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American Alternative Insurance Group v. Sorenson

Court of Workers Compensation of Montana

December 8, 1999

AMERICAN ALTERNATIVE INSURANCE GROUP, Petitioner/Insurer,
v.
SUNG SORENSON, Respondent and FLATHEAD COUNTY SCHOOL DISTRICT 6, Employer,

          Submitted: October 27, 1999

          ORDER GRANTING MOTION TO JOIN THIRD-PARTY DEFENDANT

          MIKE MCCARTER JUDGE

         Summary: Insurer for school district moved to join prior insurer in case where claimant sought occupational disease benefits. Prior insurer (MSGIA) was on risk when claimant had filed an earlier OD claim, which had been denied and not appealed. Arguing collateral estoppel, the prior insurer resisted joinder on the ground any issue of its liability had been resolved in the earlier case.

         Held: Motion for joinder granted. While collateral estoppel may in fact bar any claim against MSGIA, that defense is better resolved after MSGIA becomes a party and the evidence is developed. On the face of the allegations made, MSGIA appears to be a necessary party in order to consider the issues raised in full and to grant full relief to the parties.

         Topics:

Defenses: Collateral Estoppel. When insurer sought to join prior insurer into occupational disease proceeding in WCC, prior insurer argued claimant had previously filed a claim against it for the same condition and any present claim against it was barred by collateral estoppel. Court nonetheless granted motion for joinder, reasoning that while the collateral estoppel defense may ultimately prevail, that defense is better asserted based on the prior insurer's presence in the case and development of a record.
Procedure: Joining Third Parties. When insurer sought to join prior insurer into occupational disease proceeding in WCC, prior insurer argued claimant had previously filed a claim against it for the same condition and any present claim against it was barred by collateral estoppel. Court nonetheless granted motion for joinder, reasoning that while the collateral estoppel defense may ultimately prevail, that defense is better asserted based on the prior insurer's presence in the case and development of a record.

         1 The claimant herein, who is named as the respondent, seeks occupational disease (OD) benefits. Following evaluation by a medical panel, the Department of Labor and Industry issued an initial determination finding in favor of claimant. The insurer, American Alternative Insurance Group (American), then requested a hearing before the Department. Meanwhile, the 1999 Legislature enacted HB 592, which became law on April 23, 1999. 1999 Mont. Laws, ch. 442. The bill amended the jurisdictional provisions of the Occupational Disease Act (ODA) to provide that all disputes over OD benefits shall be heard by the Workers= Compensation Court. Id.,' 31(2). American's request for hearing was therefore transferred to the Court. Department ORDER REGARDING JURISDICTION (June 24, 1999). American subsequently filed a formal PETITION FOR HEARING (August 30, 1999), disputing the claim, hence claimant's status as respondent.

         2 The matter presently before the Court is American's motion to join Montana Schools Group Insurance Authority (MSGIA) as a third-party defendant. MSGIA previously insured claimant's employer and American alleges that it may be liable for any benefits which the Court might find payable to claimant. MSGIA disputes any liability and resists joinder.

         Factual Background

         3 The following facts are taken from the briefs with respect to American's motion. They are unverified and adopted only for purposes of deciding the pending motion.

1.Claimant worked as a janitor for Flathead County School District 6 (School District) for some time.
2.On April 10, 1996, she filed a claim stating that she suffered back pain, shoulder pain, kidney infection, and blood infection as a result of her work for the School District. (MONTANA SCHOOLS GROUP INSURANCE AUTHORITY=S ...

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