Melbert v. Compsource Oklahoma

Citations: 149 So. 3d 841; 14 La.App. 3 Cir. 356; 2014 La. App. LEXIS 2359; 2014 WL 4851860Docket: No. 14-356

Court: Louisiana Court of Appeal; October 1, 2014; Louisiana; State Appellate Court

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Kevin Melbert appealed the Office of Workers’ Compensation (OWC) judgment that dismissed his claims against CompSource Oklahoma, the employer’s insurer, due to lack of coverage for injuries sustained in Louisiana under the Oklahoma policy. The OWC found no error in this dismissal, affirming that no workers’ compensation coverage existed for Melbert’s case. 

Melbert, a Louisiana resident, suffered arm and shoulder injuries while working for TNT Construction in Carlyss, Louisiana, on May 30, 2012. He received initial medical treatment but was denied coverage for subsequent referrals by CompSource, which had insured TNT. After Melbert's attorney withdrew from the case due to service issues with TNT, CompSource's motion for summary judgment was denied. At the January 2014 trial, the OWC ruled that Melbert proved a compensable work injury and awarded him penalties against TNT, which did not participate in the proceedings. However, the OWC dismissed Melbert's claims against CompSource based on the lack of applicable coverage for Louisiana injuries.

The appellate court reviewed the factual findings under the manifest error standard, determining the reasonableness of the OWC's conclusions, while legal questions regarding policy ambiguity were assessed for correctness. Melbert's argument against the dismissal lacked legal support; it emphasized that an insurance policy must be enforced as written if clear, allowing insurers to limit liability and impose conditions, provided they do not conflict with statutory provisions or public policy. Ambiguities in the policy are construed against the insurer.

Exclusions in insurance policies must be explicitly stated, as outlined in La. Maint. Servs. Inc. v. Certain Underwriters at Lloyd’s of London and La. Civ. Code art. 2057. The insured is responsible for demonstrating that coverage exists, while the insurer must prove that an exclusion applies. CompSource, a regional workers' compensation carrier primarily serving Oklahoma employers, claims that its policy does not cover TNT for Mr. Melbert’s injury because he was not hired in Oklahoma nor primarily working there at the time of the incident. The policy specifies that coverage for out-of-state work applies only if certain conditions are met. Specifically, the policy includes stipulations regarding states listed in the Information Page and requires notification for work in unlisted states. The record indicates that neither Louisiana nor any other state was listed, and no notification of work outside Oklahoma was provided. Furthermore, the "Other States Insurance Endorsement" states that benefits will only be paid if specific criteria are met, which were not satisfied in Mr. Melbert's case. This endorsement emphasizes the need for compliance with the laws of other states if work is performed outside those listed in the policy.

Mr. Melbert was hired by TNT while living in Oakdale, Louisiana, and worked at a job site in Carlyss, Louisiana, where he was injured. According to the policy, Louisiana was not included for coverage, preventing Mr. Melbert from satisfying the necessary conditions for coverage. Although he claimed coverage based on his supervisor listing an Oklahoma address on a medical form, Mr. Melbert had never been to that address and worked solely in Louisiana. The OWC judge attempted to clarify Mr. Melbert's situation and advised him to seek legal representation to execute the favorable judgment issued against TNT. Despite sympathy for Mr. Melbert's circumstances, the court upheld the OWC's ruling that CompSource Oklahoma's policy did not cover him, as he was hired, worked, and was injured in Louisiana. Consequently, the dismissal of CompSource Oklahoma was affirmed, and the costs of the appeal were assigned to Mr. Melbert. Mr. Melbert's assertion regarding his hiring while in TNT's vehicle was not considered, as it was not presented at the OWC.