Talbot v. WMK-Davis, LLC

• Decision Date: 04 October 2016
• Docket Number: DA 15-0690
• Citation: 380 P.3d 823,385 Mont. 109,2016 MT 247
• Parties: Jason T. Talbot, Plaintiff and Appellee, v. WMK–Davis, LLC, Defendant, and Cudd Pressure Control, Inc., Intervenor and Appellant.
• Court: Montana Supreme Court

385 Mont. 109

380 P.3d 823

2016 MT 247

Jason T. Talbot, Plaintiff and Appellee,

v. WMK–Davis, LLC, Defendant,andCudd Pressure Control, Inc., Intervenor and Appellant.

DA 15-0690

Supreme Court of Montana.

Argued and Submitted: May 25, 2016

Decided: October 4, 2016

For Appellant: Emily Jones (argued), Carey E. Matovich, Matovich, Keller & Murphy, P.C., Billings, Montana.

For Appellee: Alexander (Zander) Blewett, III, Alexander (Anders) Blewett, IV (argued), Hoyt & Blewett PLLC, Great Falls, Montana, Bradley E. Norman, Norman & Edmen PLLC, Oklahoma City, Oklahoma.

Justice Patricia Cotter

delivered the Opinion of the Court.

¶ 1 Appellant Cudd Pressure Control, Inc. (Cudd) seeks to assert a subrogation lien to recover workers' compensation benefits paid to Jason T. Talbot. Following cross-motions for partial summary judgment on the issue of whether Cudd could assert a workers' compensation subrogation lien, the District Court determined that such claims were prohibited in Montana until the Plaintiff had been made whole and granted Plaintiff's Motion for Partial Summary Judgment. Cudd appeals. We affirm.

ISSUES

¶ 2 On appeal, Cudd raises three issues, which we restate as follows:

1. Did the District Court err in determining that, under Oberson v. Federated Mutual Insurance Co., Montana courts will not conduct a choice of law analysis when determining the validity of a workers' compensation subrogation lien?

2. Did the District Court err in granting summary judgment in favor of Talbot?

FACTUAL AND PROCEDURAL BACKGROUND

¶ 3 On March 18, 2014, Jason Talbot, a resident of Oklahoma, was seriously injured while crossing an intersection in Billings, Montana, when he was struck by a vehicle driven by Johnathan Tokarski, an employee of WMK–Davis, LLC (WMK–Davis). At the time of the accident, Talbot was employed by, and had travelled to Montana on business for, Cudd Pressure Control, Inc. Subsequently, Talbot filed a workers' compensation claim in Oklahoma. That claim is ongoing.

¶ 4 In August of 2014, Talbot filed a Complaint and Demand for Jury Trial in the Thirteenth Judicial District Court, Yellowstone County, against Tokarski. Talbot then amended his complaint to include WMK–Davis. In April of 2015, Cudd filed a motion to intervene in order to assert a workers' compensation subrogation lien against Talbot's potential tort recovery. Such an action is allowable under Oklahoma law, where there is a statutory policy in favor of subrogation. See Okla. Stat. tit. 85A, § 43

(2016); Caffey v. Soloray , 57 P.3d 870, 874 (Okla. 2002).

¶ 5 Following Cudd's successful intervention, the parties filed cross-motions for summary judgment to determine whether Cudd would be allowed to assert a workers' compensation subrogation lien in the underlying action, as Oklahoma law directly conflicts with Montana's rule that a party may not subrogate until the injured worker has been made whole. The District Court granted Talbot's motion for summary judgment and held that Montana law applied and Cudd was prohibited from asserting such a lien. Cudd appeals.

STANDARD OF REVIEW

¶ 6 We review a district court's summary judgment ruling de novo, applying the same rule, M. R. Civ. P. 56(c)(3)

, that a district court does when ruling on a summary judgment motion. Summary judgment “should be rendered if the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law.” M. R. Civ. P. 56(c)(3) ; Victory Ins. Co. v. Mont. State Fund , 2015 MT 82, ¶ 10, 378 Mont. 388, 344 P.3d 977 (internal citations omitted). “We will affirm the district court when it reaches the right result, even if it reaches the right result for the wrong reason.” State v. Marcial , 2013 MT 242, ¶ 10, 371 Mont. 348, 308 P.3d 69 (quoting State v. Ellison , 2012 MT 50, ¶ 8, 364 Mont. 276, 272 P.3d 646 ).

DISCUSSION

¶ 7 Talbot was struck by a truck at an intersection in Billings, Montana, at the age of 39. As a result of the collision, Talbot, a father of three, suffered an extensive brain injury

as well as multiple orthopedic injuries.

Talbot's medical bills exceed $680,000 and are still accruing. Talbot's economist estimates that his loss of earning capacity has a value in excess of $3.4 million. Although the tortfeasor Tokarski carried high limits of liability insurance, the limits were inadequate to fully compensate Talbot. Cudd does not argue that, under Montana law, Talbot has been made whole by virtue of his recovery.

¶ 8 Talbot filed a workers' compensation claim in Oklahoma and is still being treated there for his injuries. On behalf of Talbot, Cudd paid approximately $600,000 in medical and disability payments. Upon intervening in Talbot's personal injury case in Yellowstone County, Cudd attempted to assert a workers' compensation subrogation lien against any recovery Talbot might make in the case. It did so pursuant to an Oklahoma statute that entitles an employer

to a first lien on two-thirds (²/₃) of the net proceeds recovered in the action that remain after the payment of the reasonable costs of collection, for the payment to them of the amount paid and to be paid by them as compensation to the injured employee or his or her dependents.

Okla. Stat. tit. 85A, § 43(A)(1)(c)

. Talbot argued in the District Court that the workers' compensation lien of Cudd was invalid under the Montana Constitution and Montana law.

¶ 9 On cross-motions for summary judgment, the District Court agreed with Talbot, holding that this Court's decision in Oberson v. Federated Mutual Insurance Co. , 2005 MT 329, 330 Mont. 1, 126 P.3d 459

, prohibited Montana courts from undertaking a choice of law analysis under the Restatement (Second) Conflict of Laws (Restatement) when determining whether a workers' compensation subrogation lien could be asserted against an injured worker who had not been made whole. Further, the District Court distinguished Oberson from our decision in Phillips v. General Motors Corp. , 2000 MT 55, 298 Mont. 438, 995 P.2d 1002, noting that the two decisions advocated different approaches for determining which state's law applies in a particular case because Phillips dealt with a personal injury/product liability/wrongful death action while Oberson dealt specifically with workers' compensation subrogation. The District Court applied Montana's “made whole” doctrine and held that Cudd was precluded from attaching a workers' compensation subrogation lien to Talbot's potential tort recovery prior to Talbot being made whole.

¶ 10 The preliminary question before us is whether a Montana court should undertake a choice of law analysis before determining whether a workers' compensation subrogation lien may be asserted against an injured worker prior to the party being made whole. More specifically, this case allows us to further clarify our approach to choice of law issues in workers' compensation subrogation cases following our decisions in Phillips v. General Motors Corp.

, and Oberson v. Federated Mutual Insurance Co. We begin by summarizing our holdings in Phillips and Oberson.

¶ 11 In Phillips

, we answered three questions certified to this Court by the United States District Court for the District of Montana; the first and third questions are particularly relevant here. Question One asked “[w]hether, in a personal injury/product liability/wrongful death action, where there is a potential conflict of laws, Montana will follow the Restatement (Second) of Conflict of Laws, including the ‘most significant relationship’ test set forth in §§ 146 and 6, in the determination of which state's substantive law to apply?” Phillips , ¶ 2

. In answering, we considered the merits of the traditional choice of law rule, lex loci delicti commissi, which provides “the infliction of injury is actionable under the law of the state in which it was received.” Phillips , ¶ 16. In our analysis, we placed particular emphasis on moving away from rigid rules for resolving choice of law questions. We noted that the Restatement provides “a more flexible approach which permits analysis of the policies and interests underlying the particular issue before the court,” and determined that “any analysis under the Restatement approach is necessarily driven by the unique facts, issues, applicable law, and jurisdictions implicated in a particular case.” Phillips , ¶¶ 22, 26 (quoting In re Air Crash Disaster at Boston, Mass. on July 31, 1973 , 399 F.Supp. 1106, 1110 (D. Mass. 1975) ). Further, we stated that “[w]e see no reason to have one choice of law approach for contracts and another for torts,” noting that we had previously adopted the Restatement (Second) approach for conflict of law issues sounding in contract. Phillips , ¶ 23

(citing Casarotto v. Lombardi , 268 Mont. 369, 886 P.2d 931 (1994), vacated and remanded on other grounds sub nom

Doctor's Associates, Inc. v. Casarotto , 515 U.S. 1129, 115 S.Ct. 2552, 132 L.Ed.2d 807 (1995), reaff'd on reh'g

Casarotto v. Lombardi , 274 Mont. 3, 901 P.2d 596 (1995), reversed and remanded on other grounds sub nom

Doctor's Associates Inc. v. Casarotto , 517 U.S. 681, 116 S.Ct. 1652, 134 L.Ed.2d 902 (1996) ). Subsequently, we answered yes to the first certified question and adopted the Restatement (Second)'s “most significant relationship” test for choice of law questions involving issues sounding in tort. Phillips , ¶ 23.

¶ 12 Question Three asked whether Montana recognized “a ‘public policy’ exception that would require application of Montana law even where Montana's choice of law rules [might otherwise] dictate application of the laws of another state, and would such an exception apply in this case?” Phillips , ¶ 74

. We noted that “[f]or choice of law purposes, the public policy of a state is simply the rules, as expressed in its legislative enactments and judicial decisions, that it uses to decide controversies.” Phillips , ¶ 75 (citations omitted). We then...