The Tennessee Court of Appeals ruled last week that a New Mexico trucking company classified its Tennessee workers as Texans in order to skirt worker’s compensation payouts — and that it has to pay its insurance company.
American Zurich Insurance Co. had sued Mesilla Valley Transportation in 2008 for $328,341 in premiums after its officials discovered a discrepancy in an audit. According to the insurer’s lawsuit, MVT was classifying 143 Tennessee resident over-the-road drivers — who transport goods across the country — as Texas employees.
The lawsuit claimed MVT was trying to group the employees under Texas workers’ compensation laws, which are cheaper than Tennessee’s. (The drivers had in fact signed forms acknowledging that they would be covered by Texas regulations.) The result was that the company potentially owed premiums to Zurich — premiums MVT refused to pay.
The Davidson County Chancery Court ruled in favor of summary judgment to Zurich, which had argued that it faced a risk for which it wasn’t being paid. Last week, the Court of Appeals affirmed Chancery’s opinion.
“Given the undisputed facts of this case, Zurich Insurance was at risk of being required to defend MVT against a claim filed by one of MVT’s Tennessee-resident over-the-road drivers, even if only to litigate the matter of coverage,” COA Judge Holly Kirby’s opinion states.
Attorney Ben Rose and J. Matthew Blackburn of Cornelius & Collins represented Zurich in the case. Donald Capparella and Candi Henry of Dodson Parker Behm & Capparella represented MVT.