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Liberty Northwest Insurance Corp. v. Petak

Court of Workers Compensation of Montana

March 4, 1998

LIBERTY NORTHWEST INSURANCE CORPORATION Petitioner
v.
NANCY PETAK Claimant/Respondent COMMUNITY MEDICAL CENTER Respondent.

          Submitted: February 17, 1998

          ORDER DENYING COMMUNITY MEDICAL CENTER'S MOTION TO DISMISS

          MIKE McCARTER JUDGE.

         Summary: After settlement of a claim, medical provider notified insurer and claimant's attorney that it would not agree to any attorney fee being paid out of the medical benefits. Insurer filed petition naming claimant and medical provider, asking Court to resolve dispute concerning payment of attorneys' fees out of medical benefits. Medical provider moved to dismiss, arguing Workers' Compensation Court did not have jurisdiction over the subject matter of the petition.

         Held: Motion to dismiss denied. Under section 39-71-2905, MCA (1997), WCA "has exclusive jurisdiction to make determinations concerning disputes under chapter 71, except as provided in section 39-71-317 and 39-71-516." This matter does not involve those exceptions, but does involve a dispute arising under the Workers' Compensation Act. Moreover, prior decisions of the Montana Supreme Court establish that the WCC has broad jurisdiction over matters which do not directly involve but affect benefits. The present matter concerns the distribution of benefits payable under the Act.

         Topics:

Constitutions, Statutes, Regulations and Rules: Montana Code Annotated: section 39-71-2905, MCA (1997). WCC has jurisdiction over dispute between medical provider, claimant, and insurer regarding whether attorneys fees are properly paid out of medical benefits obtained through the efforts of the attorney. With a few exceptions not relevant here, the WCC has broad jurisdiction over matters arising under the WCA, including matters which do not directly involve but affect benefits. The distribution of benefits under the WCA falls under the Court's jurisdiction.
Jurisdiction: Dispute. WCC has jurisdiction over dispute between medical provider, claimant, and insurer regarding whether attorneys fees are properly paid out of medical benefits obtained through the efforts of the attorney. With a few exceptions not relevant here, the WCC has broad jurisdiction over matters arising under the WCA, including matters which do not directly involve but affect benefits. The distribution of benefits under the WCA falls under the Court's jurisdiction.

         ¶1 Liberty Northwest Insurance Corporation (Liberty) is the petitioner in this matter. By way of its petition, it seeks the Court's direction as to the payment of attorney fees with respect to medical benefits payable as a result of an industrial injury suffered by claimant/ respondent Nancy Petak (claimant).

         ¶2 Liberty named Community Medical Center (Community) as a co-respondent since the medical benefits at issue are payable to it. Community moves for an order dismissing the petition on the ground that the Workers' Compensation Court lacks jurisdiction over the subject matter of the petition. The motion is denied.

         Discussion

         ¶3 This litigation follows on the heels of a previous petition brought by claimant. Nancy Petak v. Valley Estates and Liberty Northwest Ins. Corp., WCC No. 9508-7359. That action was brought after Liberty denied her claim for compensation with respect to an industrial injury she suffered on October 19, 1994. The litigation was resolved when Liberty was persuaded to accept liability for the claim.

         ¶4 Thereafter, a further dispute ensued over the disbursement of medical benefits. Liberty issued checks for claimant's medical bills payable jointly to claimant, her attorney, and claimant's health care providers. One of the payments was in the amount of $3, 184.42 for medical care provided by Community and made payable to claimant, claimant's attorney, and Community. The check was sent to claimant's attorney, Mr. Rex Palmer (Palmer).

         ¶5 Shortly after Liberty remitted the check, Community notified Liberty and Palmer of its lien for medical services. In subsequent communications, Community disputed Palmer's right to any attorney fee out of the medical benefits which are otherwise due it. It has insisted that it be paid the full amount without any deduction for attorney fees.

         ¶6 Community asserts that this Court has no jurisdiction over the matter since it ...


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