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Liberty Northwest Insurance Corp. v. Behr

Court of Workers Compensation of Montana

July 9, 1998

LIBERTY NORTHWEST INSURANCE CORPORATION Petitioner/Insurer for BOYNE, USA Employer
v.
SHANA BEHR Respondent.

          Submitted: September 16, 1997

          ORDER DISMISSING PETITION

          MIKE McCARTER JUDGE.

         Summary: Insurer filed a petition seeking a determination whether Shana Behr may waive her entitlement to workers' compensation benefits and whether she could be ordered to undergo an independent medical examination. The petition followed Behr's filing of a tort action against Liberty's insured. Behr filed a response, stating she is not seeking workers' compensation benefits and that if she has made any claim for compensation, she withdraws the claim and waives any entitlement to benefits under the WCA.

         Held: Insurer's petition dismissed. An insurer cannot use a declaratory judgment action to force a claimant to litigate a potential claim for benefits. Second, in light of Behr's express waiver of any claim for workers' compensation benefits, no case or controversy exists between the parties, i.e. between the insurer and Behr. Finally, insofar as a real controversy may exist concerning the effect of Behr's waiver upon her tort claim against Liberty's insured, the insurer is without standing to litigate that controversy because, as a workers' compensation insurer, it has no personal stake in the outcome. The Court hearing the tort claim is the forum to handle an argument over exclusivity of the WC remedy.

         Topics:

Declaratory Judgment: Pre-emptive Strikes. WCC dismissed petition filed by insurer to litigate whether worker was entitled to benefits under WCA after worker filed tort claim against insurer's insured. An insurer cannot use a declaratory judgment action to force a claimant to litigate a potential claim for benefits. Second, in light of the employee's express waiver of any claim for WC benefits, no case or controversy exists between the parties, i.e. between the insurer and employee. Finally, insofar as a real controversy may exist concerning the effect of the waiver upon the tort claim, the insurer is without standing because, as a workers' compensation insurer, it has no personal stake in the outcome of that controversy. The Court hearing the tort claim is the forum to handle an argument over exclusivity of the WC remedy.
Jurisdiction: Case and Controversy. WCC dismissed petition filed by insurer to litigate whether worker was entitled to benefits under WCA after worker filed tort claim against insurer's insured. An insurer cannot use a declaratory judgment action to force a claimant to litigate a potential claim for benefits. Second, in light of the employee's express waiver of any claim for WC benefits, no case or controversy exists between the parties, i.e. between the insurer and employee. Finally, insofar as a real controversy may exist concerning the effect of the waiver upon the tort claim, the insurer is without standing because, as a workers' compensation insurer, it has no personal stake in the outcome of that controversy. The Court hearing the tort claim is the forum to handle an argument over exclusivity of the WC remedy.

         ¶1 On June 19, 1998, this Court entered an Order quashing discovery and staying further proceedings. It now dismisses the petition.

         Discussion

         ¶2 The petition was filed by the insurer, Liberty Northwest Insurance Corporation. Liberty filed the petition after the claimant had filed a tort action against Liberty's insured, Boyne, USA. Liberty sought a determination as to whether claimant may waive her entitlement to workers' compensation benefits and whether Liberty is entitled to an independent medical examination (IME). Immediately upon filing its petition, Liberty sought discovery of claimant's psychological records, as well as an IME.

         ¶3 In her response, the claimant states that she is not seeking workers' compensation benefits. She states that if she "has filed a claim for compensation" then she "withdraws that claim, and waives any entitlement she may have to benefits afforded to her by the Workers' Compensation Act." (Shana Behr's Response to Petition, ¶ A. 2.) In light of her response, the petition must be dismissed.

         ¶4 Initially, as I have found in two previous cases, an insurer cannot use a declaratory judgment action to force a claimant to litigate a potential claim for benefits. Champion International Corp. v. Brennan, WCC, Order Dismissing Petition Without Prejudice, WCC No. 9504-7269 (June 13, 1995); Lumbermens Mutual Casualty Company v. Mares, Order Dismissing Petition, WCC No. 9707-7782 (September 19, 1997). I attach a copy of the Mares decision and incorporate herein what was said in part I of that decision.

         ¶5 Second, in light of the claimant's express waiver of any claim for workers' compensation benefits, no case or controversy exists as between the parties, i.e., between the insurer and claimant. Lacking a case and controversy between the parties, the Court lacks jurisdiction over the petition. Bradshaw v. Bradshaw, 270 Mont. 222, 236, 891 P.2d 506, 515 (1995).

         ¶6 Finally, insofar as a real controversy may exist concerning the effect of the claimant's waiver upon her tort claim against Boyne, Liberty is without standing to litigate that controversy. "A party has no standing when there is no personal stake in the outcome of the controversy." In re Paternity of Vainio,943 P.2d 1282, 1286 (Mont. 1997). Liberty, as a workers' compensation insurer, has no personal stake in the outcome of the claimant's tort action against Boyne. In light of claimant's waiver of any claim for workers' compensation benefits, the federal court having jurisdiction ...


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