No. 90-149 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1990 

SAMUEL J. GRENZ, 

Plaintiff and Appellant, 

ORION GROUP, INC., THE FIRE AND CASUALTY 

INSURANCE COMPANY OF CONNECTICUT, DON 

MACMILLAN, EDWARD EBERLY, E. CRAIG DAUE, 

and the Law Firm of GARLINGTON, LOHN and 

ROBINSON, 

Defendants and Respondents. 

APPEAL FROM: District Court of the Eleventh Judicial District, 

In and for the County of Flathead, 

The Honorable Michael H. Keedy, Judge presiding. 

COUNSEL OF RECORD: 

For Appellant: 

Samuel J. Grenz, Whitefish, Montana (Pro Se) 

For Respondent: 

Sherman V. Lohn, Missoula, Montana; G. Richard 

Dzivi, Great Falls, Montana; Susan J. Rebeck, Great 

Falls, Montana 

Submitted on Briefs: May 24, 1990 

Decided: July 12, 1990 
Justice Fred J. Weber delivered the Opinion of the Court. 

Samuel J. Grenz (Mr. Grenz), pro se, appeals from the 

dismissal of his complaint by the District Court for the Eleventh 

Judicial District, Flathead County. We affirm. 

The sole issue before us is whether the District Court erred 

in dismissing Mr. Grenzl complaint. 

On August 22, 1984, Mr. Grenz was injured while working for 

American Stud Company in Flathead County, Montana. The employer 

was enrolled under Workers1 Compensation Plan 11. The insurer 

assumed liability for the injury and paid compensation and medical 

benefits to and for Mr. Grenz. Mr. Grenz received temporary total 

disability benefits. In June of 1987, the law firm of Garlington, 

Lohn and Robinson (GLR) was hired by the insurer to review Mr. 

Grenzl claim. Mr. Daue, a partner in GLR, assumed responsibility 

for the file. Mr. Daue requested that Mr. Grenz and his claim be 

submitted to the Northwest Medical Evaluation Panel for an 

evaluation of his disability. Mr. Grenz did not contest the 

insurer's right to require him to submit to such an evaluation. 

On the basis of extensive medical, psychological, and vocational 

data that had been received, Mr. Daue recommended to the insurer 

that Mr. Grenzl benefits could be reduced from temporary total 

disability to permanent partial disability. Subsequently, on 

August 24, 1988, Mr. Grenzt benefits were reduced as recommended. 

Subsequent to the reduction in his benefits, Mr. Grenz 

proceeded pro se and requested a mediation of his claim. The 
mediation was held and ultimately Mr. Grenzl temporary total 

disability benefits were reinstated on December 15, 1988, 

retroactive to August 24, 1988. 

In December 1988, Mr. Grenz requested a lump sum advance of 

more than $70,000 of his benefits, attorney fees and a statutory 

penalty. A hearing was held in the Workers1 Compensation Court on 

February 7, 1989. It determined that Mr. Grenz was entitled to a 

lump sum advance to pay his real estate taxes that were due and 

owing. However, it denied a lump sum conversion of his future 

compensation benefits to pay off his existing loans which were 

current; to pay a balloon payment due in September, 1990; to 

purchase a hot tub for his home; or to restore his 1964 ~ontiac. 

The penalty issue was not addressed. 

In April 1989, Mr. Grenz filed a petition in which he renewed 

his request for a penalty. He based his claim for a 20% penalty 

on four grounds: (1) that the insurer wrongfully reduced his 

benefits from temporary total to permanent partial during the 

period from August 24, 1988, to December 16, 1988; (2) that the 

insurer unreasonably used the Northwest Panel Medical Evaluation 

to justify the reduction in benefits; (3) that the insurer 

unreasonably delayed payment of a lump sum advance; and (4) that 

the insurer unreasonably delayed payment of benefits from September 

12, 1988, through October 28, 1988. 

The insurer moved to dismiss the petition and to stay 

discovery. The motion to stay was granted but the court 

specifically declined the motion to dismiss in an effort to provide 
some leniency to Mr. Grenz who was appearing pro se. 

Finally, on September 7, 1989, the Workerst Compensation Court 

dismissed the petition without prejudice, stating: 

[Mr. Grenz] wrote to the Court on his own behalf advising 

that he wished to ttwithdrawlt his petition and amended 

petitions relative to the issues now before the Court in 

this proceeding. 

Since both the insurer and [Mr. Grenz] have 

essentially moved the Court for dismissal of these 

proceedings . . . the petition and amended petition in 

the above entitled matter are DISMISSED. 

There never was any determination by the Workers1 Compensation 

Court that the insurer had acted unreasonably in the reduction of 

benefits from total to partial and Mr. Grenz has continued to 

receive temporary total disability benefits. As a result, on May 

2, 1990, Mr. Grenz again petitioned the Workers1 Compensation 

Division for an advancement of lump sum benefits based on permanent 

total disability calculated throughout his future work life 

expectancy. Mr. Grenz also alleged bad faith, entitlement to lump 

sum benefits and entitlement to a penalty. That petition was not 

yet resolved at the time of this appeal. 

In September 1989, Mr. Grenz filed a pro se complaint in the 

District Court alleging bad faith resulting from intentional torts 

and abuse of the workerst compensation system in delaying the 

payment of his benefits. He further alleged he was entitled to a 

penalty for the insurer's wrongful refusal to pay benefits in a 

lump sum. The ~istrict Court accepted an amended complaint and a 

second amended complaint, but denied a third amended complaint. 

Defendants filed a motion to dismiss, contending that there is a 

statutory remedy which a workerst compensation claimant must follow 
if he believes the workers1 compensation insurer acted unfairly. 

In short, defendants argued that Mr. Grenzl claim was premature 

because Mr. Grenz must first file his complaint with the Workers1 

Compensation Court to determine if defendants acted unfairly 

pursuant to 839-71-2907, MCA, and there must be a determination 

prior to an action in District Court. 

Agreeing, the District Court stated: 

[Mr. Grenz] is now receiving compensation benefits at 

the level of temporary total disability, retroactive to 

the date of reduction; and, his disability rating has 

not been finalized. There has been no determination from 

the Worker's Compensation Court or any other court that 

the disability rating from the Northwest Panel and the 

subsequent (temporary) reduction in benefits was 

improper. 

. . . [wlhen Plaintiff contends that the Defendants failed to 

pay benefits at the temporary total disability level 

"without conducting a reasonable investigation based upon 

all available information," and that they !@neglected to 

attempt in good faith to effectuate prompt, fair and 

equitable settlements of claims in which liability has 

become reasonably clear," the statutory bar of S33-18- 

242(6)(b), M.C.A. is triggered. There, the legislature 

has seen fit to bar even the filing of a bad faith claim 

in the adjustment of insurance coverage until the 

underlying claim has been settled or a judgment entered 

in the claimant's favor. 

In the absence of a determination by the Workers1 Compensation 

Court as to whether the disability rating and subsequent temporary 

reduction in benefits was improper, the District Court dismissed 

Mr. Grenzt complaint. Mr. Grenz appeals the dismissal of his 

complaint. 

Did the District Court err in dismissing Mr. Grenz I complaint? 

Relying on Vigue v. Evans Prod. Co. (1980), 187 Mont. 1, 608 

P. 2d 488 and Hayes v. Aetna Fire Underwriters (1980) , 187 Mont. 
148, 609 P.2d 257, Mr. Grenz contends that this action should not 

be barred from the District Court. He urges under these cases he 

may maintain an action against the insurer based on intentional 

torts because it as an independent action which does not arise out 

of an employment relationship. 

The insurer relies on Fode v. Farmers Ins. Exch. (1986), 221 

Mont. 282, 719 P. 2d 414, for the proposition that a bad faith claim 

cannot be pursued until the resolution of the underlying claim. 

Mr. Daue and GLR make the same argument and also assert that Mr. 

Grenz has no legal authority to make a third-party claim against 

them, as the defense counsel of the insurer. They assert that 833- 

18-242(1), MCA, specifies that the independent action arises only 

against "an insurer". Thus, Mr. Daue and GLR ask this Court to 

affirm the dismissal against them with prejudice. They contend 

that not only must this action await resolution in the Workerst 

compensation Court, but that 833-18-242 (1) , MCA, does not create 

a cause of action against an insurerts defense counsel. 

A complaint should not be dismissed for failure to state a 

claim upon which relief may be granted unless it appears certain 

that the plaintiff is entitled to no relief under any set of facts 

which could be proved in support of his claim. Larson v. First 

Interstate Bank of Kalispell (Mont. 1990), 786 P.2d 1176, 47 

St.Rep. 344. However, as the ~istrict Court correctly pointed out, 

in the light of a specific statute relating to the claim, dismissal 

may be appropriate. See Hasbrouck v. Krsul (1975), 168 Mont. 270, 

541 P.2d 1197. 
The ~istrict Court further stated: 

Plaintiff's complaints all sound in bad faith in the 

ltadjusting" or handling of his claim that he is 

temporarily totally disabled. There is nothing in either 

the Worker's Compensation Act or the Unfair Trade 

Practices Act barring the application of 533-18-201, 

M.C.A. et seq. to worker's compensation claims. 

Inferentially referring to Visue and Haves, the District Court 

stated: 

The Supreme Court, in holding that an injured worker has 

a separate cause of action for the commission of torts 

occurring during the settlement of his claim, based the 

right on the fact that the action does not arise out of 

an employment situation. In this way the worker's 

compensation claimant is in no different position than 

the injured third-party claimant in an automobile 

insurance case. 

The court then dismissed Mr. Grenz' action ''pending determination 

by the Worker's Compensation Court whether the disability rating 

and subsequent temporary reduction in benefits was improper." 

Section 33-18-242, MCA, provides for an independent action by 

a third-party claimant against an insurer for actual damages caused 

by the insurer. However 533-18-242(6)(b) states: 

A third-party claimant mav not file an action under this 

section until after the underlvins claim has been settled 

or a judsment entered in favor of the claimant on the 

underlying claim. (emphasis added). 

We conclude that the District Court properly dismissed Mr. 

Grenz' complaint based upon the foregoing statute. As stated in 

Visue and Hayes an independent action may lie after the underlying 

claim has been settled or a judgment entered in Mr. Grenzl favor. 

We therefore hold that the District Court did not err in dismissing 

Mr. Grenz' complaint. 

Section 33-18-242, MCA, creates a cause of action against an 
l1insurerl1. An llinsurern includes a person, f inn, or corporation 

utilizing self-insurance to pay claims made against them. Section 

33-18-242 (8) , MCA. The law firm and its attorneys defending the 

insurer do not fall under this definition. Therefore, we hold that 

the dismissal of the complaint was proper. We further hold that 

the dismissal shall be with prejudice as against Mr. Daue and 

Garlington, Lohn and Robinson as to a claim under 533-18-242(6), 

MCA . 

Affirmed. 

We Concur: