Montana Contractor Compensation Fund v. Liberty Northwest Insurance Corporation
| Decision Date | 30 July 2003 |
| Docket Number | WCC No. 2002-0547. |
| Parties | MONTANA CONTRACTOR COMPENSATION FUND Petitioner v. LIBERTY NORTHWEST INSURANCE CORPORATION Respondent/Insurer RON RUSCO, Respondent/Claimant. |
| Court | Montana Supreme Court |
Attorney Fees: Medical Benefits. Pursuant to Lockhart v. Hampshire Ins. Co., 1999 MT 205, ¶ 25, 295 Mont. 467, 984 P.2d 744, a claimant's attorney who secures disputed medical benefits on behalf of the claimant is entitled to a lien for attorney fees with respect to such benefits. However, the medical benefits must in fact be disputed and must in fact be obtained through the attorney's efforts.
Attorney Fees: Medical Benefits. Medical benefits are not disputed for purposes of an award of attorney fees under Lockhart v. Hampshire Ins. Co., 1999 MT 205, ¶ 25, 295 Mont. 467, 984 P.2d 744, where the claimant initially failed to submit his claim to the second insurer in a Belton situation (Belton v. Carlson Transport, 202 Mont. 384, 658 P.2d 405 (1983)), and where once submitted the insurer requested additional information so it could properly evaluate his claim.
Cases Discussed: Lockhart v. Hampshire Ins. Co., 1999 MT 205, ¶ 25, 295 Mont. 467, 984 P.2d 744. Pursuant to Lockhart v. Hampshire Ins. Co., 1999 MT 205, ¶ 25, 295 Mont. 467, 984 P.2d 744, a claimant's attorney who secures disputed medical benefits on behalf of the claimant is entitled to a lien for attorney fees with respect to such benefits. However, the medical benefits must in fact be disputed and must in fact be obtained through the attorney's efforts.
Cases Discussed: Lockhart v. Hampshire Ins. Co., 1999 MT 205, ¶ 25, 295 Mont. 467, 984 P.2d 744. Medical benefits are not disputed for purposes of an award of attorney fees under Lockhart v. Hampshire Ins. Co., 1999 MT 205, ¶ 25, 295 Mont. 467, 984 P.2d 744, where the claimant initially failed to submit his claim to the second insurer in a Belton situation (Belton v. Carlson Transport, 202 Mont. 384, 658 P.2d 405 (1983)), and where once submitted the insurer requested additional information so it could properly evaluate his claim.
Injury and Accident: Subsequent Injury. In light of Abfalder v. Nationwide Mutual Fire Ins. Co., 2003 MT 180, this Court's prior holding in Liberty Northwest Ins. Corp. v. State Compensation Ins. Fund, 2001 MTWCC 56, ¶ 36, is overruled to the extent it conflicts with Afbalder and the decision in this case. Where a claimant arguably aggravates a preexisting injury in a subsequent work-related incident, and there is a dispute between insurers as to whether the subsequent injury is permanent or merely temporary, or whether it or the prior injury is the cause of the claimant's current condition and disability, or whether the claimant had reached maximum medical improvement, the insurer for the subsequent injury is liable for benefits "until it proves, or until another insurance company agrees, that it [the other company] should pay the benefits." Belton v. Carlson Transport, 202 Mont. 384, 658 P.2d 405, 409-10 (1983).
Cases discussed: Abfalder v. Nationwide Mutual Fire Ins. Co., 2003 MT 180. In light of Abfalder v. Nationwide Mutual Fire Ins. Co., 2003 MT 180, this Court's prior holding in Liberty Northwest Ins. Corp. v. State Compensation Ins. Fund, 2001 MTWCC 56, ¶ 36, is overruled to the extent it conflicts with Afbalder and the decision in this case. Where a claimant arguably aggravates a preexisting injury in a subsequent work-related incident, and there is a dispute between insurers as to whether the subsequent injury is permanent
or merely temporary, or whether it or the prior injury is the cause of the claimant's current condition and disability, or whether the claimant had reached maximum medical improvement, the insurer for the subsequent injury is liable for benefits "until it proves, or until another insurance company agrees, that it [the other company] should pay the benefits." Belton v. Carlson Transport, 202 Mont. 384, 658 P.2d 405, 409-10 (1983).
Cases Discussed: Liberty Northwest Ins. Corp. v. State Compensation Ins. Fund, 2001 MTWCC 56. In light of Abfalder v. Nationwide Mutual Fire Ins. Co., 2003 MT 180, this Court's prior holding in Liberty Northwest Ins. Corp. v. State Compensation Ins. Fund, 2001 MTWCC 56, ¶ 36, is overruled to the extent it conflicts with Afbalder and the decision in this case. Where a claimant arguably aggravates a preexisting injury in a subsequent work-related incident, and there is a dispute between insurers as to whether the subsequent injury is permanent or merely temporary, or whether it or the prior injury is the cause of the claimant's current condition and disability, or whether the claimant had reached maximum medical improvement, the insurer for the subsequent injury is liable for benefits "until it proves, or until another insurance company agrees, that it [the other company] should pay the benefits." Belton v. Carlson Transport, 202 Mont. 384, 658 P.2d 405, 409-10 (1983).
Cases discussed: Belton v. Carlson Transport, 202 Mont. 384, 658 P.2d 405 (1983). In light of Abfalder v. Nationwide Mutual Fire Ins. Co., 2003 MT 180, this Court's prior holding in Liberty Northwest Ins. Corp. v. State Compensation Ins. Fund, 2001 MTWCC 56, ¶ 36, is overruled to the extent it conflicts with Afbalder and the decision in this case. Where a claimant arguably aggravates a preexisting injury in a subsequent work-related incident, and there is a dispute between insurers as to whether the subsequent injury is permanent or merely temporary, or whether it or the prior injury is the cause of the claimant's current condition and disability, or whether the claimant had reached maximum medical improvement, the insurer for the subsequent injury is liable for benefits "until it proves, or until another insurance company agrees, that it [the other company] should pay the benefits." Belton v. Carlson Transport, 202 Mont. 384, 658 P.2d 405, 409-10 (1983).
Montana Contractor Compensation Fund (MCCF) brought this action for indemnification from Liberty Northwest Insurance Corporation (Liberty), the insurer for a prior injury. MCCF alleged that a subsequent injury, for which it was at risk, was an immaterial and temporary aggravation of claimant's original industrial back injury which was covered by Liberty. It urged that claimant's current condition and disability are attributable to the prior injury. This Court previously found for MCCF. Claimant's attorneys are now seeking Lockhart attorney fees with respect to medical benefits paid by MCCF for claimant's surgery.
Claimant's attorneys are entitled to Lockhart attorney fees only if the medical benefits were paid as a result of their efforts. In this Belton type case, the evidence shows that once a claim was brought to the attention of the second insurer, the natural course of investigation resulted in the payment. The contribution of the claimant's attorneys was to set in motion events that eventually led to the lodging of a claim with the second insurer. That contribution does not entitle them to Lockhart fees.
As to which insurer is initially responsible for benefits in a Belton situation, Abfalder v. Nationwide Mutual Fire Ins. Co., 2003 MT 180, indicates that the insurer at risk for a subsequent injury or aggravation is liable until "it proves, or until another insurance company agrees, that it [the other company] should pay benefits." (Quoting from Belton v. Carlson Transport, 202 Mont. 384, 658 P.2d 405, 409-10 (1983).) Claimant's assertion that he had not reached MMI, or that he suffered an aggravation which was only temporary or immaterial, does not change that responsibility. Liberty Northwest Ins. Corp. v. State Compensation Ins. Fund, 2001 MTWCC 56, is overruled insofar as it conflicts with this holding.
¶1 On February 19, 2003, this Court entered Summary Judgment finding Liberty liable for the claimant's occupational disease and directing Liberty to reimburse MCCF for benefits paid to the claimant. The judgment was final insofar as the issues decided. These issues were (1) which of the two insurers is liable for the claimant's back surgery and current back condition and (2) whether MCCF can recover attorney fees from Liberty.
¶2 Following entry of summary judgment, Liberty and claimant settled claimant's request for past temporary total disability (TTD) benefits, attorney fees, and a penalty. Two unrelated issues remain. The first is whether claimant's attorneys are entitled to Lockhart fees with respect to claimant's surgery and related medical expenses. In the event that question is answered in the affirmative, the Court must then determine whether MCCF or Liberty should absorb the Lockhart fees. This second question arises because MCCF paid medical providers the full amount of their allowable fees without deduction for the claimed lien.
¶3 The question concerning the Lockhart lien is complicated and difficult. What occurred in this case should not have occurred.
¶4 As set out in the Summary Judgment decision, claimant suffered an industrial injury of his back on
December 8, 1998, while working for D'Agostino Concrete. Liberty was the insurer at risk at that time and accepted liability for the injury. Claimant continued working but continued to have back pain, including a flareup on April 12, 2000. At the time of the April flare-up, his employer had changed ownership and was then owned by JTL Group, Incorporated (JTL). Its insurer was MCCF.
¶5 Claimant reported his April 12, 2000 flareup to JTL the same day. According to a February 15, 2001 letter from JTL, claimant reported that "he was experiencing back pain after hitting a bump while going over a bridge." (Aff. of Charles F. Angel, Ex. 8.) JTL sent claimant to the Emergency Room at Bozeman Deaconess Hospital, where he encountered Dr. Steven R. Speth, who had been treating c...
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