Court Opinion

ID: 9719217
Source: CourtListenerOpinion
Date Created: 2023-08-26 07:45:58.474406+00
Date Added: 2024-06-11T18:24:05.246785
License: Public Domain

Fahrnbruch, J.,
dissenting.
I respectfully dissent from the majority’s conclusion that the *455compensation court is without jurisdiction to determine insurance coverage disputes between employers and their workers’ compensation insurance carriers.
While it is true that the manner in which the compensation court operates is to be found in the legislation itself, Shada v. Whitney, 172 Neb. 220, 109 N.W.2d 167 (1961); Fidelity & Casualty Co. v. Kennard, 162 Neb. 220, 75 N.W.2d 553 (1956), I disagree with the majority’s narrow focus that the statutes must expressly provide the compensation court with subject matter jurisdiction over insurance coverage disputes. It is implicit in the Nebraska Workers’ Compensation Act that the compensation court does possess such subject matter jurisdiction.
I start the analysis by remembering that the Workers’ Compensation Act is remedial in nature and its purpose is to do justice to workers without expensive litigation and unnecessary delay. Gill v. Hrupek, 184 Neb. 436, 168 N.W.2d 377 (1969).
In establishing the Nebraska Workers’ Compensation Court pursuant to article V, § 1, of the Nebraska Constitution, the Legislature granted the court “authority to administer and enforce all of the provisions of the Nebraska Workers’ Compensation Act . . . except such as are committed to the courts of appellate jurisdiction.” (Emphasis supplied.) Neb. Rev. Stat. § 48-152 (Reissue 1988).
Among the provisions that the workers’ compensation court must administer and enforce are those imposing duties upon insurance carriers. Neb. Rev. Stat. § 48-146 (Reissue 1988) requires that a workers’ compensation policy must contain an agreement that the insurer will promptly pay to the person entitled to the same all benefits conferred by the act. The agreement is to be construed as a direct promise by the insurer to the person entitled to compensation enforceable in the employee’s own name. That section also requires that a policy contain a provision that jurisdiction of the insured (employer) shall be jurisdiction of the insurer and that the insurer shall in all things be bound by the awards, judgments, or decrees rendered against such insured. Neb. Rev. Stat. § 48-147 (Reissue 1988) provides that an employee entitled to benefits has the right to recover the same directly from the employer and *456the right to enforce in his or her own name pursuant to § 48-146 the liability of any insurer who may, in whole or in part, have insured the liability for such compensation.
This court long ago held that § 48-147 appears clearly to provide that the employer and the insurer shall jointly be held liable for workers’ compensation benefits awarded to an employee. Collins v. Casualty Reciprocal Exchange, 123 Neb. 227, 242 N.W. 457 (1932). We have also held, “ ‘The provision of the workmen’s compensation law which makes the contract of an insurance carrier a direct promise enforceable in the name of one entitled to compensation benefits effectually makes of the carrier a proper party defendant in an action to recover benefits.’ ” Peeks v. Ayers Auto Supply, 157 Neb. 363, 369, 59 N.W.2d 564, 569 (1953).
Neb. Rev. Stat. § 48-178.01 (Reissue 1988) provides:
Whenever any petition is filed and the claimant’s right to compensation is not in issue, but the issue of liability is raised as between an employer, a carrier, or a risk management pool or between two or more employers, carriers, or pools, the Nebraska Workers’ Compensation Court may order payment of compensation to be made immediately by one or more of such employers, carriers, or pools. When the issue is finally resolved, an employer, carrier, or pool held not liable shall be reimbursed for any such payments by the employer, carrier, or risk management pool held liable.
It defies logic to interpret this section as providing the compensation court with the authority to order an insurance carrier to make payment to an injured employee, yet, at the same time, construe the section as not providing subject matter jurisdiction to entertain insurance coverage disputes. How can a court order a carrier to make payment unless it has subject matter jurisdiction to determine whether the insurer has a policy to cover the work-related accident being litigated?
While there is no Workers’ Compensation Act provision expressly granting the Workers’ Compensation Court jurisdiction to determine insurance coverage questions, I interpret the act to grant, by implication, ancillary jurisdiction to the court to determine insurance coverage when the Workers’ *457Compensation Court grants compensation benefits to an employee and the question of insurance coverage is raised. Without jurisdiction to determine the liability of insurance companies, the compensation court cannot carry out its duties to administer and enforce all provisions of the Workers’ Compensation Act pertaining to insurance carriers, as mandated in § 48-152. It follows that the compensation court by necessity has ancillary jurisdiction to resolve insurance coverage disputes under limited circumstances. This is in accord with the general rule that “when it is ancillary to the determination of the employee’s right, the compensation commission has authority to pass upon a question relating to the insurance policy, including ... coverage of the policy at the time of injury . ...” 4 A. Larson, The Law of Workmen’s Compensation § 92.41 at 17-44 to 17-51 (1989). See, also, Travelers Insurance Co. v. Hawaii Roofing, Inc., 64 Haw. 380, 641 P.2d 1333 (1982); Southern Farm Bur. Cas. Ins. Co. v. Tuggle, 270 Ark. 106, 603 S.W.2d 452 (1980).
From the insurer’s standpoint, it seems rather strange that an alleged insurer is a proper party defendant in a workers’ compensation action, Peeks v. Ayers Auto Supply, supra, and can raise every possible defense against a worker’s claim, with the exception that it has no policy covering the accident.
It seems unjust that an employee must overcome any defense, other than insurance coverage, raised in the workers’ compensation court by an alleged insurer, after which the employee is required to proceed in the district court to determine whether the alleged insurer has liability. That process frustrates the doctrine in Gill v. Hrupek, 184 Neb. 436, 168 N.W.2d 377 (1969), that the Workers’ Compensation Act is remedial in nature and its purpose is to do justice to workers without expensive litigation and unnecessary delay.
In the majority opinion, there is mention that no party in this case has raised any constitutional or common-law right issue. I would only note in passing that we have held that the Workers’ Compensation Act creates rights which did not exist at common law and the Legislature may place such restrictions thereon as it sees fit. University of Nebraska at Omaha v. Paustian, 190 Neb. 840, 212 N.W.2d 704 (1973).
*458I would hold that subject matter jurisdiction is vested in the Workers’ Compensation Court to resolve insurance coverage issues, but only when such determination is ancillary to the resolution of the employee’s right to compensation benefits.
White and Shanahan, JJ., join in this dissent.