My last post discussed Central Mut. Ins. Co. v. True Plastics, Inc., 84 Mass. App. Ct. 17 (2013), in which the Massachusetts Appeals Court addressed whether Sanchez, an employee of a staffing agency, was a temporary employee or a leased worker of the company to which she was assigned, True Plastics, Inc. If she was a leased worker then, as discussed in my last post, the liability policy issued to True Plastics by Central Mutual would not provide coverage. If she was a temporary worker, however, the policy would provide coverage.
The policy defined "temporary worker" as a person furnished to meet "short-term workload conditions." The policy did not define short-term workload conditions.
In a decision that invites insurance fraud, the court held that the only consideration in determining whether a person was furnished to meet short-term workload conditions is what the employer intended at the time the worker was hired. "Even if a worker's assignment ends up being lengthy, he or she will still be a 'temporary worker' within the meaning of the policy, provided the insured held an objectively reasonable expectation at the time that the worker was furnished [that the worker was hired] to meet a short-term workload condition.
Central Mutual argued that "short-term" workload conditions cannot be indefinite. The court disagreed, and held that a short-term workload condition need not be of finite duration.
The court held that True Plastics had met its burden of proving that Sanchez was furnished to meet a short-term increase in its workload.
Showing posts with label temporary workers. Show all posts
Showing posts with label temporary workers. Show all posts
Wednesday, July 31, 2013
Monday, July 29, 2013
Massachusetts Appeals Court provides guidance on burdens of proof
I posted here about the Massachusetts Superior Court decision in Central Mut. Ins. Co. v. True Plastics, Inc., 2009 WL 2603151. In that case the Superior Court held that whether or not a worker was a leased worker, in which case there would be no insurance coverage pursuant to a general liability policy, or a temporary worker, in which case there would be coverage, was a disputed issue of fact. It denied summary judgment to both sides.
Sanchez was injured while working on the premises of True Plastics, the insured. She was an employee of Dynamic Staffing, Inc., a company in the business of placing its employees at client companies.
After that decision the case went to trial as a "case stated," which essentially means that stipulations and agreed-upon evidence was submitted to the judge for a decision. The judge ruled in favor of True Plastics. Central Mutual appealed. In Central Mut. Ins. Co. v. True Plastics, Inc., 84 Mass. App. Ct. 17 (2013), because of the procedural posture the Massachusetts Appeals Court gave no deference to the trial judge's findings.
The court noted that the definition of "employee" that was referenced in the employer's liability exclusion had two parts. The definition stated that leased workers are employees (and therefore excluded from coverage under the employer liability exclusion). "Because this provision expands the universe of persons excluded from coverage, the insurer has the burden of proving that a person falls within its scope."
The definition of "employee" excluded from its definition temporary workers. Read in the context of the employer liability exclusion, temporary workers were an exception to the exclusion. True Plastics therefore had the burden of proof that Sanchez was a temporary worker.
The court thereby touched on a thorny problem. While it is axiomatic that an insured has the burden of proving that coverage is triggered, the insurer has the burden of proving that an exclusion applies, and the insured has the burden of proving that an exception to an exclusion applies, frequently the policy clause that determines coverage is not found in an exclusion or an exception, but a clause that may be "exclusion-like" or "exception-like" (my terms). Or sometimes a coverage clause is phrased in such a way that certain occurrences are not exactly "excluded" from coverage, but are left out of the definition of coverage.
Although the issue the court was dealing with here was more straightforward, its analysis is phrased in such a way as to help with the harder issues: An insured has the burden of proof on a policy clause that expands coverage, whether that clause is in an insuring clause, an exception to an exclusion, or elsewhere the policy. An insurer has the burden of proof on a policy clause that contracts coverage, whether that clause is in an exclusion or elsewhere.
Sanchez was injured while working on the premises of True Plastics, the insured. She was an employee of Dynamic Staffing, Inc., a company in the business of placing its employees at client companies.
After that decision the case went to trial as a "case stated," which essentially means that stipulations and agreed-upon evidence was submitted to the judge for a decision. The judge ruled in favor of True Plastics. Central Mutual appealed. In Central Mut. Ins. Co. v. True Plastics, Inc., 84 Mass. App. Ct. 17 (2013), because of the procedural posture the Massachusetts Appeals Court gave no deference to the trial judge's findings.
The court noted that the definition of "employee" that was referenced in the employer's liability exclusion had two parts. The definition stated that leased workers are employees (and therefore excluded from coverage under the employer liability exclusion). "Because this provision expands the universe of persons excluded from coverage, the insurer has the burden of proving that a person falls within its scope."
The definition of "employee" excluded from its definition temporary workers. Read in the context of the employer liability exclusion, temporary workers were an exception to the exclusion. True Plastics therefore had the burden of proof that Sanchez was a temporary worker.
The court thereby touched on a thorny problem. While it is axiomatic that an insured has the burden of proving that coverage is triggered, the insurer has the burden of proving that an exclusion applies, and the insured has the burden of proving that an exception to an exclusion applies, frequently the policy clause that determines coverage is not found in an exclusion or an exception, but a clause that may be "exclusion-like" or "exception-like" (my terms). Or sometimes a coverage clause is phrased in such a way that certain occurrences are not exactly "excluded" from coverage, but are left out of the definition of coverage.
Although the issue the court was dealing with here was more straightforward, its analysis is phrased in such a way as to help with the harder issues: An insured has the burden of proof on a policy clause that expands coverage, whether that clause is in an insuring clause, an exception to an exclusion, or elsewhere the policy. An insurer has the burden of proof on a policy clause that contracts coverage, whether that clause is in an exclusion or elsewhere.
Friday, September 4, 2009
Superior Court discusses distinction between "leased worker" and "temporary worker"
In Central Mut. Ins. Co. v. True Plastics, Inc., 2009 WL 2603151, the Superior Court held that whether or not a worker was a leased worker, in which case there would be no insurance coverage pursuant to a general liability policy, or a temporary worker, in which case there would be coverage, was a disputed issue of fact.
Sanchez was injured while working on the premises of True Plastics, the insured. She was an employee of Dynamic Staffing, Inc., a company in the business of placing its employees at client companies.
True Plastics had a general liability policy which excluded coverage for a "leased worker" but provided coverage for a "temporary worker." Leased worker was defined in the policy as:
Temporary worker was defined in the policy as:
The court denied summary judgment to both True Plastics and the insurer because whether Sanchez was a leased worker or a temporary worker was a disputed issue of fact. Evidence supporting the conclusion that Sanchez was a leased worker included an affidavit that Sanchez was assigned to True Plastics for an indefinite time, and the agreement between Dynamic Staffing and True Plastics suggesting a leasing arrangement.
Evidence tending to show that Sanchez was a temporary worker included testimony that Sanchez was hired to fill a large new order for products and was manufacturing that product at the time of her injury.
The court's decision denying summary judgment is in line with the United States Court of Appeals in the case of Scottsdale Ins. Co. v. Torres, 561 F.3d 74 (1st Cir. 2009), which I discussed here. In Torres the court also denied summary judgment to both sides. It held that a placement for an indefinite period of time is not necessarily incompatible with the possibility that the worker was furnished to address a short-term workload condition. The court remanded the case for resolution of the question of how the injured worker's placement fit within the insured's ordinary course of business and the nature of its work flow.
Sanchez was injured while working on the premises of True Plastics, the insured. She was an employee of Dynamic Staffing, Inc., a company in the business of placing its employees at client companies.
True Plastics had a general liability policy which excluded coverage for a "leased worker" but provided coverage for a "temporary worker." Leased worker was defined in the policy as:
a person leased to you by a labor leasing firm under an agreement between you and the labor leasing firm, to perform duties related to the conduct of your business. "Leased worker" does not include "temporary worker."
Temporary worker was defined in the policy as:
a person who is furnished to you to substitute for a permanent "employee" on leave or to meet seasonal or short-term workload conditions.
The court denied summary judgment to both True Plastics and the insurer because whether Sanchez was a leased worker or a temporary worker was a disputed issue of fact. Evidence supporting the conclusion that Sanchez was a leased worker included an affidavit that Sanchez was assigned to True Plastics for an indefinite time, and the agreement between Dynamic Staffing and True Plastics suggesting a leasing arrangement.
Evidence tending to show that Sanchez was a temporary worker included testimony that Sanchez was hired to fill a large new order for products and was manufacturing that product at the time of her injury.
The court's decision denying summary judgment is in line with the United States Court of Appeals in the case of Scottsdale Ins. Co. v. Torres, 561 F.3d 74 (1st Cir. 2009), which I discussed here. In Torres the court also denied summary judgment to both sides. It held that a placement for an indefinite period of time is not necessarily incompatible with the possibility that the worker was furnished to address a short-term workload condition. The court remanded the case for resolution of the question of how the injured worker's placement fit within the insured's ordinary course of business and the nature of its work flow.
Thursday, April 23, 2009
U.S. Court of Appeals defines "temporary worker" exception to leased worker exclusion
In Scottsdale Ins. Co. v. Torres, a recent decision of the United States Court of Appeals for the First Circuit, the court considered the "leased worker" exclusion to a CGL policy. Like most CGL policies, the policy at issue excluded personal injury claims of employees of the insured (because employees are covered by the worker's compensation law). The policy defines employees as including "leased workers."
Pursuant to an exception to the exclusion, "temporary workers" are not considered "leased workers." The policy defines temporary workers as workers "furnished to [the insured] . . . to meet seasonal or short-term workload conditions."
The court held that the actual length of time the worker ends up working for the insured is irrelevant to that definition; what matters is whether, at the time that the worker was originally furnished to the insured, the intent was that the worker fulfill short-term workload conditions.
The court also held that a placement that was for an indefinite period of time is not necessarily incompatible with the possibility that the worker was furnished to address a short-term workload condition. The court denied summary judgment to both sides, and remanded the case for resolution of the question of how the injured worker's placement fit within the insured's ordinary course of business and the nature of its workflow.
Pursuant to an exception to the exclusion, "temporary workers" are not considered "leased workers." The policy defines temporary workers as workers "furnished to [the insured] . . . to meet seasonal or short-term workload conditions."
The court held that the actual length of time the worker ends up working for the insured is irrelevant to that definition; what matters is whether, at the time that the worker was originally furnished to the insured, the intent was that the worker fulfill short-term workload conditions.
The court also held that a placement that was for an indefinite period of time is not necessarily incompatible with the possibility that the worker was furnished to address a short-term workload condition. The court denied summary judgment to both sides, and remanded the case for resolution of the question of how the injured worker's placement fit within the insured's ordinary course of business and the nature of its workflow.
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