Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Companies v. Kenneth Raylon Dunn Uninsured Employers' Fund

Court of Workers Compensation of Montana

March 20, 1995

CNA INSURANCE COMPANIES Petitioner
v.
KENNETH RAYLON DUNN UNINSURED EMPLOYERS' FUND and BIG TRUCK PRODUCTIONS Respondents.

          ORDER AND JUDGMENT DISMISSING PETITION

          Mike McCarter Judge

         Summary: Insurer filed petition asking the Workers' Compensation Court to find it liable for injuries suffered by claimant while working for alleged insured of insurer. Response to petition indicates that employer initially told claimant that workers' compensation coverage was provided by its payroll company, which turned out to be false. Claimant then filed an action in District Court alleging liability of the employer as an uninsured employer, negligence, and failure to maintain workers' compensation coverage. Then, the employer reported that coverage did exist under a CNA policy. Claimant seeks dismissal of the pending petition, arguing this Court lacks jurisdiction.

         Held: While the Workers' Compensation Court does have jurisdiction to determine an insurer's liability for benefits, the Court finds that the insurance question at issue in this matter are more appropriately decided in the pending District Court case. The insurer is free to admit liability to claimant with or without an action in this Court. The real consequence of this Court's resolution of the presented issues would involve arguable impact on the District Court case. Moreover, this Court retains discretion whether or not to issue declaratory rulings and exercises its discretion against so ruling in this case.

         Topics:

Declaratory Judgment: Grounds. The Workers' Compensation Court has discretion whether or not to issue declaratory rulings and may decline to do so.
Declaratory Judgment: Grounds. Where injured employee filed action in District Court based on information that no workers' compensation coverage was in place, and employer later asserted coverage under a CNA policy, petition in Workers' Compensation Court filed by CNA was dismissed at request of claimant. While the Workers' Compensation Court does have jurisdiction to determine CNA's liability to claimant, CNA is free to admit liability, making the real import of this Court's rulings their impact on the District Court case. Under those circumstances, the insurance issues underlying this matter are better resolved in the pending District Court proceeding. Note: this determination was affirmed in CNA Insurance Companies v. Dunn, et al., 273 Mont. 295 (1995) (No. 95-170), though the Supreme Court found the Workers' Compenation Court did not have concurrent jurisdiction where the District Court's jurisdiction was invoked prior to the filing of the Workers' Compensation Court petition.
Courts: Concurrent Jurisdiction: Competing Proceedings. Where injured employee filed action in District Court based on information that no workers' compensation coverage was in place, and employer later asserted coverage under a CNA policy, petition in Workers' Compensation Court filed by CNA was dismissed at request of claimant. While the Workers' Compensation Court does have jurisdiction to determine CNA's liability to claimant, CNA is free to admit liability, making the real import of this Court's rulings their impact on the District Court case. Under those circumstances, the insurance issues underlying this matter are better resolved in the pending District Court proceeding. Where injured employee filed action in District Court based on information that no workers' compensation coverage was in place, and employer later asserted coverage under a CNA policy, petition in Workers' Compensation Court filed by CNA was dismissed at request of claimant. While the Workers' Compensation Court does have jurisdiction to determine CNA's liability to claimant, CNA is free to admit liability, making the real import of this Court's rulings their impact on the District Court case. Under those circumstances, the insurance issues underlying this matter are better resolved in the pending District Court proceeding. Note: this determination was affirmed in CNA Insurance Companies v. Dunn, et al., 273 Mont. 295 (1995) (No. 95-170), though the Supreme Court found the Workers' Compenation Court did not have concurrent jurisdiction where the District Court's jurisdiction was invoked prior to the filing of the Workers' Compensation Court petition.

         This action for declaratory judgment was commenced by CNA Insurance Companies on November 22, 1994. The petition seeks a determination that CNA provide workers' compensation insurance coverage with respect to an August 17, 1993 industrial injury suffered by Kenneth R. Dunn (Dunn) while working for Big Truck Productions (Big Truck). Dunn, as well as Big Truck and the Uninsured Employers' Fund (UEF), are named as respondents.

         According to the petition, Dunn claims to have suffered an industrial injury on or about August 17, 1993, while working for Big Truck. (Petition for Declaratory Judgment, at 1, ¶ 4.) The petition further alleges that at the time of the alleged injury, Big Truck was insured by CNA. (Id. at 1, ¶ 5.) The first prayer for relief requests that the Court find and order that "[i]nsurance coverage for workers' compensation benefits existed and is available to Respondent Dunn under the policy issued by CNA Insurance Company." (Id. at 3.)

         On its face, the request for declaratory judgment is odd. An insurer is free to admit liability without permission or order of the Court. It is not harmed if the injured worker refuses to accept benefits.

         The response filed by Dunn, however, provides additional information illuminating the real nature of the dispute. In that response, Dunn alleges that he indeed suffered a work-related injury August 17, 1993. (Respondent Dunn's Response to Petition for Hearing, Contentions 1-3.) However, Big Truck informed him that workers' compensation insurance was provided through its payroll company, Axium. (Id. Contention 4.) When he checked with the Montana Department of Labor and Industry (DLI), Dunn learned that there was no record of insurance coverage for Big Truck. (Id., Contention 6-7.) Concluding that Axium's policy did not provide coverage and that Big Truck was otherwise uninsured, on February 16, 1994, Dunn commenced district court action directly against Big Truck. (Id., Contention 9.) In Count 1, the complaint invoked the court's jurisdiction under section 39-71-515, MCA, alleging that Big Truck was an uninsured employer. (Id., Contention 11.) The complaint also set forth two separate counts for negligence: one count of negligence for the injury itself and the other for the employer's failure to maintain workers' compensation coverage. (Id.)

         On March 25, 1994, which was over a month after the filing of the action and more than seven months after the alleged injury, Big Truck for the first time asserted that it had workers' compensation insurance coverage under the CNA policy which is the subject of the present petition. (Id., Contention 12.) Despite the emergence of the CNA policy, Dunn persists in his claim that Big Truck was uninsured, alleging that the CNA policy was not properly registered with the DLI and that it does not properly provide coverage with respect to his injuries. (Id., Contentions 13-14.) He also alleges that Big Truck is estopped from arguing that it is insured. (Id., Second Affirmative Defense.)

         In his response, Dunn also alleges that the district court has exclusive jurisdiction to determine the existence of coverage. In light of that allegation the Court invited the parties to brief the following issues:

(1) Does the Workers' Compensation Court have either exclusive or concurrent jurisdiction to determine whether there was workers' compensation insurance covering Mr. Dunn's industrial accident?
(2) If the Workers' Compensation Court has concurrent jurisdiction to determine the coverage issue, should or must it nonetheless defer to the District Court to make that coverage decision?

(Order Directing Parties to Brief Jurisdictional Issue; Order Vacating Scheduling Order and Staying Discovery, issued January 6, 1995.) CNA, the UEF and Dunn have all filed briefs. Dunn's brief was accompanied by a motion to dismiss for lack of jurisdiction. (Respondent Dunn's ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.