Worker Must Be Furnished by Third Party To Qualify as "Temporary Worker"
under CGL Policy
January 2008
In Gavan v. Bituminous
Cas. Corp. (Mo. 2008), the Missouri Supreme Court was asked to decide
whether an employee, hired to meet current workload demands, qualified as a
"temporary worker" excepted from the co-employee exclusion of a commercial general
liability (CGL) and umbrella policy. The court held that the plaintiff, who
sustained injuries in the course of his employment by the insured, was not a
"temporary worker," but was an "employee" within the meaning of the exclusion,
and that the claim was therefore barred from coverage.
by Kevin
Merriman
Ward Norris Heller
& Reidy LLP
Gavan was periodically employed by the insured as a bricklayer as workload
demanded. He sustained injuries while employed at a construction site when a
ladder on which he was working collapsed. Gavan sought and received workers
compensation benefits and also brought suit against two co-employees who had
worked with him at the site. He later entered into a settlement agreement and
judgment with his co-employees and pursued this action for coverage under his
employer's liability policies.
Distinguishing Employees from Leased, Temporary, and Furnished Workers
The insurers denied coverage for the claims, relying on an exclusion for
employees who cause bodily injury "to a 'co-employee' while that 'co-employee'
is either in the course of his or her employment or performing duties related
to the conduct of [the] business...."
The policies defined "employee" to include a "leased worker," but not a "temporary
worker." A leased worker was defined as "a person leased to [the policyholder]
by a labor leasing firm ... to perform duties related to the conduct of [the]
business," but the policies specified that a "'[l]eased worker' does not include
'temporary worker.'" "Temporary worker" was defined as "a person who is furnished
to [the policyholder] to substitute for a permanent 'employee' on leave or to
meet seasonal or short-term workload conditions."
At issue was whether plaintiff was a "co-employee" within the meaning of
the exclusion or a "temporary worker" for whom coverage was afforded by the
policy. Since Gavan was employed to satisfy short-term workload conditions,
coverage turned on whether he was "furnished to" the insured within the meaning
of "temporary worker."
Gavan argued he was furnished to his employer by the bricklayers' union.
On the record, however, the court found that he was hired because he had asked
the project manager for a job and that the union was not involved. The court
also concluded that union membership alone was insufficient to meet the "furnished
to" requirement, since membership only made a person eligible for employment
on a union job.
The court also rejected Gavan's argument that he "furnished himself" to work,
or that the term was otherwise ambiguous. Though the policies did not define
the term "furnished," the court observed that a majority of jurisdictions have
held that a worker is not "furnished" unless a third party has been involved
in providing or supplying the worker to the insured. To hold otherwise, the
court reasoned, would render the clause meaningless.
The Precedent
In this regard, the court expressly overruled a contrary holding in
American Family Mut. Ins. v. As One, Inc., 189
S.W.3d 194 (Mo. App. 2006), in which an appellate court had concluded "[t]here
is simply no requirement in the word 'furnish,' or in the policy, that indicates
a third entity must furnish the specific worker." The court found this interpretation
of the clause consistent with the statutory scheme of the workers compensation
laws and the purpose of the co-employee exclusion, which is "to prevent [plaintiff's
employer] from being liable to [plaintiff] for the same incident, having already
provided workers compensation benefits to him."
The Dissent
In a dissenting opinion, Judge Teitelman concluded the term "furnished to"
was ambiguous. The dissent reasoned the term was not defined by the policy,
and its ordinary meaning did not imply referral by a third party. Instead, the
dissent would find the term ambiguous, as evidenced by the different results
obtained in other Missouri courts. In the dissent's view:
The majority's unnecessarily restrictive interpretation of and focus on
the term "furnished to" results in covering some workers but not others
based upon how they procured the temporary job rather than on the temporary
nature of their employment.
This focus, the dissent concluded, was not consistent with an ordinary understanding
of the term "temporary worker."
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not necessarily held by the author’s employer or IRMI. This article does not purport
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