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State Compensation Insurance Fund v. Richter

Court of Workers Compensation of Montana

March 4, 1994

FRANK C. RICHTER Respondent.



         The Court has under consideration an Amended Motion for Summary Judgment of respondent, Frank C. Richter (Richter), and a Cross-motion for Summary Judgment of the petitioner, State Compensation Insurance Fund (State Fund).

         The motions are supported by affidavits of Willem Visser and Frank C. Richter. The parties also refer to, and the Court takes judicial notice of, the proceedings in State v. Sharon F. Young, Thirteenth Judicial District Court, No. DC 91-028 and the decision on appeal, State v. Young, 259 Mont. 371, 856 P.2d 961 (1993).

         While parties have requested oral argument, I find oral argument unnecessary. For the reasons set forth in the following discussion, both motions for summary judgment are denied and this matter is set for trial.


         The State Fund is attempting to recover amounts paid to Frank Richter, an attorney, out of a workers' compensation settlement he negotiated on behalf of Sharon Young. The settlement was based on an alleged injury Sharon suffered on May 4, 1983. It was negotiated and executed in 1987. Richter was paid $9, 862.50 for his efforts. He was paid out of, not in addition to, the amounts due Young.

         Sharon Young was thereafter criminally prosecuted for conspiracy to commit felony theft. The prosecution arose out of the benefits she obtained for her alleged May 4, 1983 industrial injury. The criminal information charged, and a jury found, that her 1983 claim was fraudulent. The conviction was upheld on appeal in State v. Young, 259 Mont. 371, 856 P.2d 961 (1993).

         Following Young's conviction the State Fund petitioned this Court on August 10, 1993 to recover the attorney fees Richter received for representing Young. On August 26, 1993, Richter filed a Motion to Dismiss for Lack of Jurisdiction, which was denied. He filed a renewed motion to dismiss and a motion for summary judgment on October 5, 1993. These motions were also denied. On November 8, 1993, he again renewed his motion for summary judgment. On December 1, 1993, the State Fund filed a cross-motion for summary judgment. These later motions are now ready for decision.

         Issues Presented

         The Court's earlier denials of Richter's motions were without prejudice except as to his challenge to this Court's subject matter jurisdiction. The remaining issues raised by Richter's motions are rephrased as follows:[1]

(1) Whether the petition fails to state a claim upon which relief may be granted.
(2) Whether the claim asserted against Richter is barred by the statute of limitations.
(3) Whether mediation is a prerequisite to this action.
(4) Whether the present action is barred by equitable principles of res judicata, collateral estoppel, waiver, estoppel, or unjust enrichment.
(5) Whether this action deprives Richter of rights to due process of law and a jury trial.
(6) Whether the State Fund has standing to bring this action.
(7) Whether the claim asserted in this action amounts to a prohibited impairment of contract.
(8)Whether this action is precluded because of a lack of privity of contract between the parties.
(9) Whether the Court has jurisdiction over the defendant.

         Many of the grounds asserted by Richter lack cogent legal analysis, are utterly unsupported by any citation to legal precedent, or are supported only by perfunctory assertions. The Court disapproves of this type of practice. The prospects of success are not improved by the sheer numbers of grounds asserted in a motion, and parties should not expect the Court to do their basic legal research for them.

         The State Fund advances a singular ground for its motion. Simply stated, the State Fund asserts that uncontroverted facts entitle it to judgment for the full amount of the attorney fees paid Richter.

         Summary Judgment Standard

         The rules of this Court contain no specific provision for summary judgment motions. However, the Court has in previous decisions borrowed Rule 56, Mont.R.Civ.P., and will continue to do so. Murer v. State Compensation Mutual Insurance Fund, 257 Mont. 434, 436, 849 P.2d 1036 (1993); Moen v. Peter Kiewit & Sons' Co., 201 Mont. 425, 434655 P.2d 482 (1982).

         Summary judgment must be based on sworn, admissible evidence, although it may be presented by way of affidavit, deposition and answers to written discovery. Rule 56, Mont.R.Civ.P. The Court cannot consider representations of the parties which are not rooted in the sworn evidence. B.M. by Berger v. State, 215 Mont. 175, 179, 698 P.2d 399 (1985); Prairie State Bank v. IRS of Treasury Dept., 745 P.2d 966 (Ariz. 1990). It is also not bound by the parties' characterization of evidence.

         Summary judgment will be granted only if the uncontroverted material facts entitle the moving party to judgment as a matter of law. First Security Bank v. Vander Pas, 250 Mont. 148, 152, 818 P.2d 384 (1991). Every factual link in the chain of elements necessary to entitle a party to judgment must be uncontroverted. Bickler v. Racquet Club H&S Assoc., 50 St. Rep. 409, 410 (Mont. 1993); Tippens v. Celotex Corp., 805 F.2d 949, rehearing denied 815 F.2d 66 (Ga.Ct.App.)

         Factual Basis For Motions

         The factual basis for the cross-motions are gleaned from the record of proceedings in the criminal prosecution against Sharon Young and affidavits submitted by Willem Visser and Frank Richter. No depositions or other evidence have been submitted. The following facts are deemed uncontroverted:

1. Effective March 1, 1983 Sharon Young and her husband, Robert Young, secured workers' compensation insurance coverage from the State Compensation Fund for a business known as Parrot Creek Properties. The Youngs were listed as owners of the business and they were listed as covered employees of the business.
2. On May 6, 1983, Sharon Young submitted a claim for compensation with respect to an injury she allegedly suffered on May 4, 1983. The claim was accepted and the State Fund thereafter paid benefits to Sharon.
3. On April 3, 1985, Sharon Young entered into an agreement retaining Richter to represent her with respect to her claim. The agreement established Richter's entitlement to a fee.[2]
4. Several days prior to April 7, 1986, Willem Visser, a claims manager for the State Fund, had a telephone conversation with Richter in which he expressed concern that Ms. Young's claim was fraudulent. That concern was based on a suspicious chronology of coverage and injuries which was disclosed to Richter. Richter did not view the circumstances as sufficient for him to waiver in his representation of Sharon Young and he continued to vigorously press her claim.[3]
5. According to Richter's Affidavit, a petition was filed in the Workers' Compensation Court on behalf of Sharon Young, depositions were taken and the matter was heard by a hearing examiner without any further allegations or evidence of fraud. The State Fund does not deny or reply to this statement and it is accepted as true. Neither ...

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