Wednesday, August 15, 2018

Published:09/30/2014

Kershaw was a snow-plow driver working for the City of Kansas City who was injured when a co-employee drove another snow plow into his. Kershaw filed a claim for worker’s compensation against the City, which was settled. Subsequent to settling the worker’s compensation claim, Kershaw sued the co-employee in a civil action. After the trial court awarded Kershaw damages against the co-employee, the issue became whether the City was liable for the damages of its employee under § 2-1685 of the Code of Ordinances for the City. Section 2-1685 establishes a legal expense fund and states that the City shall pay losses for claims made by third parties against any employees of the City.

The City argued that it was not liable under the Ordinance because:

The exclusivity provision of the worker’s compensation statutes prevents the City from any further liability to Kershaw based on his work injuries because the exclusivity provision is an immunity which specifically prevents the Ordinance from applying.

Kershaw is not a third party as contemplated by the Ordinance

The release signed by Kershaw in the worker’s compensation action bars Kershaw from pursuing further damages due to his work injury.

The Court disagreed with the City on all its arguments. The Court found that the exclusivity provision does not prevent the City from any voluntary agreements to indemnify that the City has made. Because the Court found § 2-1685 is a voluntary agreement to indemnify, the City was not protected from indemnifying its employee due to the exclusivity provision.

The Court also determined that the release executed by Kershaw and the City for the worker’s compensation agreement did not contain any general language that released the City from any and all claims stemming from the work accident. The release only addressed the claims specific to the worker’s compensation proceedings. It could have included any claims relating to third parties, but it did not. Therefore, the Court found that the City was liable to pay the damages owed to Kershaw by the co-employee.

Although this case is not a worker’s compensation case, it does indicate that employers can be exposed to liability beyond worker’s compensation liability when the employer has agreed to indemnify its employees. The case also seems to state, however, that an employer can limit its liability for further liability if any release signed in conjunction with the settlement of a worker’s compensation claim is general enough to release all claims made against any person.