Moreau v. Transp. Ins. Co.

• Decision Date: 26 August 2015
• Docket Number: WCC No. 2013-3216R1
• Citation: Moreau v. Transp. Ins. Co., 2015 MTWCC 17, WCC No. 2013-3216R1 (Mont. Work. Comp. Aug 26, 2015)
• Parties: CRISTITA MOREAU, individually and as Personal Representative of the Estate of Edwin Moreau Petitioner v. TRANSPORTATION INSURANCE CO. Respondent/Insurer.
• Court: Montana Workers Compensation Court

2015 MTWCC 17

CRISTITA MOREAU, individuallyand as Personal Representative of the Estate of Edwin MoreauPetitioner v. TRANSPORTATION INSURANCE CO.Respondent/Insurer.

WCC No. 2013-3216R1

WORKERS' COMPENSATION COURT OF THE STATE OF MONTANA

Submitted: June 23, 2015

August 26, 2015

ORDER DENYING MOTION TO BE JOINED OR INTERVENE

Summary: The decedent's employer moved to be joined under M.R.Civ.P. 19 and 20, or to intervene under M.R.Civ.P. 24, arguing that it had an interest in the litigation because it already paid the decedent's medical bills via an entity it had funded and because it has agreed to indemnify Respondent/Insurer for any occupational disease benefits Respondent/Insurer pays.It argues it would be forced to pay the decedent's medical benefits twice if Petitioner prevails.Petitioner argues that the employer cannot be liable for occupational disease benefits and that this Court has no jurisdiction to resolve a contract dispute between the employer and Respondent/Insurer if a dispute arises over the indemnity agreement.

Held: The employer's motion to be joined or to intervene is denied.Respondent/Insurer is the only entity that can be liable for occupational disease benefits.While the decedent's medical bills were paid by an entity that the employer funded and while the employer has agreed to indemnify Respondent/Insurer, neither the amounts the employer paid to fund the entity, the payments the entity made, nor the amounts that the employer might be required to pay under its indemnity agreement are "medical benefits" under § 39-71-704, MCA.The employer's interests are secondary and arise from a separate agreement with the Respondent/Insurer, which is outside of this Court's jurisdiction.The employer's interests are aligned with Respondent/Insurer's, which has and continues to vigorously defend this case.

¶ 1 W. R. Grace & Co.-Conn. ("W.R. Grace") moves to be joined or to intervene in this case.¹PetitionerCristita Moreau, individually and as Personal Representative of the Estate of Edwin Moreau(Moreau), opposes W.R. Grace's motion.²RespondentTransportation Ins. Co.(Transportation) has not taken a position.

Background

¶ 2Edwin Moreau(Edwin) contracted an asbestos-related occupational disease arising out of his employment with W.R. Grace, which resulted in his death.³Transportation, which insured W.R. Grace under PlanNo. 2 of the Workers' Compensation Act(WCA), accepted liability and paid benefits.⁴However, Transportation refused to pay $95,846 in medical benefits because the Libby Medical Plan (LMP) had already paid these medical bills and was not seeking reimbursement.⁵W.R. Grace created and funded the LMP to assist Libby residents in paying for medical costs resulting from asbestos exposure from vermiculite mining in Lincoln County.⁶

¶ 3 Moreau brought this case, contending that Transportation must pay the $95,846 because it is a primary payor with an absolute duty to pay benefits.⁷On December 6, 2013, Moreau and Transportation submitted their dispute to this Court via cross summary judgment motions on stipulated facts, which included a statement from one of W.R. Grace's attorneys and testimony from one of its executives.⁸This Court ruled that Moreau did not have standing and that this Court did not have jurisdiction.⁹The Montana SupremeCourt reversed and remanded, concluding that Moreau had standing and that this Court had jurisdiction to decide this case on its merits.¹⁰

¶ 4 W.R. Grace now moves to be joined under M.R.Civ.P. 19 or 20, or to intervene under M.R.Civ.P. 24.¹¹ W.R. Grace maintains that it has an interest in this case because it has contractually agreed to indemnify Transportation for benefits paid.¹²Although W.R. Grace has not put its contract with Transportation into evidence, it has filed an affidavit of its Vice President and Associate General Counsel which states, in relevant part:

3. W. R. Grace was insured for workers' compensation and occupational disease claims in the state of Montana by a Workers' Compensation and Employers Liability Insurance Policy issued by Transportation Insurance Company("Transportation"), effective June 30, 1991.The insurance was provided through a retrospective plan which requires W. R. Grace to reimburse Transportation for any benefits paid out to or on behalf of claimants effectively up to $1 million per claimant.

4.The occupational disease claim of Mr. Moreau is covered by the terms and conditions of the noted Transportation workers' compensation insurance policy and retrospective plan.

5.In 2000, W.R. Grace initiated the Libby Medical Plan ("LMP") to assist the residents of Libby, Montana, in paying for medical costs resulting from asbestos exposure associated with vermiculite mining operations in Lincoln County, Montana.

6.From 2002 to 2010, the LMP paid $95,846.00 of Mr. Moreau's medical expenses.

7.If Transportation is required to pay to the Petitioner or any other person or entity the $95,846.00 previously paid on Mr. Moreau's behalf for care and treatment of his occupational disease, W. R. Grace will be required to reimburse that amount to Transportation.¹³

Analysis and Decision

¶ 5This case is governed by the 1991 version of the Montana Occupational Disease Act (ODA) since that was the law in effect on Edwin's last day of work for his time-of-injury employer.¹⁴

¶ 6 Under ARM 24.5.308(1), this Court looks to M.R.Civ.P. 14, 19, 20, and 21, where appropriate, for the joinder of parties.Under ARM 24.5.309(1), this Court looks to M.R.Civ.P. 24 for intervention.

¶ 7 W.R. Grace argues for joinder under M.R.Civ.P. 19 and 20, or intervention under M.R.Civ.P. 24, contending that its agreement to indemnify Transportation gives it an interest in this case.¹⁵W.R. Grace argues in its Opening Brief that if Moreau prevails, it will be required to pay Edwin's medical bills twice since the LMP, which W.R. Grace funded, already paid those bills.¹⁶Throughout its Reply Brief, W.R. Grace takes its argument one step further; it contends that by funding the LMP, it already paid medical benefits and, therefore, if Moreau prevails it will be "required to pay benefits not once but twice."¹⁷W.R. Grace argues that the questions of law and fact in this matter are common to both Transportation and W.R. Grace because, if this Court orders Transportation to pay $95,846 to Moreau or another designee, Transportation will simply bill this amount to W.R. Grace.¹⁸W.R. Grace maintains that it has standing and that this Court has jurisdiction over it.¹⁹

¶ 8 Moreau argues that W.R. Grace does not have a direct interest in this case because W.R. Grace is an employer, not an "insurer," and cannot be liable for occupational disease benefits.²⁰Moreau argues that Transportation is the insurer and, asa matter of law, is therefore primarily and directly liable for benefits.²¹Moreau also argues that W.R. Grace does not have standing to assert any claims in this case.²²

Issue One: Whether the Court must join W.R. Grace under M.R.Civ.P. 19 or should join W.R. Grace under M.R.Civ.P. 20.

¶ 9 M.R.Civ.P. 19 provides, in pertinent part:

(a) Persons Required to be Joined if Feasible.

(1)Required Party.A person who is subject to service of process must be joined as a party if:

(A) in that person's absence, the court cannot accord complete relief among existing parties; or

(B) that person claims an interest relating to the subject of the action and is so situated that disposing of the action in the person's absence may:

(i) as a practical matter impair or impede the person's ability to protect the interest; or

(ii) leave an existing party subject to a substantial risk of incurring double, multiple, or otherwise inconsistent obligations because of the interest.

¶ 10 M.R.Civ.P. 20 governs permissive joinder.It provides, in pertinent part:

(a) Persons Who May Join or Be Joined.

. . . .

(2)Defendants.Persons may be joined in one action as defendants if:

(A) any right to relief is asserted against them jointly, severally, or in the alternative with respect to or arising out of the same transaction, occurrence, or series of transactions or occurrences; and

(B) any questions of law or fact common to all defendants will arise in the action.

¶ 11 The Montana Supreme Court has explained the purpose of these rules as follows:

Rule 19 is concerned with necessary and indispensable parties;Rule 20 with proper parties.The absence of an indispensable party precludesthe court from proceeding with the case since the rights of such party[may] be adversely affected by [the] judgment.A necessary party is one who should be present if [the] final determination of the case is to be obtained, but who is not available.The case may proceed if the same will not prejudice the rights of such party.A proper party falls within the scope of Rule 20.Such a person is one who should be joined if litigation is to be kept to a minimum and the rights of all persons concerned can be determined in one action.²³

¶ 12The Court has concluded that W.R. Grace is neither a necessary and indispensible party under M.R.Civ.P. 19, nor a proper party under M.R.Civ.P. 20, to this case for two reasons.

¶ 13 First, W.R. Grace does not have an interest in this case, as contemplated under M.R.Civ.P. 19 and 20, because it is not an "insurer" and therefore, cannot be liable for benefits.Section 39-71-116(9), MCA, defines "insurer" as "an employer bound by compensation plan No. 1, an insurance company transacting business under compensation plan No. 2, the state fund under compensation plan No. 3, or the uninsured employers' fund provided for in part 5 of this chapter."Having chosen to obtain insurance from Transportation under PlanNo. 2, W.R. Grace does not meet this definition.

¶ 14The statutes governing PlanNo. 2 insurers provide that the insurer is "directly and primarily" liable to pay the workers' compensation and occupational disease benefits.Section 39-71-2203(2), MCA, states in pertinent part:

No such policy shall be issued unless

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