Court Opinion

ID: 884317
Source: CourtListenerOpinion
Date Created: 2013-06-05 03:02:08.18003+00
Date Added: 2024-06-11T15:23:11.410454
License: Public Domain

96-703

                                                                                            No.       96-703

                                                             IN THE SUPREME COURT OF THE STATE OF MONTANA

                                                                                           1997

                                                                       WILL NEUSTROM,

                                                                         Petitioner and Appellant,

                                                                                           v.

                                                                                                                   STATE OF
                                                                        MONTANA,
                                                                  DEPARTMENT OF LABOR
                                                                     AND INDUSTRY,

                                                                        Respondent and Respondent,
                                                                             and

                                                                        DAROLD DAVIS,

                                                                           Real Party in Interest.

         APPEAL FROM:                              District Court of the Twenty-First Judicial District,
                                                              In and for the County of Ravalli,
                                                     The Honorable Jeffrey H. Langton, Judge presiding.

                                                                   COUNSEL OF RECORD:

                                                                  For Appellant:
                                                 Jeffrey B. Hays, Recht, Hays & Hayes, Hamilton, Montana

                                                              For Respondent:
                                          Kevin Braun, Department of Labor and Industry, Helena, Montana

                                                                       For Real Party in Interest:
                                                                          John Houtz, Forsyth, Montana

                                                                               Submitted on Briefs: March 20, 1997

                                                                       Decided:     June 17, 1997
                                                                       Filed:
                                                               __________________________________________
                                                                              Clerk

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                   Justice William E. Hunt, Sr., delivered the Opinion of the Court.

          Appellant Will Neustrom (Neustrom) appeals from the opinion and order issued
  by the Twenty-First Judicial District Court, Ravalli County, dismissing Neustrom's
  petition for alternative writs of mandate and prohibition on the grounds that the
                                         court had
 no jurisdiction to consider the matters presented, that the matters presented were
                                            within
 the jurisdiction of the Workers' Compensation Court, and that therefore Neustrom had
                   a "plain, speedy and adequate remedy" in that court.
                                               We affirm.
         The dispositive issue here is whether the District Court correctly concluded
                                              that
       the Workers' Compensation Court had exclusive jurisdiction to consider the
                                        substantive
     matters contained in Neustrom's petition for alternative writs of mandate and
                                       prohibition.
                                         BACKGROUND
          On December 5, 1991, Darold Davis (Davis) broke his arm after falling from a
     ladder at the Miles City Trading Company, which was then owned by Neustrom. On
July 30, 1992, Davis filed a claim for workers' compensation benefits, alleging that
                                               he
was an employee of Neustrom's at the time of the accident and was therefore entitled
                                               to
                                          benefits.
           The Department determined that Neustrom did not have workers' compensation
insurance at the time of Davis's accident, and accordingly transferred Davis's claim
                                               to
       the Department's Uninsured Employers Fund (UEF). On May 30, 1993, after it
     unsuccessfully attempted to obtain employee information from Neustrom, UEF sent
    Neustrom a letter informing him that it had decided to accept Davis's claim for
                                          benefits.
However, on July 18, 1993, Neustrom filed a "First Report of Injury" regarding Davis'
accident in which Neustrom expressly denied that Davis was an employee. On September
  17, 1993, UEF sent Davis a letter informing him that the Department had determined
                                              that
     he was not an employee and therefore was not entitled to workers' compensation
                                          benefits.
         On November 2, 1994, Davis filed an independent action against Neustrom in the
 Sixteenth Judicial District Court, Custer County. Section 39-71-515, MCA, provides
                                              for
an independent cause of action against an employer for failure to be enrolled in one
                                               of
              the three workers' compensation plans required by Montana law.
            Later, by letter dated July 17, 1995, Davis's attorney informed UEF that
                                            during
  discovery in the Custer County District Court action it had been established that
                                             Davis
  was Neustrom's employee at the time of Davis's injury. In the same letter, Davis's
    attorney inquired as to whether Davis could at that time still appeal from UEF's

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       September 17, 1993 decision rejecting Davis's claim. On August 2, 1995, UEF
   responded by letter stating that the 1991 version of the Workers' Compensation Act
  applied to Davis's claim and that the current 90-day appeal requirement of     39-71-
                                            520,
                                     MCA did not apply.
          Thereafter, on September 7, 1995, Davis's claim was mediated and UEF reversed
its earlier decision by concluding that Davis was in fact Neustrom's employee at the
                                            time
   of Davis' injury. By letter dated November 30, 1995, UEF informed Neustrom of its
    decision, and also informed Neustrom that its decision would become final if not
                                          appealed
    within 90 days. Neustrom indicated to UEF his disagreement with UEF's decision,
contending in a December 21, 1995 letter that the matter had already become final and
                       could not be reconsidered, but did not appeal.
             In July, 1996, the Department issued to Neustrom an "Accounts Receivable
   Invoice," a document which indicated that Neustrom was obligated to reimburse the
    Department for $13,576.67 it had paid on Davis's claim for benefits. By letter
                                         dated July
19, 1996, Neustrom objected to the action taken by UEF and requested that the invoice
by withdrawn. The Department responded through its legal counsel, informing Neustrom
   by letter dated August 1, 1996 that UEF had an obligation to pay on Davis's claim
  pending the outcome of the district court litigation, that Neustrom was required to
  reimburse UEF or face a collection action, and that if Neustrom disagreed with the
        decision made by UEF he could proceed to the Workers' Compensation Court.
            On August 7, 1996, Neustrom petitioned the Twenty-First Judicial District
                                           Court,
    Ravalli County for a writ of mandate or prohibition directing the Department to
                                           vacate
and set aside its November 30, 1995 decision. After a hearing, the District Court on
October 10, 1996, issued its opinion and order, dismissing Neustrom's petition on the
 grounds that it had no jurisdiction over the dispute, that the Workers' Compensation
  Court had exclusive jurisdiction, and that therefore Neustrom had a "plain, speedy
                                             and
 adequate remedy" in that court. Neustrom appeals from the District Court's opinion
                                             and
                                           order.

                                       DISCUSSION
          Did the District Court correctly conclude that the Workers' Compensation
                                          Court
    had exclusive jurisdiction to consider the substantive matters contained in
                                       Neustrom's
               petition for alternative writs of mandate and prohibition?
           The District Court's conclusion that the Workers' Compensation Court had
 jurisdiction over the matters presented in Neustrom's petition is a conclusion of
                                        law. We
     review a district court's conclusion in order to determine if it correctly
                                    interpreted the
 law. CNA Ins. Companies v. Dunn (1995), 273 Mont. 295, 298, 902 P.2d 1014, 1016.
         In its opinion and order, the court made two interrelated determinations in
  disposing of Neustrom's petition. First, the court engaged in a jurisdictional
                                      analysis and

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 concluded that the Workers' Compensation Court had jurisdiction over the substantive
  matters contained in the petition. Based on this first conclusion, the court then
                                              also
  concluded that dismissal of Neustrom's petition was proper because he had a "plain,
  adequate and speedy remedy" in appealing UEF's actions to the Workers' Compensation
                                             Court.
            Neustrom petitioned the District Court for writs of mandate and prohibition,
       pursuant to    27-26-102, MCA (writ of mandate), and    27-27-102, MCA (writ of
    prohibition). The statutes explain that the writs should be issued in cases in
                                         which "there
is not a plain, speedy, and adequate remedy in the ordinary course of law." Section
                                               27-
        26-102(2), MCA;    27-27-102, MCA. To determine the propriety of the court's
   dismissal of Neustrom's petition on the ground that he has "a plain, speedy, and
                                           adequate
    remedy" in an appeal to the Workers' Compensation Court, we must first determine
   whether the court's conclusion that the Workers' Compensation Court had exclusive
         jurisdiction over the matters presented in Neustrom's petition is correct.
             Neustrom contends that the court's jurisdictional conclusion is incorrect
                                            because
       Montana statutes and case law dictate that where, as here, a party files an
                                         "independent
    action" in district court against an employer for lack of workers' compensation
                                          insurance,
      the district court has jurisdiction over that action and all of its "integral
                                          elements."
  Neustrom argues that the matters presented in his petition for writs of mandate and
 prohibition are "integral elements" of Davis's Custer County District Court action,
                                               and
     are therefore within the jurisdiction of the district courts, not the Workers'
                                         Compensation
                                             Court.
           The "independent action" to which Neustrom refers is found in     39-71-515(1),
                                              MCA:
               An injured employee or the employee's beneficiaries have an independent
             cause of action against an uninsured employer for failure to be enrolled in
                           a compensation plan as required by this chapter.

                     The district courts have jurisdiction over these actions:
                      An injured employee or an employee's beneficiaries pursuing an
               independent cause of action pursuant to 39-71-515 shall bring the action in
                the district court in the district where the claimant resides or where the
                                       alleged violation occurred.

  Section 39-71-516, MCA. Finally,     39-71-2905, MCA, explains that district court
   jurisdiction over    39-71-515, MCA, "independent actions" is an exception to the
  Workers' Compensation Court's exclusive jurisdiction over disputes arising under
                                        chapter
                                          71:
             After parties have satisfied dispute resolution requirements provided
           elsewhere in this chapter, the workers' compensation judge has exclusive
          jurisdiction to make determinations concerning disputes under Chapter 71,

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                                              except as provided in 39-71-317 and 39-71-516.

         Neustrom contends that we have previously interpreted these statutes to mean
                                            that
once an "independent action" is filed in district court, the district court maintains
  exclusive jurisdiction over that action and its "integral elements." In Bohmer v.
 Uninsured Employers' Fund (1994), 266 Mont. 289, 880 P.2d 816, an injured employee
 sued his employer in district court pursuant to         39-71-515 and -516, MCA. After
                                             the
      employer agreed that it was uninsured, the employee petitioned the Workers'
Compensation Court to determine the benefits to which he was entitled. We addressed
the issue of "whether the Workers' Compensation Court had jurisdiction to determine
                                             the
compensation to which an employee is entitled from an uninsured employer pursuant to
   39-71-515(4), MCA." Bohmer, 880 P.2d at 817. In that case, we concluded that the
    district courts have exclusive jurisdiction over such actions, and refused to
                                        "insert a
[jurisdictional] limitation into [ 39-71-516, MCA] where none exists." Bohmer, 880
P.2d at 818. We were not persuaded by Bohmer's argument that the district court's
  jurisdiction was limited to liability issues raised in        39-71-515 (2), MCA, and
                                        explained
   that "[s]uch an interpretation would limit the District Court's jurisdiction to
                                        questions
   relating to [the employer's] failure to enroll in a compensation plan and would
                                          exclude
the damages issue which is an integral element of the cause of action." Bohmer, 880
P.2d at 818.
            In Dunn, the injured employee sued his allegedly uninsured employer in
                                         district
court, pursuant to      39-71-515 and -516, MCA. Then, CNA Insurance filed a petition
    with the Workers' Compensation Court, seeking a determination that its policy
                                         provided
workers' compensation insurance to the employer for the injury suffered by Dunn, the
     employee. Dunn, 902 P.2d at 1016. On appeal, CNA Insurance argued that the
 Workers' Compensation Court had jurisdiction over its petition because, unlike the
   situation in Bohmer, where the extent of benefits was at issue, at issue in the
                                      present case
  was the uninsured status of the employer. Dunn, 902 P.2d at 1017. We disagreed,
                                        stating:
           These distinctions make no difference. In Bohmer, we found that once an
            independent action pursuant to      39-71-515, MCA, is brought in district
         court, that district court has exclusive jurisdiction over any issues which
                                            are
                            an integral part of the cause of action.

                                                                                          ....

                       Section 39-71-515, MCA, provides a cause of action which includes
                 as an essential element the employer's failure to insure itself against
               workers' compensation claims. In order for Dunn to prevail in the District
                Court, he must prove that [his employer] was uninsured at the time of his
                                                 injury.

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                                  Dunn, 902 P.2d at 1017.
         Neustrom contends that, pursuant to Bohmer and Dunn, the District Court erred
 in concluding that the Workers' Compensation Court has jurisdiction over the matters
      contained in his petition for writs of mandate and prohibition. We disagree.
          Generally, the matters contained in Neustrom's petition relate to Neustrom's
dispute with UEF. Particularly, Neustrom disputes UEF's jurisdiction to reverse its
                                           prior
finding that Davis was not Neustrom's employee, and therefore disputes UEF's issuance
     of the "Accounts Receivable Invoice" and its stated requirement that Neustrom
                                         reimburse
UEF for payments made on Davis's claim. These matters are unrelated to Davis's       39-
71-515, MCA, "independent action." Instead, they are the basis of a separate dispute
    over the propriety, jurisdictionally and otherwise, of actions taken by UEF in
                                         regard to
 Davis's pursuit of a remedy through that agency. Section 39-71-508, MCA, recognizes
   that an injured employee may concurrently pursue remedies according to separate
                                          causes
                                        of action:
              An employee who suffers an injury arising out of and in the course of
             employment while working for an uninsured employer as defined in 39-71-
          501 or an employee's beneficiaries in injuries resulting in death may pursue
                     all remedies concurrently, including but not limited to:
                  (1) a claim for benefits from the uninsured employers' fund;
                                               ....
          (3) an independent action against an employer as provided in 39-71-515; ....

              Neither Bohmer nor Dunn is inconsistent with the relevant statutory
                                       provisions,
as neither case involved a concurrent claim for benefits from UEF and an "independent
      action" pursuant to    39-71-515, MCA. In Bohmer, we considered whether the
  "independent action" could be decided in piecemeal fashion with the district court
   deciding the issue of liability and the Workers' Compensation Court deciding the
                                          amount
 of compensation that was due. Bohmer, 880 P.2d at 817. We held that pursuant to the
    plain language of     39-71-516 and -2905, MCA, the district court had exclusive
 jurisdiction to decide all issues related to the "independent action." Bohmer, 880
P.2d
                                         at 818.
         In Dunn, the claimant had filed an "independent action" in district court and
                                            the
   employer's insurer filed a petition in the Workers' Compensation Court to have the
 integral issue of whether the employer was, in fact, uninsured decided in a separate
   venue. Dunn, 902 P.2d at 1016. Pursuant to Bohmer, and the plain language of the
  same two statutes, we correctly held that the "independent action" cannot be split
                                          up and
                  decided in piecemeal fashion. Dunn, 902 P.2d at 1017.
            Neither Bohmer nor Dunn involved a claim for benefits from UEF, which the
  Workers' Compensation Act clearly provides must initially be made to the Department
 and appealed to the Workers' Compensation Court. See, e.g.,      39-71-503, MCA;   39-
       71-204, MCA. Neither case discusses the specific provision in the Workers'
  Compensation Act that the UEF claim can be filed concurrently with the "independent

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 action" over which the district court has exclusive jurisdiction. See       39-71-508,
                                            MCA.
         Neustrom's procedural and jurisdictional dispute with UEF over its handling of
Davis's claim for benefits, and Davis's "independent action" against Neustrom because
   of Neustrom's alleged failure to insure himself and his workers, are two separate
disputes. Montana's Workers' Compensation Act allows these disputes to proceed along
        two separate tracks. Section 39-71-508, MCA. Neustrom's procedural and
                                      jurisdictional
   dispute with UEF is within the exclusive jurisdiction of the Workers' Compensation
   Court, while Davis's "independent action" against Neustrom is within the exclusive
               jurisdiction of the District Court. Section 39-71-2905, MCA.
         The Act's plain requirement that the Workers' Compensation Court decide issues
       related to UEF claims and the district court decide issues related to the
                                       "independent
       action" will not, as is impliedly argued in the briefs, create potentially
                                       inconsistent
  results. The claimant must initiate both claims and is bound by principles of res
                                          judicata
 or collateral estoppel by the decision of the first venue to arrive at a decision.
                                             The
claimant must take that reality into consideration when making a decision about which
                        claim to file, or the timing of each claim.
             The court correctly concluded that the Workers' Compensation Court had
                                         exclusive
 jurisdiction over the matters contained in Neustrom's petition for writs of mandate
                                             and
  prohibition, and therefore correctly dismissed Neustrom's petition because he had a
  "plain, speedy, and adequate remedy" through an appeal to the Workers' Compensation
                                           Court.
                                              Affirmed.
                                                      /S/ WILLIAM E. HUNT, SR.

                                                                            We Concur:

                                                                 /S/ KARLA M. GRAY
                                                              /S/ W. WILLIAM LEAPHART
                                                                /S/ JAMES C. NELSON
                                                              /S/ TERRY N. TRIEWEILER

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