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Mar 13, 2013

Recent Missouri Western District Appellate Case Restores Prior Law that Authorizes Exclusion of Co-Employee Claims Under Auto Liability Policies

Auto liability carriers often field claims by one employee of an insured policyholder against another employee. It has long been the rule in Missouri that one employee is not liable to the other except for intentional conduct or in extraordinary circumstances, which generally precludes coverage for co-employee claims under auto liability policies. The Western District Court of Appeals briefly introduced a wrinkle to this well-established jurisprudence, which appears to have righted itself in the recent case of Hansen v. Ritter, 375 S.W.3d 201 (Mo. App. W.D. 2012).

An employer has a nondelegable duty to provide a reasonably safe work environment for employees. Kelley v. DeKalb Energy Co., 865 S.W.2d 670, 672 (Mo. banc 1993). Because that duty cannot be delegated to individual employees, suits against co-employees for breach of the duty to maintain a safe working environment are generally barred by the workers’ compensation remedy. State ex rel. Taylor v. Wallace, 73 S.W.3d 620, 621 (Mo. banc 2002). The only exception to the workers’ compensation law’s bar on claims against co-employees for injuries that result from an affirmative act by a co-employee that causes injury, beyond mere negligence. Id. at 621-22. (Taylor was subsequently overruled only to the extent of its holding that the workers’ comp bar defense was not waived if not raised at the first opportunity. See McCracken v. Wal-Mart Stores East, LP, 298 S.W.3d 473, 478-79 (Mo. banc 2009)). The contours of the “something more” required to hold one liable to a co-employee are not entirely clear, but the standard has been repeatedly affirmed by the courts. See, e.g., Burns v. Smith, 214 S.W.3d 335 (Mo. 2007). Negligent driving is not “something more.” Taylor, supra.

That is the well-established regulatory scheme everywhere but in the Western District, apparently. In Robinson v. Hooker, 323 S.W.3d 418 (Mo. App. W.D. 2010), the Western District held that the workers’ compensation statute, Mo. Rev. Stat. § 287.010 et seq., did not bar co-employee claims. Robinson v. Hooker found that the workers’ compensation statute was required to be strictly construed following amendments in 2005. Because the statute only expressly refers to “employers,” not “co-employees,” as being entitled to the benefit of the comp bar, the Western District declined to bar co-employee claims. 

Notably, no other appellate district followed the Western District’s lead, and the court has reversed itself in substance, if not expressly, in Hansen v. Ritter, 375 S.W.3d 201 (Mo. App. W.D. 2012). In backtracking from Robinson v. Hooker, the Hansen court observed that “[t]hough Robinson abrogated affording immunity under the Act to co-employees alleged to have breached an employer’s non-delegable duty, Robinson did not comment on the contours of a co-employee's common law liability for the negligent injury of fellow employees in the workplace.”   Id. at 207. The court then returned to the pre-Robinson framework that barred co-employee claims by finding that employers had non-delegable duties to provide a safe workplace at common law, and that most co-employee claims therefore were not cognizable under the common law of Missouri. 

“[T]he pressing question is whether the negligent co-employee is also liable. At early common law, the answer to this question was no. The ‘nondelegable duties are duties of the employer to his employees and not of fellow servants to each other.’”  Hansen, 375 S.W.3d at 210. “[W]e conclude that at common law, a co-employee who has violated an independent duty to an injured employee will be ‘answerable to such person for the consequences of his negligence,’ . . . . However, a co-employee’s independent duties owed to fellow employees do not include the duty to perform the employer’s non-delegable duties.” Id. at 213-14. 

After an extensive attempt to distinguish Robinson from the abundant case law barring co-employee claims under the workers’ compensation act, Hansen ultimately accepted the “something more” test for co-employee liability. Id. at 216. While Hansen goes to great lengths to maintain that Robinson correctly abolished the workers’ compensation bar to co-employee claims, the end result of Hansen is a bar to most co-employee claims under the same standards, using the same terminology, as the pre-Robinson case law. To date, no reported cases cite either Robinson or Hansen. While this has been a confusing episode in the Western District, the end result appears to be no functional alteration to existing law on co-employee claims, and because such claims are not viable under Missouri law, there should be no coverage under auto liability policies unless such policies expressly provide coverage applicable to the circumstances.

Of note to auto liability insurers, the bar on co-employee claims does not create liability under the employer’s uninsured motorist coverage, and this well-established jurisprudence should remain intact following Robinson and Hansen. There are two principal cases that support the denial of UM claims by co-employees, Zink v. Allis, 650 S.W.2d 320 (Mo. App. W.D. 1983) and Seymour v. Lakewood Hills Association, 927 S.W.2d 405 (Mo. App. E.D. 1996).

In each of these cases, the injured employee was a passenger in a company-owned vehicle.  In each case, the auto liability policy held by the employer contained a fellow-employee exclusion clause, excluding claims by an employee for injuries caused due to the actions of another employee, mirroring the workers’ comp bar on such claims. 

In Zink, the plaintiffs were the survivors of an employee killed while a passenger in a company truck driven by another employee.  See 650 S.W.2d at 321. The substance of the plaintiffs’ argument was that, due to a fellow-employee exclusion in the liability policy, the negligent driver was “uninsured” for purposes of determining whether that policy's uninsured motorist coverage was applicable.  Id. at 322.

The Zink court found, based upon policy language, that liability under the uninsured motorist policy was contingent on whether the vehicle in which the decedent was riding was insured, not whether the driver was insured.  650 S.W.2d at 321. Because a liability policy covered the vehicle in question, the plaintiffs could not avail themselves of the uninsured motorist coverage.  Id. at 322–23.

The Zink court then addressed the issue of whether the fellow-employee exclusion within the policy caused that policy to fail to meet the mandatory minimum requirements of the uninsured motorist statute.  The court found that a fellow-employee exclusion is rational, reflecting the different responsibilities owed by an employer to its employees, as opposed to those owed to the general public.  Id. at 323–24.  That exclusion is premised, at least in part, upon the employee’s protection under the workers’ compensation statutes, id., so the continued viability of the longstanding bar on co-employee claims is important to the enforcement of co-employee exclusions in liability policies.  

In Seymour, the plaintiff was an employee injured as a passenger on a trash truck driven by another employee, when that vehicle struck a tree.  The plaintiff claimed against the employer’s uninsured motorist coverage.  The trial court sustained the insurance company’s motion for summary judgment, premised upon the grounds that the uninsured motorist insurance policy contained a “fellow-employee” coverage exclusion.  927 S.W.2d at 407. On appeal, the Eastern District initially followed the approach of Zink, noting that the vehicle was not truly an uninsured motor vehicle, as it was covered by a liability policy. Id.

The Seymour court then made a much broader statement, declaring that “uninsured motorist coverage need not extend to ‘any liability on account of bodily injury or death of an employee of the insured while engaged in the employment, other than domestic, of the insured.’”  Seymour, 927 S.W.2d at 408.  As the exclusion within the policy (a “fellow employee” exclusion) was authorized under § 303.190.5 (Missouri’s financial responsibility law), the court held that the exclusion was not in violation of public policy.  Id. 

Again, the rationale for approving co-employee exclusions in liability policies is substantially derived from what, prior to Robinson, appeared to be well-settled law barring co-employee claims, so Hansen is a puzzling but welcome decision. We suspect that Robinson and Hansen will have no practical impact upon the administration of co-employee claims under auto liability policies. We will, as always, continue to monitor and report upon developments in this area of Missouri law.