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Liberty Northwest Insurance Corp. v. State Compensation Insurance Fund

Court of Workers Compensation of Montana

October 1, 1997

LIBERTY NORTHWEST INSURANCE CORPORATION Petitioner/Insurer for BRAND S LUMBER Employer
v.
STATE COMPENSATION INSURANCE FUND Respondent.

          September 24, 1997

          ORDER DISMISSING PETITION

          Mike McCarter JUDGE

         Summary: Liberty Northwest insured Brand S Lumber, which subcontracted with McNeilly Line Logging. Liberty filed a petition against State Fund, alleging that a letter written by State Fund to Brand S indicated that McNeilly was insured, when in fact it was not, causing Liberty, pursuant to section 39-71-405, MCA (1995) to owe benefits to an individual injured while working for McNeilly. State Fund moves to dismiss for lack of subject matter jurisdiction.

         Held: While the jurisdiction of the WCC extends to any matter relating to benefits, including claims between insurers to determine which of them is liable to a claimant, the WCC does not have jurisdiction over tort actions against insurers, even though the measure of tort damages may involve the amount of benefits paid by an insurer under the Workers' Compensation Act. (Note: affirmed in Liberty Northwest Ins. v. State Fund, 1998 MT 169.)

         Topics:

Constitutions, Statutes, Regulations and Rules: Montana Code Annotated: section 39-71-2905, MCA (1995). While the jurisdiction of the WCC extends to any matter relating to benefits, including claims between insurers to determine which of them is liable to a claimant, the WCC does not have jurisdiction over tort actions against insurers, even though the measure of tort damages may involve the amount of benefits paid by an insurer under the Workers' Compensation Act. (Note: affirmed in Liberty Northwest Ins. v. State Fund, 1998 MT 169.)
Jurisdiction: Subject Matter Jurisdiction. While the jurisdiction of the WCC extends to any matter relating to benefits, including claims between insurers to determine which of them is liable to a claimant, the WCC does not have jurisdiction over tort actions against insurers, even though the measure of tort damages may involve the amount of benefits paid by an insurer under the Workers' Compensation Act. (Note: affirmed in Liberty Northwest Ins. v. State Fund, 1998 MT 169.)

         The petition in this case was commenced by Liberty Northwest Insurance Corporation (Liberty) against the State Fund Compensation Insurance Fund (State Fund). The following facts are alleged in the petition:

1. Liberty insures Brand S Lumber, which in turn has subcontracted with McNeilly Line Logging for McNeilly to provide Brand S with logs.

         2. On November 25, 1994, the State Fund wrote to Brand S stating that:

. . . McNeilly had applied for coverage with the State Fund and that "we will also notify you if cancellation procedures are initiated for any reason."
3. On September 25, 1995, Durwood Park, an employee of McNeilly, was injured. Brand S and Liberty then discovered that McNeilly was uninsured, therefore, Liberty instituted benefits pursuant to section 39-71-405, MCA.
4.Prior to the injury, the State Fund never notified Brand S that it did not provide coverage for McNeilly.

         Based on these facts, Liberty alleges that the State Funds' November 25, 1994 letter was false and further demands judgment against the State Fund for ...


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