Luis Estrada v. Thunder Framing & Construction, Inc.

Issued by THE LABOR AND INDUSTRIAL RELATIONS COMMISSION

(Affirming Award and Decision of Administrative Law Judge)

**Injury No.:** 15-102640

**Employee:** Luis Estrada (Deceased)

**Dependents:** Norma Salcido (Wife)

**Employer:** Thunder Framing & Construction, Inc., et al.

**Insurer:** Technology Insurance Company, Inc., et al.

On May 27, 2022, an administrative law judge (ALJ) issued as a temporary or partial award an "Award on Insurance Coverage" (Award). On June 15, 2022, employer Burkhart Construction Inc. (Burkhart) and its insurer Carolina Casualty Insurance Company (Carolina) filed with the Labor and Industrial Relations Commission (Commission) an application for review of the ALJ's Award. In its application for review, Burkhart/Carolina requested to file a brief and present oral argument.

The Commission has reviewed the briefs submitted by the parties in this case. Although the Commission recognizes the importance of oral argument, the issues presented in this case may be determined without oral argument.

Having reviewed the evidence and considered the whole record, the Commission finds that the ALJ's Award is supported by competent and substantial evidence and was made in accordance with the Missouri Workers' Compensation Law. Pursuant to § 286.090 RSMo, the Commission affirms the award and decision of the administrative law judge dated May 27, 2022.

The ALJ's temporary or partial award and decision issued on May 27, 2022 is attached and incorporated by this reference.

Given at Jefferson City, State of Missouri, this 1st day of November 2022.

**LABOR AND INDUSTRIAL RELATIONS COMMISSION**

Rodney J. Campbell, Chairman

Shalonn K. Curls, Member

Kathryn Swan, Member

Attest:

Secretary

Employee: Luis Estrada (Deceased)

Injury No. 15-102640

Dependents: Norma Salcido (Wife)

Employer: Thunder Framing \& Construction, Inc., et al.

Insurer: Technology Insurance Company, Inc. et al.

Additional Party: N/A

Hearing Date: February 23, 2022

Checked by: KAE

1. Are any benefits awarded herein? N/A
2. Was the injury or occupational disease compensable under Chapter 287? Yes
3. Was there an accident or incident of occupational disease under the Law? Yes
4. Date of accident or onset of occupational disease: November 21, 2015
5. State location where accident occurred or occupational disease was contracted: Jasper County, Missouri
6. Was above employee in employ of above employer at time of alleged accident or occupational disease? Yes
7. Did employer receive proper notice? Yes
8. Did accident or occupational disease arise out of and in the course of the employment? Yes
9. Was claim for compensation filed within time required by Law? Yes
10. Was employer insured by above insurer? Thunder Framing and Construction, Inc. was not insured by Technology Insurance for accidents under the Law.
11. Describe work employee was doing and how accident occurred or occupational disease contracted: Employee was performing construction work in a makeshift wooden box that was being elevated by a forklift when he fell out of the box striking the ground, which was the prevailing factor causing massive head injuries and his death.
12. Did accident or occupational disease cause death? Yes. Date of death? November 21, 2015
13. Part(s) of body injured by accident or occupational disease: Death.
14. Nature and extent of any permanent disability: Death.
15. Compensation paid to-date for temporary disability: N/A
16. Value necessary medical aid paid to date by employer/insurer? N/A

Issued by DIVISION OF WORKERS' COMPENSATION

Employee: Luis Estrada

1. Value necessary medical aid not furnished by employer/insurer? N/A
2. Employee's average weekly wages: N/A
3. Weekly compensation rate: N/A
4. Method wages computation: N/A

1. Amount of compensation payable:

TOTAL: NOT DETERMINED AT THIS TIME.

1. Future requirements awarded: N/A

Issued by DIVISION OF WORKERS' COMPENSATION

Employee: Luis Estrada (Deceased) Injury No. 15-102640

FINDINGS OF FACT and RULINGS OF LAW:

Employee: Luis Estrada (Deceased) Injury No. 15-102640

Dependents: Norma Salcido (Wife)

Employer: Thunder Framing \& Construction, Inc., et al.

Insurer: Technology Insurance Company, Inc., et al.

Additional Party: N/A

Hearing Date: February 23, 2022

Checked by: KAE

A hearing was held on February 23, 2022, by video conference with the Division of Workers' Compensation in Joplin, Missouri. Norma Salcido (henceforth "Dependent"), dependent of Luis Estrada (henceforth "Decedent-Employee") was represented by Attorney William E. Peterson. Thunder Framing \& Construction, Inc. (henceforth "Thunder") was represented by Attorney Matthew J. Barnhart. Technology Insurance Company (henceforth "Technology") was represented by Attorney Gregory T. Cook. Burkhart Construction, Inc. (henceforth "Burkhart) and its insurer, Carolina Casualty Insurance Company (henceforth "Carolina") were represented by Attorney Clayton T. Fielder. ARCO Construction Company Inc. (henceforth "ARCO") and its insurer, Old Republic, c/o Gallagher Bassett Services, Inc. (henceforth "Old Republic") were represented by Attorney James W. Gallen.

Prior to the date of the hearing the parties complied with a scheduling order wherein they submitted multiple briefs presenting their arguments on the issue of insurance coverage.

On the date of the hearing the record was opened and the parties entered evidence focused on the issue of insurance coverage with the understanding that the Court will issue an Award dispositive of that sole issue in this bifurcated hearing. The parties were permitted to submit proposed awards resulting in the record being completed and closed on March 23, 2022.

At the time of the hearing, the parties agreed on certain stipulated facts and identified the issues in dispute. These stipulations and the disputed issues, together with the findings of fact and rulings of law are set forth below as follows:

The parties stipulated to the following:

1. Luis, Estrada, (henceforth "Decedent-Employee") was born on May 9, 1986.
2. On November 21, 2015, Decedent-Employee was working subject to the Missouri Workers' Compensation Law (henceforth "the Law") in Carthage, Jasper County, Missouri on a construction project (henceforth "the construction project").

Issued by DIVISION OF WORKERS' COMPENSATION

Employee: Luis Estrada

Injury No. 15-102640

1. On November 21, 2015, Decedent-Employee was killed in a fall accident at the construction project, which arose out of and in the course and scope of his employment.
2. On November 21, 2015, Mundo Hernandez Construction (henceforth "Mundo") was an employer operating subject to the Law and Decedent-Employee was a direct employee of Mundo working on the construction project.
3. Prior to November 21, 2015, Decedent-Employee was hired in the state of Texas by Mundo.
4. Earlier, on September 21, 2015, Mundo had subcontracted with Thunder to provide specific work stated therein relative to the construction project.
5. On September 21, 2015, Thunder had subcontracted with Burkhart to provide specific work stated therein relative to the construction project.
6. On September 13, 2015, Burkhart had subcontracted with ARCO to provide specific work stated therein relative to the construction project.
7. On November 21, 2015, Burkhart's liability for Missouri Workers' Compensation benefits was fully insured by Carolina.
8. On November 21, 2015, ARCO was an employer operating subject to the Law and ARCO's liability for Missouri Workers' Compensation benefits was fully insured by Old Republic.
9. Mundo failed to provide workers' compensation insurance coverage to its employees, including Decedent-Employee, for work on the construction project and Mundo has paid no benefits herein.
10. On September 29, 2015, Thunder's insurance agent, Commercialinsurance.NET, issued a Certificate of Liability Insurance (henceforth "Certificate") listing Thunder as the Insured and Burkhart as the Certificate Holder. The Certificate lists the Workers' Compensation and Employers' Liability insurer as Technology with a Policy Number of 03-38071-15166197190 that was effective from June 5, 2015, through June 5, 2016.
11. On November 21, 2015, Thunder did not have any other insurance policy in place that provided any type of workers' compensation insurance coverage to its employees besides the aforesaid policy with Technology.

The sole issue for resolution is:

1) Which insurance policy provides primary coverage for Decedent-Employee's death?

The Parties offered the following exhibits which were admitted into evidence without objection:

Exhibit 1: A true and accurate copy of the Subcontractor Agreement between Mundo Hernandez Construction (henceforth "Mundo") and Thunder.

Exhibit 2: A true and accurate copy of the Subcontractor Agreement between Thunder and Burkhart.

Exhibit 3: A true and accurate copy of the Certificate of Liability Insurance.

Exhibit 4: A true and accurate copy of the Technology Insurance Policy Number TARAR79853-00.

Exhibit 5: A true an accurate copy of the Subcontractor Agreement between Burkhart and ARCO.

Exhibit 6: A true and accurate copy of the September 8, 2020, deposition of the Technology Insurance Corporate Representative, Steve Cooper.

Exhibit 7: Documents bates stamped Technology 000001 - Technology000109.

Exhibit 8: Decedent-Employee's Initial Brief

Exhibit 9: Technology's Initial Brief

Exhibit 10: Burkhart's Initial Brief

Exhibit 11: ARCO's Initial Brief

Exhibit 12: Decedent-Employee's Response Brief

Exhibit 13: Technology's Response Brief

Exhibit 14: Burkhart's Response Brief

Exhibit 15: ARCO's Response Brief

Exhibit 16: Decedent-Employee's Reply Brief

Exhibit 17: Technology's Reply Brief

Exhibit 18: Burkhart's Reply Brief

Exhibit 19: ARCO's Reply Brief

Exhibit 20: A true and accurate copy of the March 5, 2019, deposition of Ector Enciso

Prior to November 21, 2015, the construction project was commenced which included the construction of an assisted living facility in Carthage, Missouri. At all times relevant, Defendant ARCO was the owner of the premises on which the construction project was commenced. ARCO was the general contractor of the assisted living facility construction project. ARCO was at all times relevant an employer operating subject to the Law. ARCO's liability for workers' compensation benefits in the state of Missouri was fully insured by Old Republic.

As the general contractor of the project, ARCO contracted with Defendant Burkhart to construct the construction project. Burkhart was at all times relevant an employer operating subject to the Law. Burkhart's liability for Missouri Workers' Compensation was fully insured by Carolina.

Burkhart then contracted with Defendant Thunder to do the framing work on the construction project. Thunder, however, was not able to complete the framing project as contracted, therefore it contracted with Defendant Mundo to actually perform the framing on the construction project. Decedent-Employee was the direct employee of Mundo. He was hired in the state of Texas. It is not disputed that Decedent-Employee was not directly employed by any other Employer at any time prior to or during the construction project.

On November 21, 2015, Decedent-Employee died while working on the construction project. He was killed after falling over 10 feet from a wooden box that was being hoisted by a tractor, resulting in severe head trauma after the box struck him on the head. Thereafter, DecedentEmployee's wife, Norma Salcido, (henceforth "Dependent") filed a Claim for Compensation on November 28, 2017, seeking benefits under Missouri Workers' Compensation from Burkhart. On February 7, 2018, Dependent filed an amended Claim for Compensation adding Thunder, Mundo, ARCO, and Carthage, Missouri Living Operating Company, LLC, as Defendants.

Mundo was an employer operating subject to the Law. However, Mundo failed to provide workers' compensation insurance coverage to its employees, including Decedent-Employee. Further, Mundo has not paid any benefits related to this Claim, and Mr. Hernandez, the sole owner and operator of Mundo, cannot be located.

The parties disagree as to which Employer and its insurance company is liable under the Law for Decedent-Employee's death since his immediate employer, Mundo, was uninsured and cannot be located.

Defendant Technology issued a Workers' Compensation and Employer's Liability Insurance Policy to Thunder through the Workers' Compensation Assigned Risk Plan (hereinafter the "Policy") (Ex. 4, at 19). Technology's Policy was an Assigned Risk Policy taken out in the Assigned Risk Plan of Arkansas to cover work performed in Arkansas. (Ex. 6 at 21:14-17).

In Assigned Risk, a company does not apply for coverage directly with the carrier, rather it applies for insurance coverage through the National Council on Compensation Insurance (henceforth "NCCI"). Following that application process, NCCI assigns the policy to an insurance company. (Ex. 6 at 22:8-11). NCCI is a third-party that performs various services in workers' compensation insurance for states across the country including with the Assigned Risk Plans. (Ex. 6 at 22:19-25). In ultimately issuing an Assigned Risk Policy, the insurance company relies on the information in the application submitted through NCCI. (Ex. 6 at 23:3-7). When submitting its application to NCCI for an Assigned Risk Policy, Thunder specifically listed that it had no work outside of Arkansas, that no employee of Thunder traveled outside the state of Arkansas, and that Thunder did not use any subcontractors. (Ex. 6 at 47:1-25; 48:1-4; 83:23-25-84:1-9; 85:2); (Ex. 7, at 46 ; 59 ).

In Part A of the "General Section" of the Policy, the Policy specifically states that "The only agreements relating to this insurance are stated in this policy." (Ex. 4, at 24). Further, Part C of the "General Section" of the Policy states:

Workers Compensation Law means the workers or workmen's compensation law and occupational disease law of each state or territory named in Item 3.A. of the Information Page. It includes any amendments to that law which are in effect during the policy period. It does not include any federal workers or workmen's compensation law, any federal occupational disease law or the provisions of any law that provide nonoccupational disability benefits.

Id. The Information Page of the Policy states that it applies to the Workers' Compensation Law of the state of Arkansas. Missouri is not listed in Item 3.A. of the Policy. (Ex. 4, at 19).

The Policy also contains a "Residual Market Limited Other States Insurance Endorsement" that states Technology would:

. . . pay promptly when due the benefits required of you by the workers [sic] compensation law of any state not listed in item 3A of the Information Page if all of the following conditions are met:

a. The employee claiming benefits was either hired under a contract of employment made in a state listed in Item 3.A. of the Information Page or was, at the time of injury, principally employed in a state listed in Item 3.A. of the Information Page; and

b. The employee claiming benefits is not claiming benefits in a state where, at the time of injury, (i) you have other workers [sic] compensation coverage, or (ii) you were, by virtue of the nature of your operations in that state, required by that state's law to have obtained separate workers [sic] compensation insurance coverage, or (iii) you are an authorized self-insurer or participant in a self-insured group plan; and

c. The duration of the work being performed by the employee claiming benefits in the state for which that employee is claiming benefits is temporary.

(Ex. 4 at 23). In sum, the Endorsement provides coverage for situations in which a contract for employment was made in Arkansas or the work was principally located in that state and the duration of the work in a state not listed in Item 3.A. was temporary. Id.

In this matter, Decedent-Employee was hired by Mundo in Texas. A thorough review of the evidence reveals that Decedent-Employee never performed any work in the state of Arkansas. Further, Decedent-Employee was not a direct employee of Thunder, or any other employer working on the construction project. Further, Technology's Policy contained an explicit warning that if an employee is hired outside a state listed in Item 3.A. to do work in a state not listed on Item 3.A. of the Policy, the Policy would not satisfy the requirements of that state's workers' compensation law: "If you hire any employees outside those states listed in Item 3.A. on the Information Page or begin operations in any such state, you should do whatever may be required under that state's law, as this endorsement does not satisfy the requirements of that state's workers compensation law." (Ex. 4, at 23). As such, Technology submits that it cannot be liable for Decedent-Employee's death because it never undertook to provide coverage to Thunder against loss under the Missouri Workers' Compensation Act. The other parties, however, argue that the presence of Technology's Policy and the fact it was a statutory employer of Decedent-Employee forecloses that argument and therefore Technology should be primarily liable.

Based upon a thorough review of the evidence, stipulations of the parties, and the application of provisions of Missouri Workers' Compensation Law, this Court finds that Technology is not primarily liable for coverage here because the Technology Policy did not provide coverage to Thunder for any benefits under the Missouri Workers' Compensation Act. Instead, the next statutory employer/insurer Burkhart/Carolina is liable for payment of benefits under the Act.

This claim involves an employer and multiple statutory employers that were working on the Construction project: Mundo, Thunder, Burkhart, and ARCO. The impetus behind the current litigation is which of those statutory employers is liable for benefits under the Missouri Workers' Compensation Act for Decedent-Employee's death as Decedent-Employee's immediate employer (Mundo) failed to carry any kind of workers' compensation insurance and cannot be located. Thus, before the claim can move forward or benefits can be paid to Dependent, it must be determined

Issued by DIVISION OF WORKERS' COMPENSATION

Employee: Luis Estrada (Deceased)

which employer/insurer is liable for benefits pursuant to the Missouri Workers' Compensation Act. By mutual consent of the parties, it was agreed that the sole issue of insurance coverage would be fully litigated and determined separate from any underlying disputes in a bifurcated hearing. Before proceeding, however, this Court must ensure that such procedure is authorized by the Law.

A thorough review of the Law provides that an Administrative Law Judge and/or the Labor and Industrial Relations Commission has the authority to determine the issues of insurance coverage separate and apart from hearing any other issue in the case. In fact, it is the Court's duty to rule on every issue presented which pertains to a determination of liability. Ziade v. Quality Business Solutions, Inc., 618 S.W.3d 537, 546 (Mo. App. W.D. 2021) (quoting Mikel v. Pott Indus./St. Louis Ship, 896 S.W.2d 624, 626 (Mo. 1995) (internal quotations omitted). Notably, in a workers' compensation proceeding, such liability cannot be fixed until it is first determined from whom the employee is entitled to recover. Mikel, 896 S.W.2d at 626. In a scenario, such as this, where there exists more than one employer/insurer from whom the employee might recover, the Commission has subject-matter jurisdiction to determine which of those insurers is liable to the employee. Id. (citing Harris v. Pine Cleaners, Inc., 296 S.W.2d 27, 30 (Mo. 1956); Cain v. Robinson Lumber Co., 365 Mo. 1238, 295 S.W.2d 388 (Mo. 1956)). And the Commission is vested with the authority to determine the validity of insurance policies. Id.

Further, the Missouri Supreme Court has supported bifurcated proceedings in workers' compensation matters. See Curry v. Ozarks Elec. Corp., 39 S.W.3d 494, 496 (Mo. 2001). In Curry, although factually different from this matter, the Court noted that there is nothing in Section 287 which precludes the Commission from bifurcating a settlement proceeding and hearing a direct payment claim separately from the claimant's individual claim. Id. Similarly, the Commission consistently has also upheld bifurcated proceedings. In Charles Bell v. Midwest Pool Management et al., Injury No.: 98-075309, 1999 WL 594653, at *1 (LIRC June 29, 1999), the Commission upheld an Administrative Law Judge's decision to conduct a bifurcated hearing on the compensability of an alleged work injury, with the remaining issues, including causation, to be heard at a later date. Id. at *2. Similarly, the Commission allowed for bifurcated proceedings in William Cochran v. Honeywell, et al., Injury No.: 05-138598, 2009 WL 260813, at *2 (LIRC February 2, 2009), determining initially the liability of the employer and delaying a determination as to whether the Second Injury Fund was liable to a hearing at a later date.

Section 287 does not preclude bifurcated hearings and Missouri courts consistently have supported such proceedings. Accordingly, this Court finds that such bifurcated hearing is proper here and an Administrative Law Judge is able to hear and rule on a bifurcated issue prior to and separately from underlying issues. Therefore, the sole issue of which insurance carrier is primarily liable for payment of benefits pursuant to the Missouri Workers' Compensation Act is properly before the Court, separate from any other issue to be determined in this matter.

With the determination by this Court that a bifurcated hearing is within the authority of an Administrative Law Judge and the Commission, the issue of appealability must be addressed. The parties submit that a decision in such a bifurcated hearing is appealable beyond the Commission.

Issued by DIVISION OF WORKERS' COMPENSATION

Employee: Luis Estrada

Injury No. 15-102640

The parties argue that this scenario is different than a temporary or partial award pursuant to §

287.510¹ and instead is in line with a Final Award, which is appealable to the appellate court. See

RSMo. § 287.495. This Court agrees, given the nature of the bifurcated action and its finality as to

the multiple statutory employers and their insurers on the issue of which is primarily liable for

benefits under the Act for Decedent-Employee's death. Further, this Court finds that such

bifurcated hearing is a final hearing as contemplated by § 287.495, thus it is appealable beyond

the Commission.

Appellate review of a Commission decision is governed by the Missouri Constitution and

§ 287.495.1. Article V, section 18 of the Missouri Constitution states:

All final decisions, rules and orders on any administrative officer or body existing

under the constitution or by law, which are judicial or quasi-judicial and affect

private rights, shall be subject to direct review by the courts as provided by law;

and such review shall include the determination whether the same are authorized

by law, and in cases in which a hearing is required by law, whether the same are

supported by competent and substantial evidence upon the whole record.

Mo. Const. art. V § 18. Section 287 is clear that in order for a party to appeal beyond the

Commission, there must be finality. Specifically, § 287.490.1 dictates:

The final award of the commission shall be conclusive unless either party shall

appeal the award to the appellate court within 30 days of the final award. The

appellate court shall have jurisdiction to review *all decisions* of the commission

pursuant to this chapter where the division has original jurisdiction over the case.

§ 287.495.1. (emphasis added). It has been determined that a final award is one which disposes of

the entire controversy between the parties to the claim. *Smith v. Semo Tank & Supply Co.*, 99

S.W.3d 11, 13 (Mo. App. E.D. 2002). Further, finality is found when the Commission arrives at a

terminal, complete resolution of the case before it. *Id.* Conversely, an order lacks finality where it

remains tentative, provisional, or contingent and subject to recall, revision, or reconsideration by

the Commission. A temporary or partial award pursuant to § 287.510, would not be appealable

beyond the Commission because it explicitly is not a final award. Further, an order of the

Commission that is merely procedural in nature and does not reach the merits of a dispute is not a

final award because it does not dispose of the controversy between the parties. See *Edwards v.*

¹ All statutory references are to RSMo. (2016), unless otherwise indicated.

Page 10

In Doerr v. Teton Transportation, Inc., 258 S.W.3d 514, 520 (Mo. App. S.D. 2008), the Court held that an appellate court could review the issues on which liability turn, such as notice or whether an employee's injuries are work-related. Id. The Doerr Court likely reached its determination because a decision in favor of the challenging party would dispose of the entire dispute, thus making it a final award or decision in itself. Here, the parties dispute which employer/insurer is primarily liable for benefits under the Act for Decedent-Employee's workplace death. Regardless of the outcome of this Court's decision, two parties will be determined not to be primarily liable for benefits under the Act for Decedent-Employee's workplace death. In other words, the decision is final as to the dispute of liability between those parties; the matter in controversy between those parties will be resolved in its entirety, leaving nothing between them left to be resolved.

This decision, therefore, is not merely procedural such as contemplated in Edwards. See Edwards, 498 S.W.3d at 862. The decision is not an issue of awarding temporary benefits as contemplated by $\S 287.510$, which cannot be appealed. Last, the decision is not one which is held open to later be modified like that contemplated in AB Electrical. See AB Electrical, 498 S.W.3d at 41. Instead, the decision of this Court will be final as to which party is primarily liable for benefits under the Act. The Decision encompasses the finality as is required by the Law to authorize appeal beyond the Commission. This Decision disposes of the entire controversy between those parties and between the Decedent-Employee and the remaining insurers who are found not to be primarily liable for benefits under the Act. In other words, a determination by the Commission will have exhausted its jurisdiction by resolving all issues capable of determination at the time that the appeal is before the Commission, thus an appellate court has subject matter jurisdiction over the appeal. See Muller v. St. Louis Housing Authority, 175 S.W.3d 191, 195 (Mo. App. E.D. 2005).

Therefore, this Court will proceed with the holding that the decision of this Court with regard to which employer/insurer is liable for benefits for Decedent-Employee's workplace death is appealable beyond the Commission pursuant to the Missouri Constitution and $\S 287.495 .1$ as a final award.

The parties agree that the immediate employer of Decedent-Employee on the construction project was Mundo. (Stipulation 4-5). Decedent-Employee was hired by Mundo in Texas and had

[^0]

[^0]: ${ }^{2}$ In Edwards, the Employer wished to appeal the decision of the Commission substituting the claimant's wife as a party to his claim for benefits after he died. Edwards, 498 S.W.3d at 862. The Court of Appeals dismissed the appeal for lack of a final, appealable award, reasoning that the Commission's order was merely procedural, and it did not resolve all issues before it, nor did it dispose of the controversy between the parties. Id.

${ }^{3} In A B$ Electrical, the Commission reversed the ALJ's decision denying benefits and TTD, past and future medical, and specifically left open the determination of benefits until a final award could be issued. AB Electrical, 498 S.W.3d at 41 . There, the Court of Appeals reasoned that because the Commission's decision was made temporarily, pursuant to $\S 287.510$, pending final determination, it was not appealable.

Issued by DIVISION OF WORKERS' COMPENSATION

Employee: Luis Estrada

Injury No. 15-102640

worked for Mundo periodically for some time *Id.* As such, Mundo ordinarily would be primarily

liable to Decedent-Employee for workers' compensation benefits. However, Mundo failed to carry

workers' compensation insurance and cannot be located at this time. (Stipulation 11). Thus, the

Law instructs that liability in such a scenario turns to the secondary employers.

The parties are also in agreement that §§ 287.040.1 & 3 dictate that the general contractor

on a construction project is the statutory employer and liable under the Law to all employees of its

subcontractors. Further, it is agreed that those provisions provide the same result for each

subcontractor on such project with regard to each of its own subcontractors, and so on, down the

line. Accordingly, the parties agree that each one is a statutory employer under the law and one of

the insurers here is primarily liable for benefits for Decedent-Employee's death, but the parties

disagree as to which.

A. Interpretation of the Policy

Technology readily admits that Thunder is the next in line of intermediate employers after

Mundo failed to provide insurance because it was the subcontractor who immediately

subcontracted with Mundo for framing on the construction project. (Technology Initial Br. 14).

Technology, however, argues that it never undertook to provide coverage for Technology pursuant

to the Missouri Workers' Compensation Act, and instead it provided Thunder coverage pursuant

to an Assigned Risk Policy taken out in the Assigned Risk Plan of Arkansas to cover work

performed in Arkansas only. *Id.* Specifically, Technology cites to its insurance policy, which

references Arkansas and clearly provides coverage under the Arkansas Workers' Compensation

Act. *Id.*

As Technology correctly points out, insurance policies, including in the context of workers'

compensation, are written contracts controlled by the law of contracts binding each party by its

terms. (Tech Brief 7); *Accident Fund Ins. Co. v. Casey*, 550 S.W.3d 76, 80 (Mo. 2018). As such,

the Court looks to the insurance contract itself and is required to enforce it as written unless there

is ambiguity. *Farm Bureau Town & Country Ins. Co. of Mo. v. Am. Alternative Ins. Corp.*, 347

S.W.3d 525, 529 (Mo. App. 2011); *JCBC, L.L.C. v. Rollstock, Inc.*, 22 S.W.3d 197, 204 (Mo. App.

W.D. 2000).

Further, Technology cites to *Blew v. Conner* in support of its proposition that its

unambiguous insurance policy did not provide workers compensation coverage in Missouri. 310

S.W.2d 294, 296 (Mo. App. 1958), *aff'd*, 328 S.W.2d 626, 630-31 (Mo. Banc 1959). The parties

dispute the applicability of that case to the issue at hand. Employee and Burkhart argue that *Blew*

is inapposite because it involved two separate businesses and an injury which occurred several

miles away in Missouri unrelated to the business in Illinois which had insurance coverage. (Emp.

Br. 3-4). Further, those parties argue that the Supreme Court denied liability in that matter based

on a complex argument involving the total number of employees as opposed to insurance coverage.

(Emp. Response Br. 4); (Burkhart Response Br. 2). However, this ignores that the appellate court

in that case, which was affirmed by the Supreme Court, held that the policy at issue clearly

Page 12

Issued by DIVISION OF WORKERS' COMPENSATION

Employee: Luis Estrada (Deceased)

injury No. 15-102640

provided coverage only for claims brought under Illinois law and did not provide coverage under Missouri Law. *Blew,* 310 S.W.2d at 303, *aff'd,* 328 S.W.2d 626, 631 (Mo. 1959). Contrary to those parties' assertions, the *Blew* Court did not focus on the fact that the businesses were unrelated or the distance between the two was too great, but rather it was that the policy, pursuant to its unambiguous terms, did not provide coverage under the Missouri Workers' Compensation Law.

Further, in a prior decision from the Commission in *Employee: Lenton Eason Employer: Adams Towing, Inc. Insurer: Uninsured,* Injury No. 05-141500, 2012 WL 5473987, at *5 (Mo. Lab. Ind. Rel. Com. Nov. 8, 2012), it was noted that even where the businesses in two different states are the same, coverage only extends so far as the policy provides. Specifically, on remand from the Western District, the Commission affirmed the ALJ's decision that the Second Injury Fund was liable for benefits pursuant to § 287.220.74 because the employer failed to carry insurance in the State of Missouri, although it carried insurance in the State of Oklahoma. In that case, the employer's main business was in Oklahoma, but it had a branch in Missouri at which the claimant had been hired and employed. *Id.* at *4. Notably, in that case, the ALJ specifically reasoned: "The fact that the employer may have been insured in the State of Oklahoma is not relevant to [the] determination of [the employer's] required coverage in the State of Missouri." *Id.* at *5. Therefore, here, it matters not that Technology provided coverage in the State of Arkansas because, pursuant to the unambiguous language of the Policy, it did not provide coverage for benefits pursuant to Missouri law, which is required to hold it liable here.5

4 "If an employer fails to insure . . . 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 14, 2014 . . . .

5 Neither is this Court persuaded by Burkhart's argument that the Residual Limited Other States Endorsement in Thunder's Policy, which provides coverage in any state outside of Arkansas provided the employee was either hired in Arkansas or principally employed in Arkansas, proves that Technology is primarily liable. (Burkhart Reply Br. 2). There has been no evidence presented to this Court that suggests that Decedent-Employee was hired or principally employed in Arkansas regardless of the temporary nature of construction work. Insofar as Burkhart argues that because Thunder's business is principally located in Arkansas and therefore somehow Decedent-Employee's employment on the construction project in Missouri could be considered principally located in Missouri, it is incorrect. *Id.* Further, Burkhart directs this Court to no authority in support of its proposition nor any evidence that Decedent-Employee has ever been in Arkansas, let alone worked in Arkansas.

The Court is mindful that Chapter 287 does not define principally located, or principally localized as the chapter reads, however, the Commission has attempted to ascertain its meaning in the past, pulling from decisions of other jurisdictions and the National Commission on State Workers' Compensation Laws Model Act. *Employee: Earl G. Cable Employer Schneider Transportation, Inc.,* Injury No.: 88-183019, 1997 WL 216227, at *1-*2 (LIRC March 7, 1997). The *Gable* Commission determined, essentially, that a good definition of the phrase is: (1) the employee's employer has a place of business in the state and he regularly works at or from such place of business, or (2) he is domiciled and spends a substantial part of his working time in the service of his employer in the state. *Id.* at *1. Here, the stipulated facts explicitly state that Decedent-Employee was hired by Mundo in the State of Texas, thus not in Arkansas (Stipulation 6). Additionally, there is no evidence that Decedent-Employee ever worked in Arkansas, let alone substantially did so, and Decedent-Employee was a domiciliary in the State of Texas. Further, as decided in *Eason,* 2012 WL 5473987, at *5, the fact that the employer is principally located in one state but has operations in another at which the injured employee works does not then transform that employee's principal place of employment into the state of the employer's principal place of business. Instead, the focus is on where the employee is hired and where his principal place of employment is located, which as discussed, was not Arkansas. *Id.* Accordingly, this Court rejects Burkhart's argument.

Page 13

Notwithstanding Technology's argument that its policy does not provide coverage for this incident, Employee and Burkhart argue that the Law requires an insurer who undertakes to insure an employer pursuant to the Law must accept all liability thereunder. (Emp. Initial Br. 7); (Burkhart Initial Br. 7). It appears that those parties assert that because Technology provided some form of insurance to Thunder and because it was the only policy within Thunder's possession providing any sort of coverage for workplace loss, that it must provide coverage for this loss, otherwise Thunder would be uninsured and there would be no coverage. Further, those parties insist that Technology merely attempts to self-limit its coverage provided to Thunder in order to avoid liability here. In support, those parties rely most heavily on Allen v. Raftery, 174 S.W.2d 345, 34951 (Mo. App. 1943), Chapman v. Raftery, 174 S.W.2d 352, 346 (Mo. App. 1943), and Employee: John M. Harrington Employer: Employers Solutions Staffing Insurer: Travelers Property Casualty Company of America, Injury No. 12-051309, 2015 WL 3825843 (Mo. Lab. Ind. Rel. Com. June 18, 2015), which do discuss that once an insurer undertakes to insure an employer against liability under the Law, it cannot limit that coverage with the terms of its insurance policy.

This Court agrees that the Law is clear: once an insurer provides insurance under the Law, it cannot limit the scope of that coverage. However, that is not the case here. The proposition and cases on which those parties rely involve insurers who had undertaken to insure an employer pursuant to the Missouri Workers' Compensation Act, but then limited what benefits the policies covered pursuant to the Act. In Allen, a Missouri policy was issued to cover work performed in Missouri but attempted to exclude activities not specifically provided for in the policy. Allen, 174 S.W.2d at 349-51. In Chapman, a Missouri policy was issued to a Missouri Employer but attempted to exclude coverage for the risk or operation in which the employee had been engaged at the time of his injury. Chapman, 174 S.W.2d at 346. Similarly, in Harrington, a Missouri policy was issued to cover work performed in Missouri but attempted to avoid coverage of an injured employee because it did not satisfy the policy's endorsement definition of a Missouri employee. Harrington, 2015 WL 3825843 at *3. Thus, each involved a limitation of scope by way of policy language which conflicted with the workers' compensation law. This Court agrees, that is prohibited by the Law.

The main issue with the parties' argument here is the unavoidable fact that Technology did not provide a Policy that even contemplated coverage pursuant to the Missouri Workers' Compensation Act. Each case relied on by the Decedent-Employee and Burkhart involved policies providing explicit and undeniable coverage pursuant to the Missouri Workers' Compensation Act. Conversely, as discussed supra, in Eason, 2012 WL 5473987, at *5 the Commission affirmed the ALJ's decision that the Second Injury Fund was liable for benefits because the employer failed to carry insurance in the State of Missouri. The Eason Court did not entertain any notion that the insurer was attempting to limit the scope of its coverage but rather did not provide any insurance under the Law whatsoever. Id. And it did not matter that the employer was insured in Oklahoma for a business related to the one in Missouri at which the employee was injured. Id. Instead, the employer was uninsured against loss under the Missouri Workers' Compensation Act. Id. at *4.

Here, Technology never issued a policy pursuant to the Missouri Workers' Compensation Law. Technology issued Thunder a policy for coverage under Arkansas law only. (Technology Init Br. 4, 5); (Ex. 6 at 21:14-17). Further, Technology could not have even contemplated coverage under Missouri law because Thunder's application for insurance indicated that it did not have any employees that worked in Missouri and that it did not use subcontractors. (Ex. 7, at 46; 59). ${ }^{6}$ As the Judge in Eason reasoned, it does not matter that Thunder may have been insured in the State of Arkansas. See Id. An employer's status as insured in another state is not relevant to the determination of whether it was insured in the State of Missouri. Accordingly, this Court finds that Thunder was not insured in Missouri and Technology's Arkansas Policy did not somehow extend coverage to this incident. Technology never undertook to provide workers' compensation coverage under Missouri Law and thus cannot be liable here.

The Court further rejects Employee's and Burkhart's argument because the authority relied on were decided long before the 2005 amendments to the Law which required strict construction of Chapter 287. Instead, those courts would have been required to interpret the statute liberally, erring in favor of the injured workers and finding compensability. See Rogers v. Pacesetter Corp., 972 S.W.2d 540, 542 (Mo. App. E.D. 1998). When the Statute was amended in 2005, courts were required thereafter to construe the Statute strictly, giving neither party to a dispute the benefit of the doubt but rather confining the Statute's operation to its terms. See Harness v. S. Copyroll, Inc., 291 S.W.3d 299, 303 (Mo. App. S.D. 2009); Allcorn v. Tap Enters. Inc., 277 S.W.3d 823, 828 (Mo. App. S.D. 2009). And as such, cases decided prior to the amendment which applied liberal construction to the Law to resolve questions in favor of coverage for the employee, such as Allen and Chapman, are no longer to be followed. See Allcorn, 277 S.W.3d at 830.

Instead, this Court is required to look to the language of the Statute, giving each word, clause, and provision its plain and ordinary meaning and effect. See Templemire v. W\&M Welding, Inc., 433 S.W.3d 371, 381 (Mo. 2014); Dubinsky v. St. Louis Blues Hockey Club, 229 S.W.3d 66, 72-73 (Mo. App. E.D. 2007). Section 287.310, which controls this argument, dictates that every

[^0]In each of the cases cited by Employee and Burkhart, there was a Missouri policy for which premiums had been collected. Thus, the premiums could be adjusted after it was deemed by the Court that the certain activities which had been excepted from the policy were in fact covered pursuant to the Law. Allen, 174 S.W.2d at 349-51; Chapman, 174 S.W.2d at 346. This Court agrees with Technology that only when an insurer provides coverage pursuant to the Law that fails to account for a covered activity will the remedy be a premium adjustment. (Tech Response Br. 5). Further, Technology's post-expiration audit flagged payroll exposure in Missouri specifically because it was payroll in a state for which Thunder did not have coverage under Technology's Policy and for which no premiums had or could be collected. (Tech Response Br. 6; Ex. 7, at 83; Cooper Dep. 82:19-25; 83:1).

[^0]: ${ }^{6}$ This Court also rejects the argument put forth by Employee and Burkhart that any coverage dispute should be resolved between Thunder and Technology by way of premium adjustments. (Emp. Initial Br. 2, 7, 8); (Burkhart Br. 10, 11). Those parties again rely on Allen and Chapman to support the assertion that when an insurer attempts to limit the scope of its coverage under the Law, the solution is an adjustment to the premium to be handled between the employer and insurer. Id. However, this situation is different. Here, there never was a policy providing coverage under the Missouri Workers' Compensation Act in the first instance, no premiums with regard to Missouri were contemplated, and none could have been collected after the fact because no policy existed. Furthermore, Employee and Burkhart's argument presupposes that Thunder would have been able to obtain coverage for the work in Missouri under a Technology issued policy, which may not have been available, thus precluding a premium adjustment at a later date.

policy of insurance against liability under this chapter shall be in accordance with the provisions of the chapter and the insurer shall accept all provisions therein. As discussed above, in order to interpret that statute, the court must look to each word, giving it effect and meaning.

Here, "Against" is defined as in preparation or provision for (a problem or difficulty), such as for example insurance against sickness and unemployment. Against, Merriam-Webster.com, https://www.merriam-webster.com/dictionary/against (last visited May 23, 2022). "Under," as a preposition is defined as subject to the authority, control, guidance, or instruction of. Under, merriam-webster.com, https://www.merriam-webster.com/dictionary/under (Last visited May 23, 2022). Thus, $\S 287.310 .1$ requires that any insurance policy in preparation for liability subject to the authority of the Law accept all provisions of the Law. The requirement of acceptance of all provisions of the statute is preceded by the phrase "any insurance policy against liability". Therefore, before the acceptance of the entire Law is required, there must be an insurance policy which is against, or in preparation for liability subject to the Law.

The evidence shows that Technology never provided an insurance policy in preparation or provision for liability subject to the authority of the Missouri Workers' Compensation Law. Further, Technology could not have prepared or provided for potential liability under Missouri Law given Thunder's lack of any request for coverage nor evidence that it performed or would perform any work in Missouri. (Ex. 6 at 47:1-25; 48:1-14); (Ex. 4, at 2); (Ex. 7, at 44-47). Instead, Technology issued Thunder an Assigned Risk Policy against liability under the Arkansas Workers' Compensation Law. This Court is bound to construe Chapter 287 strictly and therefore cannot accept Employee and Burkhart's interpretation of undertaking or insuring a policy under the Law, nor is it persuaded by case law cited by the parties decided decades before strict construction.

Accordingly, this Court holds that Technology insured Thunder against the risk of loss in Arkansas but unambiguously did not provide coverage under Missouri Law.

Last, this Court is not persuaded by Employee and Burkhart's argument that Technology's Policy must provide coverage for Missouri claims because otherwise Thunder could be liable for criminal penalties pursuant to $\S 287.128 .4$. (Emp. Initial Br. 13-14); (Burkhart Initial Br. 10-11). Those parties argue that if Thunder could be found criminally liable for its failure to procure insurance coverage pursuant to the Missouri Workers' Compensation Act, the Policy must be found to provide Missouri coverage because a finding to the contrary would produce an illegal result (Thunder's failure to be insured under the Act), which is barred by Missouri law. Id. While those parties' arguments are underdeveloped on the issue, insofar as they argue that under the doctrine of contractual illegality, any agreement requiring the performance of an illegal act or predicated on the violation of laws is void based on illegality of consideration, they are correct. See Amalaco v. Butera, 593 S.W.3d 647 (Mo. App. E.D. 2019) (citing Rice v. James, 844 S.W.2d 64, 69 (Mo. App. E.D. 1992)). Insofar as they argue that is what occurs here, they are wrong.

Issued by DIVISION OF WORKERS' COMPENSATION

Employee: Luis Estrada (Deceased)

The Policy at issue in this case does not require the performance of any illegal act, nor is it predicated on any illegal bargain. Further, its purpose is not in violation of any law such that is contemplated by the doctrine of contractual illegality. In the cases cited by the parties, the contracts at issue were for or involved illegal acts on the part of the parties in violation of a specific statute or regulation. See e.g. Déjà vu of Missouri, Inc. v. Talayna's Laclede's Landing, Inc., 34 S.W.3d 245, 249 (Mo. App. E.D. 2000). ${ }^{7}$ While it is true, agreements predicated on the violation of laws or regulations or achieve illegal results will not be enforced, that is not the case in this matter. Here, there is no law or regulation of which this Court is aware, or any party has cited that is violated by an Assigned Risk Policy insuring coverage under one state's workers' compensation law but not others. See Eason, 2012 WL 543987, at *5. (holding that an Oklahoma Policy does not provide coverage for a Missouri incident, nor is its existence relevant to the determination of whether an employer is even insured in Missouri). This Court finds nothing about the application, acceptance, performance, or Policy itself contravenes any law or regulation. Thus, the Policy does not violate the doctrine of contractual illegality.

Therefore, this Court rejects Employee's and Burkhart's argument that a finding that Technology's Policy does not provide coverage pursuant to the Missouri Workers' Compensation Act produces an illegal result.

Finally, based on the stipulated facts in this Hearing and the Law, this Court finds that ARCO and its insurer cannot be found liable for benefits under the Law for Decedent-Employee's workplace death. Section 287.040 .3 dictates that " $[t]$ he liability of the immediate employer shall be primary, and that of the other secondary in their order . . [n]o such [secondary] employer shall be liable . . . if the employee was insured by his immediate or any intermediate employer." Burkhart's liability was fully insured under the Law. Thus, the inquiry into which intermediate employer is liable in the absence of Mundo would end with Burkhart by operation of law. There is no avenue under which ARCO and its insurer, Old Republic, could be found liable for benefits under the Law in this Hearing or a future Hearing in this claim. Accordingly, ARCO/Old Republic is dismissed from this claim with prejudice.

Decedent-Employee sustained an accidental injury at work on November 15, 2015, resulting in his death. Mundo was the immediate statutory employer of Decedent-Employee, who ordinarily would be liable for benefits. Mundo, however, was uninsured. Pursuant to $\S \S 287.040 .1 \& 3$, the next intermediate statutory employer steps into the shoes of Mundo and assumes liability. The next up would be Thunder. As discussed in the foregoing, Thunder was uninsured, and its Policy of insurance did not provide coverage against claims under the Missouri Workers' Compensation Law. Therefore, Burkhart and its insurer Carolina, as the next in line statutory

[^0]

[^0]: ${ }^{7}$ In that case, cited by Employee and Burkhart, the Court held that a contract for the transfer of a liquor license was illegal because it was in direct violation of Missouri law and a city ordinance, both of which prohibited such transfers.

employer, are liable for primary coverage for Decedent-Employee's death. Last, ARCO and its insurer, Old Republic are dismissed from this claim with prejudice as there is no avenue under which it can be found liable for benefits under the Law in this matter.

I certify that on May 272022

I delivered a copy of the foregoing award to the parties to the case. A complete record of the method of delivery and date of service upon each party is retained with the executed award in the Division's case file.

By: $\frac{\text { Aaomi Reason }}{\text { Aason }}$


Made by: $\qquad$ Kevin A. Elmor

Kevin A. Elmer Administrative Law Judge Division of Workers' Compensation