Evidence of Compensation Insurance Sufficient to “Secure” Compensation Under Longshore Act

Evidence of Compensation Insurance Sufficient to “Secure” Compensation Under Longshore Act

By: Emily Hall

Edited by: Tiffany Morales

Birkenbach v. National Gypsum Co., 2014 WL 2931795; 2014 U.S. Dist. LEXIS 88483 (E.D. Mich., N. Div. June 30, 2014)Paul Birkenbach brought negligence claims against his employer, National Gypsum Company (NGC), and American Steamship Company (ASC), after crushing his hands lifting the heavy eye of a mooring cable off of one of their dock pilings. He made claims under the Longshore and Harbor Workers’ Compensation Act (LHWCA), maritime common law, and Michigan state law.The plaintiff initially asserted that the defendants were negligent in violation of maritime common law. The employer maintained that the sole remedy was under the Longshore and Harbor Workers’ Compensation Act, 33 U.S.C. Sec. 901 et seq. However, the Act is the sole remedy only if the employer “secures compensation.”Birkenbach argued that even though NGC carried insurance with American Insurance Company, this was not sufficient to show that payment is actually secured. The court found the requirement to “secure payment” is satisfied when an employer “has the potential” to compensate when the timing is appropriate. NGC only has to be able to access payment, not actually disburse it. The Motion to Dismiss this claim was granted.Finally, the court denied Birkenbach’s other claim that theAct is the exclusive remedy unless the employer committed an intentional tort. Birkenbach argued that NGC’s “willful and wanton” conduct rose to the level of an intentional tort under Michigan law because NGC did not provide training and/or allowed an employee to engage in a task for which he was not properly trained.The court determined that even an employer’s willful and wanton conduct, “short of a deliberate intent to injure,” is covered by the exclusivity provision. Under Michigan tort law, it must be shown that an employer did something more than simply fail to protect an employee in order to recover.   The court stated that while NGC may have been careless, that does not mean it acted with intent. The court stated Birkenbach did not present adequate factual support to establish that an injury was certain to happen and he was otherwise not entitled to the LHWCA exclusivity exception. His state law claim was dismissed, and his only recovery is through the LHWCA.