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, Judgepresiding.

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; SusanJ. Rebeck,Great Falls, Montana

Submitted on Briefs: May 24, 1990 Decided: July 12, 1990Justice 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. Grenzlcomplaint. 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 compensationand medical benefits to and forMr. Grenz. Mr. Grenz received temporary total disability benefits. InJune of 1987, the law firm of Garlington, Lohn and Robinson (GLR) was hired by the insurer to review Mr. Grenzlclaim. Mr. Daue, a partner in GLR, assumed responsibility for the file. Mr. Daue requested thatMr. 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. Grenzlbenefits could be reduced from temporary total disability to permanent partial disability. Subsequently, on August 24, 1988,Mr. Grenztbenefits were reduced as recommended. Subsequent to the reduction in his benefits, Mr. Grenz proceeded pro se and requested a mediation of his claim. Themediation 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 Workers1CompensationCourt 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. InApril 1989,Mr. Grenz filed a petition inwhich 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 ofbenefits fromSeptember 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 themotion todismiss in an effort toprovidesome leniency to Mr. Grenz who was appearing pro se. Finally,onSeptember 7, 1989,theWorkerstCompensation Court dismissed the petition without prejudice, stating: [Mr.Grenz]wrote to theCourt on his ownbehalf advising that he wished to ttwithdrawlt his petition and amended petitions relative to the issuesnow 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 advancementof lump sumbenefits based onpermanent 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 DistrictCourt allegingbad 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 aworkerstcompensationclaimant must followif he believes the workers1compensation insurer acted unfairly. In short, defendants argued that Mr. Grenzlclaim was premature because Mr. Grenz must first filehis 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. Therehasbeennodetermination 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.



# . . . [wlhenPlaintiff contends that the Defendants failed to pay benefits at the temporary total disability level "withoutconductingareasonable investigationbasedupon all available information,"and that they !@neglectedto 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 tobar 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 towhether thedisability 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 theDistrictCourt err indismissingMr. GrenzI complaint? Relying onVigue 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 Fodev. Farmers Ins. Exch. (1986), 221 Mont. 282, 719 P.2d 414, for theproposition that abad 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 thedefense 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 insurertsdefense counsel. A complaint should not be dismissed for failure to state a claim upon which relief may be granted unless it appears certain that theplaintiff 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 correctlypointed out, in the light of a specific statuterelating to the claim,dismissal may be appropriate. SeeHasbrouckv. Krsul (1975), 168Mont. 270, 541 P.2d 1197.The ~istrict Court further stated: Plaintiff's complaintsall sound inbad faith inthe ltadjusting"or handling of his claim that he is temporarily totallydisabled. There isnothing 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, inholding that an injuredworker 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 ''pendingdetermination 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 actionby

a third-party claimantagainstan insurer foractualdamagescaused by the insurer. However 533-18-242(6)(b) states: A third-party claimantmav not file an actionunder this sectionuntil after theunderlvinsclaimhasbeen settled or a judsment entered in favor of the claimant on the underlying claim. (emphasisadded). We conclude that the District Court properly dismissed Mr. Grenz' complaint based upon the foregoing statute. As stated in Visue and Hayes an independent actionmay lie after theunderlying claim has been settled or a judgment entered in Mr. Grenzlfavor. We thereforehold that the District Court did not err indismissing Mr. Grenz' complaint. Section 33-18-242,MCA, creates a cause of action against anl1insurerl1.An llinsurern includes a person, finn, or corporation utilizing self-insurancetopay claims made against them. Section 33-18-242 (8)

## , MCA. The law firm and its attorneys defending the insurerdonot fallunder thisdefinition. Therefore,wehold that the dismissal of the complaintwas 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: