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Baugus v. State Compensation Insurance Fund

Court of Workers Compensation of Montana

June 13, 1997

J.B. BAUGUS Petitioner
v.
STATE COMPENSATION INSURANCE FUND Respondent/Insurer for EMPIRE SAND & GRAVEL Employer.

          ORDER GOVERNING PRODUCTION OF DOCUMENTARY EVIDENCE AND DEPOSITIONS

          Mike McCarter Judge

         Summary: Petitioner facing felony charges in district court for alleged theft of workers' compensation benefits sought protective order against his deposition testimony and against requiring his wife to disclose spousal communications. Insurer sought reconsideration of prior WCC order finding documents suppressed in criminal proceeding also subject to suppression in this proceeding.

         Held: Following discussion with counsel, agreement was reached for certain testimony of petitioner in light of interrogatory answers he had previously given.

         Topics:

Discovery: Depositions: Objections. After hearing, claimant conceded he had at least partially waived claim of fifth amendment privilege against answering deposition questions by previously providing interrogatory answers on certain topics.

         There are several matters before the Court. First, there is petitioner's (claimant's) motion for a protective order prohibiting respondent, State Compensation Insurance Fund (State Fund), from questioning claimant and his wife as to issues surrounding pending criminal charges in Yellowstone County. Second, claimant has requested an Order precluding the examination of his wife concerning spousal communications. Third, the State Fund has requested the Court to reconsider is previous Order denying its motion to compel discovery of documents and records seized in the criminal case.

         Factual Background

         The following facts appear from documents provided to the Court and which are contained in the Court file. The documents are copies of documents from the district court file in State of Montana v. J.B. Baugus, Montana Thirteenth Judicial District Court, Yellowstone County, Cause No. DC 94-554 and State of Montana v. J.B. Baugus, Margaret Baugus and James M. Rogina, Jr., Montana Thirteenth Judicial District Court, Yellowstone County, Cause No. 95-195.

         This present Petition for Hearing was triggered by a criminal prosecution which commenced on October 18, 1994. On that date, the State of Montana presented Judge Russell Fillner with a motion for leave to file a Criminal Information. Judge Fillner granted the State leave to file the Information. The State then filed an Information charging claimant with felony theft of workers' compensation benefits. It thereafter filed an Amended Information on January 4, 1996, alleging that between May 1982 and October 16, 1994, the claimant obtained "approximately $136, 963.85" in workers' compensation benefits by misstating his physical condition and by failing to report income he received from construction and excavation projects. (Affidavit of Counsel in Support of Claimant's Response to Motion for Stay or in the Alternative to Continue, Ex. A at 1.)

         At the same time he approved the Information, Judge Fillner also issued a search warrant. The warrant authorized agents of the Montana Criminal Investigation Bureau (CIB) to search claimant's home and property.

         CIB agents went to claimant's home the next day, October 19, 1994, and carried out an extensive search of the home. They were there for several hours. During that time, they invited reporters from the Billings Gazette into the home to photograph their efforts. Ultimately, they seized numerous items, including financial records belonging to claimant.

         Subsequently, claimant filed a motion to suppress all evidence seized during the search, citing the State's violation of his constitutional right to privacy. The violation was based on CIB agents permitting reporters to roam through the house and photograph items while the search was being conducted. The claimant also attacked the search warrant as over broad.

         On June 5, 1996, Judge Robert W. Holmstrom, who had assumed jurisdiction over the criminal case, issued an Order finding that the search violated claimant's right to privacy and that the it was indeed over broad. He ordered that all evidence obtained during the search be suppressed.

         The State appealed the suppression order to the Montana Supreme Court. However, the appeal was dismissed at the request of the Montana Attorney General.

         In the meantime, on January 9, 1996, claimant filed the present action in this Court. His petition seeks a determination of his entitlement to past and future workers' compensation benefits.

         On January 8, 1996, the day before he filed his petition with this Court, claimant filed a motion with Judge Holmstrom requesting that the criminal case be dismissed. He argued that the Workers' Compensation Court has exclusive jurisdiction to determine his legal entitlement to benefits and that "[u]ntil these workers' compensation issues are decided this Court [the District Court in the criminal matter] is unable to instruct a jury as to what Mr. Baugus' rights and entitlement under the workers' compensation law were during the period of time for which he is charged with theft." (Affidavit of Counsel in Support of Claimant's Response to Motion for Stay or in the Alternative to Continue, Ex. C at 7.)

         On May 21, 1996, Judge Holmstrom denied the motion to dismiss. However, he stayed further criminal proceedings "until the Workers' Compensation Court determines his [claimant's] benefits under the Workers' Compensation Act." (Petitioner's Response to State Fund's Motion to Compel and Request for Declaratory Ruling Regarding Release of Evidence, Ex. 10.) He noted that the State Fund had conceded that claimant was entitled to compensation "up to a certain point in time" (id., Ex. 10 at 7) and concluded that before any criminal prosecution can proceed the Workers' Compensation Court must determine the extent of claimant's entitlement to benefits:

[T]he Defendant's guilt or innocence cannot be determined without making a determination of what, if any, benefits the Defendant was actually entitled to. Section 39-71-2905 is unequivocal in its assignment to the Workers' Compensation Court of exclusive jurisdiction over workers' compensation disputes.

(Id.; Ex. 10 at 9.)

         Following that decision, discovery proceeded in this action. Respondent propounded and claimant responded to interrogatories and requests for production. Claimant, however, resisted discovery of the evidence suppressed by Judge Holmstrom.

         On March 20, 1997, the State Fund moved to compel production of the evidence. (Motion to Compel and Request for Declaratory Ruling Regarding Release of Evidence.) Claimant resisted the motion and on April 23, 1997, I denied the discovery request, holding that Judge Holmstrom's Orders had made this action an ...


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