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ST. Paul Fire and Marine Insurance Co. v. Subsequent Injury Fund

Court of Workers Compensation of Montana

February 19, 1998

ST. PAUL FIRE AND MARINE INSURANCE COMPANY Appellant
v.
SUBSEQUENT INJURY FUND Respondent.

          Submitted: January 20, 1998

          DECISION ON APPEAL

          Mike McCarter, Judge.

         Summary: Insurer appealed decision of Department of Labor, arguing for tolling of the notice requirement of section 39-71-906, MCA (1989) to permit shifting of liability for injured worker's benefits to Subsequent Injury Fund (SIF). The injured worker had been certified with the SIF, but the new employer had not supplied information about that employment to the Department as required by section 39-71-906, MCA. The insurer argued that claimant had not told the new employer about his prior injuries and that the notice provision should be tolled, or the SIF estopped from relying on the provision.

         Held: Appeal denied. The plain terms of section 39-71-906, MCA, require the employer to advise the Department within 60 days after the first day of employment or "before an injury . . ." that an employee is certified under the SIF. There is no provision for tolling the limitation. There is also no requirement that a worker notify a prospective employer of certification or even obtain certification. There is no requirement that the employer invoke the SIF provisions even if informed of certification. The elements of estoppel are also not satisfied. The party against whom the insurer wishes to apply the elements of estoppel, the SIF, made no representations whatsoever. Even if the estoppel doctrine could be applied to the SIF through the employer and claimant, the insurer failed to prove the reliance and injury elements where it never asked claimant if he was certified and the insurer would not have reduced insurance premiums based on the employee's certification.

         Topics:

Constitutions, Statutes, Regulations and Rules: Montana Code Annotated: section 39-71-906, MCA (1989). On appeal from the DOL, the WCC agreed that the notice provisions of section 39-71-906, MCA (1989) could not be tolled and that the Subsequent Injury Fund (SIF) was not estopped from relying on those provisions. Although a worker had been certified with the SIF, he lied to his employer about the existence of prior injuries and neither the employer nor the insurer knew he was certified with the SIF, thus no notice was given to the SIF about his employment. Nevertheless, the plain terms of section 39-71-906, MCA, require the employer to advise the Department within 60 days after the first day of employment or "before an injury. . ." that an employee is certified under the SIF. There is no provision for tolling the limitation. There is also no requirement that a worker notify a prospective employer of certification or even obtain certification. There is no requirement that the employer invoke the SIF provisions even if informed of certification. The elements of estoppel are also not satisfied. The party against whom the insurer wishes to apply the elements of estoppel, the SIF, made no representations whatsoever. Even if the estoppel doctrine could be applied to the SIF through the employer and claimant, the insurer failed to prove the reliance and injury elements where it never asked claimant if he was certified and the insurer would not have reduced insurance premiums based on the employee's certification.
Estoppel and Waiver: Equitable Estoppel. On appeal from the DOL, the WCC agreed that the notice provisions of section 39-71-906, MCA (1989) could not be tolled and that the Subsequent Injury Fund (SIF) was not estopped from relying on those provisions. Although a worker had been certified with the SIF, he lied to his employer about the existence of prior injuries and neither the employer nor the insurer knew he was certified with the SIF, thus no notice was given to the SIF about his employment. Nevertheless, the plain terms of section 39-71-906, MCA, require the employer to advise the Department within 60 days after the first day of employment or "before an injury. . ." that an employee is certified under the SIF. There is no provision for tolling the limitation. The elements of estoppel are not satisfied where the party against whom the insurer wishes to apply the elements of estoppel, the SIF, made no representations whatsoever. Even if the estoppel doctrine could be applied to the SIF through the employer and claimant, the insurer failed to prove the reliance and injury elements where it never asked claimant if he was certified and the insurer would not have reduced insurance premiums based on the employee's certification.
Subsequent Injury Fund. On appeal from the DOL, the WCC agreed that the notice provisions of section 39-71-906, MCA (1989) could not be tolled and that the Subsequent Injury Fund (SIF) was not estopped from relying on those provisions. Although a worker had been certified with the SIF, he lied to his employer about the existence of prior injuries and neither the employer nor the insurer knew he was certified with the SIF, thus no notice was given to the SIF about his employment. Nevertheless, the plain terms of section 39-71-906, MCA, require the employer to advise the Department within 60 days after the first day of employment or "before an injury. . ." that an employee is certified under the SIF. There is no provision for tolling the limitation. There is also no requirement that a worker notify a prospective employer of certification or even obtain certification. There is no requirement that the employer invoke the SIF provisions even if informed of certification. The elements of estoppel are also not satisfied. The party against whom the insurer wishes to apply the elements of estoppel, the SIF, made no representations whatsoever. Even if the estoppel doctrine could be applied to the SIF through the employer and claimant, the insurer failed to prove the reliance and injury elements where it never asked claimant if he was certified and the insurer would not have reduced insurance premiums based on the employee's certification.

         ¶1 This is an appeal by St. Paul Fire and Marine Insurance Company (St. Paul) from a July 18, 1997 decision of the Department of Labor and Industry (DLI). The parties have agreed that a transcript of the proceedings is unnecessary to the appeal. They have briefed the appeal and the matter was deemed submitted for decision on January 20, 1998.

         ¶2 Issue: St. Paul asserts on appeal that, based on the undisputed facts of this case, the notice requirement of section 39-71-906, MCA, should be tolled.

         Facts

         ¶3 In the proceeding below the parties filed an agreed statement of facts. Findings of Fact, Conclusions of Law and Order (July 18, 1997). The uncontested facts are as follows:

1. Steve Nave is a former employee of The Western Sugar Company, an employer enrolled under Compensation Plan No. 2 and insured by Petitioner St. Paul Fire and Marine Insurance Company. Prior to his employment with The Western Sugar Company, Mr. Nave was employed by Pierce Packing Company. Mr. Nave suffered an industrial injury on November 11, 1978, while employed by Pierce Packing Co. Following that injury, Mr. Nave applied to be certified as being vocationally handicapped, for the purposes of the Subsequent Injury Fund. Mr. Nave was certified as being vocationally handicapped on July 8, 1980, certification number 6-81-00003.
2. Mr. Nave, while employed by Pierce Packing Co. suffered a second industrial accident on December 4, 1980, sustaining an injury to his knees and back. He underwent surgery on both his left knee and his back in an effort to treat the injuries he had sustained. The Subsequent Injury Fund became liable for payment of a portion of Mr. Nave's benefit entitlement arising out of the industrial injury. Mr. Nave suffered permanent disability as a result of his knee and back injuries. Ultimately, the claim was settled whereby the Subsequent Injury Fund agreed to pay to Mr. Nave in a lump sum permanent partial disability benefits totaling $36, 624.00 in addition to a $2, 500.00 partial lump sum advance which was already paid to Mr. Nave. The Subsequent Injury Fund also agreed to pay attorneys fees totaling $9, 156.00 and costs totaling $225.00. Temporary total disability benefits were also paid by the Subsequent Injury Fund. The claim was settled in August, 1984.
3. Mr. Nave applied for employment with Petitioner's insured, The Western Sugar Company, in August, 1984. As a part of the application process, Mr. Nave was required to complete a form entitled "Physical Condition - Statement of Facts." The form was completed on August 12, 1984, and contained the following question:
Do you now have or have you ever been treated for a back condition or injury? Explain and ...

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