EMPLOYERS MUTUAL CASUALTY CO. v. D.S. WILSON ENTERPR

W.B. HAND, Senior Judge

It is ORDERED, ADJUDGED and DECREED that plaintiffs' motion for summary judgment (Doc. 14) be and is hereby GRANTED and that JUDGMENT be and is hereby entered in favor of the plaintiffs, American Liberty Insurance Company and Employers Mutual Casualty Company, and against the defendants, D.S. Wilson Enterprises, Inc. d/b/a Selma Printing; Selma Printing Services; Gordan Wilson and Jenny Banks, declaring that the plaintiffs have no duty to defend or indemnify any of the defendants in connection with the state court action styled Carolyn P. Pittman v. D.S. Wilson Enterprises, Inc. d/b/a Selma Printing, et al., CV 99-467A, and now pending in the Circuit Court of Dallas County, Alabama. Costs are taxed against the defendants.

FINDINGS OF FACT; CONCLUSIONS OF LAW AND ORDER

This action is before the Court on plaintiffs' motion for summary judgment (Doc. 14). Pursuant to the Court's Order of July 6, 2000 (Doc. 16), defendants were required to file any opposition to plaintiffs' motion within thirty (30) days. The defendants have neither filed an opposition nor sought an extension of time within which to do so. The defendants have thereby consented to the motion and the entry of a judgment in plaintiffs' favor.

FINDINGS OF FACT

Upon consideration of the unopposed motion for summary judgment and all pertinent portions of the record, the Court finds as undisputed fact:

1. American Liberty Insurance Company ("American Liberty") and Employers Mutual Casualty Company (EMCC) filed this declaratory judgment action based on insurance coverage issues created by a state court lawsuit asserted against D.S. Wilson Enterprises, Inc. d/b/a Selma Printing; Selma Printing Services; Gordan Wilson (individually and as President of D.S. Wilson Enterprises, Inc.); and Jenny Banks (individually and as Vice-President of D.S. Wilson Enterprises, Inc.). The subject state court action, styled Carolyn P. Pittman v. D.S. Wilson Enterprises, Inc. d/b/a Selma Printing, et al., CV 99-467A, was filed in the Circuit Court of Dallas County, Alabama.

The state court complaint also names Vaughan Regional Medical Center, Inc. as a defendant but the claims against that entity are not at issue in this declaratory judgment action.

2. EMCC issued a Workers Compensation and Employers Liability Insurance Policy (#0H4-39-09) and American Liberty issued a Business Owners Insurance Policy (#0W4-39-09) to D.S. Wilson Enterprises, Inc. d/b/a Selma Printing Services ("Selma Printing"). These policies are the insurance agreements through which Selma Printing, Mr. Wilson and Ms. Banks are seeking defense and indemnity coverage for the underlying state court action.

3. In the subject state court action, the complaint alleges that on November 21, 1997, Carolyn Pittman, who was an employee of Selma Printing, injured her right hand while on-the-job. Ms. Pittman received medical treatment from Vaughan Regional Medical Center ("Vaughan") that same day during which Vaughan took a urine sample from Ms. Pittman to be used for a drug test. Ms. Pittman asserts that in January, 1998, she advised Selma Printing that she could return to work in a limited fashion. However, on January 16, 1998, Selma Printing, in a letter from Mr. Wilson and Ms. Banks, allegedly informed Ms. Pittman that she was terminated because she tested positive for illegal drugs in a November 21, 1997 drug test.

4. According to her state court complaint, Ms. Pittman requested reinstatement at Selma Printing but the request was denied. Based on these allegations, the state court complaint asserts the following causes of action against Selma Printing, Mr. Wilson and Ms. banks: (1) retaliatory discharge; (2) negligence/wantonness with regard to whether the drug test was administered and reviewed in accordance with Ala. Code § 25-5-51 (1975); (3) outrage; and (4) slander.

5. The Workers Compensation and Employers Liability Insurance Policy ("Workers Compensation Policy") issued by EMCC has two separate coverage parts: Part One which provides workers' compensation coverage and Part Two which provides employers liability coverage. Under the general provisions applicable to both coverages, the insured is defined as the "employer in Item 1 on the Information Page." The only insured listed at that location is D.S. Wilson Enterprises, Inc. d/b/a Selma printing Service. Coverage in Part One of the Workers Compensation Policy "applies to bodily injury by accident or bodily injury by disease." Under this policy, EMCC agrees to "pay promptly when due the benefits required by [the insured] by the workers compensation law" and to defend suits seeking such benefits. Furthermore, under section F of Part One coverage, the insured is responsible for payments in excess of benefits, including payments because "you discharge, coerce or otherwise discriminate against any employee in violation of the workers compensation laws." Part Two of the Policy contains a similar exclusion: "This insurance does not cover . . . damages arising out of coercion, criticism, demotion, evaluation, reassignment, discipline, defamation, harassment, humiliation, discrimination against or termination of any employee, or any personnel practices, policies, acts, or omissions."

6. The Business Owners Insurance Policy ("Business Owners Policy") issued by American Liberty contains the following endorsement which incorporates an employment-related practices exclusion:

This insurance does not apply to:

1. "Bodily injury" or "personal injury" to:

a. A person arising out of any:

(1) Refusal to employ that person;

(2) Termination of that person's employment; or

(3) Employment-related practices, policies, acts or omissions, such as coercion, demotion, evaluation, reassignment, discipline, defamation, harassment, humiliation or discrimination directed at that person.

This exclusion applies whether the particular insured seeking coverage "may be liable as an employer or in any other capacity." For there to be coverage under the Business Owners Policy, any alleged injury must be caused by an "occurrence" which is defined as "an accident, including continuous or repeated exposure to substantially the same general harmful conditions." Further, this policy excludes coverage for injury "expected or intended from the standpoint of the insured."

CONCLUSIONS OF LAW

With respect to the Workers Compensation Policy, neither Ms. Banks or Mr. Wilson is considered an insured under the policy. In her state court action, Ms. Pittman's cites Ala. Code § 25-5-11.1 (1975) as the basis for her retaliatory discharge claim. Under that section of the Alabama Workers' Compensation Act, an employer is prohibited from terminating an employee "solely because the employee has instituted or maintained any action against the employer to recover workers' compensation benefits." The Court agrees, however, that Ms. Pittman does not seek such benefits in her state court action and therefore does not seek damages covered under Part One of the Workers Compensation Policy at issue in this case. The Court further concludes not only that Ms. Pittman's retaliatory discharge claim is clearly excluded from coverage under this Policy but that each of her other claims (i.e., negligence/wantonness, outrage and slander) is likewise excluded by the express language of the Policy.

In view of the above-quoted exclusion contained in the Business Owners Policy issued by American Liberty and for all the reasons stated in plaintiffs' brief(Doc. 15) submitted in support of the motion for summary judgment, each of Ms. Pittman's claims is expressly excluded from coverage under this policy. There exists no basis for claiming a right to recovery or indemnification or a right to a defense under either the Business Owners Policy or the Workers Compensation Policy at issue in this case.

CONCLUSION and ORDER

For the reasons stated above, the court concludes that plaintiffs' motion for summary judgment is due to be granted. It is therefore ORDERED, ADJUDGED and DECREED that plaintiffs' motion for summary judgment (Doc. 14) be and is hereby GRANTED and that JUDGMENT be entered in favor of the plaintiffs, American Liberty Insurance Company and Employers Mutual Casualty Company, and against the defendants, D.S. Wilson Enterprises, Inc. d/b/a Selma Printing; Selma Printing Services; Gordan Wilson and Jenny Banks, declaring that the plaintiffs have no duty to defend or indemnify any of the defendants in connection with the state court action styled Carolyn P. Pittman v. D.S. Wilson Enterprises, Inc. d/b/a Selma Printing, et al., CV 99-467A, and now pending in the Circuit Court of Dallas County, Alabama. Costs are taxed against the defendants.