Court Opinion

ID: 4261764
Source: CourtListenerOpinion
Date Created: 2018-04-05 19:53:14.549793+00
Date Added: 2024-06-11T14:29:52.360279
License: Public Domain

IN THE SUPREME COURT OF APPEALS OF WEST VIRGINIA

                             January 2018 Term

                                                                         FILED
                                                                      April 5, 2018
                                                                     released at 3:00 p.m.
                                 No. 17-0592                     EDYTHE NASH GAISER, CLERK

                                                                 SUPREME COURT OF APPEALS

                                                                      OF WEST VIRGINIA

             BRICKSTREET MUTUAL INSURANCE COMPANY,
                            Petitioner,

                                      V.

               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

                         Submitted: January 17, 2018

                            Filed: April 5, 2018

Don C.A. Parker                        Philip J. Sbrolla
Spilman Thomas & Battle, PLLC          Jeffrey B. Brannon
Charleston, West Virginia              Cipriani & Werner, PC
Attorney for the Petitioner            Wheeling, West Virginia
                                       Attorneys for the Respondent
Trevor K. Taylor
Taylor Law Office
Morgantown, West Virginia
Attorney for Amicus Curiae,
American Insurance Association

JUSTICE DAVIS delivered the Opinion of the Court.
                             SYLLABUS BY THE COURT

              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’

                                             i
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.

                                            ii

Davis, Justice:

              This Court is herein presented with three certified questions from the United

States Court of Appeals for the Fourth Circuit. The underlying action is a dispute between

two insurance companies, petitioner BrickStreet Mutual Insurance Company (“BrickStreet”)

and respondent Zurich American Insurance Company (“Zurich”), over whether both

companies should contribute to the payment of workers’ compensation benefits arising from

a single uncontested work-related injury. The subject injury was to an employee who had

been hired by BrickStreet’s insured, Employers’ Innovative Network, LLC (“EIN”), a

professional employer organization (“PEO”), and assigned by EIN to work for Zurich’s

insured, Taggart Site Services Group (“Taggart”). Our resolution of this matter necessitates

that we answer only two of the questions certified:1

                     (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?

              1
               The third question, which need not be answered, asked:

                      (3)   When a PEO is named as the sole employer in a
              workers’ compensation claim, does the “other insurance” clause
              in the PEO’s workers’ compensation insurance policy require
              the client-employer’s insurer to pay a portion of benefits, when
              the PEO is not an insured party under the client-employer’s
              policy?

See infra note 2 for an explanation of why it is unnecessary for us to address this issue.

                                              1

                      (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

                                              2

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.2

                                              I.

                     FACTUAL AND PROCEDURAL HISTORY

              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).3

              2
               Because we find the workers’ compensation insurance policy obtained by a
PEO under the circumstances herein presented is the primary policy, and a client-employer
policy is not triggered absent a default by the PEO or its insurance carrier, we need not
consider the impact of an “other insurance” clause contained in the PEO policy.
Accordingly, we do not reach the third question certified to this Court by the Fourth Circuit.
See supra note 1 for the text of the third question.
              3
               The agreement further specified that EIN would be responsible for, inter alia,
the hiring, personnel relations, wage payment, discipline, and termination of its worksite
employees. Taggart was responsible for day to day supervision and control of EIN’s
worksite employees to the extent necessary for Taggart to conduct its normal business.

                                              3

              EIN and other PEOs in this State are governed by W. Va. Code § 33-46A-1 et

seq. With respect to workers’ compensation, the West Virginia Code requires, in relevant

part:

                     (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.

                    (b) If the responsibility is allocated to the PEO under the
              agreement:

                     (1) The agreement shall require that the PEO maintain
              and provide workers’ compensation coverage for the covered
              employees from a carrier authorized to do business in this state:
              Provided, That the provisions of section seven [§ 23-2-7], article
              two, chapter twenty-three of this chapter[4] may not be abrogated
              by a PEO agreement and the client-employer shall at all times
              remain ultimately liable under chapter twenty-three of this code
              to provide workers’ compensation coverage for its covered
              employees[5];

              4
               Under W. Va. Code § 23-2-7 (1974) (Repl. Vol. 2017), “[n]o employer or
employee shall exempt himself from the burden or waive the benefits of this chapter [Chapter
23] by any contract, agreement, rule or regulation, and any such contract, agreement, rule or
regulation shall be pro tanto void.”
              5
                  The term

                      “[c]overed employee” means a person employed by a
              client-employer for whom certain employer responsibilities are
              shared or allocated pursuant to a PEO agreement. Persons who
              are officers, directors, shareholders, partners and managers of
              the client-employer and who perform day-to-day operational
              services for the client-employer will be covered employees only
              to the extent expressly set forth in the professional employer
              agreement.
                                                                                   (continued...)

                                              4

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.6 The

              5
             (...continued)
W. Va. Code § 33-46A-2(c) (2008) (Repl. Vol. 2011). “‘Client-employer’ means an
employer who enters into a professional employer agreement with a PEO.” W. Va. Code
§ 33-46A-2(b).
              6
              BrickStreet represents that it is undisputed that this policy is a multiple
coordinated policy. With respect to PEOs,

                     (c) Workers’ compensation coverage may be provided:

                      (1) On a master policy basis, under which a single policy
              issued to the PEO provides coverage for more than one
              client-employer, and may also provide coverage to the PEO with
              respect to its worksite employees . . . .

                      (2) On a multiple coordinated policy basis, under which
              a separate policy is issued to or on behalf of each
              client-employer or group of affiliated client-employers with
              certain payment obligations and policy communications
              coordinated through the PEO; or

                                                                                  (continued...)

                                              5

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

              6
               (...continued)
                      (3) On any other basis approved by the commissioner.

W. Va. Code § 33-46A-7(c) (2008) (Repl. Vol. 2011) (emphasis added).

                                              6

compensable, and this decision was not protested. Accordingly, BrickStreet began paying

Mr. Gutierrez’s workers’ compensation benefits.

              BrickStreet explains that it learned of the Zurich policy through a deliberate

intent action filed by Mr. Gutierrez against Taggart in relation to the injuries he sustained in

January 2012.7 Accordingly, in December 2014, BrickStreet sought contribution from Zurich

toward the substantial workers’ compensation benefits it had paid to or on behalf of Mr.

Gutierrez.8 Zurich refused, and, on May 13, 2015, BrickStreet filed a declaratory judgment

action against Zurich in the United States District Court for the Southern District of West

Virginia. Zurich filed a motion to dismiss that was denied. Thereafter, both parties moved

for summary judgment. By order entered September 15, 2016, the district court granted

summary judgment to BrickStreet and denied Zurich’s summary judgment motion. The

district court concluded that Zurich was obligated to reimburse BrickStreet for half of all past

and future benefits paid to or on behalf of Mr. Gutierrez. Zurich appealed the decision to the

              7
               Mr. Gutierrez filed a lawsuit against Taggart and others asserting deliberate
intent and various negligence claims. The lawsuit resulted in a confidential settlement.
BrickStreet states that Zurich paid funds from the Zurich policy to settle Mr. Gutierrez’s
deliberate intent action against Taggart. Under the agreement between EIN and Taggart,
“EIN will not have any liability for the failure of [Taggart’s] workplace to comply with
[w]orkplace [s]afety laws.”
              8
               According to the Fourth Circuit, the benefits BrickStreet has paid in relation
to Mr. Gutierrez’s clam have exceeded two-million dollars and ultimately may exceed four-
million dollars.

                                               7

United States Court of Appeals for the Fourth Circuit. The Fourth Circuit then certified three

questions to this Court. The two dispositive questions are:9

                     (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). By corrected order10 entered August 30,

2017, this Court accepted the certified questions. Having considered the parties’ briefs, the

              9
                See supra note 2 for an explanation of why it is unnecessary for us to address
the third question certified to this Court by the Fourth Circuit.
              10
               The order was corrected to reflect the accurate date for oral argument of this
matter on the Rule 20 docket of this Court.

                                              8

brief of Amicus Curiae,11 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.

                                              II.

                                STANDARD OF REVIEW

               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.

               11
              We appreciate the participation in this matter of Amicus Curiae, the American
Insurance Association.

                                              9

                                             III.

                                      DISCUSSION

              We will address in turn the two dispositive certified questions presented by the

Fourth Circuit.

                                      A. Jurisdiction

              The Fourth Circuit certified the following question pertaining to jurisdiction:

                     (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?

              Before endeavoring to answer this question, we exercise our authority to

reformulate the question so that we may fully and clearly address the precise legal issue

presented therein. In this regard, we have recognized that

                       [w]hen a certified question is not framed so that this
              Court is able to fully address the law which is involved in the
              question, then this Court retains the power to reformulate
              questions certified to it under . . . the Uniform Certification of
              Questions of Law Act found in W. Va. Code, 51-1A-1, et
              seq. . . .

Syl. pt. 3, in part, Kincaid v. Mangum, 189 W. Va. 404, 432 S.E.2d 74 (1993). See also

W. Va. Code § 51-1A-4 (1996) (Repl. Vol. 2016) (“The Supreme Court of Appeals of West

                                             10

Virginia may reformulate a question certified to it.”). Accordingly, we reformulate the

question as follows:

                     Does the Workers’ Compensation Office of Judges
              possess jurisdiction over a declaratory judgment action initiated
              by an insurance carrier for the purpose of determining whether
              coverage for an undisputed 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?

For the reasons explained below, we answer this question in the negative.

              BrickStreet argues that the West Virginia Workers’ Compensation Office of

Judges (“OOJ”) has no jurisdiction to hear insurance coverage disputes such as the one at

issue between BrickStreet and Zurich. BrickStreet notes that Zurich relies on W. Va. Code

§ 23-5-1 (2009) (Repl. Vol. 2017) to argue that jurisdiction lies with the OOJ. BrickStreet

contends that this reliance is misplaced insofar as W. Va. Code § 23-5-1 pertains to the

administration of workers’ compensation claims, themselves, and not the litigation of

insurance coverage issues.

              Zurich responds by noting that West Virginia’s Workers’ Compensation

scheme is wholly statutory. Therefore, Zurich contends, the workers’ compensation statutes

are controlling and exclusive over rights, remedies, and procedures provided therein. Citing

W. Va. Code § 23-5-1 and W. Va. Code § 23-5-6 (2003) (Repl. Vol. 2017), which pertain

                                             11

to the administrative process for objecting to an adverse decision in a workers’ compensation

claim, Zurich reasons that, after BrickStreet found Mr. Gutierrez’s workers’ compensation

claim to be compensable, there was a maximum of 120 days within which to challenge the

compensability determination and issues related to the chargeable employer. Zurich argues

that, because no appeal was filed, the decision is now final. According to Zurich, the time

for any administrative challenge has passed; therefore, BrickStreet is jurisdictionally barred

from challenging the claim now.

              We find Zurich’s reliance on the administrative process for appealing a

workers’ compensation claim as a basis for arguing that jurisdiction for the instant insurance

dispute lies solely with the OOJ is misplaced. As Zurich correctly points out, this Court has

long recognized that “the right to [workers’] compensation benefits is wholly statutory.” Syl.

pt. 2, in part, Dunlap v. State Comp. Dir., 149 W. Va. 266, 140 S.E.2d 448 (1965) (emphasis

added). Accord Syl. pt. 9, Simpson v. West Virginia Office of Ins. Comm’r, 223 W. Va. 495,

678 S.E.2d 1 (2009); Syl. pt. 5, State ex rel. ACF Indus., Inc. v. Vieweg, 204 W. Va. 525, 514
S.E.2d 176 (1999). However, this case does not involve an injured employee’s right to

workers’ compensation benefits. It is undisputed that Mr. Gutierrez’s claim was found to be

compensable, and his entitlement to workers’ compensation benefits is likewise not in

dispute. Instead, this case involves a conflict between insurance companies who are not

parties to Mr. Gutierrez’s claim for workers’ compensation benefits. See, e.g., W. Va. Code

                                             12

§ 23-5-1(a) (2009) (Repl. Vol. 2017) (establishing, in general, that “[t]he parties to a claim

are the claimant and, if applicable, the claimant’s dependants, and the employer”). See also

W. Va. C.S.R. § 93-1-3.2 (OOJ procedural rule clarifying that “‘[p]arty’ shall mean the

injured worker (claimant), claimant’s dependants, [and] the employer . . . . Private carriers,

insurance agents, and third party administrators are not parties to the litigation.”).12

              The OOJ is a quasi-judicial body that was created to function as “a system of

administrative review of orders issued by the Workers’ Compensation Commission which

orders have been objected to by a party.” W. Va. Code § 23-5-8(c) (2005) (Repl. Vol. 2017).

In other words, the OOJ possesses the authority to hear disputed workers’ compensation

claims. See W. Va. Code § 23-5-8(f) (“The Chief Administrative Law Judge has the power

to hear and determine all disputed claims in accordance with the provision of this article[.]”);

W. Va. Code § 23-5-9(a) (2007) (Repl. Vol. 2017) (“Objection to a decision of the Insurance

Commissioner, private carrier[,] or self-insured employer, whichever is applicable, made

pursuant to the provisions of section one [§ 23-5-1] of this article shall be filed with the

office of judges.”]. Indeed, according to procedural rules promulgated by the OOJ,

              12
                We do recognize, however, that “[i]n claims in which the employer had
coverage on the date of the injury or last exposure, the employer’s carrier has sole authority
to act on the employer’s behalf in all aspects related to litigation of the claim.” W. Va. Code
§ 23-5-1(a) (2009) (Repl. Vol. 2017). However, the authority to act on an employer’s behalf
does not make the insurer a party to the claim. See W. Va. C.S.R. § 93-1-3.2

                                              13

                     [t]he purpose of the litigation process before the Office
              of Judges is to receive and consider, as expeditiously and as
              fairly as possible, evidence and information relevant to the
              determination of the rights of the parties and to provide a review
              of claims management rulings made by the claim administrator
              with regard to the grant or denial of any award, or the entry of
              any order, or the grant or denial of any modification or change
              with respect to former findings, orders[,] or awards made
              pursuant to the West Virginia Workers’ Compensation Law,
              W. Va. Code § 23-1-1 et seq., as amended.

W. Va. C.S.R. § 93-1-4. See also W. Va. C.S.R. § 93-1-1.1 (“Scope – These procedural rules

shall govern the initiation and conduct of litigation in contested Workers’ Compensation

claims before the Workers’ Compensation Office of Judges.” (emphasis added)). The

underlying insurance dispute simply does not come within the OOJ’s authority to review

rulings related to contested claims.

              Zurich attempts to characterize the instant matter as a dispute over the proper

chargeable employer. We disagree with this characterization. As will be demonstrated by

our analysis in Section III.B. of this opinion, infra, resolving a dispute such as the one

underlying the instant proceeding does not call for a determination of who employed the

injured worker at the time of his or her compensable injury, but, rather, requires the

interpretation of statutory provisions and rules pertaining to professional employer

organizations, and a contract made pursuant thereto, in order to determine whether more than

one insurance company provided coverage for the incident. We find nothing in the statutes

or rules pertaining to the OOJ that grants that body the authority to preside over such a

                                             14

dispute. Accordingly, we now hold that 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. Applying this holding to certified question number one, we answer the

question in the negative.

                                     B. Primary Policy

              The second question certified to this Court by the Fourth Circuit asks:

                      (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).

                                              15

              Brickstreet argues that W. Va. Code § 33-46A-7(a) does not create priority of

coverage as between a workers’ compensation policy purchased by a PEO on a multiple

coordinated policy basis for the benefit of the client-employer and a workers’ compensation

policy purchased to satisfy the client-employer’s obligation to “remain ultimately liable under

chapter twenty-three [§ 23-1-1 et seq.] of [the] code to provide workers’ compensation

coverage for its covered employees.” W. Va. Code § 33-46A-7(b)(1). Rather, Brickstreet

argues that, because Taggart is “ultimately liable” to provide workers’ compensation

coverage, Taggart’s insurer Zurich must contribute to the payment of Mr. Gutierrez’s claim.

              Zurich responds that W. Va. Code §§ 33-46A-7(a) and (b) mandate that if the

PEO is the party designated to provide workers’ compensation coverage, then the PEO’s

workers’ compensation policy is the primary policy, and the client-employer’s policy is

triggered only if the PEO defaults. Moreover, Zurich contends that W. Va. C.S.R. § 85-31­

6.3 reinforces the statutory requirement that there will be two policies in effect and dictates

which policy will be primary. Zurich avers that, under the circumstances of this case, the

BrickStreet policy is primary.

              Amicus Curiae, American Insurance Association (“AIA”), in support of Zurich,

contends that, under W. Va. Code § 33-46A-7, either the PEO or the client-employer is

responsible for providing workers’ compensation coverage to covered employees, but not

                                              16

both. AIA contends that BrickStreet’s interpretation of the statute would effectively void the

portion of the statute that allows a PEO and a client-employer to designate the party who will

provide workers’ compensation coverage. According to AIA, the “ultimately liable”

provision in W. Va. Code § 33-46A-7(b)(1) clearly intends that the client-employer’s

workers’ compensation coverage would be secondary, responding only in the event

BrickStreet’s insured, EIN, breached the professional employer agreement’s terms by

defaulting on its contractual obligation to provide workers’ compensation coverage for its

covered employees assigned to Taggart. AIA contends this interpretation is supported by

W. Va. C.S.R. § 85-31-6.3, which expressly provides that, when there are both a PEO policy

and a direct purchase policy in effect, the PEO policy shall be the primary policy. AIA

further contends that BrickStreet’s reading of W. Va. Code § 33-46A-7 creates significant

and burdensome administrative challenges and eliminates a significant incentive to using

professional employer agreements.

              Insofar as answering this certified question requires scrutiny of the relevant

statutory provisions and applicable rules, we are mindful that “[t]he primary object in

construing a statute is to ascertain and give effect to the intent of the Legislature.” Syl. pt.

1, Smith v. State Workmen’s Comp. Comm’r, 159 W. Va. 108, 219 S.E.2d 361 (1975). When

this Court’s resolution of an issue requires us to pass upon the meaning of a statute or rule,

“[w]e look first to the statute’s language. If the text, given its plain meaning, answers the

                                              17

interpretive question, the language must prevail and further inquiry is foreclosed.”

Appalachian Power Co. v. State Tax Dep’t of West Virginia, 195 W. Va. 573, 587, 466
S.E.2d 424, 438 (1995). See also Foster Found. v. Gainer, 228 W. Va. 99, 110, 717 S.E.2d
883, 894 (2011) (“Statutes whose language is plain must be applied as written.”); Syl. pt. 2,

State v. Epperly, 135 W. Va. 877, 65 S.E.2d 488 (1951) (“A statutory provision [that] is clear

and unambiguous and plainly expresses the legislative intent will not be interpreted by the

courts but will be given full force and effect.”). On the other hand, “[a] statute that is

ambiguous must be construed before it can be applied.” Syl. pt. 1, Farley v. Buckalew, 186
W. Va. 693, 414 S.E.2d 454 (1992). See also Foster Found., 228 W. Va. at 110, 717 S.E.2d

at 894 (“Statutes. . . whose language is ambiguous must be construed before they can be

applied.”).

              To answer the second question certified by the Fourth Circuit, we begin by

examining W. Va. Code § 33-46A-7, which governs how workers’ compensation is to be

addressed in a professional employer agreement:

                     (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.

                    (b) If the responsibility is allocated to the PEO under the
              agreement:

                    (1) The agreement shall require that the PEO maintain
              and provide workers’ compensation coverage for the covered

                                             18

              employees from a carrier authorized to do business in this state:
              Provided, That the provisions of section seven [§ 23-2-7], article
              two, chapter twenty-three of this chapter may not be abrogated
              by a PEO agreement and the client-employer shall at all times
              remain ultimately liable under chapter twenty-three [§ 23-1-1
              et seq.] of this code to provide workers’ compensation coverage
              for its covered employees[.]

W. Va. Code § 33-46A-7 (emphasis added).

              We first note that the statute uses plain mandatory language to require that

professional employer agreements identify which party will bear the responsibility of

obtaining workers’ compensation coverage:           “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(a) (emphasis added). By using the word “shall,” the

Legislature has clearly directed that such a designation must be made. See Syl. pt. 1, Nelson

v. West Virginia Pub. Emps. Ins. Bd., 171 W. Va. 445, 300 S.E.2d 86 (1982) (“It is well

established that the word ‘shall,’ in the absence of language in the statute showing a contrary

intent on the part of the Legislature, should be afforded a mandatory connotation.”).

              Moreover, the statute instructs that the parties to the professional employer

agreement must designate “either the client-employer or the PEO” as the party responsible

to obtain workers’ compensation coverage. W. Va. Code § 33-46A-7(a) (emphasis added).

                                              19

This language plainly commands a choice of either one or the other. Indeed, “[r]ecognizing

the obvious, the normal use of the disjunctive ‘or’ in a statute connotes an alternative or

option to select.” Carper v. Kanawha Banking & Trust Co., 157 W. Va. 477, 517, 207
S.E.2d 897, 921 (1974). See also State v. Wilkerson, 230 W. Va. 366, 372, 738 S.E.2d 32,

38 (2013) (“The use of the word ‘or’ indicates an alternative choice.” (footnote omitted));

State v. Rummer, 189 W. Va. 369, 377, 432 S.E.2d 39, 47 (1993) (“We have customarily

stated that where the disjunctive ‘or’ is used, it ordinarily connotes an alternative between

the two clauses it connects.” (internal quotations and citations omitted)). Accordingly, we

now hold that, pursuant to W. Va. Code § 33-46A-7(a), 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.

              Where the PEO is designated to be the party responsible to obtain workers’

compensation coverage, the statute goes on to instruct that

                      [t]he agreement shall require that the PEO maintain and
              provide workers’ compensation coverage for the covered
              employees from a carrier authorized to do business in this state:
              Provided, That the provisions of section seven [§ 23-2-7], article
              two, chapter twenty-three of this chapter may not be abrogated
              by a PEO agreement and the client-employer shall at all times
              remain ultimately liable under chapter twenty-three [§ 23-1-1
              et seq.] of this code to provide workers’ compensation coverage
              for its covered employees[.]

                                             20

W. Va. Code § 33-46A-7(b)(1) (emphasis added). This Court is herein asked to determine

whether the statutory requirement that “the client-employer shall at all times remain

ultimately liable under chapter twenty-three [§ 23-1-1 et seq.] of this code to provide

workers’ compensation coverage for its covered employees,” id., requires a client-employer’s

insurer to share in the payment of workers’ compensation benefits to an injured covered

employee even where the PEO has been designated to provide the workers’ compensation

coverage. We find that it does not.

              Because W. Va. Code § 33-46A-7(a) mandates that the parties to a professional

employer agreement designate either the professional employer organization or the

client-employer as the responsible party for obtaining workers’ compensation insurance

coverage for covered employees, an interpretation of W. Va. Code § 33-46A-7(b) that

requires contemporaneous coverage by both entities would create an improper conflict

between W. Va. Code §§ 33-46A-7(a) and (b).

                     In the construction of a statute[,] a court should seek to
              avoid any conflict in its provisions by endeavoring to reconcile
              every word, section, or part thereof, so that each shall be
              effective; and where a statute lends itself to two constructions,
              one of which will result in an irreconcilable conflict between its
              provisions, and the other will result in no conflict, the latter
              construction should be adopted.

Syl. pt. 3, Ebbert v. Tucker, 123 W. Va. 385, 15 S.E.2d 583 (1941). Applying the foregoing

principle in construing W. Va. Code § 33-46A-7(b), we find the more tenable interpretation

                                             21

of this provision to be that its requirement that “the client-employer shall at all times remain

ultimately liable under chapter twenty-three [§ 23-1-1 et seq.] of this code to provide

workers’ compensation coverage for its covered employees,” even though the obligation to

do so has been contractually relegated to the PEO, merely ensures coverage for workers in

the event that the PEO or its insurer default on their obligation to provide workers’

compensation coverage. Cf. Bowens v. Allied Warehousing Servs., Inc., 229 W. Va. 523,

535, 729 S.E.2d 845, 857 (2012) (discussing workers’ compensation immunity in the context

of general and special employers and observing that “[t]he workers’ compensation liability

placed upon the special employer may be discharged by requiring and verifying that the

statutory general employer obtained workers’ compensation coverage. Even though a

general employer and special employer may agree between themselves that the general

employer is responsible for payment of benefits, the special employer would be liable if the

general employer defaulted in that obligation.”).

              This conclusion is supported by a rule promulgated by the West Virginia

Insurance Commissioner, which expressly states that

                     6.3. If on the relevant date of injury there is both a PEO
              workers’ compensation policy in effect and a direct purchase
              policy[13] in effect, the following shall apply:

              13
                A “direct purchase policy” is a policy between the client-employer and an
insurer. See W. Va. C.S.R. § 85-31-3.6 (“‘Direct purchase basis’ means an arrangement in
which all contractual obligations under the insurance policy run directly between the insurer
                                                                               (continued...)

                                              22

                     a. If the claimant is a covered employee,[14] then the PEO
              policy shall be the primary policy; or

                      b. If the claimant is not a covered employee, then the
              direct purchase policy shall be the primary policy.

W. Va. C.S.R. § 85-31-6.3 (footnotes and emphasis added). Thus, the plain language of

W. Va. C.S.R. § 85-31-6.3 answers the second question herein certified by expressly

directing, in mandatory fashion utilizing the word “shall,”15 that where both a PEO workers’

compensation policy and a direct purchase workers’ compensation policy are in effect, the

PEO policy is the primary policy with respect to covered employees. Therefore, coverage

              13
                (...continued)
and the client[-]employer without the involvement of the PEO.”).
              14
                   Pursuant to W. Va. Code § 33-46A-2(c) (2008) (Repl. Vol. 2011),

                      “[c]overed employee” means a person employed by a
              client-employer for whom certain employer responsibilities are
              shared or allocated pursuant to a PEO agreement. Persons who
              are officers, directors, shareholders, partners and managers of
              the client-employer and who perform day-to-day operational
              services for the client-employer will be covered employees only
              to the extent expressly set forth in the professional employer
              agreement.

Accord W. Va. C.S.R. § 85-31-3.4. It is undisputed that Mr. Gutierrez is a covered
employee.
              15
                 See Syl. pt. 1, Nelson v. West Virginia Pub. Emps. Ins. Bd., 171 W. Va. 445,
300 S.E.2d 86 (1982) (“It is well established that the word ‘shall,’ in the absence of language
in the statute showing a contrary intent on the part of the Legislature, should be afforded a
mandatory connotation.”).

                                              23

under the direct purchase policy is triggered only in the event of a default on the part of the

PEO or its workers’ compensation carrier.

              BrickStreet argues that W. Va. C.S.R. § 85-31-6.3 does not apply to the type

of insurance policy purchased by EIN insofar as EIN purchased a multiple coordinated

policy. According to BrickStreet, the ambit of W. Va. C.S.R. § 85-31-6 is limited to master

policies, as demonstrated by its title: “Scope of Coverage for Master Policies.” We reject this

argument. We have recognized that, “[i]n construing an ambiguity in a statute, this Court

will examine the title to the Act of the Legislature as a means of ascertaining the legislative

intent, and the overall purpose of the legislation.” Syl. pt. 2, City of Huntington v. State

Water Comm’n, 135 W. Va. 568, 64 S.E.2d 225 (1951). Accord Syl. pt. 4, L.H. Jones Equip.

Co. v. Swenson Spreader LLC, 224 W. Va. 570, 687 S.E.2d 353 (2009). Nevertheless, “it

is well established that the title of a statute cannot limit the plain meaning of [its] text.”

United States v. Abdelshafi, 592 F.3d 602, 608 n.4 (4th Cir. 2010) (quotations and citations

omitted). Accord Pennsylvania Dep’t of Corr. v. Yeskey, 524 U.S. 206, 212, 118 S. Ct. 1952,

1956, 141 L. Ed. 2d 215 (1998); United States v. Buculei, 262 F.3d 322, 331 (4th Cir. 2001).

              Although the title to W. Va. C.S.R. § 85-31-6 refers only to “Master Policies,”

the body of the rule discusses policies issued on both a master policy and multiple

coordinated policy basis. In this regard, paragraph 6.1 of the rule describes the employees

                                               24

who are covered by a policy of insurance “issued to a PEO on a master policy basis.” W. Va.

C.S.R. § 85-31-6.1 (emphasis added).16 However, paragraph 6.2 delineates the employees

who are covered under a “workers’ compensation policy of insurance issued to a client[-]

employer on a multiple coordinated policy basis.” W. Va. C.S.R. § 85-31-6.2 (emphasis

added).17 Notably, W. Va. C.S.R. § 85-31-6.3, the provision upon which we rely, does not

limit its scope to a particular type of policy. Rather, its application is triggered “[i]f on the

              16
                W. Va. C.S.R. § 85-31-6.1 states in full:

                   A workers’ compensation policy of insurance issued to
              a PEO on a master policy basis shall provide workers’
              compensation to:

                      a.     All the direct hire employees of the PEO;

                      b.      All covered employees working for each
                      client[-]employer of the PEO; and

                      c.     All other employees of the PEO or client[-]
                      employer required to be provided West Virginia
                      workers’ compensation coverage for whom there
                      is no other workers’ compensation policy
                      providing coverage effective on the relevant date
                      of injury.
              17
                W. Va. C.S.R. § 85-31-6.2 states in full:

                      A workers’ compensation policy of insurance issued to
              a client[-]employer on a multiple coordinated policy basis shall
              provide workers’ compensation to all covered employees
              working for the client[-]employer and all other employees of the
              PEO or client[-]employer required to have West Virginia
              workers’ compensation coverage for whom there is no other
              workers’ compensation policy providing coverage effective on
              the relevant date of injury.

                                               25

relevant date of injury there is both a PEO workers’ compensation policy in effect and a

direct purchase policy in effect.” W. Va. C.S.R. § 85-31-6.3. Because W. Va. C.S.R. § 85­

31-6.3 is not limited in its application to only a certain type of insurance policy, it is not for

this Court to add such a requirement. See Banker v. Banker, 196 W. Va. 535, 546-47, 474
S.E.2d 465, 476-77 (1996) (“It is not for this Court arbitrarily to read into [a statute or

administrative rule] that which it does not say. Just as courts are not to eliminate through

judicial interpretation words that were purposely included, we are obliged not to add to

statutes [and administrative rules] something . . . purposely omitted.” (citations omitted));

Martin v. Randolph Cnty. Bd. of Educ., 195 W. Va. 297, 312, 465 S.E.2d 399, 414 (1995)

(“[C]ourts must presume that a legislature says in a statute what it means and means in a

statute what it says there.” (quotations and citations omitted)); Syl. pt. 1, Consumer Advocate

Div. v. Public Serv. Comm’n, 182 W. Va. 152, 386 S.E.2d 650 (1989) (“A statute, or an

administrative rule, may not, under the guise of ‘interpretation,’ be modified, revised,

amended or rewritten.”).18 Moreover,

               [t]his Court generally accords deference to rules properly
               promulgated by an administrative agency so long as such rules
               accord with the intent of the enabling statute pursuant to which
               they were promulgated. In other words, “procedures and rules
               properly promulgated by an administrative agency with authority
               to enforce a law will be upheld so long as they are reasonable
               and do not enlarge, amend or repeal substantive rights created

               18
              “[I]t is generally accepted that statutes and administrative regulations are
governed by the same rules of construction.” West Virginia Racing Comm’n v. Reynolds,
236 W. Va. 398, 402, 780 S.E.2d 664, 668 (2015) (quotations and citation omitted).

                                               26

              by statute.” Syl. pt. 4, State ex rel. Callaghan v. West Virginia
              Civil Serv. Comm’n, 166 W. Va. 117, 273 S.E.2d 72 [(1980)].

Simpson v. West Virginia Office of Ins. Comm’r, 223 W. Va. 495, 509, 678 S.E.2d 1, 15

(2009). We find nothing in W. Va. C.S.R. § 85-31-6.3 to indicate that it is not in “accord

with the intent of the enabling statute.” Simpson, 223 W. Va. at 509, 678 S.E.2d at 15.

              Based upon the foregoing analysis, we now hold that, 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 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. Applying this holding to the second question certified by the Fourth Circuit, we

answer that question in the affirmative.19

              19
               Because we find that the policy obtained by the PEO is primary, it is
unnecessary for us to answer the third question certified by the Fourth Circuit. See supra
note 2.

                                             27

                                           IV.

                                    CONCLUSION

             The certified questions having been answered, we remand this case to the

United States Court of Appeals for the Fourth Circuit for further proceedings.

                                                           Certified Questions Answered.

                                            28