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Montana State Fund v. Liberty Northwest Insurance Corp.

Court of Workers Compensation of Montana

August 12, 2005

MONTANA STATE FUND Petitioner/Insurer
v.
LIBERTY NORTHWEST INSURANCE CORPORATION Respondent IN RE: ANNETTA LAUNDRY Claimant.

          Submitted: May 5, 2005

          ORDER DENYING SUMMARY JUDGMENT

          MIKE MCCARTER, JUDGE

         Summary: The claimant filed two occupational disease claims with respect to her shoulders, one in 2000 with Liberty Northwest Insurance Corporation and the second in 2002 with the Montana State Fund. Liberty initially denied the claim in 2000 but then agreed to pay medical bills pursuant to section 39-71-615, MCA (1999). The Montana State Fund has been paying benefits under a reservation of rights and brought a petition for indemnification, asking that Liberty be determined liable for benefits for the claimant's shoulder condition. Citing the two-year limitations period in section 39-71-2905(2), MCA (1997-2003), Liberty moved for summary judgment, arguing that the petition is barred on account of the State Fund's and the claimant's failure to petition the Court within two years of Liberty's denial. It also urged that the claim is barred by the claimant's failure to file a written claim with Liberty within one year as required in section 39-72-403, MCA (1999).

         Held: Liberty has not shown as an uncontroverted matter that more than one year prior to her filing her claim the claimant was aware that her condition was work related; therefore, Liberty is not entitled to summary judgment on that ground. Moreover, where an insurer initially denies a claim but thereafter agrees to pay medical bills under section 39-71-615, MCA (1999), the subsequent agreement supercedes the original denial, in effect rescinding it, and places the claim in a status of being neither accepted nor denied. Therefore, until there is a second denial pursuant to section 39-71-615(3), MCA (1999), the two-year limitations period for filing a petition in the Workers' Compensation Court does not commence running.

         Topics:

Limitations Periods: Occupational Disease. Section 39-72-403, MCA (1999), required a claimant to file a claim for an occupational disease "within 1 year from the date the claimant knew or should have known that the claimant's condition resulted from an occupational disease." Under the plain language of the provision, the limitations period begins running only when the claimant is not only aware of her condition but is aware that the condition resulted from her work. The fact that the claimant received care for her condition more than one year prior to the filing of her claim does not start the running of the limitations period unless more than one year prior to filing the claim she was also aware that her condition was work related.
Limitations Periods: Workers' Compensation Court Petitions. Where an insurer initially denies a claim but thereafter agrees to pay medical bills under section 39-71-615, MCA (1999), the subsequent agreement supercedes the original denial, in effect rescinding it, and places the claim in a status of being neither accepted nor denied. Therefore, until there is a second denial pursuant to section 39-71-615(3), MCA (1999), the two-year limitations period for filing a petition in the Workers' Compensation Court does not commence running.

         ¶1 Through its petition in this case, the Montana State Fund (State Fund) seeks indemnification from Liberty Northwest Insurance Corporation (Liberty) for benefits it has paid and is continuing to pay Annetta Laundry (claimant) on account of an alleged work-related bilateral shoulder condition. The claimant has filed a response to the petition alleging that either Liberty or State Fund is liable for her shoulder condition.

         ¶2 Liberty moves for summary judgment, [1] urging that any claim for indemnification or benefits is barred by the two-year statute of limitations set out section 39-71-2905(2), MCA (1997-2003), and by the claimant's failure to file her claim within one year of learning of her occupational disease, § 39-72-403, MCA (1999).

         Uncontroverted Facts

         ¶3 The following facts are uncontroverted:

¶3a On or about August 10, 2000, SLC Investments Cost Cutters (Cost Cutters) filed a First Report of Occupational Injury or Occupational Disease on behalf of the claimant. (Affidavit of Chris Helmer, Ex. 1.) The report states, "Employee is having problems with bursitis in her arms . . . Dr visits reveal this is work related." The report went on to list the shoulders as the affected body part and the cause of the condition as "continuous hair cutting."
ΒΆ3b The first report stated that the claimant had been employed by Cost Cutters since ...

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