No. 12685 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1974 

CLAYTON R. FISCUS, 

Plaintiff and Respondent, 

-vs - 

BEARTOOTH ELECTRIC, 

Defendant and Appellant. 

ORIGINAL PROCEEDING: 

Counsel of Record: 

For Appellant : 

Hutton, Sheehy and Cromley, Billings, Montana 

John C. Sheehy argued, Billings, Montana 

For Respondent: 

Berger, Anderson, Sinclair and Murphy, Billings, Montana 

Richard W. Anderson argued, Billings, Montana 

For Amicus Curiae : 

Gene Huntley argued, Baker, Montana 

Bruce R. Toole argued, Billings, Montana 

Filed : MAY 7 1974 

Submitted: February 27, 1974 

Decided : 

7 1974 
Mr. Justice Wesley Castles delivered the Opinion of the Court. 

This matter comes on an application to accept jurisdiction 

of an appeal from a summary judgment in favor of plaintiff on 

an issue of law as to immunity to a common law tort action of 

the defendant. No issue is made of procedural matters, and 

we treat this as an appeal. 

The defendant in this case is Beartooth Electric Co-operative, Inc., headquartered at Red Lodge, Montana. Its business 

is supplying electricity in rural areas in Carbon, Stillwater, 

and Sweet Grass Counties, and in part in Park County, Wyoming. 

It is a Montana corporation, incorporated in 1938. It has 

electric transmission systems, including the usual poles and 

transmission wire over which electricity is conducted to its 

cus tomer s . 

Plaintiff is Clayton R. Fiscus, a resident of Billings, 

Montana, who was on the date of this accident 34 years old. 

He is employed as a journeyman lineman for High Voltage 

Systems, Inc., an electrical contractor. 

Shortly before the accident here involved, High Voltage 

Systems, Inc., had entered into a bid contract with Beartooth 

whereby High Voltage Systems, Inc., would convert five miles 

of single phase line on the Beartooth system to three phase 

number 2 ACSI wire, and a number 4 neutral. 

There is no dispute between the parties that in performing 

the contract for Beartooth, High Voltage Systems, Inc., was an 

independent contractor. 

Plaintiff Fiscus, as an employee of High Voltage Systems, 
Inc., on May 27, 1971, while on a power pole in the Beartooth 

system, came in contact with the electric power, in such manner 

that he sustained injuries from which he 10s t one arm above the 

elbow and one leg below the knee. 

High Voltage Systems, Inc., had provided workmen's compensation coverage to cover its employees in connection with its 

work. Plaintiff Fiscus has been compensated, and is now being 

compensated for his medical expenses, and for compensation 

benefits, by the workmen's compensation carrier for his employer, 

High Voltage Systems, Inc., as a result of the accident. 

In the action now pending in the district court plaintiff 

has sued Beartooth for his personal injuries, alleging that 

Beartooth negligently failed to provide plaintiff with a safe 

place to work, and with safe working appliances. 

Beartooth did not specifically require, verbally or in 

writing, that High Voltage Systems, Inc. provide workmen's 

compensation coverage for its employees. However, the statutes 

do so require and provide a criminal penalty for failure to do 

so, section 92-207, R.C.M. 1947, and, as noted above, High 

Voltage did cover plaintiff . 

This proceeding involves a step-out from the holdings of 

this Court in Ashcraft v. Montana Power, 156 Mont. 368, 480 P. 2d 

812 and Buerkle v. Montana Power Co., 157 Mont. 57, 482 P.2d 

564, with respect to the legal liability of an owner to the injured 

employee of an 

/independent contractor. The injury occurred on May 27, 1971; 

thus the applicable statutes are those that applied at the 

time of the decisions in Ashcraft and Buerkle. 
The issue here is whether immunity to common law liability 

recognized in Ashcraft and Buerkle extend to an owner where 

the contractor in fact provided workmen ' s compensation coverage, 

but the owner did not require it in the contract. 

In Buerkle the plaintiff disputed the Ashcraf t rule and 

claimed that because the negligence of the general employer, 

Montana Power Company, was at least a concurrent cause of the 

injuries to the plaintiff, the defendant power company was not 

immune from common law liability even under the Ashcraft rule. 

This Court held that Buerkle was ruled by the rule in 

Ashcraft and explained its rationale in Buerkle at p. 59: 

1 I Bearing in mind the reasoning above, the self- - 

evident result in Ashcraft was that a general 

employer under such circumstances is immune from 

third- party liability suits. The same conclusion 

would mechanically follow in the present case 

except plaintiff charges section 92-438, R.C.M. 

1947, should be limited in effect to the Workmen's 

Compensation Act and should not be a bar to third 

party liability suits grounded on the common law. 

This Court does not agree with this reasoning. 

"To understand the scope of section 92-438,R.C.M. 

1947, it must be read in conjunction with sections 

92-604 and 92-204, R.C.M. 1947. Section 92-604, 

R.C .M. 1947 provides : 

11 1 Where any employer procures any work to be done, 

wholly or in part for him, by a contractor other 

than an independent contractor, and the work so 

procured to be done is a part or process in the 

trade or business of such employer, then such 

employer shall be liable to pay all compensation 

under this act to the same extent as if the work 

were done without the intervention of such contractor. 

And the work so procured to be done shall not be 

II construed to be casual employment. Il I 

"The effect of this statute makes a general contractor 

liable for injuries sustained by employees of another - - 

contractor where the work project is a part or process 

in the trade or business of the general contractor. 
For example, if a general contractor hired another as 

a subcontractor, the general contractor would control 

and supervise the details and means of carrying out 

the work, and an employee of the subcontractor was 

injured, the general contractor would be liable for 

the employee's injuries if the project was a part of 

the business of the general contractor. 

I I But how extensive would the general contractor ' s 

liability be? Section 92-204, R.C.M. 1947, provides 

this answer: 

"'Where both the employer and employee have elected 

to come under this act, the provisions of this act 

shall be exclusive, and such election shall be held 

to be a surrender by such employer and the servants, 

and employees of such employer and of such employee, 

as among themselves, of their right to any other 

method, form or kind of compensation, or determination 

thereof, or to any other compensation, or kind of 

determination thereof, or cause of action, action at 

law, suit in equity, or statutory or common law right 

or remedy, or proceeding whatever, for or on account 

of any personal injury to or death of such employee * * *.' 

"This portion of section 92-204 limits the general 

contractor's liability exclusively to compensation 

provided by the Workmen s Compensation Act . 

"How is this relative to section 92-438, R.C.M. 1947? 

The previously quoted portion of section 92-438 prevents 

I a general contractor from using the defense of independent contractor' where he does not require an employee's 

immediate employer to carry workmen ' s compensation 

insurance. Therefore, if the general contractor can 

I not use the independent contractor' defense then he 

falls within the scope of section 92-604, which as 

previously described makes him exclusively liable for 

compensation under the Workmen s Compensation Act in 

accordance with section 92-204. Therefore, if section 

92-438 in conjunction with sections 92-604 and 92-204 

limit the liability of a general contractor exclusively 

to compensation under the Workmen ' s Compensation Act in 

circumstances just described, is it reasonable under the 

same statutes to assume that where a general contractor 

requires the employee's immediate contractor to carry 

workmen's compensation insurance, the general contractor 

is not immune from a common law liability suit as a 

third party? This Court does not believe so. 

"A contrary result would be abusive of the central theory 

behind the Workmen's Compensation Act. In Yurkovich v. 

Indus. Acc. Bd., 132 Mont. 77, 83, 84, 314 P.2d 866, in 
reference to the workmen's Compensation Act, we said: 

"'This act is fundamental legislation enacted first 

for the protection and benefit of the injured workman, 

his wife and children, and other dependents. By force 

of the law the employee surrenders his right of an 

action in tort for injury or death. The act however 

assures him and his dependents of the protection of 

certain benefits in case of injury or death. 

"'Secondly, the act fixes a limited liability of the 

employer so that the economic loss caused by such 

accidents shall not rest upon the employee or the 

public, but that the industry in which the accident 

occurs shall pay in the first instance for the loss 

occasioned by such accident. 

11 1 In construing a statute the whole act must be read 

together, and where there are several provisions or 

particulars such a construction is, if possible, to 

be adopted as will give effect to all. ' 

I I The system of compensation under the Workmen ' s 

Compensation Act does not envision benefits drawn 

from a single employer by a common law tort action 

together with liability from workmen's compensation 

insurance. " (Emphasis supplied.) 

What makes the instant case appear different from Ashcraft 

and Buerkle is the language in section 92-438, R.C.M. 1947, 

reading in part "except when such defense is interposed on 

behalf of a party who has previously required the claimant's 

immediate employer to come within the workmen's compensation 

act. " (Emphasis supplied.) The meaning of the words "a party 

who has previously required" is argued by the respondent to 

mean a party who has previously required by contract rather 

than a party who has relied on the law with criminal sanctions 

to require compensation insurance. The argument goes that 

the words "previously requiredm must have some meaning in 

the statute and that the mere - fact of coverage pursuant to 

law is not sufficient. Was not this compliance with previously 

required coverage? 
Under Buerkle above, we said that where a general employer 

had not required his independent contractor to provide workmen ' s 

compensation, the general employer would be liable for workmen's 

compensation under section 92-204, R.C.M. 1947. It is a contingent liability. If the independent contractor did not in fact 

cover the employee, even though required both by contract and 

by law to have done so; then, in that event the general employer 

or owner is liable for compensation. This contingent liability, 

actually a real liability in the sense that it is reflected in 

the cost of doing business in any event, is what entitles the 

general employer to the protection of immunity. The workman 

is guaranteed protection. This is what "statutory employer" 

is all about. 

In the instant case, because Beartooth did not require 

High Voltage Systems to provide coverage, Beartooth became 

liable to Fiscus for coverage if High Voltage Systems had 

failed for any reason to have done so. In other words the 

general employer is responsible in the first instance for 

nonfault liability even though he may pass it on to a subcontractor. The general employer is under a continuing 

potential liability; he has thus assumed a burden in exchange 

for which he is entitled to immunity from a damage suit resulting from the same accident with or without fault. (See Volume 2, 

Larson, workmen's Compensation Law, Section 72.31 (Cum. Supp.)) 

The grant of immunity to an owner or general employer who 

has not required his independent contractors to comply with 

the Workmen's Compensation Act does not represent a departure 
from our prior holdings. In Ashcraft the question was whether 

or not a general employer who had complied with section 92-438 

and required compliance with the Workmen's Compensation Act 

by his independent contractors could be sued as a third party 

by the contractor's employees. We held that he could not. 

Following Ashcraft the question was again presented in Buerkle. 

In deciding that case we elaborated our reasoning as heretofore 

pointed out. Subsequently the question was again presented 

albeit in slight different form in First National Bank and 

Trust Company v. District Court, 161 Mont. 127, 505 P.2d 408, 

412. The reasoning of Buerkle was reiterated in that decision. 

In the First Kaitional Bank we observed that an owner or general 

employer would be inrmune to a third party suit on either of 

two bases : 

"* * * First, in the absence of workmen's compensation 

coverage by either Allen or American, (the independent 

contractors) clearly under the statute the Bank would 

not be entitled to the independent contractor defense, 

and would thus be deemed plaintiff ' s ' statutory employer ' . Second, the Bank complied with the intent of the statute 

that all persons working on the construction would be 

covered by workmen ' s compensation. 11 

In all our previous cases the element of required compliance 

with the Workmen's Compensation Act on the part of the independent 

contractor has been present. In each of those cases we held 

the owner imxmme from suit as a third party. In each of those 

cases we granted the immunity because of the fundamental 

unfairness of subjecting an employer to third party liability 

which he could have avoided as a statutory employer had he not 

required his independent contractor comply with the Workmen's 
Compensation Act. In this case we face the situation in which 

the owner or general employer did not require compliance with 

the Workmen ' s Compensation Act and is accordingly subject to 

potential no-fault liability for benefits under the Workmen ' s 

Compensation Act as the statutory employer of the injured workman. Since the owner Beartooth is subject to such liability 

it necessarily follows that it is also immune to suit as a third 

party under section 92-204, R.C.M. 1947, which makes the remedies 

of the Workmen's Compensation Act exclusive between employer and 

employee. 

Also appearing in this action as amicus curiae were Shell 

Oil Company and James B. Hatfield, the parties litigant in a 

cause currently pending in federal district court which involves 

the same legal question herein decided. 

The order of the district court denying summary judgment 

is vacated and the district court is directed to grant summary 

judgment to Beartoo th Electric Co-operative. 

We concur: 

............................... -L. 

Chief Justice 8 

............................... Justices 
Mr. Justice Gene B. Daly dissenting: 

I dissent. 

This case turns on the interpretation of section 92-438, 

R.C.M. 1947, as amended by Section 1, Chapter 49 of the Laws of 

1965, and since repealed by Section 2, Chapter 251, Laws of 1973. 

Therefore any in depth discussion on points of disagreement would 

be by any view academic and of little value to the bar of Montana. 

I would only point out that the language contained in 

the 1965 amendment was not clear or as direct as it might have 

been to aid in the search for legislative intent. My views in 

the original treatment contained in Ashcraft v. Montana Power, 

156 Mont. 368, 480 P.2d 812, recognized the power of the legislature to grant immunity from common law liability in return for 

vicarious statutory liability but the legislative intent must be 

manifest and of course contained within the Workmen's compensation 

as restated in Kelleher v. Montana Aeronautics, 160 Mont. 365, 

503 P.2d 29. The majority in Ashcraft found the intent to limit 

third party actions but restricted the application to a narrow 

application within the terms of the 1965 amendment. We have 

followed this interpretation since that time. 

It is my view that the majority here makes a departure 

from the narrow application of Ashcraft when it considers the 

mandate of a criminal statute to satisfy the requirements of the 

Act placed on the employer, Beartooth Electric, if they wish to 

avoid their responsibility to 

contractor to respond to a th 

Justice 

I concur in the for 

Gene B. Daly. 

Justice 

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