Insurer Must Cover, and Employer Must Indemnify Client Against, Workplace Injury Lawsuit – Harleysville Insurance Co. v. PDSI
When someone is injured in a workplace involving more than one contractor, it can be difficult to sort out who is obligated to cover the resulting damages. As a Missouri workplace injury lawyer, I always start these cases by determining which company is obligated to provide worker’s compensation—and whether there might be a separate cause of action against one of the other companies. In Harleysville Insurance Co. v. PDSI, an injury to PDSI employee Jonathan Hughes took place at the premises of Miller Transporters Inc. PDSI is a staffing agency for transportation firms and Miller was a client; Harleysville is the general commercial liability insurance carrier for PDSI. The district court found that PDSI was contractually required to indemnify Miller for its settlement payment to Hughes, and Harleysville was required to pay PDSI for that cost.
In 2007, Hughes fell ten to eleven feet from a ladder while he was cleaning resin out of a chemical tanker truck’s tank, at Miller’s work site. He had been told to clean it by a PDSI supervisor, but the area was maintained by Miller; most importantly, Miller had failed to provide fall protection equipment or a stairway in this area, though they were available in another area of the facility. The manager of the Miller facility had brought this up to his supervisors, who, he testified, had said they cost too much money to install. Hughes’s fall left him with permanent chronic pain and changed his gait. He sued Miller in state court and eventually reached a $300,000 settlement. Under the 1989 contract between PDSI and Miller, PDSI agreed to indemnify Miller against actions “in any way relating to personnel assigned to Miller.” PDSI, in turn, asked Harleysville to cover the cost of the settlement.
Harleysville refused and sued for a declaratory judgment saying its policy didn’t cover the settlement, and that PDSI was not obligated to indemnify Miller. The district court ultimately granted summary judgment to Miller and PDSI.
On Harleysville’s appeal, the Eighth U.S. Circuit Court of Appeals agreed. The contract between PDSI and Miller clearly says that PDSI will indemnify Miller against personal injury claims, and Harleysville cannot show otherwise by relying on a footnote in a case that is not on point, the Eighth said. On the insurance issue, Harleysville argued that its policy limits coverage to bodily injury caused by PDSI or people acting on PDSI’s behalf, and that this requires proximate causation. The district court found that it required only “but for” causation, a lower standard. The Eighth concluded that the undisputed facts show that PDSI and its employees at least partly caused the injury to Hughes; Chapman was the direct supervisor who asked Hughes to clean out the tank. This interpretation is consistent with the contract as a whole, the Eighth noted, and common sense backs it up. A dissent by Judge Colloton argued that PDSI should not be obligated to cover accidents caused by Miller’s own negligence.
As a St. Louis personal injury attorney, I’m always pleased to see an injured person get the recovery that he or she needs to make ends meet, treat an injury and recover. In some cases involving a dispute over who was obligated to cover an injury, the compensation is in real doubt because not every party necessarily has the money to cover the injury—for example, an individual driver without insurance. But in this case, the question was merely whether the insurance company was going to be forced to assume its contractual responsibilities. In my experience as a southern Illinois accident lawyer, insurance companies frequently attempt to avoid liability for large payments even when, as in this case, the court concludes that the contract is unambiguous about covering the injury. That’s why it’s absolutely vital to have an experienced attorney on your side, who can protect you from being cheated out of the money you need.
If you or someone you love suffered a serious injury because of someone else’s negligence, don’t wait to call Carey, Danis & Lowe for help. You can
reach us through our website or call 1-877-678-3400 today.
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