Workers Comp Bad Faith: KENTUCKY EMPLOYERS MUTUAL INS. V. HON. EDDY COLEMAN (SC 8/23/2007)

KENTUCKY EMPLOYERS MUTUAL INS. V. HON. EDDY COLEMAN
WORKER COMPENSATION: 
Bad faith refusal to provide medical treatment barred by exclusive remedy provision
2006-SC-000608-MR.pdf
PUBLISHED: REVERSING
OPINION BY NOBLE (SCOTT DISSENTS BY SEPARATE OPINION)
DATE RENDERED: 08/23/2007

The Supreme Court determined that the Circuit Court could not proceed with a civil suit against the workers’ compensation insurance company for what were found to be bad faith refusals to allow medical treatment and pay for medications required by a work related in jury. The Administrative Law Judge found in favor of the injured worker and awarded sanctions against the workers’ compensation insurance carrier in the form of attorneys fees and costs. The case was also referred to the Executive Director of the Office of Workers’ Claims for imposition of fines for unfair settlement practices. The Executive Director fined the insurance company $9,000, which has been appealed. The claimant filed a bad faith action against the carrier, which the carrier sought to dismiss on the grounds of lack of jurisdiction, relying on the exclusive remedy provisions of the work comp act. The Circuit Court denied the motion, and the carrier then sought a writ of prohibition against the Circuit Court, which was denied. The Supreme Court reversed, holding that the workers’ compensation insurance company was immune from a civil tort action because of the exclusive remedy of the workers’ compensation act. A dissenting opinion by Justice Scott points out that this violates the jural rights of workers guaranteed by the Kentucky Constitution, and that a tortious act of an insurance company, such as sending private investigators to harass the injured worker or inflicting harm upon the worker by denying necessary medical treatment, are separate non-work related injuries. Granting immunity for even the most contemptible acts will allow workers’ compensation insurers to act with impunity while suffering only minor sanctions under the workers’ compensation act.

Digested by Peter Naake
Priddy, Cutler, Miller & Meade

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