The president of the Workers' Compensation Fund of Utah will continue pushing a bill before the Legislature that would attempt to offset a Utah Supreme Court decision on workers' compensation. His action comes in spite of opposition from the board of governors of the Salt Lake Area Chamber of Commerce.
Lane Summerhays believes the chamber's State Legislative Action Committee members didn't have adequate information on how workers' compensation insurance premiums would be impacted when it voted to oppose the bill. Summerhays said he wasn't invited to attend a committee meeting when the issue was discussed.Jim Peacock, executive director of the Utah Petroleum Association and a board member, made the motion to adopt a resolution opposing the fund's bill and said all sides had a chance to speak at the committee meeting.
The board's resolution said the fund's bill would place third parties at a disproportionately high level of liability in an industrial accident and the court's Sullivan decision "could lead to a scenario where a workers' compensation accident victim might suffer financially due to the court's ruling."
David Bird, an attorney and committee chairman, said the high court ruled that a jury, under the Utah Liability Reform Act, could apportion the fault of an employer in an industrial accident even though the employer was immune from suit by the Workers' Compensation Act.
He said the chamber believes no defendant should pay more than its fair share of an award.
Summerhays told the board that Utah's workers' compensation system is a "no fault" system, which means benefits are set for injured workers, thereby preventing them from suing their employers. Calling Utah's system one of the best in the country, he said the state ranks 35th in the nation in premiums charged.
He said the court decision has undermined the system and predicted that workers' compensation premiums would increase 2-3 percent or between $6 million and $9 million annually.
Summerhays said Bird's law firm is the prime mover behind letting the Sullivan decision stand. He contends that people opposing his bill don't understand the financial ramifications of the court's decision.
What is the Sullivan decision that has prompted his battle?
In October 1986, Kenneth Ray Sullivan lost his left arm and left leg in an accident on the railroad tracks at the Freeport Center in Clearfield. He was employed by Scoular Grain Co., Freeport Center Associates and Scoular Grain Company of Utah. He filed a lawsuit in federal court against several defendants, but the case was transferred to the state court system.
Justice Christine Durham wrote the majority opinion, saying, "We hold that the purpose and intent of the Utah Liability Reform Act require that a jury account for the relative proportion of fault of a plaintiff's employer that may have caused or contributed to an accident, even though the employer is immune from suit."
Summerhays and other fund officials side with Justice I. Daniel Stewart, who wrote a dissent. He said, "I submit that the majority, in direct defiance of the specific language of the act and its legislative history, completely reverses the intended effect of the act as to how fault should be apportioned when one of the parties whose negligence contributed to the plaintiff's injuries is immune from liability."
"The damage the majority does to the legislative scheme and to a plaintiff's rights is exacerbated by the provision in the Workers' Compensation Act that gives an employer (whose fault may have contributed to a plaintiff's injuries) a lien against the plaintiff's damage recovery for benefits paid out of workers' compensation," Stewart wrote.
He continued, "Thus, not only is the plaintiff made responsible for the employer's proportionate share of fault, but he must also reimburse his employer out of his diminished recovery for any workers' compensation benefits received. This is not only unjust and inequitable but might well be unconstitutional."
Summerhays said if the impact of the Sullivan decision is allowed to stand, the fund will have to defend employers in any third-party suits. He said that already has been done, costing the fund $8,000.