Estate has standing to sue employer’s insurer, but suit is barred based on workers’ compensation exclusion and election of remedies.

The decedent was killed on the job, and his Estate entered into a workers’ compensation settlement with Zenith, the employer’s workers’ compensation and employer liability insurer. The settlement contained a release by which the Estate elected the settlement as the sole remedy with respect to the insurance coverage Zenith provided. The Estate also sued the employer for negligence and obtained a multi-million dollar default judgment. Zenith refused to pay on the judgment, and the Estate sued. In answering questions certified by the Eleventh Circuit, the Supreme Court held: (1) the Estate has standing to sue Zenith, as it stands in the shoes of the decedent, an employee of the insured employer; (2) the Estate’s negligence claim against the employer is barred by the workers’ compensation statute and, therefore, Zenith has no duty to pay on the judgment; and (3) the election of remedies in the workers’ compensation settlement worked to bar the tort remedy. Note that, despite the entry of a default judgment against the employer, Zenith was still able to stand on both workers’ compensation exclusivity and the release.

Case Law Alerts, 1st Quarter, January 2015