Uninsured employers aren't self-insured for WC: Iowa SC

Legal News Line Feb. 16, 2007, 6:46am

Chief Justice Marsha Ternus

DES MOINES -- Employers without any form of worker-compensation (WC) insurance aren't liable for failing to pay awarded WC benefits to an injured employee, the Iowa Supreme Court ruled today. In Bremer vs. Wallace and Iowa Great Lakes Lift (case no. 84 / 04-1176), the Supreme Court vacated an Appeals Court decision that affirmed a District Court ruling awarding Bremer compensatory and punitive damages. The district court awarded damages because defendants failed to pay earlier WC benefits awarded to Bremer. Bremer originally received an award from the state workers compensation commission for healing period benefits and permanent and partial disability due to a work-related injury. Wallace subsequently paid no benefit, leading Bremer to bring his suit. Bremer's lawyers argued that an uninsured employer like Wallace carried the same liability for "bad-faith tort conduct," such as refusal to pay awarded benefits, as "self-insured" employers. The Supreme Court disagreed. Self-insured employers, in contrast to uninsureds, "are members of a highly regulated formal insurance association that is responsible for paying workers' compensation benefits owed to employees of association members," wrote Chief Justice Marsha Ternus in the unanimous decision. Because Wallace was uninsured, Bremer could have brought a civil suit but chose the WC route instead, Ternus wrote. Bremer could also obtain a court judgment against the defendant for the benefits awarded, he added. "To find these remedies inadequate would mean any defendant who in bad faith fails to promptly pay a judgment would arguably be subject to liability for damages flowing from this failure," Ternus concluded. The case was thus remanded "for entry of an order of dismissal."

More News