Oct. 25, 2022 – A worker injured when a co-worker drove a telehandler over his foot and leg has no right to recovery outside the state worker's compensation scheme, the Wisconsin Court of Appeals has ruled.

In Rood v. Selective Insurance Company of South Carolina, 2021AP392 (Aug. 16, 2022), the Court of Appeals District III held that an endorsement to the employer’s insurance policy did not waive the exclusive remedy provision of the worker's compensation law. The court also held that a telehandler is not a motor vehicle for purposes of an exception to exclusive remedy provision.

Injured in Texas

In 2016, Charles Rood worked for several months for Stockton Stainless. Rood installed steel pipes at a factory in Texas.

One day, Rood’s supervisor, Randall Rademaker, drove a telehander over Rood’s foot and leg.

A telehandler is a work vehicle with four large, tractor-like wheels and a forklift mounted on telescopic arms. The telehandler was equipped with a cockpit, headlights, and blinkers. A slow-moving-vehicle sign was mounted on the back of the telehandler.

Stockton neither owned nor leased the telehandler; it was kept at the factory for use by all the contractors working on the project.

Lawsuit in Wisconsin

Rood collected worker's compensation benefits for the injury. Later, he filed a negligence action against the insurance carrier for Stockton Stainless and Rademaker, in St. Croix County Circuit Court.

The circuit court granted summary judgment to Stockton Stainless and ruled that the state worker's compensation scheme provided the sole remedy for Rood’s injuries.

Rood appealed.

Exclusive Remedy Can be Waived

Writing for a three-judge panel, Judge Thomas Hruz pointed out that an employee can show an intent to waive the exclusive remedy provision provided by Wis. Stat. section 102.03(2) by the express terms of an insurance policy.

Rood argued that Stockton Stainless had done just that by agreeing to the inclusion of a Fellow Employee Extension endorsement to its general commercial liability insurance policy.

That policy, Hruz noted, included provisions that: 1) required the insurance company to pay only sums it was legally obligated to pay as damages because of bodily injury or property injury covered by the policy; and 2) excluded injuries covered by the worker's compensation law.

Additionally, Hruz noted, the policy excluded from the definition of “insureds” employees harmed by co-employees.

What Effect of Change to Definition?

Rood argued that the endorsement removed the exception for injuries caused by a co-employee by changing the definition of “insured.”

Rood relied on three Wisconsin Court of Appeals cases. None were on point, Judge Hruz wrote, because “in each case, the court determined that the insurer waived the exclusive remedy provision through policy language that expressly removed an exclusion to coverage for bodily injury to co-employees.”

“In contrast,” Hruz wrote, “the Fellow Employee Extension in this case did not remove an exclusion for bodily injury to a co-employee but rather modified the definition of an ‘insured’ to include an employee, under certain circumstances, when the employee caused bodily injury to a co-employee.”

Hruz pointed out that the Wisconsin Court of Appeals considered a nearly verbatim change to the definition of “insured” in Brantner v. ABC Manufacturing Co., 217 Wis. 2d. 143, 579 N.W.2d 742 (Ct. App. 1998). The analysis in that case was dispositive, Hruz reasoned.

“Although the Fellow Employee Extension also renders the Policy’s Employer’s Liability exclusion inapplicable, that modification does not demonstrate an intent to waive the exclusive remedy provision,” Judge Hruz wrote.

“The disabling of that exclusion in the context of an employee causing bodily injury to a co-employee, however, does not conflict with, or contradict, the exclusive remedy provision.”

Instead, Judge Hruz explained, the Fellow Employee Extension should be construed as expanding the definition of “insured” to include employees injured in situations that: 1) are not covered by the worker's compensation law; and 2) might fit within an exception to the exclusive remedy provision provided by section 102.03(2).

Telehandler is not a ‘Motor Vehicle’

Rood also argued that the telehandler was a “motor vehicle” for purposes of an exception to the exclusive remedy provision in the state worker's compensation law.

Section 102.03(2) specifies that the exclusive remedy provisions does not bar a lawsuit by an employee against a co-employee for the negligent operation of a “motor vehicle” that is not owned or leased by the employer.

Chapter 102 contains no definition of “motor vehicle,” and Judge Hruz pointed out that the context of Chapter 102 provides no clues as how to a court should interpret the term.

The court must therefore look to the legislative history of Chapter 102, Hruz concluded. In a previous case, Judge Hruz noted, the Wisconsin Court of Appeals held that the legislature amended section 102.03(2) in 1977 “to prohibit most work-related injury suits between employees.”

But Rood argued that the court should interpret the term “motor vehicle” to include any vehicle capable of being driven on the highway, and he argued that a telehandler, by virtue of its large tires, headlights, and blinkers, was such a vehicle.

In support of his argument, Rood cited a Wisconsin Court of Appeals case in which the court held that a riding lawn mower was a motor vehicle for purposes of the state’s operating while intoxicated (OWI) law.

But broadly defining “motor vehicle” for purpose of the OWI law made sense, Judge Hruz reasoned, given that the main purpose of the OWI law is to keep the state’s highways safe.

“In contrast, the purposes of Wis. Stat. section 102.03(2) necessitate that the term ‘motor vehicle’ be interpreted narrowly to allocate the cost of workers’ injuries to the industry in which they occur and to protect workers from financial burdens of co-employee suits,” Hruz wrote.

Therefore, Judge Hruz concluded, because telehandlers are not designed primarily for use on public highways, they are not ‘motor vehicles’ for purposes of section 102.03(2).