Friday, March 19, 2021

Personal Liability of Corporate Officers for Black Lung Benefits Affirmed Even as Veil of Insurer Not Pierced


Personal Liability of Corporate Officers for Black Lung Benefits
 Affirmed Even as Veil of Insurer Not Pierced

      In a March, 2021, decision from the U.S. District Court for the Eastern District of Kentucky, the court addressed the personal liability of corporate officers for black lung benefits. With respect to the mine operator, it was held that the officers of the mining company are personally liable thereon. In contrast, its insurer, which had not paid on the policy, would not be pierced to hold the officers of the insurer personally liable upon the claim. Templeton v. Apollo Fuels, Inc., No. 6:19-CV-71-REW, 2021 WL 920982 (E.D. Ky. March 10, 2021).

      Templeton had been granted an award of black lung benefits, including a lump sum for past benefits owed and attorneys’ fees. Neither Debra Lynn Coal, Inc. (“DLC”) nor Apollo Fuels, Inc. (“AFI”) satisfied the claim (AFI was the insurer), and this case arose.

      Applying the Black Lung Benefits Act (the “BLBA”), notwithstanding having purchased insurance thereon, the court noted that the obligation to make payments under the BLBA is on the operator, and the acquisition of insurance thereon does not absolve it of that ultimate responsibility. From there, the BLBA, its § 933(d)(1), “assesses personal liability on certain corporate officers if the employer required to secure benefits fails to do so.” quoting Donovan v. McKee, 669F. Supp. 138, 139 (S.D. W. Va. 1987), aff’d, 845 F.2d 70 (4th Cir. 1988). This liability extends to the president, the secretary and the treasurer of the operator. Based upon that authority, the court granted the plaintiff’s motion to hold each of the president and the secretary/treasurer of DLC liable for the benefits due and owing.

       Conversely, the court would not hold the president of AFI, the insurer, personally liable on the amounts due and owing. While § 933(d)(1) may have impose liability upon the operator’s officers, there existed no statutory equivalent with respect to an insurer. The court as well observed “A court should be reluctant to pierce the corporate veil absent a clear directive.”

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