The Supreme Court of Missouri issued its opinion in Piatt v. Indiana Lumbermen’s Mut. Ins. Co. on April 28, 2015. The Court held an Employer’s Liability exclusion in a CGL policy applicable to a wrongful death claim against the decedent’s co-employee.
Linda Nunley was killed while working for Missouri Hardwood Charcoal, a charcoal factory whose sole owner, director, and executive officer was Junior Flowers. Company policy required Missouri Hardwood’s enormous kiln doors occasionally to be removed and propped against its kilns. On one such occasion, a kiln door was blown over by the wind, crushing Ms. Nunley. Ms. Nunley’s family brought a wrongful death suit against Flowers, alleging he was negligent in enforcing the company’s dangerous door removal policy.
While Flowers was held liable for negligence in the wrongful death judgment, the Court found that Missouri Hardwood’s CGL policy and umbrella policy were unambiguous in their exclusion of coverage for “an employee of the insured” for work-related injuries. Since both Missouri Hardwood and Flowers were insured, the key question before the Court was whether Flowers was Ms. Nunley’s employer. First, the Court emphasized that the general intent of CGL policies is to protect the public, not employees, against company accidents. To that end, CGL policies typically exclude liability for employees’ workplace accidents when they are already covered by workers’ compensation laws. Second, the Court stated that a “corporation can only act through its agents.” The wrongful death judgment already held Flowers liable for negligently maintaining Missouri Hardwood’s policy, “a claim of failure to provide a safe workplace, which is exclusively the employer’s duty.” Thus, the CGL and umbrella policies precluded coverage for the judgment against Flowers, despite his liability for Ms. Nunley’s workplace death, because he was acting as Ms. Nunley’s employer.
This decision by the Supreme Court seemingly stands in contrast to its earlier decision in Baker v. DePew and the cases based on it. There, the Court determined the severability clause found in most CGL policies meant the Employer’s Liability exclusion only applied to claims by an employee against the actual employer and not claims against co-employees. However, it does not appear the Supreme Court intended to overrule Baker, as the rule from that case can still be applied in a co-employee situation if it is determined the at-fault co-employee was acting as the injured worker’s employer.