Billy Hood v. Vandalia Area Historical Society

Employee: Billy Hood

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Here is the sequence of events:

- July 31, 2014: Claimant files a claim for compensation against VAHS and Mr. Menech with the Division of Workers Compensation in injury number 12-107135.

- September 15, 2014: Claimant files an amended claim for compensation, adding the Second Injury Fund as an additional party in injury number 12-107135.

- August 9, 2016: The administrative law judge issues a final award in injury number 12-107135.

- March 29, 2017: Claimant files civil lawsuit against VAHS and Paul Ray.

- July 19, 2017: The commission modifies the administrative law judge's award and issues a temporary award.

- January 21, 2018: Claimant files an amended petition adding Mr. Menech.

- September 24, 2018: Claimant executes a settlement agreement with Mr. Menech and VAHS, releasing them of all claims.

- October 5, 2018: Claimant dismisses the civil lawsuit with prejudice.

- January 8, 2019: Claimant accepts payment from the Second Injury Fund for $\ 23,226.27 for past medical expenses.

Section 287.220 .7 states, in pertinent part:

If an employer fails to insure or self-insure as required in section 287.280, funds from the Second Injury Fund may be withdrawn to cover the fair, reasonable, and necessary expenses incurred relating to claims for injuries occurring prior to January 1, 2014, to cure and relieve the effects of the injury or disability of an injured employee in the employ of an uninsured employer consistent with subsection 3 of section 287.140 .... In defense of claims arising under this subsection... the Second Injury Fund, shall have the same defenses to such claims as would the uninsured employer. Any funds received by the employee $\ldots$ through civil or other action, must go towards reimbursement of the second injury fund, for all payments made to the employee... from the Second Injury Fund pursuant to this subsection.

The election of remedies doctrine provides that "if there are two or more inconsistent remedies available, the election to pursue the one is a bar to any suit based upon the other."1 The purpose of the doctrine is to prevent double redress for a single wrong. ${ }^{2}$ "Where a party has a right to pursue one of two inconsistent remedies, makes his election, institutes suit and

[^0]

[^0]: ${ }^{1} Lewis v. Gilmore. 366 S.W.3d 522,525 (Mo. banc 2012) (citation omitted).

{ }^{2}$ Stromberg v. Moore, 170 S.W.3d 26, 30 (Mo. App. 2005).

Imployee: Billy Hood

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prosecutes it to final judgment, or receives something of value on the claim, he cannot thereafter pursue another and inconsistent remedy."3 In a claim for uninsured medical benefits from the Second Injury Fund, the Second Injury Fund has all the same defenses as would the uninsured employer. ${ }^{4}$

Missouri courts have addressed the election of remedies doctrine and its relation to workers' compensation claims. In Bailey v. McClelland, ${ }^{5}$ an employee was killed in a motor vehicle accident while driving a commercial truck. The decedent's wife filed a wrongful death suit against the employer in the circuit court, ending in a judgment in favor of the plaintiffs. ${ }^{6}$ The decedent's wife subsequently filed a claim against the Second Injury Fund, alleging that employer was uninsured at the time of the accident. ${ }^{7}$ The claim was denied by the Commission "because claimants elected to proceed in the circuit court to judgment before continuing to prosecute the workers' compensation claim." ${ }^{8}$

The court noted that the Second Injury Fund has all the same defenses as the employer in a claim for medical expenses under $\S 287.220 .7$. The court held that, "[a]s the alleged employer was not insured ... under $\S 287.280$, RSMo Supp. 1982, appellants could 'elect' to file a workers' compensation claim or could bring suit in the circuit court," and, therefore, the Commission's denial of benefits was affirmed. ${ }^{9}

In Lewis v. Gilmore, { }^{10}$ Lewis was killed in a motor vehicle accident while riding as a passenger in a truck driven by Gilmore, but owned by Freeman. Freeman, who was uninsured, was operating pursuant to a contract with DOT Transportation (DOT), which was insured. Lewis's widow filed a workers' compensation claim against Freeman and DOT, and filed a wrongful death claim against Gilmore and Freeman in circuit court.

The Supreme Court stated that:

When an employer does not carry workers' compensation insurance, the injured employee or his dependents "may elect" one of three options. First, the employee or his dependents may elect to file a civil action against ... the employer that fails to carry legally required workers' compensation insurance. Second, the employee or his dependents may elect to "recover under this chapter" and pursue a workers' compensation claim. Third, the employee or his dependents may elect to seek payment from the second injury fund. ${ }^{11}$

The Supreme Court found that Lewis's claim against Freeman and Gilmore was not barred, because she recovered workers' compensation benefits from DOT as the statutory employer, and then "elected to file a civil suit against Freeman due to his failure to carry workers' compensation insurance."12 Because Lewis took different action against each employer, the election of remedies did not apply. ${ }^{13}$

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[^0]: ${ }^{3} Alexander v. Link's Landing, Inc., 814 S.W.2d 614, 620 (Mo. App. 1991).

{ }^{4} Section 287.220.7.

{ }^{5} 848 S.W.2d 46 (Mo. App. 1993).

{ }^{6} Bailey, 848 S.W.2d at 46-47.

{ }^{7} Id.

{ }^{8} Id. at 47.

{ }^{9} Id.

{ }^{10} 366 S.W.3d 522 (Mo. banc 2012).

{ }^{11} Lewis, 366 S.W.3d at 525.

{ }^{12} Lewis, 366 S.W.3d at 526.

{ }^{13} \mathrm{Id}$.

We find that the election of remedies doctrine does apply to employee's case, and that it barred him from recovering the Second Injury Fund funds he received in 2019, due to his 2018 settlement of his civil law suit.

Employee's arguments appear to be focused on the timing of each of the events, whereas the Second Injury Fund's arguments are focused more on the aspect of employee receiving a financial windfall from receiving an award from his workers' compensation claim and his civil lawsuit.

We believe that the Second Injury Fund's arguments are more in line with the current case law regarding the remedies doctrine. Employee's employer (Menech) and VAHS were listed as parties in employee's workers' compensation claim and the civil suit. Since employee settled his civil suit against VAHS and Menech, we believe employee, under our interpretation of Bailey, Lewis, and $\S 287.280$, would receive a "double recovery" from the settlement of his civil suit, and the $\ 23,226.27 from the commission's July 19, 2017, temporary award.

Although employee pursued his workers' compensation claim before he filed his civil lawsuit, employee did not receive the Second Injury Fund award until 2019, which was after employee's civil lawsuit had been settled. Employee acknowledged receipt of the settlement funds on October 1, 2018, but did not receive the $\ 23,226.27 from the Second Injury Fund until January 2019.

After employee received the remedy (the $\ 53,000 from the 2018 settlement), employee was barred by the election of remedies doctrine from accepting the $\ 23,226.27. Furthermore, we believe that the Second Injury Fund can raise the election of remedies as a defense to the workers' compensation claim under $\S 287.220 .7$ because of the 2018 settlement, and because employee pursued its workers' compensation claim against the Second Injury Fund on the basis of employee being uninsured. Employee, therefore, must pay back the funds it received from the Second Injury Fund.

Employee's case can primarily be distinguished from Lewis because the claimant in Lewis filed a workers' compensation claim against an uninsured employer and an insured employer, and took different actions against each employer. Therefore, the election of remedies did not apply in Lewis.

In Bailey, the elections of remedies did apply since the employee in that case pursued claims against an employer and the Second Injury Fund. Likewise, the election of remedies applies in the present case since employee pursued a workers compensation claim against VAHS, Mr. Menech, and the Second Injury Fund; and pursued a civil claim against VAHS and Mr. Menech. Employee may elect a single remedy under $\S 287.220 .7$. Employee sought the same remedy in the civil claim and the workers' compensation suit, which is why the remedies doctrine applies to employee's case.

We also would like to point out that employee argued in his brief that workers' compensation statutes are to be co