STATE COMPENSATION INSURANCE FUND Petitioner/Insurer for ANDERSON LOGGING COMPANY, INCORPORATED Employer
LOWELL McMILLAN Respondent/Claimant.
Submitted: June 21, 1999
ORDER DENYING MOTION FOR SUMMARY JUDGMENT
This action is brought by the State Compensation Insurance
Fund (State Fund) to establish and enforce a subrogation
interest in a $2, 619, 477 third-party recovery. The
claimant, who is the respondent herein, moves for summary
judgment, alleging that the subrogation claim is time-barred
and if not time-barred then barred by the doctrine of laches.
The following facts are taken from the parties' briefs
and exhibits. They are uncontroverted.
On July 13, 1987, claimant suffered an industrial injury in
the course and scope of his employment with Anderson Logging
Co., Inc. (Anderson Logging).
At the time of claimant's industrial injury, Anderson
Logging was insured by the State Fund.
Claimant filed a claim for compensation and the State Fund
accepted liability for his claim. The State Fund has paid
claimant substantial compensation and medical benefits.
Claimant filed a third-party claim against the United States
Forest Service on account of his accident. The claim was
filed under the Federal Tort Claims Act and was eventually
litigated in the United States District Court of Montana.
After a bench trial the District Court (the Honorable Charles
Lovell) issued Findings of Fact, Conclusions of Law and Order
on May 3, 1995, finding that claimant's total damages
were $4, 762, 686. However, the Court reduced the award to
$2, 619, 477 based on a finding that the claimant was 45%
The State Fund was aware of the District Court decision by at
least August 18, 1995.
The Forest Service appealed and claimant cross-appealed from
the District Court judgment. McMillan v. United
States, 112 F.3rd 1040, 1041 (1997).
On May 2, 1997, the United States Court of Appeals for the
Ninth Circuit affirmed the District Court decision.
The judgment, without interest, was paid sometime after
September 29, 1997, and prior to September 14, 1998. The
Court is not informed as to the exact date of payment.
See Exhibits B and C to petitioner's brief in
opposition to motion for summary judgment. An appeal
regarding the payment of interest on the judgment is
presently pending in the United States Court of Appeals for
the Ninth Circuit. Id., Exhibit D.
The petition in the present case was filed February 19, 1999.
Summary judgment may be granted only where uncontroverted,
material facts require, as a matter of law, judgment for the
moving party. ARM 24.5.329(2); Schelske v. Creative Nail
Design, Inc., 280 Mont. 476, 482, 933 P.2d 799, 802
(1997). It is appropriate where the statute of limitations is
raised as an affirmative defense and uncontroverted facts
show that the claim or action is time-barred. Boles v.
Simonton, 242 Mont. 394, 398, 791 P.2d 755, 757 (1990).
The State Fund's right to subrogation is governed by
section 39-71-414, MCA (1985), which was the subrogation
statute in effect on the date of the claimant's
injury. The section provides:
39-71-414. Subrogation. (1) If an action is
prosecuted as provided for in 39-71-412 or 39-71-413 and
except as otherwise provided in this section, the insurer is
entitled to subrogation for all compensation and benefits
paid or to be paid under the Workers' Compensation Act.
The insurer's right of subrogation is a first lien on the
claim, judgment, or recovery.
(2) (a) If the injured employee intends to institute the
third party action, he shall give the insurer reasonable
notice of his intention to institute the action.
(b) The injured employee may request that the insurer pay a
proportionate share of the reasonable cost of the action,
including attorneys' fees.
(c) The insurer may elect not to participate in the cost of
the action. If this election is made, the insurer waives 50%
of its subrogation rights granted by this section.
(d) If the injured employee or the employee's personal
representative institutes the action, the employee is
entitled to at least one-third of the amount recovered by
judgment or settlement less a proportionate share of
reasonable costs, including attorneys' fees, if the
amount of recovery is ...