CRISTITA MOREAU, Individually and as Personal Representative of the Estate of Edwin Moreau Petitioner
TRANSPORTATION INSURANCE CO. Respondent/Insurer.
Submitted: November 17, 2015
TO MONTANA SUPREME COUNT
ORDER GRANTING RESPONDENT'S MOTION FOR SUMMARY
JUDGMENT AND DENYING PETITIONER'S CROSS-MOTION FOR
M. SANDLER JUDGE.
Respondent accepted liability for the decedent's
occupational disease, and paid certain medical benefits.
However, another entity had already paid some of the medical
bills for which Respondent would have been liable under
§ 39-71-704, MCA. Petitioner contends that since that
entity does not want to be reimbursed, Respondent should pay
the amount of those medical bills to Petitioner. Respondent
moved for summary judgment, contending that it is not liable
to Petitioner since the decedent received the medical
services to which he was entitled. Petitioner cross-moved for
Under controlling case law, Respondent is entitled to summary
judgment. It is not liable to pay Petitioner the value of the
decedent's medical bills which were paid by an entity
that is not seeking reimbursement from Petitioner.
Furthermore, this Court does not have jurisdiction to decide
whether Respondent must reimburse another entity that is not
a party to this case for paying the decedent's medical
1 In Moreau v. Transportation Ins. Co.,
Montana Supreme Court held that Petitioner Christita Moreau,
Individually and as Personal Representative of the Estate of
Edwin Moreau (Moreau), had standing and that this Court had
jurisdiction to decide this case on its merits. After remand,
Respondent Transportation Insurance Co. (Transportation)
moved for summary judgment, arguing that it is not liable for
the compensation Moreau seeks. Moreau objects to
Transportation's motion and has cross-moved for summary
2 The following issues are before this Court:
Issue One: Is Transportation liable to Moreau for $95, 846,
which Transportation would have owed for certain medical
bills had another entity not paid them?
Issue Two: Is Transportation liable for Moreau's costs
and attorney fees, plus a 20% penalty?
3 Since Moreau is not the prevailing party, Transportation is
not liable for her costs, attorney fees, or a penalty, and
Issue Two is therefore resolved.
4 Edwin Moreau (Edwin) contracted an asbestos-related
occupational disease which arose out of his employment with
W.R. Grace and ultimately caused his death.
5 In 2001, W.R. Grace created and funded the Libby Medical
Plan (LMP) to assist Libby residents in paying for medical
costs resulting from asbestos exposure from vermiculite
mining in Lincoln County.
6 During Edwin's illness, the LMP paid $95, 846 of his
7 As part of the resolution of W.R. Grace's bankruptcy
case, on September 21, 2012, certain rights and duties of the
LMP were transferred into the Libby Medical Plan Trust (Libby
Trust), with W.R. Grace remaining responsible for the
LMP's ongoing payment obligations incurred prior to that
date. The LMP ceased to offer benefits on that date, but
medical providers had until September 21, 2014, to submit
claims for services already rendered to the LMP for
8 Transportation initially denied liability for Edwin's
occupational disease. During subsequent litigation, it
accepted liability for Edwin's occupational disease, and
the parties stipulated to a satisfaction of
judgment. Thereafter, Transportation reimbursed
Moreau for out-of-pocket medical expenses and paid medical
bills which had been paid by other insurers and Medicaid.
9 Jay Flynn, MD, medical director of the LMP, agreed in his
deposition that the bills the LMP paid on Edwin's behalf
were for reasonable and necessary medical care related to
Edwin's occupational disease. He testified that the LMP
paid these bills with no strings attached and that the LMP
never made any demand for reimbursement nor did it expect
10 William M. Corcoran, an executive from W.R. Grace, also
testified in his deposition that W.R. Grace is not making any
claim for reimbursement of Edwin's medical bills paid by
the LMP. Corcoran stated that the amounts W.R. Grace
deposited into the LMP were voluntary with no conditions.
Corcoran further testified that, regardless of the source of
the funds, W.R. Grace would not accept reimbursement for
bills paid by the LMP. Likewise, Adam Paul, an attorney who
represented W.R. Grace in connection with its bankruptcy,
informed the parties that W.R. Grace would not seek
11 Moreau's attorneys advised Transportation's
counsel that if W.R. Grace did not want to be reimbursed for
the funds the LMP paid for Edwin's treatment, "then
the amount should be paid to [Moreau]." Because neither
the LMP nor W.R. Grace sought reimbursement from
Transportation or Moreau for the medical bills the LMP paid,
Transportation refused to pay the $95, 846 to Moreau.
12 Moreau subsequently brought this case, contending that
Transportation must pay the $95, 846 to her because it is a
primary payor with an absolute duty to pay benefits.
13 In addition to representing Moreau, her attorneys also
represent the Libby Trust for purposes of recovering the
disputed $95, 846. The Libby Trust is not a party to this
case. The attorneys informed this Court, via affidavit, that
they "have been authorized by Francis McGovern, Trustee
of the Libby Trust, to recover, on behalf of the Trust, the
medical payments made by the Libby Medical Plan to treat
Edwin Moreau's occupational disease."
14 On October 23, 2014, Moreau's and the Libby
Trust's attorneys sent a letter to Transportation
demanding that Transportation reimburse the Libby Trust. The
letter states, in relevant part:
Demand is hereby made for immediate repayment to the Trust of
the $95, 846 in medical benefits paid by the Libby Medical
Plan on behalf of Edwin Moreau. . . . If the funds are not
reimbursed, we will initiate a proceeding in the Workers'
Compensation Court to enforce the Trust's rights to
reimbursement and for a penalty for the denial of benefits
and misrepresentation to the WCC. We will then seek a remand
of the Moreau case on the grounds that the basis for
Transportation's argument has been rendered moot.
15 Transportation did not reimburse the Libby Trust and it
asserts it does not have a legal duty or obligation to do so.
Transportation also argues that the Libby Trust's right
of reimbursement, if any, is irrelevant to the present matter
since the Libby Trust is not a party to this case. As of the
date of this Order, the Libby Trust has not brought a claim
in this Court against Transportation for reimbursement.
16 This case is governed by the 1991 version of the Montana
Workers' Compensation Act (WCA) since that was the law in
effect on Edwin's last day of work for his time-of-injury
17 For the Court to grant summary judgment, the moving party
must establish that no genuine issues of material fact exist
and the moving party is entitled to judgment as a matter of
The material facts necessary for disposition of this case are
undisputed. Accordingly, this case is appropriate for summary
18 Transportation argues that under § 39-71-704, MCA,
and Shepard v. Midland Foods, Inc.,  it is not liable
to Moreau for the amount she now seeks since the LMP paid
Edwin's medical bills and neither the LMP, the Libby
Trust, nor W.R. Grace has asked Moreau for reimbursement.
19 Moreau contends that since Transportation did not
reimburse the $95, 846 in medical bills paid by the LMP, it
owes $95, 846 worth of medical benefits and that she is
legally entitled to these funds.
20 Section 39-71-704, MCA, states, in relevant part:
Payment of medical, hospital, and related services -
fee schedules and hospital rates - fee limitation.
(1) In addition to the compensation provided under this
chapter and as an additional benefit separate and apart from
compensation benefits actually provided, the following must
(a) After the happening of the injury and subject to the
provisions of subsection (1)(d), the insurer shall furnish,
without limitation as to length of time or dollar amount,
reasonable services by a physician or surgeon, reasonable
hospital services and medicines when needed, and such other
treatment as my be approved by the department for the
injuries sustained, subject to the requirements of 39-71-727.
21 The Montana Supreme Court interpreted this statute in
Shepard, a case with facts similar to the case at
Shepard injured his knee in an industrial accident and
incurred medical bills. Because the insurer initially denied
liability for the claim, Medicare and private health
insurance paid some of Shepard's bills. This Court
ruled that the workers' compensation insurer was not
required to pay the value of these medical bills to Shepard,
explaining: "If, at a future date, claimant is sued for
medical costs which should have been paid by defendant,
claimant may file a Petition asking for a ruling on the
matter … If the claimant is held responsible, it is
clearly the insurer's obligation to pay medical benefits;
thus, litigation of that issue seems
22 On appeal, Shepard argued that the workers'
compensation insurer was liable either to reimburse Medicare
and his private health insurer for the amounts each had paid,
or to pay those amounts to him. The Supreme Court
rejected both arguments. First, the court held that since
neither Medicare nor the health insurer was a party to the
case, this Court did not have jurisdiction to
"adjudicate any right to reimbursement which those
entities had." Second, the court rejected Shepard's
argument that the workers' compensation insurer was
liable to pay him the medical benefits under §
39-71-704, MCA. The court explained:
Contrary to appellant's assertion, this statute is not
authority for ordering respondent to pay appellant for
medical expenses already paid by other health care providers.
The statute requires the insurer to furnish
reasonable services, medicine and treatment. To
order the insurer to pay appellant for medical expenses
already paid is not furnishing services nor is it reasonable.
. . .
Appellant Shepard is here asking for a windfall. The lower
court ruled that if Shepard were sued for medical expenses,
he could petition the Workers' Compensation Court for
relief. That ruling is logical, equitable and can provide
Shepard with prompt relief. We hold ...