An insurance company accused of conspiring with a transport company to misclassify workers as independent contractors denies liability, arguing that it issued individual policies and paid accident benefits to drivers based on their own representations.
Zurich American Insurance Co. answered the complaint on June 1 through attorney Beth Ann Berger Zerman of Lewis Brisbois Bisgaard & Smith LLP in Chicago, denying liability.
In its affirmative defenses, Zurich argues that plaintiff Michael Daley is equitably estopped from asserting his claims against the defendant.
“Plaintiff represented to Zurich that he was an independent contractor of Jones Motor and intended or reasonably expected that Zurich would rely on such representation in issuing the Occupational Accident Policy Certificate to plaintiff,” the answer states. “Zurich detrimentally relied upon plaintiff’s representation in issuing the Occupational Accident Policy Certificate to plaintiff and paying occupational accident benefits to plaintiff.”
The defendant also argues that Daley’s claims are barred due to the doctrine of unclean hands.
Jones Motor Company also answered the complaint on June 1 through attorney Rebecca Dircks of Benesch Friedlander Coplan & Aronoff LLP in Chicago.
According to its affirmative defenses, Jones Motor Company argues that Daley and other putative class members waived their rights to assert their claims through a settlement of their workers’ compensation claims “or by other means.”
The defendant also argues that Daley fails to state a claim, is barred from asserting his claims under the doctrine of unclean hands, collaterally estopped from pursuing this action based on an unspecified ruling from a prior court, and failed to file the action within the proper statute of limitations.
Daley replied to both defendants’ affirmative defenses separately on June 7 through attorney Charles Armbruster of Armbruster Dripps Winterscheidt & Blotevogel LLC in Maryville. He denies each and every allegation.
Daley filed the complaint individually and on behalf of all others similarly situated on Nov. 20, 2019, against Zurich and Jones Motor Company.
According to the complaint, Daley is a former driver for Jones Motor Company and claims he and other drivers were misclassified as independent contractors rather than employees.
Daley claims an estimated 52 drivers employed between 2011 and 2017 were uniformly and consistently under the direction and control of Jones Motor Company and worked exclusively for the defendant. They were allegedly all required to receive instructions via company dispatchers and their activities were monitored and supervised by the defendant.
However, they claim that because they were not classified as employees, they were required to buy their own insurance and could not receive workers’ compensation benefits. They claim $38 was deducted each week from their paychecks to pay for insurance policies provided by Zurich Insurance.
The plaintiffs allege the defendants engaged in conspiracy as Zurich is accused of quickly settling any claim “effectively buying the injured workers’ silence and avoiding governmental scrutiny of Jones Motor’s practice.”
The suit alleges the defendants wanted to avoid any contact between the drivers and the Illinois Workers Compensation Commission to avoid the agency ruling that they were employees. The alleged conspiracy also allowed Jones Motor Company to avoid paying workers’ compensation premiums while benefiting from the “limited exposure granted to employers,” the suit states.
Daley filed a nearly identical complaint in the U.S. District for the Southern District of Illinois on Jan. 19, 2017. The complaint was dismissed on March 30, 2018, for failure to state a claim.
Jones Motor Company previously sought to dismiss the complaint, arguing that no court has jurisdiction until the Workers’ Compensation Commission determines if Daley was misclassified as an independent contractor. After Daley appealed, the Seventh Circuit Appellate Court affirmed the dismissal, but held that the district court lacked jurisdiction under the Class Action Fairness Act.
The defendant also argued that Daley waited too long to file his claims for civil conspiracy and violation of the Illinois Consumer Fraud and Deceptive Practices Act.
Madison County Circuit Judge Sarah Smith rejected the arguments, determining that the statute of limitations had not yet run at the time the claims were filed and the Workers’ Compensation Commission did not have sole jurisdiction.
“The Commission would not have any legal authority to resolve the claims made by plaintiff in this matter. While defendant is correct that the Commission has exclusive jurisdiction to determine the rights of injured employees, the complaint is void of any allegation of a workplace injury, and instead rests its claims upon common law and statutory claims,” Smith wrote.
Madison County Circuit Court case number 19-L-1663