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Reesor v. Montana State Fund

Court of Workers Compensation of Montana

June 2, 2008

DALE REESOR Petitioner
v.
MONTANA STATE FUND Respondent/Insurer.

         On Appeal at the Montana Supreme Court - June 30, 2008

         Dismissed With Prejudice Per Stipulation at Montana Supreme Court -11/05/08

          ORDER ADOPTING ORDER OF SPECIAL MASTER

          JAY P. DUFRECHOU SPECIAL MASTER

         Topics:

         Common Fund Litigation: Common Fund Doctrine. Pursuant to the Montana Supreme Court's reasoning in Stavenjord II, common fund status must be denied in Reesor. As in Stavenjord, claimants benefiting from the Reesor decision will be eligible for additional benefits depending on various factors that will require evidence varying from beneficiary to beneficiary, specifically, evidence regarding age, education, lifting restrictions and wage loss. While factors of age and education may be readily ascertainable from file reviews, determining appropriate lifting restrictions and wage loss will likely involve seeking additional evidence outside the file.

         Common Fund Litigation: Retroactivity. In Stavenjord II the Montana Supreme Court stated that "it is now well-settled that a party arguing for purely prospective application of this Court's jurisprudence must show that all three factors of the Chevron test are met." The Supreme Court held that the second Chevron factor was not met in Stavenjord or Schmill; this Court cannot conclude that the second factor can be met in Reesor. Though the constitutional principle in Reesor is not identical to that in Schmill or Stavenjord, all three cases involve equal treatment of similarly-situated individuals with "open" workers' compensation claims.

         Common Fund Litigation: Retroactivity. In Stavenjord II the Montana Supreme Court stated that "it is now well-settled that a party arguing for purely prospective application of this Court's jurisprudence must show that all three factors of the Chevron test are met." Where the burden with regard to actual payment of Reesor benefits is not likely any greater than in Schmill or Stavenjord, and the Supreme Court has ordered retroactive application in those cases, the Court concludes that the third Chevron factor -"the inequity imposed by retroactive application"- does not favor prospective application of Reesor.

         Common Fund Litigation: Retroactivity. Where the Montana Supreme Court has mandated the payment of benefits on all "open" claims impacted by Stavenjord and Schmill, this Court concludes that holding "retroactive" payment of Reesor benefits is neither an unconstitutional taking nor impairment of contract.

         ORDER ADOPTING ORDER OF SPECIAL MASTER

         ¶ 1 Issues in the above-entitled matter were duly briefed before Special Master Jay Dufrechou, who considered the evidence and prepared and submitted his Order for consideration by the Court. These issues are fully set forth in the Special Master's Order.

         ¶ 2 Thereupon, the Court considered the record in the above-captioned matter, considered the Order of the Special Master, and does hereby make and enter the following Order.

         ¶ 3 IT IS ORDERED the "Findings and Conclusions by Special Master on Common Fund Issues" are adopted as follows:

¶ 3a No common fund exists.
¶ 3b Reesor applies retroactively.
¶ 3c Payment on open claims is not barred on timeliness grounds.
¶ 3d Application of the common fund doctrine does not violate constitutional guarantees of "freedom of contract and taking without just compensation."

         FINDINGS AND CONCLUSIONS BY SPECIAL MASTER ON COMMON FUND ISSUES

         ¶ 1 Pending before the Workers' Compensation Court (WCC) are various issues identified in the Amended Order Delineating Issues and Setting Briefing Schedule filed April 14, 2006. Those issues are:

¶ 1 a Does a common fund exist?
¶ 1 b Is there an ascertainable class?
¶ 1 c Is there an ascertainable fund?
¶ 1 d If there is a common fund, is it retroactive?
¶ 1 e Do laches or statutes of limitations apply to claims which failed to timely present a challenge to Montana Code Annotated?
¶ 1 f Does application of the common fund doctrine violate constitutional guarantees of "freedom of contract and taking without just compensation"?

         I. No Common Fund Exists

         ¶ 2 In Stavenjord v. Montana State Fund (Stavenjord II)[1], the Montana Supreme Court held that no common fund exists in a situation closely analogous to this matter. The underlying determination in Stavenjord v. Montana State Fund (Stavenjord I)[2] was that § 39-72-405(2), MCA, was unconstitutional in that it denied occupational disease claimants the permanent partial disability benefits available to injury claimants under § 39-71-703, MCA.

         ¶ 3 Stavenjord II found that the rule of law announced in Stavenjord I was retroactive to any claim arising on or after June 30, 1987, if the claim remained open, with "open" defined as not previously finalized and closed by either Court order or settlement and release. This meant that individuals with open claims who ...


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