MARK MICELI, et al., Applicant,
v.
JACUZZI, INC., REMEDY TEMP, INC., AMERICAN HOME ASSURANCE CO., RELIANCE NATIONAL INDEMNITY CO. (In Liquidation), CALIFORNIA INSURANCE GUARANTEE ASSOCIATION, Defendants.
No. POM 248928
California Workers Compensation Decisions
Workers Compensation Appeals Board State of California
March 28, 2003
OPINION AND DECISION AFTER RECONSIDERATION (EN
BANC)
MERLE
C. RABINE, Chairman
INTRODUCTION
Jacuzzi,
Inc. (Jacuzzi) contracted with Remedy Temp, Inc. (Remedy
Temp), a temporary staffing agency, to supply temporary
employees to Jacuzzi. Temporary employee Mark Miceli was on
Remedy Temp's payroll and working at a Jacuzzi jobsite
when he sustained an industrial injury. Per stipulation,
Remedy Temp was Miceli's general employer and Jacuzzi was
his special employer. The legal nature of this relationship
is discussed later in this opinion.
At the
time of injury, Jacuzzi had a workers' compensation
policy with American Home Assurance Company (AHA). Remedy
Temp had a workers' compensation policy covering
temporary employees with the now-insolvent carrier Reliance
National Indemnity Company (Reliance), whose "covered
claims" are adjusted by the California Insurance
Guarantee Association (CIGA) per Insurance Code section 1063
et seq. The Reliance policy contained an alternate
employer endorsement, which included Jacuzzi as an alternate
employer.
[1]
Miceli
filed a workers' compensation claim against Remedy Temp.
After Reliance's insolvency, CIGA entered the case and
asserted that Miceli's claim was not a "covered
claim" because Jacuzzi's policy with AHA constituted
"other insurance" within the meaning of Insurance
Code section 1063.1(c)(9). The workers' compensation
administrative law judge (WCJ) agreed, and issued a decision
dismissing CIGA as a party defendant and imposing liability
on AHA.
Thereafter,
the Workers' Compensation Appeals Board (Appeals Board)
granted reconsideration to further study the matter. Because
of the important legal issue presented, and in order to
secure uniformity of decision in the future, the Chairman of
the Appeals Board, upon a majority vote of its members,
reassigned this case to the Appeals Board as a whole for an
en banc decision. (Labor Code, §115.)
[2] We conclude that where
the workers' compensation carrier for the general
employer has become insolvent, and where there are no
specific exclusions from the workers' compensation policy
of the special employer, the policy provided by the insurer
of the special employer constitutes "other
insurance…available to the claimant or insured"
within the meaning of Insurance Code section 1063.1(c)(9).
Because there is "other insurance," workers'
compensation claims filed by temporary employees of the
special employer are not "covered claims" for which
CIGA has liability. Therefore, in this case, the WCJ properly
imposed liability on American Home Assurance and dismissed
CIGA as a party defendant, and accordingly we will affirm his
decision.
BACKGROUND
This
case is the representative case for some 540 consolidated
cases involving the general employer, Remedy Temp, and
various special employers to whom Remedy Temp supplied
temporary employees.
[3] The essential facts were stipulated
at the hearing of September 20, 2002.
The
applicant, Mark Miceli, sustained industrial injury to his
left minor ring finger on March 1, 2000, while employed as a
shipper/receiver by Remedy Temp as the general employer and
Jacuzzi as the special employer. Pursuant to Remedy
Temp's contract with Jacuzzi to provide employees to help
meet Jacuzzi's temporary staffing needs, Miceli was on
Remedy Temp's payroll, not on Jacuzzi's payroll. At
the time of injury, the workers' compensation insurance
carrier for Remedy Temp was Reliance, which went into
liquidation on October 3, 2001. As noted above,
Reliance's "covered claims" are now adjusted by
CIGA.
Jacuzzi
was included as an "alternate employer" in the
"alternate employer endorsement" contained within
the policy between Remedy Temp and Reliance. The endorsement
stated, in relevant part, that it applied to bodily injury to
Remedy Temp's "employees while in the course of
special or temporary employment by the alternate
employer…as though the alternate employer is
insured." Jacuzzi also had a workers' compensation
policy provided by AHA, to cover employees on Jacuzzi's
payroll.
The WCJ
framed the issue as follows:
"…[W]here applicant, Mark Miceli was injured
while employed by general employer, Remedy Temp, Inc., then
insured by [Reliance], and was also employed by special
employer, Jacuzzi, Inc., who was insured by [Reliance] under
the alternate employer endorsement, as well as by [AHA],
which party defendant, or defendants, is, or are, liable for
payment of the applicant's workers' compensation
benefits where [Reliance] has become insolvent. Is [CIGA], in
place of [Reliance] liable, or is [AHA] liable?"
In
addition, the WCJ was to determine the applicability of
Insurance Code sections 1063.1(c)(9) and 11663, as well as
Labor Code section 3602(d).
In the
Findings and Order of October 31, 2002, the WCJ dismissed
CIGA as a party defendant, without prejudice, based on the
following findings:
"1. Insurance Code §11663 does not disturb the
joint and several liability of Remedy Temp as the general
employer and Jacuzzi, Inc., as the special employer. This
code section applies only as between insurance carriers.
Here, there is only one insurance carrier. Therefore,
Insurance Code §11663 is inapplicable."
"2. The service agreement pursuant to Labor Code
§3602(d) as between Remedy Temp and Jacuzzi, Inc. does
not extinguish their joint and several liability as to the
injured employee. [CIGA] is not a party to the service
agreement."
"3. The alternate employer endorsement between Reliance
and Jacuzzi, Inc. does not extinguish the joint and several
liability of Jacuzzi, Inc. to the injured employee. CIGA is
not a party to the agreement."
"4. Jacuzzi, Inc. and Remedy Temp have joint and several
liability for the compensation benefits to the injured
employee. At the time of injury, Jacuzzi had dual insurance
coverage with Reliance and with [AHA]. Where Reliance has
become bankrupt, liability for this claim falls to
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