Poteat v. St. Paul Mercury Ins. Co., 95-529

• Citation: 918 P.2d 677,277 Mont. 117
• Decision Date: 25 June 1996
• Docket Number: No. 95-529,95-529
• Parties: Sharon POTEAT, Plaintiff and Appellant, v. ST. PAUL MERCURY INS. CO., John Doe I and John Doe II, Defendants and Respondents.
• Court: United States State Supreme Court of Montana

Page 677

918 P.2d 677

277 Mont. 117

Sharon POTEAT, Plaintiff and Appellant, v. ST. PAUL MERCURY INS. CO., John Doe I and John Doe II,

Defendants and Respondents.

No. 95-529.

Supreme Court of Montana.

Submitted on Briefs April 18, 1996.

Decided June 25, 1996.

John M. Morrison, Meloy & Morrison, Helena, for appellant.

Stephen C. Berg, Warden, Christiansen, Johnson & Berg, Kalispell, for respondents.

HUNT, Justice.

Sharon Poteat (Poteat) appeals the order of the Twenty-First Judicial District Court, Ravalli County, granting the motion of St. Paul Mercury Insurance Company (St. Paul) to dismiss her complaint for lack of subject matter jurisdiction.

We affirm in part, reverse in part, and remand.

The sole issue on appeal is whether the District Court erred by granting St. Paul's motion to dismiss Poteat's complaint for lack of subject matter jurisdiction.

On June 6, 1985, Poteat suffered a work-related injury during the course of her employment as a nurse at Marcus Daly Memorial Hospital in Hamilton. In 1990, Poteat filed a petition for a hearing before the Workers' Compensation Court, asserting that St. Paul, the hospital's insurer, refused to pay her claim. In 1992, the parties entered into a full and final compromise settlement agreement. By the terms of that agreement, Poteat accepted a lump sum payment but specifically reserved "future medical and hospital benefits." Subject to that reservation, Poteat accepted the lump sum and released St. Paul "from all further obligations for compensation benefits for this injury under the Workers' Compensation Act."

In 1993, Poteat filed suit in the District Court against St. Paul alleging various illegal trade practices. Specifically, Poteat alleged that St. Paul had committed:

Count One: unfair trade practices prior to the settlement agreement;

Count Two: breach of the settlement agreement;

Count Three: unfair trade practices subsequent to the settlement agreement; and

Count Four: actual malice, arising from St. Paul's alleged refusal to pay medical and pharmaceutical expenses.

St. Paul moved to dismiss the complaint for lack of subject matter jurisdiction, and the District Court granted the motion. In its order, the District Court noted that a complainant is statutorily prohibited from filing an UTPA suit against an insurer until after the underlying claim has been settled or adjudicated. Since Poteat had expressly reserved medical benefits, the District Court concluded that the settlement agreement was not a final settlement of the underlying claim. The District Court determined that it lacked subject matter jurisdiction to consider Poteat's unfair trade practices claims until the underlying claim had been adjudicated by the Workers' Compensation Court or settled entirely, including future medical benefits. It accordingly granted St. Paul's motion to dismiss Poteat's suit. Poteat appeals.

Did the District Court err by granting St. Paul's motion to dismiss Poteat's claim for lack of subject matter jurisdiction?

When deciding a motion to dismiss based on lack of subject matter jurisdiction, a district court must determine whether the complaint states facts that, if true, would vest the district court with subject matter jurisdiction. Barthule v. Karman (1994), 268 Mont. 477, 483, 886 P.2d 971, 975 (citing Stanley v. Holms (1994), 267 Mont. 316, 883 P.2d 837). This conclusion is a question of law, and we will review to determine whether the District Court's interpretation of the law is correct. Barthule, 886 P.2d at 975 (citing In re Marriage of Barnard (1994), 264 Mont. 103, 870 P.2d 91).

The parties agree that Poteat brought her District Court complaint alleging unfair trade practices, breach of contract, and actual malice under the Montana Unfair Trade Practices Act (UTPA), § 33-18-242, MCA. While the UTPA authorizes such suits, it specifically states:

A third-party claimant may not file an action under this section until after the underlying claim has been settled or a judgment entered in favor of the claimant on the underlying claim.

Section 33-18-242(6)(b), MCA. St. Paul argued, and the District Court agreed, that the settlement agreement in this case did not serve to settle the entire underlying claim because future medical benefits were reserved. Since the underlying claim involved workers' compensation, and since, pursuant to § 39-71-2905, MCA, the Workers' Compensation Court...