No. 95-104 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1996 

AUSTIN A. MALEK, 

Plaintiff and Appellant, sJAiv ;3 (j ~,y,tj 

v. 

JOE HANKINS, 

Defendant and Respondent. 

APPEAL FROM: District Court of the Twelfth Judicial District, 

In and for the County of Chouteau, 

The Honorable John Warner, Judge presiding. 

COUNSEL OF RECORD: 

For Appellant: 

John E. Seidlitz, Jr., Great Falls, Montana 

For Respondent: 

Filed: 

Charles R. Cashmore! Crowley, Haughey, Hanson, 

Toole & Dietrich, Billings, Montana 

Heard: December 14, 1995 

Submitted: December 19, 1995 

Decided: January 30, 1996 
Chief Justice J. A. Turnage delivered the Opinion of the Court. 

Austin A. Malek appeals a judgment of the Twelfth Judicial 

District Court, Chouteau County, which granted Joe Hankins' motion 

for summary judgment on this claim of negligence in the workplace. 

We affirm. 

The issue is whether the District Court erred in ruling that 

Hankins, an employee of Malek, Inc., cannot be deprived of his coemployee immunity from suit by the corporation's election not to 

provide workers' compensation coverage for its officer and 

employee, Malek. 

Austin Malek was a compensated director and officer (president) of Malek, Inc. Joe Hankins was an employee of the corporation. In March of 1990, Hankins, while acting within the course 

and scope of his employment, unintentionally caused injury to 

Malek. Hankins was covered by workers' compensation insurance 

through his employment with Malek, Inc. The corporation had 

properly and effectively elected not to cover corporate officer 

Malek under the Workers' Compensation Act, pursuant to § 39-71- 

401(4) (a), MCA (1989). 

In March of 1993, Malek brought this negligence action against 

Hankins. Hankins moved for summary judgment, relying on the 

principle of exclusivity under the Workers' Compensation Act as a 

bar to Malek's claim. After briefing and a hearing, the District 

Court entered judgment for Hankins. Malek appeals. 

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Did the District Court err in ruling that Hankins, an employee 

of Malek, Inc., cannot be deprived of his co-employee immunity from 

suit by the corporation's election not to provide workers' 

compensation coverage for its officer and employee Malek? 

This Court's standard of review of a summary judgment is the 

same as that used by the trial court in ruling upon the motion for 

summary judgment--that is, summary judgment is proper only when 

there is no genuine issue of material fact and the moving party is 

entitled to judgment as a matter of law. Rule 56(c), M.R.Civ.P.; 

Motarie v. Northern Montana Joint Refuse Disposal Dist. (Mont. 

1995), 907 P.Zd 154, 52 St.Rep. 1209. 

Section 39-71-118(l) (a), MCA (19891, defines the term 

"employee" for purposes of the Workers' Compensation Act as 

each person who is in the service of an employer 

The term includes all of the elected and 

appointed officers and members of boards of 

directors of . private corporations . while 

rendering actual service for such corporations for pay. 

Hankins was clearly an employee under the statute. Malek, too, was 

a statutory "employee," as an officer of a private corporation 

rendering services to the corporation for pay. 

Hankins and Malek, as employees of the same employer, were coemployees. This Court has recognized that co-employees are immune 

from suit in cases in which the Workers' Compensation Act applies. 

See, Forrester v. Kuck (1978), 177 Mont. 44, 579 P.2d 756; State ex 

rel. Fergusen v. District Court (19741, 164 Mont. 84, 519 P.2d 151; 

Madison v. Pierce (19701, 156 Mont. 209, 478 P.2d 860. Malek 

infers that when an election has been made not to cover an officer 

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and employee under workers' compensation, a co-employee is not 

immune from suit for injury to the officer and employee. 

Malek also relies upon this Court's opinion in Shea v. NorthButte Mining Co. (1919), 55 Mont. 522, 179 P. 499. In -I Shea both 

the employer and the employee had elected workers' compensation 

coverage under the statutes then in effect. The issue before the 

Court was the constitutionality of closing the courts to injured 

workers who had chosen to become subject to the workers' compensation statutes. This Court stated: 

[Wlhen an employee has elected to become subject to the 

provision of the act, he may not thereafter prosecute an 

action for damages against the employer for an injury 

suffered by him during the course of his employment[.l 

Shea, 179 P. at 502. Malek infers from this language that if an 

election has been made under the Act to reject coverage for an 

officer and employee, then that officer and employee retains the 

right to sue a negligent co-employee for damages. 

Malekls inferences are overbroad. His view would allow the 

voluntary choice by Malek, Inc., to forego workers' compensation 

coverage of its employee Malek to adversely affect the rights and 

obligations of its non-officer employee Hankins, who must remain 

bound under the Act to his exclusive remedy. The law gave Hankins 

no voice in the choice to forego workers' compensation coverage for 

Malek. 

We cannot accept Malek's view. As the District Court cogently 

stated: 

It is undisputed that as part of his Workers' 

Compensation coverage Hankins gave up his right to sue 

his employer. In exchange for this waiver of the right 

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to sue his employer, Hankins is entitled to receive the 

benefits of the Workers' Compensation Act. One of those 

benefits is immunity from lawsuits by co-employees 

injured in the course of employment. 

. . 

[Malek'sl argument fails to recognize that [Hankins] 

is covered by the Act, does bear the burden [of waiver of 

the right to sue his employer], and is therefore entitled 

to the Act's benefits, one of which is immunity from 

lawsuits by co-employees for work-related injuries. 

We agree with the District Court. We conclude that the Workers' 

Compensation Act provides immunity to a covered employee for workrelated injuries to a co-employee, regardless of the employer's 

election not to cover the injured co-employee under workers' 

compensation. 

The Supreme Court of Colorado considered an identical issue in 

Kelly v. Mile Hi Single Ply, Inc. (Cola. 1995)) 890 P.Zd 1161. 

Mile Hi had opted out of workers' compensation coverage for Kelly, 

a corporate officer, as allowed under Colorado law. Kelly was 

injured in an automobile accident in which James, an employee of 

Mile Hi, was the driver. Kelly sued James and Mile Hi to recover 

damages for his injury. 

As to James' liability, the Supreme Court of Colorado 

reasoned: 

[I]t would be unjust to burden a co-employee with 

liability based on an officer's election to reject 

coverage under the Act when the co-employee is covered by 

the Act, and his or her exclusive remedy for any workrelated injuries is dictated by the Act. 

We hold, therefore, that co-employees are immune 

from common law actions brought by an officer who has 

rejected coverage under the Act. Our decision to 

insulate co-employees from common law actions is based on 

the status of the defendant co-employee, and not on that 

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of the rejecting officer. It makes no difference whether 

the employee bringing the action is covered by the Act or 

has rejected coverage, provided the co-employee's 

exclusive remedies are found in the Act. To decide 

otherwise would require us to elevate the interests of 

the rejecting officer over those of a co-employee who has 

no knowledge or control over the rejecting officer's 

decision, and moreover, receives no benefit from the 

rejection of coverage. 

Kelly, 890 P.2d at 1165. We agree with the rationale set forth by 

the Supreme Court of Colorado. 

Based upon the above considerations, we hold that the election 

by Malek, Inc., to opt out of workers' compensation coverage for 

its corporate officer Malek did not affect Hankins' co-employee 

immunity under the Workers' Compensation Act. We therefore affirm 

the summary judgment entered by the District Court. 

Chief Justice 

We concur: 

Justices 

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