An injured employee suing his employer for tort damages under the dual persona doctrine cannot sue for pain and suffering if he has accepted a settlement from the employer under the Workers Compensation Act (WCA), the Wisconsin Court of Appeals held on Feb. 4. The court determined that prevailing on such a claim would constitute a double recovery for the same injuries.
Curtis J. Keltgen is a developmentally disabled adult with autism and mild mental retardation. In August 1994, he began working at L.E. Phillips Career Development Center, Inc. (CDC), a non-profit corporation that operates a sheltered workshop pursuant to a contract with Eau Claire County under sec. 51.437.
During his employment at CDC, Keltgen was repeatedly sexually assaulted by Giles Smith, another sheltered employee, in a work restroom. Smith had a history of sexually assaultive behavior of which CDC was aware.
Ultimately, Keltgens mother discovered the abuse, and contacted CDC, which notified the police, resulting in Smiths arrest.
CDC had insurance for liability with St. Paul Fire & Marine Insurance Co., and workers compensation insurance with Venture Insurance Company and Wausau Insurance Company.
St. Paul brought a declaratory judgment action, seeking a declaration that workers compensation was Keltgens only remedy against CDC for the assaults.
Keltgen counterclaimed against CDC and St. Paul in tort, against Smith for intentional assault, and against CDC, Venture, and Wausau under the WCA. Keltgen alleged that CDC was not entitled to protection of the exclusive remedy provisions of the WCA, under the dual persona doctrine, because CDC was not only Keltgens employer, but also his developmentally disabled service provider.
He also later added a claim under sec. 51.61, the patients rights law. The action was stayed by the trial court, pending a determination by the Department of Workforce Development (DWD) whether the assaults were compensable under workers compensation.
However, the court heard a motion to dismiss on the sec. 51.61 claims, and dismissed all but Keltgens claim under sec. 51.61(1)(f), concluding sheltered employment was an "educational service" and Keltgen had properly alleged that CDC violated this right by failing to stop the assaults. The court did not address the negligence claim against CDC and St. Paul.
In March 2000, a DWD administrative law judge entered an order asserting jurisdiction and finding the assaults were compensable under workers compensation. In November of that year, the parties settled the workers compensation claim for $10,000.
CDC then filed for summary judgment, arguing it did not have a dual persona in its relationship with Keltgen and that he could not maintain his action under sec. 51.61(1)(f) because any recovery would duplicate the damages he received in the workers compensation settlement.
Reserve Judge Thomas H. Barland agreed with CDC that these damages would duplicate those already paid under the workers compensation settlement. Barland also concluded the dual persona doctrine did not apply to CDC, and accordingly, granted CDC and its insurers summary judgment.
Keltgen appealed, but the court of appeals affirmed in a decision by Judge R. Thomas Cane.
The court first concluded that Keltgen was a "patient" under sec. 51.61. Section 51.61(1) defines "patient" to include persons receiving "services for … developmental disabilities," and sec. 51.437(1) defines those "services" to include "sheltered employment."
The court further concluded that, similar to actions brought under the Wisconsin Fair Employment Act, actions pursuant to the provisions of sec. 51.61 are not prohibited by the exclusive remedy provisions of the WCA.
What the court held
Case: St. Paul Fire & Marine Ins. Co. v. Curtis J. Keltgen, et al., 02-1249
Issue: Do the exclusive remedy provisions of the WCA bar an action by a developmentally disabled sheltered employee pursuant to the patients rights law, sec. 51.61?
Can a sheltered employee who was sexually assaulted by another sheltered employee sue his
Can the employee sue the employer under sec. 51.61(1)(f) for failing to provide adequate educational services?
Can an employee who has accepted a settlement from the employers workers compensation insurer then sue the employers liability insurer for pain and suffering?
Does the employer of a sheltered employee have a dual persona that would permit an injured employee to sue the employer for tort remedies?
Holdings: No. The WCA and sec. 51.61 protect different interests.
No. It is not the employer in such a case who violated the employees privacy; and an employer of sheltered employees is not a treatment facility within the meaning of the
Yes. Sheltered employment is an educational service, and failure to provide that service adequately is compensable.
No. The workers compensation settlement includes such damages, and further recovery from the liability insurer would result in double recovery for the same injuries.
No. The roles of employer and treatment service provider are intertwined, and constitute one
Counsel: Phillip R. Todryk, Hudson, for the appellant; John P. Richie, Eau Claire, for the respondent.
The court reasoned, "The patients rights provision of Wis. Stat. ch. 51 and the WCA are designed to remedy distinct harms. Wisconsin Stat. sec. 51.61 guarantees certain rights to persons being treated for a variety of mental health disorders and provides an enforcement mechanism for these rights. The WCA, in contrast, serves to resolve tort claims between employers and employees. We conclude that in order to give effect to both of these statutes and their purposes, the exclusive remedy provision of the WCA does not bar a claim under Wis. Stat. sec. 51.61 when the injuries result from the same set of facts. Although it seems unlikely these two sections will interact with any great frequency, when they do, a recovery under the WCA does not prohibit a cause of action under ch. 51."
Turning to the specific claims under sec. 51.61, the court affirmed the dismissal of the claims brought pursuant to subsecs. (1)(s) and (1)(x), which guarantee a patients right to a reasonable protection of privacy, and the right to be treated with respect and dignity by all employees of a treatment facility, respectively.
Rejecting Keltgens claim that his right to privacy was violated, the court reasoned, "Keltgen alleges the assaults occurred in the restroom where he had gone to use the toilet and, therefore, his right to privacy in the restroom was violated. We disagree. The assaults did not occur because CDC failed to protect Keltgens privacy in the restroom; they occurred because CDC failed to protect his safety in the restroom (emphasis in original)."
The court also affirmed the dismissal of the respect and dignity claim, because it concluded that CDC was not a "treatment facility," as required for such a claim.
Section 51.01(19) defines "treatment facility" as "any publicly or privately operated facility or unit thereof providing treatment … of … developmentally disabled persons." Section 51.01(17) defines "treatment" as "those psychological, educational, social, chemical, medical or somatic techniques designed to bring about rehabilitation of a … developmentally disabled person."
Although these definitions would appear to cover CDC, the court concluded that the sheltered employment offered by CDC is not rehabilitation but habilitation the development of "eating, dressing, hygiene, minimum social skills and such other things that facilitate personal maintenance and functioning."
The court noted that, in the case of In re C.J., 120 Wis.2d 355, 360, fn.5, 354 N.W.2d 219 (Ct.App.1984), the court cited a list of activities from a Department of Health, Education, and Welfare definition of "habilitation" that specifically included "sheltered employment." Accordingly, the court concluded that, because sheltered employment is habilitation, rather than rehabilitation, therefore CDC cannot be considered a treatment center under sec. 51.61(1)(x).
However, the court agreed with the trial court that Keltgen did state a claim under sec. 51.61(1)(f), which gives patients the right to "receive prompt and adequate treatment, rehabilitation and educational services appropriate for his or her condition."
The court found that the program at CDC constituted "educational services" because it was intended to upgrade the employment skills of the participants. The court noted that the definition of "sheltered employment services" in Wis. Admin. Code HFS 61.40, reads, in part, "Sheltered employment programs shall include sheltered employment services or work activity services and may include the additional developmental disabilities services of … education."
Nevertheless, the court affirmed the grant of summary judgment to CDC on the sec. 51.61(1)(f) claim, because the court determined that it would duplicate the damages Keltgen already received in his workers compensation claim, and constitute a prohibited double recovery.
Keltgen argued that there would be no double recovery because the WCA only compensates for economic injuries, whereas he is seeking recovery for posttraumatic stress unrelated to his economic injuries.
Keltgen relied on the Supreme Courts statement that, "[n]o allowance can be made in a [workers] compensation award for physical or mental suffering, however acute, which does not interfere with earning capacity." Shymanski v. Industrial Commn, 274 Wis. 307, 314, 79 N.W.2d 640 (1956).
The court rejected the argument, however, citing the Supreme Courts statement that, "Pain and suffering as a result of a work-related injury clearly flow from that injury." Threshermens Mut. Ins. Co. v. Page, 217 Wis. 2d 451, 467, 577 N.W.2d 335 (1998).
The court interpreted Page to hold that pain and suffering was compensable through WCA recoveries, despite not being specifically enumerated by the Act, because the Page court stated, "the degree of pain sustained by an injured worker is certainly a factor in the determination of the level of disability and thus the disability payments accorded the worker." Page, 217 Wis.2d at 467-68.
Accordingly, the court held, "allowing Keltgen to recover for pain and suffering under Wis. Stat. sec. 51.61(1)(f) would result in a double recovery for the pain and suffering already compensated by his WCA settlement. While we acknowledge Keltgens argument that the WCA recovery has not made him whole, we must reject this claim because Keltgen agreed to the settlement. This recovery compensated him for the pain and suffering that arose as the result of the attacks, and any further claim would lead to a double recovery."
"Dual Persona Doctrine"
Finally, the court concluded that, even if the one viable claim that Keltgen had against CDC was not barred as duplicative, the claim would fail nevertheless, because Keltgen failed to show that CDC fit within the "dual persona doctrine."
The doctrine is an exception to the exclusive remedy provision of the WCA, under which, "An employer may become a third person, vulnerable to tort suit by an employee, if – and only if – he possesses a second persona so completely independent from and unrelated to his status as employer that by established standards the law recognizes it as a separate legal person."
Keltgen argued that CDC acted both as his employer and as his developmentally disabled service provider, and therefore possessed a dual persona. Keltgen noted that there are state statutes which: establish a statewide system of services for the developmentally disabled; allowing counties to provide the services through contracts with private entities; and exempt these entities from the wage law.
Rejecting the argument, the court concluded, "Under the dual persona doctrine, the employers second role must be so unrelated to its role as an employer that it constitutes a separate legal person. Here, CDCs roles are related. In fact, they appear so intertwined it would be difficult to tell what responsibilities each role was obligated to meet for Keltgen. His sheltered employment at CDC was the services he was receiving as a developmentally
disabled person. The two roles CDC played are so related they amount to one role. CDC did not have a dual persona in its relationship with Keltgen."
Accordingly, the court affirmed the grant of summary judgment on this claim, as well as the dismissal of the rest.
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