No. 85-41 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1985 

STACEY JO HUBBEL, Individually and 

as Guardian ad Litem of BROOKE ANNE 

HUBBEL, et al., 

Plaintiffs and Respondents, 

THE WESTERI? FIRE INSURANCE COMPANY 

and STATE FARM MUTUAL AUTOMOBILE 

INSURANCE COMPANY, 

Defendant and Appellant, 

APPEAL FROM: District Court of the Fourth Judicial District, 

In and for the County of Ravalli, 

The Honorable James B. Wheelis, Judge presiding. 

COUNSEL OF RECORD: 

For Appellant: 

Williams Law Firm; Richard Ranney argued, ?4issoula, 

Montana 

For Respondents: 

Recht & Greef; John D. Greef argued, Hamilton, 

Montana 

Filed: 

Submitted: July 25, 1985 

Decided: September 10, 1985 

SEP 10 4985 

Clerk 
Mr. Justice Frank B. Morrison, Jr., delivered the Opinion of 

the Court. 

State Farm Mutual Automobile Insurance Company (State 

Farm) appeals the November 23, 1984, opinion and order of the 

Fourth Judicial District Court holding that Stac~y Jo Hubbel, 

individually, as personal representative of her husband's 

estate and as guardian ad litem of their children, is entitled to recover damages from State Farm under an insurance 

policy's uninsured motorist provisions. We reverse the order 

of the District Court. 

Ronald L. Pearson and David Earl Hubbel were partners, 

doing business as Alpine Oil. They elected to be covered by 

Workers' Compensation Insurance. On April 12, 1983, while 

acting within the course and scope of their employment, 

Pearson and Hubbel were killed in an automobile accident. 

Pearson was driving. It is alleged that Pearson's negligence 

was the sole cause of the accident. 

Workers' Compensation benefits were applied for and 

received by the heirs and/or personal representatives of the 

decedents. Thereafter, respondent, Stacey Jo Hubbel, brought 

a declaratory judgment action against Western Fire Insurance, 

the insurer of two vehicles owned by Alpine Oil, and State 

Farm, the insurer of the vehicle involved in the fatal collision, claiming entitlement to uninsured motorist benefits 

from both companies. The insurance companies denied any 

obligation to respondent, claiming that neither of the two 

conditions for receiving uninsured motorist benefits exists. 

The parties briefed the issues. Thereafter, the trial 

judge determined that the two conditions were met and that 

respondent was entitled to receive the benefits. Western 

Fire Insurance has since settled with respondent. State Farm 

appeals, raising one issue: 
"Whether respondent is legally entitled to uninsured motorist benefits in addition to any Workers' 

Compensation benefits received when the decedent 

was fatally injured by a co-employee's negligent 

operation of a motor vehicle?" 

Ron Pearson was the owner and operator of the vehicle 

i-nvolved in the fatal collision. He purchased a standard 

automobile insurance policy from State Farm to cover the 

vehicle. The policy provides for uninsured motorist coverage. The liability and the uninsured motorist coverage 

limits are legally sufficient under Montana law. 

The uninsured motorist provisions of the policy and 

Montana's uninsured motorist's statute, 5 33-23-201, MCA, 

base payment of uninsured motorist benefits on two conditions: (1) the claimant is legally entitled to recover 

damages from the owner or operator of the uninsured vehicle; 

and (2) the driver of the vehicle is uninsured. Oleson v. 

Farmers Insurance Group (1980), 185 Mont. 164, 166, 605 P.2d 

166, 167. 

We find that neither of these conditions exists. Therefore, respondent is not entitled to uninsured motorist 

benefits. 

I 

LEGAL ENTITLEMENT TO DAMAGES 

Section 39-71-411, MCA, provides that when an employer 

has elected to be covered under the Workers' Compensation 

Act, that Act provides the exclusive remedy available to 

employees for the negligent acts of their employer. Section 

39-71-412, MCA, and Madison v. Pierce (1970), 156 Mont. 209, 

212-216, 478 P.2d 860, 863-866, extend this exclusive remedy 

to recovery for injuries caused by the negligent acts of 

co-employees. In case of an employee's death, the Act also 

binds "his personal representative and all persons having any 
right or claim to compensation for his injury or 

death. . . ." Section 39-71-411, MCA. 

Stacey Hubbel's exclusive remedy is that provided by the 

Workers' Compensation Act, so neither Ron Pearson nor his 

insurer is liable to respondent. Gray v. Margot Inc. 

(La.~pp. 1981), 408 So.2d 436, 437 - 438. Respondent has no 

cause of action against Ron Pearson. Respondent therefore is 

not legally entitled to recover damages from Ron Pearson or 

Pearson's insurer. Carlisle v. State Department of Transportation and Development (La.App. 1981), 400 So. 2d 284, 286. 

We approve the rationale on which the Michigan Court of 

Appeals relied when resolving a similar issue. In Hopkins v. 

Auto-Owners Insurance Company (Mich.App. 2972), 200 N.W.2d 

784, an employee was injured as a result of the negligent 

driving of a co-employee who was also an uninsured motorist. 

The injured employee, despite conceding his inability to 

bring a direct action against the tortfeasor because of the 

exclusive remedy provisions of the Workers' Compensation Act, 

sought redress from the uninsured motorist provisions of his 

employer's insurer. In affirming an arbitrator' s denial of 

any liability on the part of the insurer, the court stated: 

"Because of the exclusiveness of the workman's 

compensation coverage, plaintiff never had a remedy 

against the tortfeasor. He was never entitled to 

damages from the negligent motorist. To hold 

otherwise would be to grant plaintiff a windfall 

not contemplated by the parties when they entered 

into their contract of insurance, and not intended 

by the Legislature in its enactments encouraging 

the utilization of uninsured motorist coverage 

[citations omitted] . " Hopkins, 200 N.W. 2d at 786. 

Finally, we find the trial judge's reliance on this 

Court's decision in Sullivan v. Doe (1972), 159 Mont. 50, 495 

P.2d 193, to be misplaced. In Sullivan, two co-employees 

were injured as a result of a third party's negligence. The 

third party was neither their employer nor a co-employee. 
Therefore, the Workers1 Compensation Act did not provide the 

exclusive remedy availabl-e to plaintiffs for their injuries. 

Plaintiffs could seek redress through the uninsured motorist 

provisions of their employer's insurance policy. 

I1 

UNINSURED MOTORIST 

The trial judge found Ron Pearson to be an uninsured 

motorist for two reasons. First, S 39-71-411, MCA, requires 

that respondent's exclusive remedy be the Workers1 Compensation Act, so Pearson1s automobile insurance is not applicable. Since the insurance is not applicable, Pearson was 

operating an uninsured vehicle. Second, State Farm's refusal 

to provide coverage under the "bodily injury" portions of its 

policy resulted in Pearson qualifying as an uninsured motorist. The trial judge's analysj-s creates a "Catch-22" situation for the insurance company. First, the insurance policy 

is not applicable because of the exclusive remedy set forth 

in the Workers' Compensation Act. Therefore, the uninsured 

motorist provision of the policy comes into play, providing 

insurance coverage in violation of § 39-71-411, MCA. Second, 

the insurance company1 s refusal to provide coverage because 

of the exclusive remedy provided by the Act triggers the 

uninsured motorist provisions, and respondent is once again 

entitled to a remedy other than that provided for in the Act. 

These results are contrary to the intent of the Legislature in creating the uninsured motorist provisions. This 

Court discussed two reasons for the provisions in Sullivan, 

supra. 

"The basic purpose of this statute is obvious - to 

provide protection for the automobile insurance 

policyholder against the risk of inadequate compensation for injuries or death caused by the negligence of financially irresponsible motorists." 

Sullivan, 159 Mont. at 60, 495 P.2d at 198. 
Pearson was not a financially irresponsible motorist. As 

discussed earlier, he was covered by legally adequate automobile insurance policies. He was an insured motorist. 

"The legislative purpose behind the enactment of 

such statutory provisions on 'uninsured motorist' 

coverage is equally clear. It is simply to place 

the injured policyholder in the same position he 

would have been if the uninsured motorist had 

liability insurance. . . ." Sullivan, 159 Mont. at 

60, 495 P.2d at 198. 

A corollary to this principle is that uninsured motorist 

provisions should not be used to place an injured claimant in 

a better position than he would be under the ordinary provisions of an existing insurance policy. As State Farm states 

on page ten of its brief, "[wlhether or not Hubbel can recover judgment for his damages against Pearson does not depend, 

and is not affected, by whether or not Pearson had liability 

insurance. " Rather, recovery by Hubbel from Pearson is 

dependent on, and denied by, the exclusive remedy provisions 

of the Workers' Compensation Act. 

Reversed and remanded for entry of an order consistent 

with the law set forth in this opinion. 

We concur: 
Mr. Justice John C. Sheehy, dissenting: 

I dissent. I would affirm the District Court and. hold 

that plaintiffs are entitled to recover from State Farm 

Mutual Automobile Insurance Company under the uninsured 

motorist provisions of its policy issued to Ron Pearson. 

The majority opinion puts an exception in § 33-23-201, 

MCA, the uninsured motorist coverage statute, that was not 

placed there by the legislature. The Court-made exception 

holds that employees in the course of their employment who 

are injured or killed by the negligent acts of their 

co-employees have no right to claim uninsured motorist 

coverage benefits even under their own policies. The 

exception is all-inclusive: there could be no recovery from 

policies of insurance provided by the employer, the injured 

employee, nor the negligent co-employee. I do not accept 

that holding. 

The public policy of this State is expressed in § 

33-23-201, MCA, stating: 

No automobile liability . . . policy . . . shall be 

delivered . . . in this State, . . . unless 

coverage is provided therein . . . for the 

protection of persons insured thereunder who are 

legally entitled to recover damages from owners or 

operators of uninsured motor vehicles . . . Here the heirs of David Hubbel are "legally" entitled to 

recover damages for their decedent against Ron Pearson's 

estate. This was made clear in a recent case involving the 

same insurance company, State Farm Automobile Insurance 

Company v. Baldwin (Ala. 1985), 470 So.2d 1230. The facts in 

Baldwin are right in line with the facts in this case. 

Baldwin, an army sergeant, was riding a motorcycle when a 

U.S. government vehicle operated by White, a civilian 
employee of U.S. Government, collided with Baldwin's 

motorcycle. All parties conced-ed that the accident was 

caused by White's negligence. Under the Federal Tort Claims 

Act, 28 U.S.C.A., S 1346, as interpreted in Feres v. United 

States (1950), 340 U.S. 135, 71 S.Ct. 153, 95 L.Ed. 152, 

Baldwin cannot recover from either the United States of 

America or its employee-agent, Wh.ite. 

It is noteworthy that the situation of Baldwin is 

exactly the situation in the case at bar. In Baldwin, the 

plaintiff Baldwin could not recover from the government or 

its employee because of the Feres doctrine. In the case at 

bar, the heirs of Hubbel could not recover against his 

employer or his co-employee because of the exclusivity 

provisions in the Workers' Compensation Act. 

The Baldwin court discussed what the words "legally 

entitled" meant in the Alabama uninsured motorist statute. 

It said: 

"One must, then, make a determination as to what 

the words, 'legally entitled to recover damages,' 

mean. They mean that the insured ---- must be able to 

establish fault on the part - of - the uninsured 

motorist, which rise -- to damages, --- and must be 

-- able to prove the extent of those damages. In a. 

direct action by the insured against the insurer, 

the insured had the burden of proving in this 

regard that the other motorist was uninsured, 

legally liable for damage to the insured, and the 

amount of this liability. Note that the insurer 

would have available, in addition to policy 

defenses, the substitute defenses that would have 

been available to the uninsured motorist . . ." 

4707 So.2d 1233. (Emphasis added.) 

The Alabama Supreme Court went on to note that State 

Farm wanted not only to use the substantive defenses 

available to White and the United States Government, but also 

to assert the immunity defense afforded by the Feres 

doctrine. The Alabama Court held that such application of 

the Feres doctrine to prevent the recovery of uninsured 
motorist benefits violated Alabama's legislative policy. It 

refused to allow State Farm to apply the Feres doctrine to 

avoid liability under the uninsured motorist coverage 

statute. 

We should reach the same result here. The only defenses 

available to State Farm which we should allow should relate 

to defenses as to legal liability on the part of Pearson (for 

example comparative negligence) or policy defenses which 

relate to the coverage itself. Otherwise, the legislative 

policy declared in S: 33-23-201, MCA, is impaired. We noted 

in Sullivan v. Doe, relied on by the majority, that " [tlhe 

majority of jurisdictions outside Montana declare void those 

clauses which purport to limit liability not expressly 

authorized by statute." 159 Mont. at 63, 495 P.2d at 200. 

Moreover, the majority members are uninstructed as to 

the underlying facts and the effect of the holding in 

Sullivan v. Doe. In that case, both Sullivan and Miller had 

recovered a judgment against John Doe, an unknown uninsured 

motorist. Sullivan and Miller were both policemen who were 

riding in a police car in Butte at the time of the incident. 

Sullivan was driving with Miller a passenger beside him in 

the front seat. The police car was owned and provided by the 

City of Butte which also carried an automobile insurance 

policy on the police car containing an uninsured motorist 

endorsement with Glacier General Insurance Company. In 

addition Sullivan carried his own policy with an uninsured 

motorist endorsement with Hartford Accident Indemnity 

Company. Miller carried a policy with an uninsured motorist 

endorsement with State Farm Mutual Automobile Insurance 

Company. 
When the case reached this Court on appeal, this Court 

determined that Sullivan, the driver of the automobile, was 

negligent as a matter of law, and therefore set aside his 

judgment against the unknown uninsured motorist. This Court, 

however, sustained the judgment that Miller had obtained, 

since as a passenger in the police car, the negligence of 

Sullivan in operating the police car was not imputed to 

Miller. In holding for Miller, this Court decided that the 

City of Butte's Glacier General insurance policy containing 

uninsured motorist coverage applied and that in addition 

Miller could recover from his own insurer, State Farm Mutual, 

for an additional uninsured motorist coverage benefit. 

Thus, Miller was in exactly the same position that the 

heirs of Hubbel are in this case. Miller had been injured by 

his co-employee, Sullivan, and Miller was held entitled to 

recover uninsured motorist coverage benefits against the 

policy provided by his employer, the City of Butte. Miller 

also recovered Workers' Compensation benefits. Further 

Miller recovered from the insurer under his own policy for 

the legal liability of the unknown uninsured motorist. 

In Sullivan, both insurers Glacier General and State 

Farm contended that because Miller had recovered Workers' 

Compensation, they were entitled. to an offset to the extent 

of the Workers' Compensation that he ha.d received. This 

Court held that such a holding would reduce or limit his 

"eligible uninsured motorist coverage" by deduction of 

payments from other insurance which was adverse to Montana's 

uninsured motorist coverage law. 

Without stating so, the majority members have overruled 

Sullivan v. Doe, supra. They have ignored the legislative 
policy to provide uninsured motorist coverage, which we have 

heretofore strongly supported. 

The basic fault in the reasoning of the majority members 

in this case is they have regarded the interpretation of the 

Workers' Compensation Act and the Uninsured Motorist Coverage 

Act from the viewpoint of the insurer, and not from the 

viewpoint of the claimant. To State Farm Mutual, Pearson is 

not uninsured, because its policy does provide liability 

coverage to him. To the Hubbel claimants, however, Pearson 

is uninsured, because through a legal technicality, much the 

same as the Feres doctrine, the Hubbel heirs cannot obtain a 

judgment against Pearson which could be satisfied under the 

liability portion of the State Farm Policy. If State Farm is 

caught in a Catch-22, the Hubbel heirs are caught in a 

Catch-44, a double whammy. State Farm gets to keep the money 

for which it collected a premium; the Hubbel heirs do not get 

to collect anything under the uninsured motorist coverage. 

The district judge here correctly decided to support the 

legislative policy of this State. I would affirm the holding 

of the district judge. 

Justice 

Mr. Justice John Conway Harrison, dissenting: 

I concur in the dissent of Mr. Justice Sheehy. 

- F 

Justice