Preston v. Transportation Ins. Co., 02-522.

• Decision Date: 01 December 2004
• Docket Number: No. 02-522.,02-522.
• Citation: 324 Mont. 225,2004 MT 339,102 P.3d 527
• Court: Montana Supreme Court
• Parties: Laurie PRESTON, Petitioner, Claimant and Appellant, v. TRANSPORTATION INSURANCE CO., Respondent and Insurer for, Waste Management, Employer, Respondent and Cross Appellant.

102 P.3d 527

2004 MT 339

324 Mont. 225

Laurie PRESTON, Petitioner, Claimant and Appellant, v. TRANSPORTATION INSURANCE CO., Respondent and Insurer for, Waste Management, Employer, Respondent and Cross Appellant.

No. 02-522.

Supreme Court of Montana.

Submitted on Briefs March 27, 2003.

Decided December 1, 2004.

For Appellant: Richard J. Martin, Linnell Newhall Martin & Schulke, P.C., Great Falls, Montana.

For Respondent: David M. Sandler, Hammer Hewitt & Sandler, Kalispell, Montana.

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

¶ 1 Laurie Preston (Preston) appeals the judgment of the Workers' Compensation Court denying her petition to set aside the settlement Preston entered into with Transportation Insurance Company (Transportation), insurer to her former employer, Waste Management.

¶ 2 We affirm in part, reverse in part, and remand for further proceedings consistent with this Opinion.

¶ 3 We address the following issues on appeal:

¶ 4 1. Does filing a petition for mediation with the Department of Labor and Industry commence an "action?"

¶ 5 2. Does the statute of limitations for filing an action to set aside a settlement of a workers' compensation claim toll during the pendency of a statutorily mandated mediation?

¶ 6 Transportation raises the following issue on cross-appeal which we affirm:

¶ 7 3. Did the Workers' Compensation Court err in finding that the statute of limitations began running on August 9, 1999?

FACTUAL AND PROCEDURAL BACKGROUND

¶ 8 On September 14, 1994, while working at Waste Management, Preston went into the bathroom. As she closed the door, an eight foot, fifteen to twenty pound stretcher that was kept in the bathroom fell on her from behind. As a result of this accident, Preston injured her left arm, for which she received medical treatment.

¶ 9 Transportation accepted liability for Preston's industrial accident under Montana's Workers' Compensation Act. Subsequently, in the summer of 1995, Preston settled her claim with Transportation for $5,874.75.

¶ 10 At the time of her settlement, both Preston and Transportation knew that Preston had been diagnosed with depression.

¶ 11 Preston continued working for Waste Management for the next four years; however, her mental condition deteriorated over time. Consequently, Preston was referred to a psychiatrist.

¶ 12 Preston saw a psychiatrist on February 12, 1999. At that time, the psychiatrist diagnosed Preston with severe panic disorder with agoraphobia, severe major depressive disorder, post traumatic stress syndrome, and pathological gambling. The psychiatrist also, at that time, stated that it was her belief that one causal factor of Preston's mental condition was the industrial accident.

¶ 13 Preston felt she could no longer continue working due to her mental conditions, so she tendered her letter of resignation to Waste Management on August 9, 1999. Thereafter, Preston resigned from her position on August 25, 1999, and has not since worked.

¶ 14 On August 17, 1999, Preston's then-attorney wrote a letter to the workers' compensation claims' adjuster in an attempt to reopen her formerly-settled claim. The claims' adjuster denied this request.

¶ 15 Subsequently, after waiting more than one year after the denial of this request, Preston petitioned the Department of Labor to mediate her dispute with the claims' adjuster on November 29, 2000. The mediator issued her mediation report and recommendation on January 4, 2001.

¶ 16 Preston then petitioned the Workers' Compensation Court for a hearing on September 19, 2001, regarding the reopening of her formerly-settled claim. Preston submitted this petition after waiting more than nine months after the mediator issued her report.

¶ 17 After a hearing, the Workers' Compensation Court determined that there existed a mutual mistake of fact between Preston and Transportation regarding the severity of Preston's mental illness as a result of her industrial accident. However, the Workers' Compensation Court determined that reopening Preston's formerly-settled claim based on this mutual mistake of fact was time-barred under the two-year statute of limitations delineated in § 27-2-203, MCA. Hence, the Workers' Compensation Court denied Preston's petition to set aside the settlement she entered into with Transportation and dismissed her petition with prejudice.

¶ 18 Preston now appeals the Workers' Compensation Court's judgment.

STANDARD OF REVIEW

¶ 19 We review a Workers' Compensation Court's findings of fact to determine whether those findings are supported by substantial evidence. Hiett v. Missoula County Public Schools, 2003 MT 213, ¶ 15, 317 Mont. 95, ¶ 15, 75 P.3d 341, ¶ 15. We review a Workers' Compensation Court's conclusions of law to determine whether those conclusions are correct. Hiett, ¶ 15.

DISCUSSION

¶ 20 1. Does filing a petition for mediation with the Department of Labor and Industry commence an "action?"

¶ 21 Preston argues that by petitioning the Department of Labor for mediation, she commenced an action as that term is used in §§ 27-2-101, 27-2-102, and 27-2-203, MCA. Specifically, Preston argues that a petition for mediation is an action, as that term is used in § 27-2-101, MCA, because the petition is a "special proceeding of a civil nature." Hence, her petition, which was based on Preston and Transportation's mutual mistake regarding her mental illness, was timely because she petitioned the Department of Labor for mediation on November 29, 2000. Consequently, her petition was filed within two years from the discovery of the mutual mistake, which was August 9, 1999 (the day the statute of limitations began to run).

¶ 22 Transportation argues that a petition for workers' compensation mediation is not a "special proceeding of civil nature," because special proceedings, as those terms are used in §§ 27-2-101 and 27-2-102, MCA, mean court proceedings, not administrative proceedings. Hence, Preston's petition to reopen her formerly-settled claim on September 19, 2001, was untimely, as it was not filed within two years from the discovery of the mutual mistake on August 9, 1999.

¶ 23 Under § 27-2-101, MCA, the term "action" is "to be construed, whenever it is necessary to do so, as including a special proceeding of a civil nature." Some examples of special proceedings include writs of certiorari, writs of mandamus, and writs of prohibition. See §§ 27-25-101 et seq., 27-26-101 et seq., and 27-27-101 et seq., MCA. We have held that petitions for these writs are "special proceedings of a civil nature," in part because they are based upon a judgment from which an appeal lies. See Application of Bertelson (1980), 189 Mont. 524, 617 P.2d 121

.

¶ 24 In Patterson v. State, Dept. of Justice, 2002 MT 97, 309 Mont. 381, 46 P.3d 642, we held that civil proceedings "must be conducted in accordance with the Montana Rules of Civil Procedure." Patterson, ¶ 12. Under Montana's Workers' Compensation Act, mediation is a non-binding and informal meeting, wherein the claimant and the insurer attempt to settle their dispute with a neutral mediator's assistance. Specifically, § 39-71-2408(2), MCA, states the a resolution recommended by a mediator is "without administrative or judicial authority," and, hence, is "not binding on the parties." Indeed, § 39-71-2411(4), MCA, states that during mediation, a party is not limited by the rules of evidence, nor is a verbatim record made of the mediation proceedings, § 39-71-2410(1)(b), MCA.

¶ 25 Here, Preston's petition for mediation is a petition for a non-binding and informal meeting with Transportation, the mediator, and herself. This meeting, as the statute states, is "without administrative or judicial authority." Hence, Preston's petition for mediation is unlike other special proceedings — i.e., writs of certiorari, writs of mandamus, and writs of prohibition, to name a few — wherein the petition inheres from an appealable judgment.

¶ 26 Therefore, we hold that a petition for mediation does not commence an action, as that term is used in § 27-2-101, MCA.

¶ 27 2. Does the statute of limitations for filing an action to set aside a settlement of a workers' compensation claim toll during the pendency of a statutorily-mandated mediation?

¶ 28 Preston argues that the statute of limitations tolled during the pendency of her mediation because the Workers' Compensation Court did not have jurisdiction over her petition to reopen her claim until the mediation was complete. Hence, because the mediation lasted 62 days, the applicable two-year statute of limitations for claims of mutual mistake was extended by 62 days. And, as such, Preston argues that because she filed her petition to reopen her claim on September 19, 2001, and because the two-year statute of limitations had been extended by the 62 days, she was within the two-year time frame.

¶ 29 In the alternative, Preston argues that the statute of limitations was tolled under the doctrine of equitable tolling — as this Court articulated that doctrine in Hash v. U.S. West Communications Services (1994), 268 Mont. 326, 886 P.2d 442. Preston also argues that in the event that this Court holds that by petitioning the Department of Labor for mediation Preston did not commence an action, the statute of limitations was equitably tolled. She maintains that under the doctrine, her time within which to file a petition to reopen her workers' compensation claim was equitably tolled during the pendency of the mediation process.

¶ 30 Transportation first argues that administrative hearings do not toll a statute of limitations unless a statute expressly so provides. Because the Workers' Compensation Act does not contain any statute stating that a mediation tolls any statute of limitations, Transportation argues that Preston's mediation did not toll the statute of limitations to mutual mistake of fact. Second, Transportation argues that Preston abandoned her argument regarding the tolling of ...