COURT OF APPEALS OF VIRGINIA
Present: Judges Benton, Annunziata and Senior Judge Duff
Argued at Richmond, Virginia
UNINSURED EMPLOYER'S FUND
OPINION BY
v. Record No. 2116-96-3 JUDGE JAMES W. BENTON, JR.
APRIL 22, 1997
HAROLD C. MOUNTS,
GREASY CREEK COAL COMPANY AND
VIRGINIA PROPERTY AND CASUALTY
INSURANCE GUARANTY ASSOCIATION
FROM THE VIRGINIA WORKERS' COMPENSATION COMMISSION
John J. Beall, Jr., Senior Assistant Attorney
General (James S. Gilmore, III, Attorney
General; Richard L. Walton, Jr., Senior
Assistant Attorney General; James W. Osborne,
Assistant Attorney General, on briefs), for
appellant.
Vincent J. Carroll for appellee Harold C.
Mounts.
Dabney J. Carr, IV (Mays & Valentine, L.L.P.,
on brief), for appellee Virginia Property and
Casualty Insurance Guaranty Association.
No brief or argument for appellee Greasy
Creek Coal Company.
The Uninsured Employer's Fund appeals from a ruling of the
Workers' Compensation Commission requiring the employer, Greasy
Creek Coal Company, and the Fund to provide Harold C. Mounts
disability benefits based on first stage pneumoconiosis. The
Fund contends that because Greasy Creek was insured as required
by Code § 65.2-801 when Mounts was last injuriously exposed to
coal dust, the commission erred in ruling that the Fund was
liable for Mounts' disability. The Fund also contends that even
if it is liable, Mounts is barred from making this claim because
he received a diagnosis of pneumoconiosis in 1984, nine years
before he filed his claim. For the reasons that follow, we
affirm the award.
I.
This matter initially was heard by a deputy commissioner
without the inclusion of the Fund as a party. At the conclusion
of those proceedings, the commission issued an opinion holding
the Fund liable for paying Mounts' benefits. When the Fund
learned of the award, it filed a motion for reconsideration
because it had not been made a party to the proceedings. The
commission vacated its award and remanded the case for a new
hearing with all of the parties properly joined.
The evidence before the deputy commissioner at the second
hearing proved that Mounts sought employment in 1984 with James
Estep, a contractor who supplied workers for United Coal
Corporation. United required Estep's employees to have a
pre-employment physical examination. Mounts testified that after
he was examined at a hospital, he asked the man who interpreted
the x-rays, "what did my x-rays show . . . ?" Mounts testified
that the man answered, "nothing." Mounts further testified that
he did not know whether the man was a doctor.
The examination form that was prepared at the hospital and
dated July 30, 1984 states that the x-ray indicated "possible
pneumoconiosis." Mounts took the forms to the United personnel
- 2 -
office after the examination. While he was at the personnel
office, Mounts signed employment documents, including a form that
states above his signature, "the undersigned hereby waives the
right to claim compensation benefits covering . . . occupational
pneumoconiosis." Mounts testified that he signed the forms
because he was told that he had to do so to be employed and that
he was unaware that he was signing a waiver. Mounts also
testified that he only completed five years of schooling and is
unable to read. Mounts was employed by Estep and worked in
United's coal mines.
Lois Gillespie, a United employee, testified that although
she witnessed Mounts' signature on the waiver card, she did not
remember Mounts. Gillespie testified that the purpose of the
waiver was to bar "black lung" claims against Estep. She also
testified that her "personal policy" was to tell potential
employees, such as Mounts, "that they had a positive diagnosis
for black lung, that [the form] was a waiver[, and] that if they
signed they could not file for . . . black lung against the
company they were going to work for." Gillespie testified that
if a potential employee would not sign the form, Estep would not
hire that person. Gillespie also testified that her records did
not indicate that the waiver had been approved by the commission.
After Mounts' employment in United's mines ended, he was
employed by Greasy Creek Coal Company. Mounts suffered a
work-related injury to his back on October 12, 1988 while working
- 3 -
for Greasy Creek and stopped working because of that disability.
Greasy Creek was Mounts' last employer.
On August 16, 1991, a court in Pennsylvania declared
insolvent Greasy Creek's workers' compensation insurance carrier,
Rockwood Insurance, and appointed a liquidator. The liquidator
gave notice that all creditors and other interested persons were
to assert their claims before August 26, 1992.
Alleging that on September 15, 1993 he received a diagnosis
of pneumoconiosis, Mounts filed with the commission on September
24, 1993 a claim for benefits against Greasy Creek for an
occupational disease. Mounts notified Virginia Property and
Casualty Insurance Guaranty Association, the statutory
association established to provide protection when insurance
companies are insolvent, see Code § 38.2-1600, that he was filing
for benefits for pneumoconiosis. The Association informed Greasy
Creek that it was "unable to offer a defense on [Greasy Creek's]
behalf" because Mounts' claim for benefits was not filed within
the one-year deadline for filing claims with the liquidator
against Rockwood, the insolvent insurance carrier. See Code
§ 38.2-1606(A)(1)(ii).
Based on this evidence, the deputy commissioner found that
even though Mounts testified that he could not read the waiver
form and was not informed that the waiver said he had
pneumoconiosis, Mounts' signature on the 1984 waiver established
that he received a communication of the diagnosis of
- 4 -
pneumoconiosis. Thus, the deputy commissioner ruled that Mounts'
claim was barred by the statute of limitations. Mounts requested
a review. The Association also filed a request for review to
protect its defense that it could not be held liable.
On review, the commission found that the waiver form had not
been filed with the commission as required by Code § 65.2-407 and
that Mounts had not been told that he had an occupational disease
when he signed the form. The commission also found that Mounts
received his first communication that he had pneumoconiosis in
1993 and that the evidence proved that Mounts had the disease.
Thus, the commission reversed the deputy commissioner's ruling,
granted Mounts benefits, and ruled that the Fund was required to
pay the benefits.
II.
The Fund disputes the commission's finding that the Fund is
liable for Mounts' claim. It argues that because Greasy Creek
was insured on the date of Mounts' last exposure to the hazardous
substance, Greasy Creek met the requirements of Code § 65.2-801.
Therefore, the Fund argues, it cannot be held liable under Code
§ 65.2-1203(A).
Code § 65.2-1203(A) provides as follows:
Whenever, following due investigation of a
claim for compensation benefits, the
Commission determines that (i) the employer
of record has failed to comply with the
provisions of § 65.2-801 . . . , and (ii) the
claim is compensable, the Commission shall
. . . order payment of any award of
compensation benefits pursuant to this
chapter from the Uninsured Employer's Fund.
- 5 -
Id. Code § 65.2-801 provides, in relevant part, as follows:
A. Every employer subject to this title
shall secure his liability thereunder by one
of the following methods:
1. Insuring and keeping insured his
liability in an insurer authorized to
transact the business of workers'
compensation insurance in this
Commonwealth . . . .
Id. (emphasis added).
To read Code § 65.2-801 to require only that employers have
insurance on the date of the employee's last exposure, and not on
the date when the diagnosis of the disease was communicated to
the employee, would exempt employers from insuring themselves
against a great number of occupational disease claims. Moreover,
Code § 65.2-801, by its use of the phrase "keeping insured,"
requires employers to remain insured. Therefore, we hold that
because Greasy Creek was not insured on the date the diagnosis
was communicated to Mounts, Greasy Creek failed to "keep[]
[itself] insured" as required by Code § 65.2-801.
The Fund also contends that because the employer was insured
on the date of the last exposure, Code § 65.2-404 exempts the
Fund from liability. The Fund argues that only the insurance
carrier that insured the employer's liability when the last
injurious exposure occurred can be held liable. We disagree.
Code § 65.2-404 states that "the employer in whose employment
[the employee] was last injuriously exposed to the hazards of the
disease and the employer's insurance carrier, if any, at the time
- 6 -
of the exposure, shall alone be liable . . . , without right to
contribution from any prior employer or insurance carrier." By
its terms, Code § 65.2-404 addresses only the liability of the
employer in whose employment the employee was last injuriously
exposed, and its insurance carrier, in contradistinction to prior
employers and their insurance carriers. Code § 65.2-404
identifies the employer that is to be held liable and excludes
prior employers from liability. See Cooper v. Mary E. Coal
Corp., 215 Va. 806, 214 S.E.2d 162 (1975). Nothing in Code
§ 65.2-404 was intended to release employers from the duty of
"keeping [themselves] insured" as required by Code § 65.2-801 or
to exempt the Fund when the employer has breached its statutory
obligation.
Accordingly, we hold that the commission properly ruled that
the Fund was responsible for payment of benefits to Mounts. "The
purpose of the Fund is to insure that injured employees will be
paid their compensation benefits even though their employer has
breached his duty [under Code § 65.2-801]." A.G. Van Metre, Jr.,
Inc. v. Gandy, 7 Va. App. 207, 213, 372 S.E.2d 198, 202 (1988).
The Fund further argues that under the circumstances of this
case, the statutes vest in the Virginia Property and Casualty
Insurance Guaranty Association the obligation to pay the
benefits. We disagree. The General Assembly created the
Association to "provide prompt payment of covered claims to
reduce financial loss to [any person instituting a liability
- 7 -
claim] or policyholders resulting from the insolvency of an
insurer." Code § 38.2-1600; see also Code § 38.2-1602. The
Association's duties and powers are explicitly defined by
statute. See Code § 38.2-1606.
The statutory scheme requires the Association to pay "[t]he
full amount of a covered claim for benefits under a workers'
compensation insurance coverage." Code § 38.2-1606(A)(1)(i).
However, that statutory duty is limited by the proviso that
"[n]otwithstanding any other provision of this chapter, a covered
claim shall not include any claim filed with the . . .
Association after the final date set by the court for the filing
of claims against the liquidator or receiver of an insolvent
insurer." Code § 38.2-1606(A)(1)(ii). The legislation that
created the Association, "considered as a whole, clearly
indicates that the General Assembly did not intend . . . the
Association . . . [to be] merely a solvent substitute for an
insolvent insurance company." Virginia Property and Cas. Ins.
Guar. Ass'n v. International Ins. Co., 238 Va. 702, 703, 385
S.E.2d 614, 616 (1989).
When the Pennsylvania court declared Rockwood to be
insolvent, the court-appointed liquidator set August 26, 1992 as
the last date for filing claims. The evidence proved that
Mounts' claim for benefits was not filed until 1993. Clearly,
the Association was barred by statute from considering Mounts'
claim to be "a covered claim," Code § 38.2-1606(A)(1)(ii), and
- 8 -
was not authorized to pay benefits. Accordingly, we hold that
the commission properly ruled that the Fund, not the Association,
was liable for payment of Mounts' claim.
III.
The Fund next argues that Mounts received a communication of
his diagnosis in 1984 and that, therefore, his claim is barred by
the statute of limitations because it was not filed until 1993.
We disagree.
Whether a diagnosis of an occupational disease was
communicated and when the communication occurred are factual
determinations to be made by the commission upon the evidence.
See Roller v. Basic Constr. Co., 238 Va. 321, 329, 384 S.E.2d
323, 326 (1989). Upon appellate review, the findings of fact
made by the commission will be upheld when supported by credible
evidence. See James v. Capitol Steel Constr. Co., 8 Va. App.
512, 515, 382 S.E.2d 487, 488 (1989).
Viewed in the light most favorable to Mounts, who prevailed
before the commission, see Fairfax County v. Espinola, 11 Va.
App. 126, 129, 396 S.E.2d 856, 858 (1990), the evidence proved
that the pre-employment physical examination form that Mounts
received after his examination in the hospital indicated only
"possible pneumoconiosis." An opinion that an employee "may have
pneumoconiosis," Blue Diamond Coal Co. v. Pannell, 203 Va. 49,
51, 122 S.E.2d 666, 668 (1961), is not a positive diagnosis of an
occupational disease because it "would indicate that claimant
- 9 -
might or might not have had pneumoconiosis." Id. at 52, 122
S.E.2d at 669. Such a diagnosis is "not sufficiently definite to
apprise [an employee] that he had contracted the disease." Id.
Consequently, we hold that this "tentative diagnosis will not
trigger the running of the limitation period." Via v. Citicorp
Mortgage, Inc., 10 Va. App. 572, 576, 394 S.E.2d 505, 507 (1990).
Even if the medical forms had been more definite, credible
evidence supports the commission's ruling that Mounts did not
receive a communication of pneumoconiosis in 1984. When Mounts
was examined at the hospital prior to being employed by Estep, he
received an x-ray and inquired about it. Mounts testified that
when he asked the man who interpreted his x-ray what the x-ray
showed, the man said it showed "nothing." As the trier of fact,
the commission determined the weight of this evidence and the
credibility of the witness. See Goodyear Tire & Rubber Co. v.
Pierce, 5 Va. App. 374, 381, 363 S.E.2d 433, 437 (1987). Because
the commission accepted Mounts' testimony, credible evidence
supports its finding. See id.
The evidence also proved that Mounts cannot read. Although
Mounts signed a form indicating that he "waiv[ed his] right to
claim compensation benefits . . . [for] pneumoconiosis," Mounts
was told that he had to sign the employment forms to obtain work.
Gillespie, the personnel employee who witnessed Mounts'
signature, testified that she had no memory of Mounts because she
witnessed forms for thousands of prospective employees. The
- 10 -
commission was not required to believe that, because she said her
personal policy was to explain the forms, she did so in this
instance. The commission accepted Mounts' testimony that she did
not explain the forms to him. See id.
Citing Jewell Ridge Coal Corp. v. Vance, 203 Va. 557, 125
S.E.2d 879 (1962), the Fund contends that, as a matter of law,
Mounts' illiteracy "has no impact on the effectiveness of the
communication of the knowledge imparted by the written report."
We disagree with the Fund's interpretation of Vance. Although
Vance "could neither read nor write," id. at 558, 125 S.E.2d at
880, a witness testified that he heard a personnel office
employee explain the physician's report to Vance, tell Vance that
his chest examination was below the required physical standards,
and inform Vance that Vance "'would have to waive his right to
claim compensation for silicosis or any aggravation of it.'" Id.
at 559, 125 S.E.2d at 880. The witness testified that Vance
deliberated for more than thirty minutes and then signed the
waiver. See id. On this evidence, the Court held that "the
Commission found as a fact that [Vance] executed the waiver under
the circumstances related by [the witness], and . . . this
finding is binding on [appeal]." Id. at 559, 125 S.E.2d at 881
(emphasis added).
Although Mounts, like Vance, could not read, unlike in
Vance, the commission found from the evidence in this case that
the forms were not orally explained to Mounts. Nothing in Vance
- 11 -
holds that an employee who is unable to read shall be presumed to
know the contents of a document merely because the employee
signed the document. The commission found that Mounts was not
told that he had an occupational disease when he signed the
documents. Obviously, when the commission accepted Mounts'
version of the events it accepted as true that neither the person
who interpreted Mounts' x-rays nor Gillespie informed Mounts of a
diagnosis of pneumoconiosis. Where "'reasonable inference[s may]
. . . be drawn from [the] evidence to support the Commission's
[factual] findings, they will not be disturbed by this Court on
appeal.'" Board of Supervisors v. Taylor, 1 Va. App. 425, 431,
339 S.E.2d 565, 568 (1986) (citation omitted). Thus, credible
evidence supports the commission's findings that Mounts was
unable to read the information on the waiver form and that he was
not informed of the import of the information on the form.
Accordingly, those findings are binding on this appeal. See
James, 8 Va. App. at 515, 382 S.E.2d at 488.
Gillespie testified that her records did not reveal that the
waiver had been approved by the commission. Based upon that
evidence, the commission properly found that the waiver form was
not filed with the commission or approved by the commission as
required by Code § 65.2-407. Accordingly, the waiver has no
affect on Mounts' claim for benefits.
Credible evidence in the record proved that Mounts received
a definite communication of pneumoconiosis on September 15, 1993.
- 12 -
Accordingly, Mounts' September 24, 1993 application was not
barred by the statute of limitations. Furthermore, credible
evidence supports the commission's finding that Mounts sustained
first stage coal workers' pneumoconiosis. Accordingly, we affirm
the award.
Affirmed.
- 13 -