Man May Sue Insurance Handler For Delay
An injured carpenter can sue a company handling worker compensation claims for the state for tying his case up for years and delaying his payments, the state Supreme Court ruled Thursday.The decision reverses a ruling by the 4th District Court of Appeals, which found in 2006 the Worker’s Compensation Act barred Christopher Aslakson from filing a claim alleging bad faith in the compensation process. The Supreme Court ruled the act doesn’t apply in such a situation.
Aslakson’s attorney, Daniel Arndt, called the decision great news for Wisconsin workers whose employers don’t carry compensation insurance and have to turn to the state for benefits.
“This will have widespread implications across the state in that those workers will have to be treated with respect,” Arndt said.
According to the Supreme Court decision, Aslakson of Red Wing, Minn., was hurt in a fall while he was working on a pole barn for Ken Donais Construction in 1998.
The company didn’t have worker’s compensation insurance, so Aslakson filed a claim with the state’s Uninsured Employers Fund in January 2000. The fund provides compensation to workers who suffer injuries for which their employers are liable.
The state Department of Workforce Development had hired Gallagher Bassett Services to handle claims on the fund.
Gallagher Bassett first denied Aslakson’s claims, then ordered him to undergo an independent medical exam. The tests showed he was disabled and entitled to compensation benefits.
Despite Aslakson’s repeated requests, Gallagher Bassett hadn’t paid him anything as of September 2001, more than a year after he underwent the exam.
That November, an administrative law judge ordered Aslakson receive $100,000. Gallagher Bassett gave him $4,000, refused to pay more and launched a legal challenge.
The Labor Industry and Review Commission and a Dane County judge upheld the award. Gallagher Bassett finally paid the balance after an appeals court affirmed the award in September 2003.
Aslakson filed a lawsuit in circuit court, alleging Gallagher Bassett had no basis to deny his claims or make its legal challenges. Gallagher Bassett moved to dismiss the lawsuit, contending the Worker’s Compensation Act governed the lawsuit and those statutes don’t allow bad faith claims.
The case eventually ended up with the state Supreme Court, which said the Worker’s Compensation Act didn’t apply in a bad faith claim separate from the initial injury and reinstated the lawsuit.
Gallagher Bassett’s attorney, David Piehler, said he disagreed with the court’s interpretation. He plans to fight the case in circuit court, perhaps by arguing the state’s sovereign immunity — a concept in which government is protected from lawsuits unless it agrees to be sued — extends to the company because it was a state agent.
“We believe the claim was handled in good faith,” he said.