Source: http://wv.findacase.com/research/wfrmDocViewer.aspx/xq/fac.20180405_0000213.WV.htm/qx
Timestamp: 2019-04-26 14:50:49+00:00

Document:
FindACase | Brickstreet Mutual Insurance Co. v. Zurich American Insurance Co.
ZURICH AMERICAN INSURANCE COMPANY, Respondent.
Certified Questions from the United States Court of Appeals for the Fourth Circuit Honorable Barbara Milano Keenan; J. Harvie Wilkinson, III; and Stephanie D. Thacker, Circuit Judges Appeal No. 16-2204 CERTIFIED QUESTIONS ANSWERED.
Don C.A. Parker Spilman Thomas & Battle, PLLC Charleston, West Virginia Attorney for the Petitioner Trevor K. Taylor Taylor Law Office Morgantown, West Virginia Attorney for Amicus Curiae, American Insurance Association.
Philip J. Sbrolla Jeffrey B. Brannon Cipriani & Werner, PC Wheeling, West Virginia Attorneys for the Respondent.
1. The Workers' Compensation Office of Judges does not possess jurisdiction over a declaratory judgment action initiated by an insurance carrier for the purpose of determining whether coverage for a workers' compensation claim exists under a second policy of insurance such that a second carrier is obligated to contribute to the payment of workers' compensation benefits to an injured employee who suffered a single workplace accident.
2. Pursuant to W.Va. Code § 33-46A-7(a) (2008) (Repl. Vol. 2011), parties to a professional employer agreement must designate either the professional employer organization or the client-employer as the responsible party for obtaining workers' compensation insurance coverage for covered employees.
3. Pursuant to W.Va. Code § 33-46A-7(b) (2008) (Repl. Vol. 2011), and W.Va. C.S.R. § 85-31-6.3, when parties to a professional employer agreement designate the professional employer organization ("PEO") as the responsible party for obtaining workers' compensation insurance coverage for covered employees, the policy obtained by the PEO is primary over a policy obtained by a client-employer. Therefore, coverage under a workers' compensation policy purchased by the client-employer is triggered only if the PEO or its carrier default on their obligation to provide workers' compensation coverage.
(1) Does jurisdiction lie exclusively with the West Virginia Workers' Compensation Office of Judges to hear disputes between insurance carriers regarding whether one or both carriers are responsible for contributing toward payment of an employee's workers' compensation benefits?
(2) West Virginia Code § 33-46A-7(a) requires that parties to a professional employer agreement designate "either" the professional employer organization (PEO) "or" the client-employer as responsible for obtaining workers' compensation insurance coverage for covered employees . . .; and under subsection (b) of the statute, if the PEO is the designated party, the client-employer "shall at all times remain ultimately liable" to provide workers' compensation coverage for covered employees. Do these statutory provisions mandate the designated party's workers' compensation policy as the primary policy over coverage provided by the other party, precluding the PEO and client-employer from agreeing to provide shared coverage? And, if the PEO is designated as the responsible party to obtain workers' compensation coverage, does the term "ultimately" trigger liability by the client-employer for such coverage only if the PEO, or its carrier, defaults?
(Footnote defining "covered employee" omitted).
We reformulate the first question and answer it in the negative, finding that the Workers' Compensation Office of Judges does not have jurisdiction over a declaratory judgment action such as the one underlying the instant proceeding. We answer the second question in the affirmative, and conclude that, pursuant to W.Va. Code § 33-46A-7(a) (2008) (Repl. Vol. 2011), parties to a professional employer agreement must designate either the professional employer organization or the client-employer as the responsible party for obtaining workers' compensation insurance coverage for covered employees. Moreover, pursuant to W.Va. Code § 33-46A-7(b), and W.Va. C.S.R. § 85-31-6.3, when parties to a professional employer agreement designate the PEO as the responsible party for obtaining workers' compensation insurance coverage for covered employees, the policy obtained by the PEO is primary over a policy obtained by a client-employer. Therefore, coverage under a workers' compensation policy purchased by the client-employer is triggered only if the PEO or its carrier default on their obligation to provide workers' compensation coverage.
In 2010, EIN executed a professional employer agreement (sometimes referred to as a "PEO agreement") with Taggart "to provide professional employer organization services at [Taggart's] workplace(s) through the assignment to [Taggart's] workplace(s) of qualified EIN employees ('Worksite Employees'), including supervisory personnel." (Emphasis added).
(a) The responsibility to obtain workers' compensation coverage for covered employees in compliance with all applicable law shall be specifically allocated in the professional employer agreement to either the client-employer or the PEO.
W.Va. Code § 33-46A-7 (footnotes and emphasis added). Accordingly, and of particular relevance to the instant dispute, the professional employer agreement between EIN and Taggart expressly required that "EIN shall obtain and maintain workers' compensation coverage on all Worksite Employees assigned to [Taggart's] workplace(s) and shall administer all related workers' compensation claims. [Taggart] shall, however, maintain its status as a complying employer with its current insurance carrier. . . ."
In compliance with the foregoing agreement, EIN secured workers' compensation coverage through a multiple coordinated policy issued by BrickStreet. The BrickStreet policy names Taggart as an insured and provides that BrickStreet "will pay promptly when due the benefits required of you by the workers [sic] compensation law."
Likewise, Taggart had workers' compensation coverage through a policy issued by Zurich. The policy was issued to Taggart's parent company and listed Taggart as a named insured. Thus, by virtue of this policy, Taggart complied with both its obligation imposed by W.Va. Code § 33-46A-7 to "remain ultimately liable under chapter twenty-three [§ 23-1-1 et seq.] of this code to provide workers' compensation coverage for its covered employees, " and its obligation under the professional employer agreement with EIN to "maintain its status as a complying employer with its current insurance carrier. . . ."
Jonathan Gutierrez ("Mr. Gutierrez") was hired by EIN and assigned to work at a Taggart workplace. In January 2012, during the coverage periods of the two aforementioned workers' compensation policies, Mr. Gutierrez sustained serious injuries in the course of and resulting from his employment. Mr. Gutierrez filed a claim for workers' compensation benefits with EIN. He did not file a claim with Taggart. Mr. Gutierrez's claim was submitted to BrickStreet. BrickStreet determined Mr. Gutierrez's claim was compensable, and this decision was not protested. Accordingly, BrickStreet began paying Mr. Gutierrez's workers' compensation benefits.
(Footnote defining "covered employee" omitted). By corrected order entered August 30, 2017, this Court accepted the certified questions. Having considered the parties' briefs, the brief of Amicus Curiae,  the relevant authorities, and the oral arguments presented, we now answer the first certified question in the negative, and the second certified question in the affirmative.
It is well established that "[t]his Court undertakes plenary review of legal issues presented by certified question from a federal district or appellate court." Syl. pt. 1, Bower v. Westinghouse Elec. Corp., 206 W.Va. 133, 522 S.E.2d 424 (1999). See also Syl. pt. 2, Valentine v. Sugar Rock, Inc., 234 W.Va. 526, 766 S.E.2d 785 (2014) ("When reviewing a question certified from a federal district or appellate court, this Court will give the question plenary review, and may consider any portions of the federal court's record that are relevant to the question of law to be answered."). Having acknowledged the de novo standard to be herein applied, we proceed to answer the dispositive certified questions presented.

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