Pinnow v. Montana State Fund

• Citation: 2007 MT 332,172 P.3d 1273
• Decision Date: 11 December 2007
• Docket Number: No. DA 06-0203.,DA 06-0203.
• Parties: Gayle PINNOW, Claimant and Appellant, v. MONTANA STATE FUND, Respondent and Appellee, and Halverson, Sheehy & Plath, P.C., Intervenor and Appellee.
• Court: United States State Supreme Court of Montana

172 P.3d 1273

2007 MT 332

Gayle PINNOW, Claimant and Appellant, v. MONTANA STATE FUND, Respondent and Appellee, and Halverson, Sheehy & Plath, P.C., Intervenor and Appellee.

No. DA 06-0203.

Supreme Court of Montana.

Submitted on Briefs November 28, 2007.

Decided December 11, 2007.

For Appellant: Roy W. Johnson, Billings, Montana.

For Respondent: Michael P. Heringer, William A. D'Alton, Brown Law Firm, Billings, Montana.

For Intervenor: Victor R. Halverson, Halverson, Sheehy & Plath, Billings, Montana.

Justice JAMES C. NELSON delivered the Opinion of the Court.

¶ 1 Gayle Pinnow appeals from an order of the Workers' Compensation Court ("WCC") granting summary judgment in favor of respondent Montana State Fund ("MSF") and intervenor Halverson, Sheehy & Plath, P.C. ("Halverson"). We reverse.

¶ 2 The issues on appeal are as follows:

1. Did District Court Judge Sherlock have authority to assume jurisdiction over this case and sit in place of WCC Judge McCarter following Judge McCarter's recusal?

2. Did the WCC err by not referring Pinnow and Halverson's dispute regarding attorney's fees to the Montana Department of Labor and Industry for a hearing?

FACTUAL AND PROCEDURAL BACKGROUND

¶ 3 On May 24, 2004, Pinnow retained R. Russell Plath as her attorney and executed an Attorney Retainer Agreement. The Attorney Retainer Agreement was the standard agreement prepared by the Montana Department of Labor and Industry ("DOLI") for use by attorneys representing claimants having workers' compensation claims. It provided for a twenty-percent contingency fee on settled claims. The DOLI approved the Attorney Retainer Agreement on June 4, 2004.

¶ 4 On November 15, 2004, Plath (on Pinnow's behalf) filed a Petition for Hearing in the WCC, naming MSF as respondent. The petition pertained to two occupational disease claims previously filed by Pinnow, the first involving bilateral carpal tunnel syndrome and the second involving a shoulder injury. Pinnow had asked MSF to pay for additional surgeries and pain management, but MSF had refused. Thus, she requested in her petition that the WCC require MSF to furnish her with reasonable primary medical services.

¶ 5 On February 17, 2005, Pinnow, Plath, and counsel for MSF signed a stipulation for settlement. MSF agreed to pay $125,000 to settle both of Pinnow's claims. The WCC approved and adopted the settlement on February 22, 2005, and dismissed the case with prejudice.

¶ 6 On March 10 and April 1, 2005, however, Pinnow wrote letters to the WCC indicating that she was repudiating the settlement and requesting that Plath receive no attorney's fees. Pinnow stated that she had been coerced into signing the settlement stipulation, that she was dyslexic and did not understand the terms of the settlement stipulation, and that the details of the settlement had not been fully disclosed to her. Apparently, Pinnow believed that she was settling only her shoulder claim, not both claims.

¶ 7 In another letter addressed to the WCC, dated April 14, 2005, Pinnow explained the basis of her dispute with Plath's representation as follows:

Mr. Plath unethically withheld from me, and lied to me about information regarding my claim. . . . As a result of Mr. Plath's actions and decisions to act as he did, I feel that he did not represent me to the best of his ability, and with my best interest in mind, therefore negating any kind of compensation due according to our agreement.

Pinnow asked the WCC to "order no fees are paid for services. [Plath] doesn't deserve it."

¶ 8 On April 20, 2005, the WCC held a telephone conference with Pinnow, Plath, and counsel for MSF to discuss the disposition of the settlement checks and Pinnow's correspondence with the court regarding Plath's entitlement to attorney's fees. Plath made a motion to withdraw as Pinnow's counsel, which the court granted. Furthermore, the WCC ordered MSF to retain the settlement checks until Pinnow decided how she wanted to proceed. As for the attorney's fees dispute, the WCC informed Pinnow that the court has limited jurisdiction regarding attorney's fees and that it would have to be determined whether her complaints fell within that jurisdiction. Ultimately, the court stated that it would treat Pinnow's correspondence as "a petition disputing the attorney fees" and would open a new case file. In a letter to the WCC dated April 26, 2005, Pinnow stated that she had decided to reject the terms of the settlement agreement.

¶ 9 On May 2, 2005, the WCC Judge, the Honorable Mike McCarter, issued an order stating that he had deemed himself disqualified and requesting that the Honorable Jeffrey M. Sherlock, District Judge of the First Judicial District Court, assume jurisdiction over the matter. On May 3, 2005, Judge Sherlock issued an order granting Judge McCarter's request. He purported to act as the WCC judge through the final resolution of this case. We note that although the original case (No. 2004-1190) had been dismissed by Judge McCarter "with prejudice" on February 22, 2005, when he approved and adopted the parties' stipulation for settlement, a new case file related to Pinnow's repudiation of the settlement agreement and her dispute regarding attorney's fees was not opened. Rather, the case proceeded under the original cause number.

¶ 10 MSF filed a motion for summary judgment on November 10, 2005, arguing that the settlement stipulation was a valid contract, that the language of the settlement stipulation was clear and unambiguous and should be enforced as written, and that there was no evidence demonstrating that Pinnow was dyslexic or in any way incapable of understanding the terms of the settlement. On or about November 22, 2005, Pinnow informed Judge Sherlock that she had changed her mind and was withdrawing her objections to the stipulated settlement; however, she told Judge Sherlock explicitly that she was maintaining her dispute as to whether Plath should receive attorney's fees. At this point in time, the only named respondent in the case was MSF; however, on November 30, 2005, Halverson filed a motion to intervene in the action, which Judge Sherlock granted. Meanwhile, MSF filed a motion requesting direction from Judge Sherlock regarding the settlement checks and the attorney's fees.

¶ 11 Pinnow (proceeding pro se) and Halverson thereafter filed cross-motions for summary judgment on the issue of attorney's fees. On February 24, 2006, Judge Sherlock granted summary judgment in favor of both MSF and Halverson and denied Pinnow's motion for summary judgment. He enforced the settlement stipulation and also held that the twenty-percent contingency fee arrangement in the Attorney Retainer Agreement was reasonable and that Halverson was entitled to attorney's fees. He ordered MSF to pay Halverson $25,000.00 in attorney's fees plus costs of $1,906.04. MSF thereafter paid the attorney's fees and costs, in full, to Halverson.

¶ 12 Pinnow now appeals from Judge Sherlock's February 24, 2006 Order on Cross-Motions for Summary Judgment.

STANDARD OF REVIEW

¶ 13 Our standard of review of the WCC's ruling on a motion for summary judgment is de novo. Mathews v. BJS Construction, Inc., 2003 MT 116, ¶ 12, 315 Mont. 441, ¶ 12, 68 P.3d 865, ¶ 12; Otteson v. Montana State Fund, 2005 MT 198, ¶ 8, 328 Mont. 174, ¶ 8, 119 P.3d 1188, ¶ 8. We determine whether there is an absence of genuine issues of material fact and whether the moving party is entitled to judgment as a matter of law. Otteson, ¶ 8. Whether a court has jurisdiction over the parties or the subject matter is a legal conclusion, which we review de novo. See Stanley v. Lemire, 2006 MT 304, ¶ 52, 334 Mont. 489, ¶ 52, 148 P.3d 643, ¶ 52.

DISCUSSION

¶ 14 Issue 1. Did District Court Judge Sherlock have authority to assume jurisdiction over this case and sit in place of WCC Judge McCarter following Judge McCarter's recusal?

¶ 15 Pinnow, Halverson, and MSF address whether the WCC has authority to hear and decide the parties' dispute regarding attorney's fees (which we address under Issue 2, infra). However, none of them addresses whether District Judge Sherlock had authority to assume jurisdiction over this case and sit in place of WCC Judge McCarter following McCarter's recusal. Generally, we do not address issues not raised by the parties. See In re Parenting of D.A.H., 2005 MT 68, ¶ 7, 326 Mont. 296, ¶ 7, 109 P.3d 247, ¶ 7 ("As a general rule, we decline to address on appeal an issue not raised by the parties before the District Court." (citing Armstrong v. State, 1999 MT 261, ¶ 4, 296 Mont. 361, ¶ 4, 989 P.2d 364, ¶ 4, and Mortgage Source, Inc. v. Strong, 2003 MT 205, ¶ 14, 317 Mont. 37, ¶ 14, 75 P.3d 304, ¶ 14)). Nevertheless, for the reasons which follow, it is necessary that we address this question sua sponte.

¶ 16 As we explained in Stanley, jurisdiction involves the fundamental power and authority of a court to hear and decide an issue. Stanley, ¶ 30. As such, jurisdictional issues "`transcend procedural considerations.'" Stanley, ¶ 31 (quoting Thompson v. Crow Tribe of Indians, 1998 MT 161, ¶ 12, 289 Mont. 358, ¶ 12, 962 P.2d 577, ¶ 12). Indeed, "`lack of jurisdiction over the subject matter can be raised at any time and a court which in fact lacks such jurisdiction cannot acquire it even by consent of the parties.'" Stanley, ¶ 31 (quoting Corban v. Corban, 161 Mont. 93, 96, 504 P.2d 985, 987 (1972)). Moreover, we observed in Stanley that "`courts, including this Court, have an independent obligation to determine whether subject-matter jurisdiction exists, even in the absence of a challenge from any party.'" Stanley, ¶ 32 (quoting Arbaugh v. Y & H Corp., 546 U.S. 500, 514, 126 S.Ct. 1235, 1244, 163 L.Ed.2d 1097 (2006)); see also State v. Reeder, 2004 MT 244, ¶ 4, 323 Mont. 15, ¶ 4, 97 P.3d 1104, ¶ 4.

¶ 17 In the case at hand, if Judge Sherlock did not have authority to sit in place of Judge McCarter and hear this case, this case has, in essence, been idle since May...