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Liberty Northwest Insurance Corp. v. Champion International Corp.

Court of Workers Compensation of Montana

March 27, 1996

LIBERTY NORTHWEST INSURANCE CORPORATION Petitioner/Insurer for
v.
CHAMPION INTERNATIONAL CORPORATION Respondent. STIMSON LUMBER COMPANY Employer

          Submitted: February 28, 1996

          ORDER DENYING SUMMARY JUDGMENT

          Mike McCarter Judge.

         Summary: Claimant, who injured back while working at Champion, continued to suffer back problems after the mill was sold to Stimson, whose insurer, Liberty Northwest, accepted liability but now seeks indemnification from Champion. Champion moves for summary judgment.

         Held: Where Liberty clearly and unequivocally accepted liability without reservation of rights, it cannot repudiate acceptance, but it may seek indemnification from a prior insurer who bears responsibility for claimant's condition. (Note: in Liberty Northwest Ins. Corp. v. Champion, 285 Mont. 76, 945 P.2d 433 (1997), the Supreme Court affirmed the WCC's determination that Liberty was liable for claimant's condition; no issue of the right to indemnification following unequivocal acceptance was presented to the Supreme Court.)

         Topics:

Claims: Acceptance. Where insurer clearly and unequivocally accepted liability for claimant's back condition without reservation of rights, it cannot repudiate that acceptance, but it may seek indemnification from a prior insurer who bears responsibility for claimant's condition.
Indemnification: Between Insurers. Where insurer clearly and unequivocally accepted liability for claimant's back condition without reservation of rights, it cannot repudiate that acceptance, but it may seek indemnification from a prior insurer who bears responsibility for claimant's condition.
Insurers: Acceptance of Claim. Where insurer clearly and unequivocally accepted liability for claimant's back condition without reservation of rights, it cannot repudiate that acceptance, but it may seek indemnification from a prior insurer who bears responsibility for claimant's condition.

         This is an action between two insurers over liability for Ronald Deschamps' bad back. In 1992 Deschamps injured his back while working at Champion International Corporation's lumber mill in Bonner, Montana. He returned to work. The Bonner mill was then purchased by Stimson Lumber Company. Deschamps went to work for Stimson but his back continued to hurt and he complained to his new employer. Stimson turned the matter over to its insurer, Liberty Northwest Insurance Corporation. Liberty investigated the matter and ultimately accepted Deschamps' condition as compensable under the Montana Occupational Disease Act (MODA). But after paying benefits under MODA, Liberty decided that Deschamps' condition is the result of his 1992 injury and petitioned this Court for indemnification from Champion.

         The matter presently before the Court is Champion's Motion for Summary Judgment. Affidavits supporting and opposing the motion have been submitted and the motion briefed.

         Facts

         The facts are set forth in the admitted allegations of the petition, two affidavits of Bradley J. Luck, an affidavit of Cynthia Bean, and the exhibits attached to the affidavits. Each of the Luck affidavits is Entitled Affidavit of Bradley J. Luck, so the affidavit filed February 1, 1996, will be cited as "Luck Affidavit I" while the affidavit filed February 28, 1996, will be cited as "Luck Affidavit II." The Affidavit of Cynthia Bean will be cited as "Bean Affidavit." The Luck exhibits are numerical, with 1 through 5 attached to Luck Affidavit I. Exhibits 6 through 16 are attached to Luck Affidavit II. The Bean exhibits are A through C. The essential facts are not in controversy and for the most part are documentary.

         Ronald Deschamps injured his back on March 30, 1992, while working a as millwright at a wood products mill in Bonner, Montana. (Ex. A; Petition ¶1; Response ¶1.[1]) At the time of the injury, the Bonner mill was owned by respondent, Champion International Corporation. (Luck Affidavit I.)

         Claimant filed a Claim for Compensation. (Ex. A.) Champion, which was self-insured, accepted the claim and paid benefits. (Petition ¶2; Response ¶1.) The nature and amount of benefits paid are not specified, however, they are not material to the present motion.

         Subsequent to Deschamps' injury, Champion sold the Bonner mill to Stimson Lumber Company. Stimson took over the Bonner mill operations in November of 1993. (Luck Affidavit I.) Deschamps applied for a position with the new owner of the mill and underwent a physical examination; he was found fit for employment. (Ex. 2.) He was hired and went to work.

         While working for Stimson, Deschamps experienced renewed or continuing back pain. He submitted a claim to Liberty on October 12, 1994. (Bean Affidavit ¶ 2.) ...


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