Hayes v. Aetna Fire Underwriters, 14853

• Decision Date: 18 March 1980
• Docket Number: No. 14853,14853
• Citation: 187 Mont. 148,609 P.2d 257
• Parties: , 8 A.L.R.4th 892 Francis HAYES, Plaintiff and Appellant, v. AETNA FIRE UNDERWRITERS, a corp., and George Wood d/b/a Compensation Adjusters, Inc., Defendants and Respondents.
• Court: Montana Supreme Court

Page 257

609 P.2d 257

187 Mont. 148, 8 A.L.R.4th 892

Francis HAYES, Plaintiff and Appellant, v. AETNA FIRE UNDERWRITERS, a corp., and George Wood d/b/a

Compensation Adjusters, Inc., Defendants and

Respondents.

No. 14853.

Supreme Court of Montana.

Submitted Jan. 15, 1980.

Decided March 18, 1980.

Hoyt, Trieweiler, Lewis & Regnier, Great Falls, John Hoyt argued, Great Falls, for plaintiff and appellant.

Garlington, Lohn & Robinson, Missoula, Larry E. Riley argued, Missoula, Church Harris, Johnson & Williams, Great Falls, Cresap S. McCracken argued, Great Falls, for defendants and respondents.

DALY, Justice.

This is an appeal from a judgment of dismissal of plaintiff's action from the District Court of the Fourth Judicial District, in and for the County of Missoula.

Plaintiff was injured within the course and scope of his employment with JMS Construction in an industrial accident that occurred on October 23, 1975. Defendant Aetna was the Plan II carrier for JMS Construction. Aetna employed defendant Wood to handle the adjusting of workers' compensation claims on its behalf. Both defendants accepted plaintiff's workers' compensation claim as compensable under the Workers' Compensation Act.

In January 1977, plaintiff filed a complaint against Aetna and Wood in the District Court of the Fifteenth Judicial District, in and for the County of Roosevelt, alleging tortious acts on the part of Aetna and Wood with respect to the adjusting and handling of his workers' compensation claim. Aetna and Wood appeared and moved to dismiss. The Roosevelt County District Court granted the motion to dismiss on May 12, 1977, determining that plaintiff first had to establish his right to compensation before the Workers' Compensation Court, which possessed exclusive jurisdiction.

Following the Roosevelt County District Court's dismissal, plaintiff pursued his claim for workers' compensation benefits before the Workers' Compensation Court, wherein he prevailed. Aetna then appealed the Workers' Compensation decision to the Montana Supreme Court. This Court affirmed the decision of the Workers' Compensation Court. Hayes v. J.M.S. Const. (1978) Mont., 579 P.2d 1225, 35 St.Rep. 722.

Thereafter, plaintiff filed an amended complaint in Roosevelt County District Court in July 1978, alleging that Aetna and Wood had committed the intentional torts of fraud, conversion and intentional infliction of emotional distress. Plaintiff also alleged that Aetna and Wood had continuously refused to pay compensation benefits and medical bills. Both Aetna and Wood moved to dismiss in August 1978. On September 12, 1978, the Roosevelt County District Court denied the motions of Aetna and Wood to dismiss and ordered responsive pleadings.

The case was then transferred to Missoula County by stipulation of counsel, together with a memorandum opinion issued by the Honorable M. James Sorte, Judge of the District Court, Fifteenth Judicial District, Roosevelt County. The pertinent part reads:

"By reason of a stipulation filed by counsel, this case is transferred to the jurisdiction of Missoula County, Montana. However, there has been filed in the case, Plaintiff's Reply to the Objections by Aetna Fire Underwriters to Plaintiff's Motion to Dismiss. The tenor of the reply is that counsel for Plaintiff entered into a stipulation that the matter could be transferred to Missoula County but counsel for Defendants have raised certain questions that have already been ruled upon by this Court. It is the opinion of this Court that the matters that have been briefed, considered by the Court, and ruled upon, are the rule and law of the case in this matter and that the District Court of the Fourth Judicial District is and should be bound by the rulings of this Court on all matters that have been previously brought before the Court, ruled upon, and are now final for those reasons. To allow counsel to again raise the same questions as have been ruled upon by this Court would do nothing less than encourage counsel to shop around for a different venue so that their position could be ruled upon on several occasions. All of this is contrary to the clear intent of our rules of procedure."

In disregard of Judge Sorte's Opinion, Wood and Aetna refiled in the Missoula County District Court on February 28, 1979 and March 13, 1979, respectively, motions which had been previously ruled upon in Roosevelt County. Such refiling constitutes a contempt. Sections 3-1-502 and 503, MCA. On June 1, 1979, the Missoula County District Court filed an order dismissing plaintiff's complaint upon the grounds that the District Court lacked jurisdiction because exclusive jurisdiction rested with the Workers' Compensation Court under section 92-204.1, R.C.M.1947, and the complaint failed to state a claim against the defendant upon which relief could be granted.

Plaintiff now appeals from the judgment of the Missoula County District Court granting the defendants' motions to dismiss.

The appellant in this case states the issue for review by this Court as follows: whether a worker who sustains an injury covered by the Workers' Compensation Act may assert in District Court a separate claim for damages alleging that the insurer and its adjustor committed intentional torts and acted in bad faith in adjusting and processing the workers' compensation claim. Stated in another manner, is a complaint alleging that a workers' compensation insurer and its adjustor committed the intentional torts of fraud, conversion, and intentional infliction of emotional distress upon a workers' compensation claimant within the exclusive subject matter jurisdiction of the Workers' Compensation Court?

Respondent George Wood agrees with the issue as stated by appellant. Respondent Aetna would like to confine the issue to the question: can the injured workman have his cake and eat it too?

We will accept the issues as formulated by appellant.

The dismissal by the Missoula District Court dated May 31, 1979, is with prejudice for lack of jurisdiction and exclusive jurisdiction in the Workers' Compensation Court under section 92-204.1, R.C.M.1947, and because the complaint fails to state a claim against the defendant upon which relief can be granted.

It is a little difficult to agree or disagree with the Missoula District Court because the presiding judge rendered no opinion. We do not know if the court meant that under the exclusivity provision of section 92-204.1, R.C.M.1947, (now section 39-71-411, MCA) the Workers' Compensation Court has jurisdiction to try willful torts not arising out of the actual employment or that the pleading was such that it did not state a claim in any court. In any case, the dismissal appears to be in direct conflict with the law of the case as established by the District Court of the Fifteenth Judicial District, the court of original jurisdiction.

We will not attempt to evaluate the merits of the dismissed case by the manner in which it was pleaded, but rather try to evaluate it from the standpoint of the type of action at bar and its genesis.

At the center of the dispute is the exclusivity provision of the Montana Workers' Compensation Act, which is set forth in section 39-71-411, MCA. That statute states:

"For all employments covered under the Workers' Compensation Act or for which an election has been made for coverage under this chapter, the provisions of this chapter are exclusive. Except as provided in part 5 of this chapter for uninsured employers and except as otherwise provided in the Workers' Compensation Act, an employer is not subject to any liability whatever for the death of or personal injury to an employee covered by the Workers' Compensation Act or for any claims for contribution or indemnity asserted by a third person from whom damages are sought on account of such injuries or death. The Workers' Compensation Act binds the employee himself, and in case of death binds his personal representative and all persons having any right or claim to compensation for his injury or death, as well as the employer and the servants and employees of such employer and those conducting his business during liquidation, bankruptcy, or insolvency." (Emphasis added.)

Professor Larson in his treatise on Workmen's Compensation Law has categorized exclusivity statutes in state workers' compensation schemes into three general types. Larson, Workmen's Compensation Law § 66.00, at 12-20, 21. Montana's statute is a blend of two categories. It is intended to be a broad surrender of liability. It partakes of the California and Michigan type statutes, which state that an employer shall have "no other liability whatsoever," and the New York type statute, which carries the surrender of liability one step farther by specifying that the excluded action includes those by "such employee, his personal representative, husband, parents, dependents or next of kin, or anyone otherwise entitled to recover damages, at common law or otherwise on account of such injury or death." The last category is the Massachusetts type, which is the narrowest and states that the employee, by coming within the act, only waives his common law rights.

In three recent cases, this Court has been concerned with the exclusivity of Montana's Workers' Compensation Act. Each time the Court has resolved any doubt about the exclusivity of remedies in favor of the provisions of the Act. See Jacques v. Nelson (1979) Mont., 591 P.2d 186, 36 St.Rep. 287; Carlson v. Anaconda Co. (1974), 165 Mont. 413, 529 P.2d 356. Cordier v. Stetson-Ross, Inc. (1979) Mont., 604 P.2d 86, 36 St.Rep. 2107.

Respondents urge that Carlson is on all fours with the present cases. Carlson may be distinguished from the case at bar, however, on the basis that the facts and circumstances in Carlson give the case a much different character. Whereas the present case involves intentional torts or the presence of bad faith, Carlson involved a case of negligence or...