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Workers' Compensation

Missouri Supreme Court Issues Opinion on Hegger v. Valley Farm Dairy Co.

On February 18, 2020, the Missouri Supreme Court issued an important opinion addressing enhanced remedy benefits in toxic exposure claims in Hegger v. Valley Farm Dairy Co.

The Missouri legislature enacted the enhanced remedy benefit section, 287.200.4 RSMo for certain toxic exposure claims on January 1, 2014.This law created additional benefits strictly for employees exposed to certain toxic substances that result in one of the diseases or conditions listed in the statute. An important provision in the new law addressed mesothelioma resulting from asbestos exposure.  This would allow employers to come under the exclusive remedy protections of the Workers’ Compensation Act for claims of mesothelioma if the employer elected to accept coverage for enhanced mesothelioma liability under the Act. If the employer did not elect to accept coverage under the Act, they would be subject to civil liability. The enhanced remedy benefit is 300% of the state average weekly wage for 212 weeks. At present, the enhanced remedy benefit totals $594,596 for mesothelioma claims.

Case Background:

The employee, Vincent Hegger, worked for Valley Farm Dairy from 1968 to 1984. Valley Farm maintained a workers’ compensation policy during that time, however Valley Farm did not exist when the enhanced remedy benefits were enacted on January 1, 2014. Hegger serviced industrial machinery which exposed him to asbestos gaskets, asbestos insulation, and other asbestos containing materials. Hegger was diagnosed with mesothelioma caused by exposure to asbestos in 2014 and died from the disease in 2015.

ALJ and Commission Findings

(1) Claimant’s exposure to asbestos at work was the prevailing factor in his diagnosis of mesothelioma;

(2) Hegger was last exposed to the hazards of asbestos working for Valley Farm Dairy; and

(3) Claimant did not meet his burden of proving entitlement to the benefits provided in 287.200.4

because Valley Farm Dairy was not in existence as of January 1, 2014, and therefore could not “elect to accept” coverage under section 287.200.4 (3)(a).

Court of Appeals Findings:

The Court of Appeals held that the employer, Valley Farm Dairy, although not in existence on January 1, 2014, did elect to accept coverage for enhanced remedy benefits by insuring their liability when the claimant was last exposed to the hazards of asbestos in 1984.

The employee based their argument on the statutory provision that stated, “employer’s that elect to accept mesothelioma liability under this subsection may do so by…insuring their liability…” The court supported the employee’s position that “insuring their liability” means an employer insures all of their workers’ compensation liability, including mesothelioma liability, when they have an active workers’ compensation insurance policy. In turn, even an employer that ceased to exist prior to the 2014 changes could be held liable for enhanced mesothelioma benefits stemming from exposure that occurred before January 1, 2014 simply because they had an active workers’ compensation policy at the time of exposure.

Supreme Court Findings

The Missouri Supreme Court addressed whether an employer that did not exist when the 2014 toxic exposure changes were enacted could be held liable for enhanced mesothelioma benefits.

The Court first held that under the January 1, 2014 changes, an employer has to elect to accept their mesothelioma liability. The Court then held that a now-defunct employer is not considered to have elected to accept mesothelioma liability solely by maintaining a workers’ compensation insurance policy at the time of the employee’s exposure to asbestos.

Specifically, the Court focused on the operative term “elect”, stating that the plain and ordinary meaning of the term is to make a selection or to choose. The Court then explained that Valley Farm could not have “elect[ed] to accept mesothelioma liability” under changes to the statute that did not take effect until 16 years after the company ceased to exist.

In conclusion, the Court found that an employer ceasing to exist before the January 1, 2014 changes were enacted, could not possibly “elect” to accept mesothelioma liability. Importantly, if an employer does not elect to insure their enhanced mesothelioma liability, they do not fall within the exclusivity provision of the Missouri Workers’ Compensation Act and can be sued civilly.

If you have any questions regarding this case or toxic exposure, please contact Steve McManus