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Insurance Company of State of Pennsylvania v. State Compensation Insurance Fund

Court of Workers Compensation of Montana

May 5, 2000

INSURANCE COMPANY OF STATE OF PENNSYLVANIA Petitioner/Insurer
v.
STATE COMPENSATION INSURANCE FUND Respondent/Insurer. and CAROL RENEE BERQUIST Claimant/Respondent,

          Submitted: April 24, 2000

          ORDER GRANTING MOTION TO AMEND RESPONSE

          MIKE McCARTER, JUDGE

         Summary: Insurer which had paid benefits to claimant sought indemnification from carrier at risk following earlier injury (State Fund). State Fund sought to amend its response to WCC petition to allege that it should not be required to indemnify other insurer for medical benefits which were unreasonable or for temporary total disability benefits claimant should not have received because he was able to work. Other insurer argued that State Fund's motion to amend was untimely under Court Rules.

         Held: Good cause existed to extend deadline for filing motion by one day where parties had already agreed to postpone trial date and proposed amendment appeared to state tenable defense. In allowing amendment, WCC noted one insurer has right to claim indemnification for benefits which "should have been paid" by another carrier. Question raised is whether what "should have been paid" can be determined by hindsight and regarding appropriate standard for refusing indemnification for medical or disability benefits on the ground they were not reasonably paid.

         Topics:

Constitutions, Statutes, Regulations and Rules: Workers Compensation Court Rules: ARM 24.5.316. Where time for filing motion to amend response to petition has been set in WCC scheduling order, and missed by one day by moving party, the question is whether there is good cause to extend the deadline and excuse the moving party from its failure to file a timely motion. Where the deadline was missed by one day, the parties have already agreed to postpone the trial date, and the proposed amendments appear to state tenable defenses, the amendment of the response is allowed.
Indemnification: Between Insurers. Insurer which had paid benefits to claimant sought indemnification from carrier at risk following earlier injury (State Fund). State Fund sought to amend its response to WCC petition to allege that it should not be required to indemnify other insurer for medical benefits which were unreasonable or for temporary total disability benefits claimant should not have received because he was able to work. In allowing amendment, WCC noted one insurer has right to claim indemnification for benefits which "should have been paid" by another carrier. Question raised was whether what "should have been paid" may be determined by hindsight, which WCC doubted was proper standard. Although not resolving issue because not adequately briefed, WCC suggested that if insurer used reasonable judgment in adjusting claim it may be inequitable to deny indemnification based upon subsequently discovered facts. On the other hand, if insurer's adjustment practices were unreasonable and it paid, for example, benefits for medical procedures it knew or should have known, at the time of payment, were not reasonable, then it may be inequitable to allow indemnification.
Procedure: Motions: Generally. Where time for filing motion to amend response to petition has been set in WCC scheduling order, and missed by one day by moving party, the question is whether there is good cause to extend the deadline and excuse the moving party from its failure to file a timely motion. Where the deadline was missed by one day, the parties have already agreed to postpone the trial date, and the proposed amendments appear to state tenable defenses, the amendment of the response is allowed.

         ¶1 The Court has before it the respondent State Compensation Insurance Fund's motion to amend its response to the petition. The motion is granted with the proviso set forth in the discussion below.

         Factual Background

         ¶2 Petitioner, Insurance Company of State of Pennsylvania (Pennsylvania), and respondent State Fund are insurers for successive work-related injuries suffered by claimant. State Fund was the insurer at risk for a first back injury which occurred September 3, 1996. It accepted liability for the injury and paid benefits. Thereafter, claimant returned to work at another job. In late March 1998, she ceased work on account of back pain. At that time, her employer was insured by Pennsylvania, however, in late April the State Fund commenced benefits under a reservation of rights. Later, in August 1998, the State Fund stopped benefits based upon its determination that claimant had suffered a new injury in March 1998. Pennsylvania then began paying benefits but alleges in this action that the State Fund is liable for the benefits because claimant either had not reached maximum medical improvement in March 1998, or she suffered only a temporary aggravation of her preexisting condition. Through this action, it seeks indemnification from the State Fund for benefits it has paid the claimant.

         ¶3 The petition herein was filed on September 7, 1999, and initially set for trial during the week of February 21, 2000. (September 14, 1999 Scheduling Order.) On October 13, 1999, the State Fund filed its response.

         ¶4 On February 14, 2000, at the request of the parties, an Order Resetting Scheduling Order was issued resetting the trial for the week of May 8, 2000. The Order provided that all pretrial motions, including motions to amend pleadings, must be filed "on or before March 31, 2000." (Order Resetting Scheduling Order, underlining in original.) It further required that all written discovery was to be served by March 24, 2000, and lists of witnesses and exhibits exchanged by March 31, 2000. (Id.)

         ¶5 On April 4, 2000, the Court received the State Fund's Motion to Amend Response to Petition for Hearing, Memorandum in Support of Motion to Amend Response to Petition, and a proposed Amended Response to Petition for Hearing, all of which were dated and sent April 3, 2000. Under this ...


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