr. Casey’s non-
dependent children to recover benefits.  But there is no limit on a child’s recovery based 
upon dependency status in the amended section 287.200, unlike other workers’ 
compensation provisions.8  This section provides, “Notwithstanding any other provision 
of this chapter to the contrary,” if an employee dies before the enhanced mesothelioma 
benefits are paid, the “benefits are payable to the employee’s spouse or children.”  
Section 287.200.4(5) (emphasis added).  This Court gives the words of a statute their 
plain and ordinary meaning.  Mantia v. Mo. Dep’t of Transp., 529 S.W.3d 804, 809 (Mo. 
banc 2017).  Ms. Murphy used Box 21 – “Additional Statements” – to refer to the 
attached sheet on which she set out the eight surviving children who were also making a 
claim for benefits.  Mr. Casey’s children are not precluded from recovering benefits, as 
they were properly delineated as claimants.   
Because section 287.200.4 does not limit recovery to dependent children, but 
allows all children to recover, and because the children were properly listed on the 
amended claim, they should have been included in the final award.  Although the 
Commission’s omission of the children was inadvertent, it was nevertheless in error.  
                                              
appeal and the Commission lost its jurisdiction over the matter before it could rule on the 
motion.  
8 For example, “The employer shall [] pay to the dependents of the employee a death benefit on 
the employee’s average weekly earnings during the year immediately preceding the injury that 
results in the death of the employee.”  Section 287.240(2). 
13 
 
This Court modifies the Commission’s decision to include Mr. Casey’s children in the 
final award.  Rule 84.14.  
Conclusion 
For the foregoing reasons, this Court affirms the Commission’s decision as 
modified by this opinion.  Rule 84.14. 
 
 
 
______________________________ 
Mary R. Russell, Judge 
 
 
 
 
All concur.