Opinion ID: 1655551
Heading Depth: 1
Heading Rank: 2

Heading: The insurers' immunity

Text: We agree with the trial court's dismissal of the claim against the insurers who had already paid workers' compensation benefits with respect to this claim. Whether an insurer who has agreed to inspect the work premises as a part of the contract by which it provides workers' compensation coverage to an employer may have independent liability to an employee who is injured in the workplace is a question of first impression in this court. However, the United States Court of Appeals for the Eighth Circuit has considered the matter and has predicted, with great accuracy as it turns out, our holding. In Kifer v. Liberty Mutual Insurance Company, 777 F.2d 1325 (8th Cir.1985), an injured employee sued the carrier of his employer's workers' compensation insurance claiming that it had independent liability to him for a workplace injury caused by its failure to inspect the premises and warn him of danger. The court made an exhaustive study of the law with respect to whether a workers' compensation act such as ours precludes such liability, and found that it did. We agree with the opinion in the Kifer case, particularly with that portion of it which concludes that Ark.Stat.Ann. § 81-1340 (Repl. 1976), in addressing the matter of third party liability to an injured worker, shows the intent of the general assembly to have been to preclude the insurer from independent liability. We quote from the opinion: The language in subsection (a)(2) of section 81-1340 implies that the extent of a carrier's liability for injuries covered by the Act is limited to the payment of workers' compensation benefits. That subsection establishes a formula by which the proceeds of any recovery from the third party are distributed. After deducting reasonable attorney's fees and one-third of the remainder for the injured employee, the subsection provides for the distribution of the remainder, or so much thereof as is necessary to discharge the actual amount of the liability of the employer and the carrier .... (emphasis added) The reference to the phrase actual amount of the liability of the ... carrier suggests a legislative intent to limit the carrier's liability to the payment of workers' compensation benefits. Language by the Arkansas Supreme Court in Neal v. Oliver, 246 Ark. 377, 438 S.W.2d 313 (1969) lends additional support for this construction of section 81-1340(a)(1). Although Neal did not involve a workers' compensation insurance carrier as the defendant, the language employed by the court seems applicable to the facts of the present case. The term third party is not defined in the act and the first and second parties are not even mentioned, but from the language employed in the context it is used in § 1340(a) ... third party can only mean some person or entity other than the first and second parties involved, and the first and second parties can only mean the injured employee and the employer or one liable under the compensation act. Id. at 380, 438 S.W.2d at 315 (emphasis added). The court's reference to one liable under the compensation act can only mean a workers' compensation insurance carrier. The carrier is the only other party mentioned in section 81-1340 who is equated with the employer and who is liable for the payment of compensation. Neal represents the closest approach of the Arkansas Supreme Court to the issue presented in this case. We note also that Professor Arthur Larson, who is generally regarded as the leading academic authority on workers' compensation statutes, has reached a similar conclusion in regard to the issue of carrier immunity under the Arkansas Act. In his treatise, Professor Larson includes the Arkansas Act within the category of statutes that, while not expressly identifying the carrier with the employer [for purposes of immunity], employ language containing a strong implication to [that] effect. 2A A. Larson, The Law of Workmen's Compensation § 72.93, at 14-290 to -291 (1983). Professor Larson cross-references to Horne for the proposition that under the Arkansas Act a workers' compensation carrier is immune from tort actions brought by the injured employee. His treatment of Arkansas law on this point is summed up with a citation to Horne and the statement: Carrier held immune under the wording of the Arkansas third-party provision, in which the words `employer or carrier' are closely followed by `any third party,' thus identifying the employer and carrier in third-party situations, and disassociating the carrier from `any third party.' Id. at § 72.91, at 14-273 n. 29. [777 F.2d at 1333-1334] We hold that a workers' compensation insurance carrier has the same immunity from suit by an injured employee as is provided the employer by Ark.Stat.Ann. § 81-1304 (Supp. 1985). The dismissal of the action against PPG Industries, Inc., Parker Solvents Company, Inc., and Diaz Refinery, Inc., is reversed, and the dismissal of the action against Aetna Casualty and Surety Company and The Standard Fire Insurance Company is affirmed. Affirmed in part, reversed in part, and remanded. HICKMAN, HAYS and GLAZE, JJ., dissent.