Workers comp: Who has jurisdiction?
Stacey Gaasch, as personal representative of the estate of the late Troy Gaasch, brought suit against St. Paul Fire & Marine Insurance Company, which provided workers compensation insurance to Troy’s employer. The action sought to recover for wrongful death, breach of contract, and bad faith in delaying an in-hospital nutrition consultation for Troy until days before his death.
After his work-related injury, Troy required multiple surgeries. He allegedly became malnourished with accompanying weight loss, and physicians and a nurse practitioner recommended a nutrition consult. Troy died in the hospital approximately six months after the consult was recommended.
Prior to his work-related injury, Troy underwent gastric bypass surgery and allegedly suffered from a malabsorption syndrome secondary to this surgery. A disagreement arose between the insurer and Troy concerning whether the insurer was required to pay for a nutritional consult. The insurer claimed Troy’s nutritional problems were created before his work-related injury and his nutritional state in the hospital was not a result of the work-related injury.
During his hospitalization, Troy’s counsel requested an order from the Workers’ Compensation Court for treatment by a nutritionist. The form was filed three days before Troy’s death. Two days later and one day before his death, St. Paul Fire & Marine approved the request for a nutritional consult. Troy died on February 26, 2010.
A few months later, the Workers’ Compensation Court held a hearing on the issue of death benefits. The court found “without a doubt that claimant died as a direct result of the original injury.” The court made findings in support of this conclusion and relied on one doctor’s report and another doctor’s autopsy report. The court awarded a lump-sum payment, continuing payments, and an amount for funeral expenses. The payments were ordered to be paid to Troy’s surviving spouse and two children. This order was affirmed in part and modified in part by a three-judge panel of the court. The order was reduced because one of the children was an adult. The panel agreed that Troy died as a direct result of his original work-related injury combined with “consequential injuries.” The Court of Civil Appeals agreed in a subsequent appeal.
Stacey Gaasch brought an action in which she alleged that St. Paul Fire & Marine failed to provide Troy reasonable and necessary medical treatment as required by “the final orders of the Oklahoma Workers’ Compensation Court.” Stacey said the insurer breached its duty of good faith and characterized this allegation as a bad faith claim.
Stacey characterized the second part of the petition as a claim for wrongful death. She alleged that Troy’s survivors suffered compensable damages arising from the insurer’s breach of its duty of good faith and fair dealing associated with the insurance contract. The third part of the petition alleged that St. Paul (1) continued to deny approval of reasonable and necessary medical treatment until the day before Troy died and (2) made statements shortly before his death that it would be cheaper for the insurer if Troy would die, and (3) that the insurer’s conduct and statements caused Stacey severe emotional distress.
St. Paul filed a motion to dismiss, and it was granted on Stacey’s claim of bad faith and denied on her wrongful death claim. Stacey voluntarily dismissed with prejudice the claim against St. Paul for intentional infliction of emotional distress. Subsequently St. Paul sought summary judgment on Stacey’s wrongful death claim, and it was granted. Stacey appealed.
On appeal, the court noted that Stacey’s action arose from a workers compensation policy and a court-ordered duty imposed on that policy where (1) Stacey alleged that a death had occurred and (2) workers compensation death benefits previously were paid for that death. The court said that Stacey’s action to recover for Troy’s injury was governed by workers compensation jurisdictional remedies.
The court stated: “This workers’ compensation insurance carrier had its legal duty for providing payment adjudicated by an order of the Workers’ Compensation Court. [Stacey], like any other claimant seeking to enforce an award requiring an insurer to provide a benefit, ‘must first utilize the mechanism provided in section 42(A) of the Act and have the award certified for enforcement.’ The insurer has a workers compensation statutory right to defend its conduct in the context of its good-cause burden.”
The court said that Stacey attempted to go around this procedure by characterizing her claim as a breach of contract and an action for damages resulting from an alleged wrongful death. “The clear public policy … requires available workers’ compensation remedies for any type of wrongful death claim to be pursued in the Workers’ Compensation Court when required by the workers’ compensation statutes.”
The trial court’s summary judgment in favor of St. Paul was affirmed.
Gaasch/Estate of Gaasch vs. St. Paul Fire & Marine Insurance Company-Supreme Court of Oklahoma-February 6, 2018-2018 WL 716466.